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Trends & Insights    >    Publications    >    Consumer Insight Magazine

Health & Wellness Trends—The Speculation Is Over

Tom Pirovano
Retailing Insights


While much has been written on the latest trends in dieting and fitness, few marketers have a strong understanding of health & wellness labeling across categories…that is, until now. Supporting research with hard numbers on actual purchase behavior—rather than speculation on consumer opinions—is allowing manufacturers and retailers to gain a better handle on health & wellness trends. Readers be cautioned: these numbers may surprise you.

Looking into 2007 and beyond, which health & wellness characteristics are the ones to watch? According to research from ACNielsen's LabelTrends™, products with antioxidants, fiber, no preservatives and organic claims all grew by 10% or more versus last year. Other characteristics with solid growth in the 5% and 10% range include lactose-free, gluten-free, whole grain, natural, and omega content. Although fiber content is measured in some weight-loss programs, it's interesting to note that most of the top growth characteristics are not related to weight-loss. This may represent a shift away from carb-conscious foods and back to a reliance on supplements and meal replacements.

The recovering carb
Although carb-conscious foods grew rapidly to a peak in July of 2004, year-ago sales were down by 9% to $2.4 billion. Sales are still up a whopping 516%, however, versus 2001. The impact of the Atkins craze has diminished, but many high-carb categories are still recovering slowly. Some of the top-selling carb-conscious products include beer, soda and ice cream items. Products with a protein claim also rode the Atkins wave, with sales up 52% versus 2001, but are up only 1% versus year ago.

Nature’s best defense
Products with antioxidants showed more growth than any other major health claim, with sales versus year-ago up nearly 22%. Although sales are only at a half billion dollars per year, this is definitely a product attribute to keep an eye on. The top products with antioxidants represent a wide variety of categories including vitamins, cereal, juice, tea and soy milk. Look for continued growth from products making antioxidant claims. Retailers may consider displaying products with antioxidant claims in the days following news stories on major cancer-related studies.

Products labeled “natural” represent $20 billion in annual sales and cross a wide spectrum of categories. Eight categories are represented in the list of top 10 natural SKUs. This product claim has grown by almost 7% versus year-ago and by 32% since 2001. Natural product sales increased by over $1.2 billion in 2005.

Organic products represent $4.3 billion in annual sales and have grown by nearly 18% versus year-ago. This includes only UPC-coded products and excludes random-weight produce. Sales of organic products have grown steadily each year, and are now up by 60% versus 2001. The top-selling organics include fresh produce and dairy products including eggs. We can speculate that growth of organic brands will expand into many processed food categories.

Obesity in America
Perhaps recent government programs aimed at combating the obesity epidemic—such as the U.S. Food and Drug Administration’s “Calories Count” and the Department of Health and Human Services' “Small Steps” programs—have further magnified media and public attention on obesity as well as weight loss, because based on dollar sales across U.S. grocery, drug and mass channels excluding Wal-Mart, the number one health claim reported is for reduced fat, representing $35 billion annually or more than 14% of all food and beverage sales reported by ACNielsen. The dairy department is filled with reduced-fat offerings starting with 2% milk, where private label 2% gallons generate over $1.7 billion each year. Eggs and cheese are also strong players in the reduced-fat arena. Overall, reduced-fat products show only modest growth in line with total food and beverage sales.

While the FDA defines 2% milk as reduced-fat, 1% milk is considered low-fat. While low-fat products generate $15.5 billion annually, sales have only grown by 2.8% since 2001. One-gallon private label 1% milk is the number one low-fat SKU by a wide margin. The RTE breakfast cereal category represents five of the top 10 low fat SKUs.

To some surprise, fat-free products show a slight decline (-4%) vs. 2001. Like other fat content characteristics, milk plays a large role, representing four of the top 10 SKUs. Although we tend to just assume that orange juice is a fat-free product, many of the top-selling refrigerated orange juice SKUs make a fat-free claim, including five of the top 10 fat-free SKUs across categories.

Heart-healthy choices
Products with a cholesterol claim (cholesterol-free, low-cholesterol, or cholesterol-lowering) generate nearly $10 billion annually and are down by 5% versus year-ago. Refrigerated orange juice also dominates the top selling products with a cholesterol claim. One could speculate that the widespread use of Statin drugs like Lipitor and others could soon make cholesterol claims irrelevant for many Americans who can afford to take these prescription drugs instead.

Fiber content is another fast-growth health claim, up 18% versus year-ago and up 50% versus 2001. The top items are mostly breakfast cereals and bread products. Fiber content is a key component of calculating “net carbs” popularized by Atkins, yet has not shown the recent declines seen by carb-conscious foods. We can expect sales of high-fiber products to continue to grow as the U.S. population ages.

Although low-sodium products generate over $11 billion each year, this health claim is dominated by the carbonated beverages category. With the exception of a single cracker SKU, all of the top 60 low-sodium products are beverages or soups. Low-sodium products are also flat relative to other food and beverage categories. Products with no sodium or salt added have a very different profile than low-sodium sodas and soups. No-sodium products are less than half the size of low-sodium and show slight declines versus year-ago and versus 2001. Six of the top 10 no-sodium items are from a single brand of refrigerated juice.

Sales of lactose-free products were up by 9% versus year-ago. As you would guess, the top sellers are baby formulas and milk substitutes. With sales of $1.8 billion annually,
this niche segment maintains a loyal following. Consider targeting lactose-free consumers with multiple-unit pricing and coupons good on the next purchase occasion. Many lactose-free products are made with soy. While sales of soy products are down slightly versus year-ago, there is still high loyalty among consumers using soy as a milk substitute or a source of protein. Both manufacturers and retailers may want to drive consumer penetration by creating awareness of the health benefits of soy.

Another characteristic to watch is omega-3. Products with omega oils are up nearly 8% versus year-ago and up 39% versus 2001. The top items with omega claims are dominated by a few brands of canned seafood and eggs. As more information is revealed on the heart-healthy benefits of omega, we can expect continued growth from products with this health claim.

Health claim labeling has proven to be an effective tool for creating a differential advantage for many brands. Some brands boast as many as four separate health claims on a single label. Many brands make health claims for characteristics that would seem almost too obvious for their category, like fat-free orange juice, natural bottled water and low-sodium sodas. As manufacturers look to create a differential advantage for their brands, we can expect to see more labeling for health claims not yet discovered.


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