Baby boomers’ lust for a healthy life is fuelling the fortunes of foods and drinks with health benefits, even in the teeth of recession, according to Julian Mellentin’s new report 10 Key Trends in Food, Nutrition and Health 2010.
While consumers are willing to cut back in many areas – consumer electronics, cars and luxuries – they see products that provide a benefit that they need as good value-for-money, even when they are sold at super-premium prices.
“From the age of 40, maintaining good digestive health; from 50, looking after your heart; from 60, keeping your joints free from discomfort are increasingly the top concerns of mature consumers around the world,” says Mellentin, “and brands that address these issues have recorded growth rates of 20% or more during the economic recession, despite premium pricing.”
Consider the following growth figures for 2009:
• In the US, General Mills’ Fiber One breakfast cereal brand increased its sales by 20%, to over $225 million (€150 million).
• In the US Yakult increased its sales by 44%.
• In Italy, although the economy shrank by 6%, sales of Danone’s premium-priced Activia digestive health brand actually grew by an impressive 19.5%, to €222.5 million ($325 million), according to IRI.
• In the UK, the economy shrank by 5.2% and the overall yoghurt market was static (Nielsen), yet sales of the Activia brand grew 32% to over €270 million ($314 million).
• Italians embrace food as a way of maintaining health, even in the teeth of economic gales. Danone’s Danacol cholesterol-lowering brand, which is based on plant sterols, earned €72.7 million ($106 million) in retail sales in 2009, a 28.8% increase (IRI data). For a brand that sells at a 100%+ premium, to achieve this growth even while the Italian economy contracted by 6% is quite some achievement. Pro rata Danacol’s performance to a market the size of the US and it would be a $500 million brand.
• Benecol cholesterol-lowering drink – the most expensive dairy product in the UK supermarket – actually increased its sales in 2009 by 18.8% to £39.2 million ($61 million/€44.6 million).
• In the US, Elations juice drinks with added glucosamine were on track for sales of $55 million (€37 million) in 2009 and on a path to reach $85 million (€57 million) in 2010. In 2008, Elations’ sales were just $15 million (€10 million).
“That these premium-priced brands have done well in the recession seems counter-intuitive,” continues Mellentin. “But given that many of today’s over-50s, and in particular over 65s, have little or no debt, have often accumulated significant assets and have more disposable income to spend on their health than any previous generation, we should not be surprised that the boomers are now driving the growth of brands that address their main health concerns.”
“What these brands have in common and what the boomers want is that they actually work,” Mellentin concludes. “Benefits based in proven science will become an even more important competitive advantage for anyone targeting these mature consumers.”
Benecol, for example, is one brand that has already benefited from being able to say its health claim has been “approved by the European Commission”. Sirco juice’s claim that it helps “maintain a healthy blood flow and benefits circulation” is another one of the few signed off by EU regulators. In test markets Sirco found that its buyers were overwhelmingly aged over 60 and formed a loyal hardcore with a high repeat purchase pattern.
Of Europe’s 500 million people 20% are over the age of 65 and the average age of the population is 41. By 2030 30% will be over the age of 65. With figures like these in prospect, the market faces a new era of growth.
About the report
Each year since 1995, industry expert Julian Mellentin has forecast and analysed trends in food, nutrition and health. These are the important trends which will shape the business of food and health not only in the next 12 months but for many years beyond – trends every company must take into account in developing a food and nutrition strategy.
This 98-page report includes a short bullet-point summary of each trend and of the key factors Mellentin believes can contribute to enduring success. Analyses are supported by detailed brand sales data, comparisons of product pricing and advertising messages and claims, and more than 90 illustrations and charts.
Mellentin’s 10 Key Trends for 2010 are:
1. Digestive health – a mega-trend moves beyond the tipping point
2. An intrinsic health benefit that’s also convenient
3. Feel the benefit – the most powerful marketing message
4. Energy – a world of untapped opportunities
5. Fruit and superfruit – the future of food and health
6. Antioxidants – big in America, dead in Europe?
7. Weight management
8. Healthy snacking
9. Packaging and premiumisation
10. Bones and movement
The report also includes seven Micro-Trends:
1. Protein power
2. Kids’ nutrition
3. New life for heart health and cholesterol-lowering?
4. Probiotic’s new prospects
5. Immunity – a great claim that’s hard to use
6. Fresh start for omega-3?
7. Beauty an ultra-niche opportunity