Insights into Tomorrow's Nutraceutical Consumers

The ageing of the population and the increasing importance that consumers attach to health mean that the US and European nutraceuticals markets will grow to US$25bn and US$7bn by 2009. However growth is hampered by consumers' mistrust of manufacturers' claims: almost 50% find them untrustworthy. Players will need to overcome this and other obstacles to grow their share of this market.

REPORT HIGHLIGHTS

Sales of functional products are rising across all food and drink categories in the US and Europe alike. The US market was worth US$18.9bn in 2004, with annual sales growth averaging 7.2% over the 1999-2004 period.

Europe's Young Adults consume 36% more nutraceuticals than an average consumer, and even in the US the figure is as high as 28%.

Despite stereotypes about Europeans being particularly distrustful of business, 45% of Americans say that they largely or entirely disbelieve food and drink manufacturers' health claims, a similar figure to France and far more than in the Netherlands.
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CHAPTER 1 EXECUTIVE SUMMARY

The hot topic
The future decoded
Action points

CHAPTER 2 THE FUTURE DECODED

Introduction
TREND: Lifestyle health problems are on the rise
The proportion of Senior consumers is growing
Lifestyle diseases are becoming more common
TREND: Nutraceutical consumption is growing fast
US consumption growth is driven by energy and drinks
European consumption is more evenly split
Swedes and Germans are Europe’s keenest nutraceutical consumers
TREND: Healthy eating is increasingly part of consumers’ lives
People increasingly understand the importance of a healthy diet
On-the-go healthy food and drink consumption is rising relentlessly
INSIGHT: Higher-income women and young people are the key audience
Seniors lag behind in consumption terms
American women are the biggest nutraceutical consumers
Nutraceutical products are not benefiting from ‘masstige’ trends
INSIGHT: People do not believe manufacturers’ health claims
People are increasingly skeptical about corporate claims
Food and drink claims are particularly distrusted
Consumers must understand products to trust their claims
People will believe realistic and focused claims
INSIGHT: Consumers have an attitude-behavior gap concerning healthy eating
Younger consumers show the biggest gap concerning general health
Men show the biggest gap when it comes to healthy eating
The picture is more mixed when health enters the fray
The attitude-behavior gap is declining
INSIGHT: People use nutraceuticals for short-term reasons
Weight loss, energy and clean teeth are most important
Long-term health concerns are becoming more important
Anti-ageing beauty benefits are an emerging niche
INSIGHT: Nutraceuticals must satisfy trends beyond just health
A good sensory experience is vital, but challenging to achieve
Time pressure drives healthy consumers to nutraceuticals
Some functional food and drinks have ‘cool’ value
Conclusions

CHAPTER 3 ACTION POINTS

Introduction
Communicate effectively with consumers to gain their trust
Focus tightly on specific health benefits
Seek endorsements from reputable organizations
Build trust in your company as well as your products
Show a corporate commitment to health and wellness
Extend brands that consumers already trust
Create products that address the attitude-behavior gap
Use natural ingredients for taste and authenticity
Draw attention to products’ convenience and cool benefits
Create ‘masstige’ products for lower-income groups
Tap into demand for ‘accessible premium’ products
Apply ‘hi-lo consumption’ to functional food marketing
Meet older and younger consumers’ unmet needs
Target Seniors by highlighting product effectiveness
Help younger consumers to maximize their alertness
Stimulate demand for appearance-enhancing products
Capitalize on obesity concerns with weight-loss functional foods
Target reluctant consumers with beauty claims
Borrow successful innovations from abroad
Look to Japan for esoteric advances
Learn what consumers like from other Western markets

CHAPTER 4 APPENDIX

Supplementary data
Functional food & drink sales in France
Functional food & drink sales in Germany
Functional food & drink sales in Italy
Functional food & drink sales in the Netherlands
Functional food & drink sales in Spain
Functional food & drink sales in Sweden
Functional food & drink sales in the UK
Functional food & drink sales in the rest of Europe
Definitions
Research methodology
Future readings
Report writing team
How to contact experts in your industry
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Table 1: Population by age group (m), Europe and US, 1999-2009 15
Table 2: Consumers suffering from bone health problems (m), Europe and US, 1999-2009 17
Table 3: Consumers suffering from heart health problems (m), Europe and US, 1999-2009 18
Table 4: Consumers suffering from gut health problems (m), Europe and US, 1999-2009 20
Table 5: US functional food & drink market value (US$ m), by category, 1999-2009 21
Table 6: US functional food & drink market value (US$ m), by claimed health benefit, 1999-2009 22
Table 7: Europe functional food & drink market value (US$ m), by category, 1999-2009 23
Table 8: Europe functional food & drink market value (US$ m), by claimed health benefit, 1999-2009 24
Table 9: Europe functional food & drink market value (US$ m), by country, 1999-2009 26
Table 10: Importance of improving physical health through diet, Europe and US, 2005 27
Table 11: Healthy on-the-go eating occasions (per head and total), Europe & US, 2004-2009 28
Table 12: European and US healthy on-the-go drinking occasions (per head and total), 2004-2009 29
Table 13: Functional food and drink share of volume consumption by age group, Europe & US, 2004 30
Table 14: Functional food and drink share of volume consumption by gender, Europe & US, 2004 31
Table 15: Consumers’ trust of specific institutions (% respondents), 2003 34
Table 16: Consumers’ trust of claims made by food and drink manufacturers (% respondents), Europe and US, 2005 35
Table 17: Consumers’ likelihood of taking active steps to improve physical health as % of stated importance of improving physical health, Europe and US, 2005 38
Table 18: Consumers’ likelihood of improving their diet as % of stated importance of improving physical health through diet, Europe and US, 2005 39
Table 19: Consumers’ likelihood of choosing health over taste as % of stated importance of choosing health over taste, Europe and US, 2005 40
Table 20: US consumers’ perceived interest in functional and fortified product types, 2005 42
Table 21: Fastest-growing new nutraceutical ingredients in Japan, 2003-2005 67
Table 22: France functional food & drink market value (US$ m), by category, 1999-2009 70
Table 23: France functional food & drink market value (US$ m), by claimed health benefit, 1999-2009 70
Table 24: Germany functional food & drink market value (US$ m), by category, 1999-2009 71
Table 25: Germany functional food & drink market value (US$ m), by claimed health benefit, 1999-2009 71
Table 26: Italy functional food & drink market value (US$ m), by category, 1999-2009 72
Table 27: Italy functional food & drink market value (US$ m), by claimed health benefit, 1999-2009 72
Table 28: Netherlands functional food & drink market value (US$ m), by category, 1999-2009 73
Table 29: Netherlands functional food & drink market value (US$ m), by claimed health benefit, 1999-2009 73
Table 30: Spain functional food & drink market value (US$ m), by category, 1999-2009 74
Table 31: Spain functional food & drink market value (US$ m), by claimed health benefit, 1999-2009 74
Table 32: Sweden functional food & drink market value (US$ m), by category, 1999-2009 75
Table 33: Sweden functional food & drink market value (US$ m), by claimed health benefit, 1999-2009 75
Table 34: UK functional food & drink market value (US$ m), by category, 1999-2009 76
Table 35: UK functional food & drink market value (US$ m), by claimed health benefit, 1999-2009 76
Table 36: Rest of Europe functional food & drink market value (US$ m), by category, 1999-2009 77
Table 37: Rest of Europe functional food & drink market value (US$ m), by claimed health benefit, 1999-2009 77
Table 38: Definitions of disease types covered

Figure 1: Swedes and Germans are the biggest per-capita nutraceuticals consumers 25
Figure 2: Low earners are almost as indulgent as high earners in terms of purchasing behavior 32
Figure 3: There are strong gains to be made from targeting the needs of specific consumer groups, such as pregnant women 37
Figure 4: Consumers’ health behaviors in the future will be decreasingly characterized by attitude/ behavior gaps 41
Figure 5: US consumers’ well-being concerns focus on presentation issues 43
Figure 6: Oral beauty products have a limited but rising market penetration across the leading developed economies 44
Figure 7: Nutraceuticals that target specific beauty care concerns are starting to appear 45
Figure 8: All-natural nutraceutical products have authenticity and often taste benefits over artificial additives 47
Figure 9: Targeted functional products can be made from natural ingredients, but many natural products currently just make general health claims 52
Figure 10: Successful ‘healthy’ product lines can easily be extended into functional categories 55
Figure 11: Some fortified categories can be marketed as strongly aspirational even at a relatively low price point 59
Figure 12: Products that are closely targeted to Seniors’ taste and health requirements can help overcome their skepticism 62
Figure 13: Highly specific alertness claims may win over younger consumers, but only if they can be substantiated 63
Figure 14: Functional products can target weight-conscious consumers with active weight-loss benefits 65
Figure 15: Many Japanese nutraceuticals could not be replicated in the US or Europe 68
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