The health and wellness landscape has been undergoing some major changes over the past several years, spurred by various factors, including scientific discoveries, nutrient breakthroughs, changing lifestyles and demographics, rising obesity, desire for wellness personalization and demand for corporate social responsibility. All of these transformations can make it difficult for natural foods retailers to target exactly what their customers are looking for. To help you better understand how to market to today's consumers, The Natural Marketing Institute has put together a list of the top 10 health and wellness trends of 2006, based on our research of more than 300,000 U.S. consumers.
NMI's top 10 trends of 2006 include:
No. 1: Changing demographics create health and wellness opportunities
The U.S. population is undergoing a dramatic shift in demographics, as household sizes change, the population ages and the number of minorities increases. Savvy retailers need to understand how to market to these various demographics.
One of the key factors is catering to the aging population. As a growing number of the 78 million-strong baby boomer generation enters the "empty nest" life phase, they will be looking for convenient meal and side dish options that are easily portioned for two. In addition, the aging boomer generation is more focused on preventing certain health conditions, and is more likely than other generations to increase consumption of healthy foods and beverages, and avoid problematic ingredients such as sodium and sugar.
On the other end of the age spectrum, opportunity will arise for new products targeting the increasing number of 20-somethings who are just starting out on their own and are far more adventurous in food choices.
In addition, the growing number of Hispanics and other ethnicities in the United States presents unique opportunities, along with single households, larger households and children. Look for these demographic trends to have a significant impact on your sales.
No. 2: Organic versus natural: The balance of price and benefits
According to our research, 56 percent of American households use organic products, and the market is poised to grow from $13 billion in 2005 to $20 billion in 2009. With approximately 500 new organic products introduced into the marketplace over the past year, including many mainstream brand extensions and an explosion of private-label brands, retailers need to understand the trade-offs consumers make in their purchase decisions of natural versus organic products.
Consequently, the need for consumer education in the marketplace is evident. Finding the optimal balance of price, benefits and levels of understanding drive consumer choice among natural and organic products (and will provide the edge over conventional products). With an 88 percent increase from 2002 to 2005 in consumer willingness to pay a premium price for organic foods and beverages (17 percent versus 32 percent), helping them understand the features of organic should translate into increased sales dollars and continued double-digit market growth.
No. 3: Energy and vitality: Future platforms for growth
A residual of the low-carbohydrate dieting trend is a desire for products that provide balanced and sustained energy. Our research shows that more than half of all shoppers want foods (51 percent) and supplements (59 percent) that help them prevent energy loss. With two-thirds of the general population feeling that having enough energy is "very important" in their lives, and 81 percent interested in maintaining their health specifically to have enough energy, look for an increased array of products advertising their energy benefits.
More specifically, foods that provide balanced energy are showing strong potential. Low-glycemic foods, for example, may prove to be less trendy and have more staying power than low-carb because of their ability to stabilize blood-sugar levels, satiate, provide energy and even help with weight management. According to our research, low-glycemic food consumption has nearly doubled, from 22 percent in 2004 to 42 percent in 2005. In addition, consumers may eat low-glycemic foods and beverages throughout their lives, because these products offer benefits for people of all ages.
No. 4: Ingredient/nutrient drivers
Specific types of nutrients will continue to drive food, beverage and supplements sales in 2006 and beyond. NMI has found that more than half of all consumers seek foods and nutritional supplements that have "a specific health claim." In addition, with more than 29 million adults and children suffering from food allergies, allergen-free foods will continue to exhibit solid growth. Gluten-free foods alone have shown a 50 percent compound annual growth over the past six years and generate U.S. retail sales in excess of $400 million.
Nutrients such as fish oil, omega-3s, lutein, lycopene, probiotics and plant sterols that are related to health conditions such as heart disease and digestive problems are being integrated into foods and supplements. While consumers' lack of understanding of the specific health benefits of some nutrients sometimes creates barriers, continued education will help retailers and manufacturers raise the value of their nutrient-rich products in the eyes of the consumer.
No. 5: The proliferation of heart-healthy products
Heart disease and stroke account for about 40 percent of deaths in the United States—one death every 34 seconds. The cost of cardiovascular disease is $400 billion, including health care costs and lost productivity.
The good news is that many of the factors that contribute to the development of cardiovascular disease can be controlled through diet and lifestyle. Consumers are getting the message and are buying more fortified and functional products, and foods with less sugar, salt, fat and additives.
With upwards of 100 million U.S. adults managing cardiovascular disease, look for more heart-healthy products in the marketplace. Whether it's focusing on cholesterol, blood pressure, C-reactive protein levels or other heart-related issues, this trend has real staying power.
No. 6: On-the-go healthy eating
Saying that today's consumer is busy is an understatement. Shoppers find themselves grabbing meals and grazing whenever they can find time, and often are forced to make trade-offs between taste, convenience and health. These lifestyle changes open the door for many healthy snacking and on-the-go meal products. In addition, as workdays lengthen, the average dinnertime is being pushed past 6:30 p.m., creating a prime opportunity for healthy "hold-me-over" snacks.
With 72 percent of consumers feeling snacking can be part of a healthy diet, and 59 percent interested in healthy foods that can be eaten on the go, opportunities flourish in this fast-growing category. Fifty-one percent of consumers also readily admit they would eat more fast food products if they were available in healthier versions—thus expanding the on-the-go food category into the foodservice arena and prepared takeout within the retail market.
No. 7: The next growth opportunities in nutritional supplements
Even in a market showing slow growth, there are opportunities for nutritional supplements. For example, usage of condition-specific supplements has more than doubled, from 22 percent of consumers in 1999 to 49 percent in 2005, a 119 percent jump.
In addition, consumers are becoming increasingly interested in nonpill supplement formats. Since 2002, 93 percent more consumers indicate they would use supplements if they came in a chewable form. Gum and quick-dissolve strips also show rising popularity, with compound annual growth increases of 35 percent and 46 percent, respectively, over the past four years. With 21 percent of the population unsatisfied with the number of pills they have to take and 18 percent reporting difficulty in swallowing pills, there is a major opportunity for the supplement industry to increase consumer reach by extending product lines to include alternative formats.
Clinical proof also has a considerable impact. Sixty-eight percent of consumers prefer to purchase supplements with proven clinical effectiveness, and 64 percent say clinical research affects whether they believe supplement claims.
Another supplement opportunity surrounds the issue of compliance, with many users not taking their supplements on a regular basis.
No. 8: Premium personal care
Consumers are becoming more interested in premium personal care products, and are seeking more elegant packaging and expanded product benefits. According to our research, 53 percent of consumers have used natural personal care products in the past year, and 34 percent have used organic. While personal appearance is one of the primary drivers, two out of five consumers use natural/ organic personal care products for overall health and wellness and because of environmental concerns.
Organic personal care is a hot market segment; half of all users have increased their consumption over the past year. This increase may also be driven by the introduction of more organic products into the marketplace.
Look for personal care to outpace the growth of other natural and organic products in the coming years.
No. 9: Individualism crosses categories
Consumers are increasingly collecting health and wellness information and developing individualized, personalized health plans such as the U.S. Department of Agriculture's "My Food Pyramid," which launched in 2005 and can be customized for individual physical characteristics.
For example, consumers managing heart disease show a high desire for foods that have a specific health claim, and three-quarters try to eat heart-healthy foods while making other food selections based on heart-healthy criteria such as low salt and low fat. Watch for new, "personalized" supplements too.
An emerging segment of the U.S. population, known as Lifestyles Of Health And Sustainability consumers, aligns itself with these belief systems and corporate social responsibility. LOHAS consumers are influencers and early adopters; they try to teach their family and friends about the benefits of purchasing environmentally friendly products, and they are usually one of the first in their family or circle of friends to try a new product. Because of LOHAS consumers' influential and trend-predicting behavior, they are an attractive segment of the market.
This connection between values and purchase behaviors is a strong trend to watch, both in the United States and globally.
Click here to order a copy of Market Overview 2005.
Steve French is managing partner of The Natural Marketing Institute, a Harleysville, Pa.-based strategic consulting, market research and business development company specializing in health, wellness and sustainability.
Natural Foods Merchandiser volume XXVII/number 6/p. 26-28