Dr. A. Elizabeth Sloan10.01.05
Resveratrol labeling on red wine; weight, high blood pressure and cholesterol-reducing claims all on a single food product; daily beverage "shots" that deliver the day's fruit and vegetable requirements; and breakfast cereals designed to help kids think-who said the low-carb movement derailed the nutraceuticals industry?
ACNielsen, Schaumburg, IL, reports that health became the number one driver of the global food industry in 2004, ahead of convenience and private label (Table 1). Polyphenols were credited with a 14% increase in chocolate/confectionary sales worldwide, a switch to healthier and lower calorie cooking basics pushed oil and artificial sweetener sales up 7% and 10%, respectively, and non-dairy beverages soared 31%, while drinkable yogurt grew nearly 20%!
Omega 3 fatty acids were the front-runners in the overall dietary supplement market; FDA approved a qualified health claim for chromium picolinate to reduce the risk of insulin resistance and possibly type 2 diabetes, and enzymes, whey protein and essential fatty acids quietly moved center stage.
This year health also started to become a top priority for convenience stores and restaurants, the latter of which recently started sporting health claims on menus. In addition, White Castle became the first fast food restaurant to introduce an energy beverage to its customers by offering Coca-Cola's Full Throttle energy beverage free to late night diners; Dunkin' Donuts launched Turbo Ice coffee beverages and McDonald's added PowerAde to its menu. Also active on this front is leading convenience store chain 7-Eleven, which recently joined forces with Natural Precepts to introduce Yes! (short for "Your Essential Source"), which is a drink that promises a 75% absorption rate-five times the absorption rate of multivitamins-for 12 vitamins, eight antioxidants, 10 minerals, 70 trace elements and 22 amino acids. It also recently launched its own functional foods and beverages under the name Formula 7.
Over the next 10 years, dramatic demographic changes will refocus the supplement and healthy food and beverage industries. With "Gen X," now aged 29-40, 35% smaller than the "Baby Boomer" generation and 30% smaller than their younger "Gen Y" counter parts, marketers will be faced with a smaller pool of active, healthy, middle-aged adults and families with children under age 18. Youth-directed products aimed at busy families, such as aseptic juices, packaged dinners and kids' multivitamins, will face a tight market over the next five to seven years, until Gen Y adults and larger ethnic families begin to grow the pool of children again. In the meantime, marketers must cater to the larger pool of aging-and aged-Americans; better understand the needs of the 43 million surprisingly health conscious Gen Y young adults and find products for which Gen Xers will pay a premium price.
Over past 30 days, 85% of Americans said that they had at least one day where they did not feel very healthy and full of energy, according to a soon-to-be-released Monitor study from Yankelovich, Chapel Hill, NC. Among this group, 60% had one or more days where their physical or mental health kept them from doing their usual activities. Nearly six out of 10 (58%) were hampered by low energy/extreme tiredness/fatigue; 49% by a common cold, flu or stomach virus; 31% had back/neck pain/problems; 28% suffered from depression/anxiety/emotional distress/sadness; 27% complained of joint pain/stiffness and 18% of arthritis/ rheumatism. Led by weight loss and getting enough sleep, Yankelovich also identified and prioritized health-related product opportunities by quantifying the gap between goals that consumers care about and those that they have actually put into practice (Table 2).
Similarly, the Natural Marketing Institute (NMI), Harleysville, PA, through its Healthy Aging Boomer Database, has identified several key strategic opportunities among the 76 million Baby Boomers based on unmet need states. Among the largest gaps between very important today and very satisfied with the job they are doing, are also having enough energy (a 54-point gap), preventing disease (a 46-point gap) and maintaining proper weight (a 36-point gap).
More than half of Boomers (57%) and two-thirds of "Matures" (67%) are making a lot of effort to eat healthier versus 45% of Gen X and 33% of Gen Y, according to the Food Marketing Institute (FMI), Chicago, IL. Health has a lot of impact on about half of Boomer shoppers' selections, compared to 59% of Matures, 43% of Gen Xers and 42% of Gen Y-still very big segments!
According to the "Fall 2004 Simmons National Consumer Survey," three-quarters of respondents aged 55+ take vitamin or mineral supplements, compared to well under half of those aged 18-34. Those over age 55 are also more likely to take more than one supplement.
With the nation's 76 million Boomers at an age when they are most likely to experience a chronic illness for the first time, coupled with the increasing practice of self-treatment among all age groups, the demand for condition-specific, OTC drug products and risk-reducing foods and supplements will continue to grow (Figure 1). HealthFocus International, St. Petersburg, FL, recommends targeting older Boomers (aged 50-59) as they are more likely than younger Boomers (age 40-49) to suffer from, and be concerned about, chronic health conditions and to purchase disease-related products (Table 3 page 54).
As Boomers confront lifestyle issues associated with middle age, they will look for more products to help with digestive ailments. NMI reports that 30% of households have a member managing/treating acid reflux, 19% indigestion, 14% constipation and 12% lactose intolerance. With one-third of female Boomers going through menopause, women will seek more natural products for symptom relief, and with the incidence of erectile dysfunction in men projected by Gallup Multi-Sponsor Surveys (Somerville, NJ) to increase another 22% by 2013, so will men. Non-prescription sleep-inducing, relaxation and natural remedies for depression, anxiety and pain will also be in high demand. And, for the first time, longevity-enhancing, anti-aging and inner beauty are now viable mass market opportunities.
Boomers account for 43% of all obese food shoppers and Matures make up 33%. Together these groups make up the majority of shoppers (69%), who want to lose weight, followed by Gen Y (56%) and Gen X (54%), according to FMI. Moreover, 43% of dieters, primarily Boomers and Matures, are trying to lose weight for health reasons, according to NMI. In fact, Gallup Multi-Sponsor Surveys found that high blood pressure (HBP) became the top reason for health-directed dieting last year, while those motivated by diabetes nearly doubled. Products that address more than one risk factor will have strong appeal (e.g., 73% of diabetics also have HBP). Products like Quaker Oats' Heart to Heart cereal are well suited for weight, blood pressure and cholesterol control. Diabetes, high cholesterol and obesity sufferers are far more likely than the general population to be on specific diet plans, according to Informationa Resources Inc., Chicago, IL.
With cholesterol sufferers a larger target than the coveted Hispanic market, new strategies for marketing to ailment-specific consumers are quickly emerging. IRI has observed that 56% of consumers who fill a prescription at a grocery, drug or mass merchandiser store also purchase related "connector" products while shopping. For example, low-calorie soft drinks; 1- and 2-letter vitamins, multivitamin and mineral supplements; antacid tablets; and skim/low-fat milks are among the items most frequently purchased with a heart-related prescription. IRI estimates heart-connector products to be a $71-billion untapped supermarket opportunity, pain/muscular/joint $40 billion, gastrointestinal reflux $21 billion, menopause $16 billion, diabetes $14 billion and arthritis $14 billion. In addition, diabetic households spend significantly above average on soda ($155 vs. $118 per year), packaged deli meats, cookies, soup and frozen novelties, according to ACNielsen.
And, tapping into these prescription-driven markets is easy. FMI reports that 85% of supermarket pharmacies offer disease management programs for diabetes, 48% hyperlipidemia, 33% hypertension, 30% asthma, 22% women's health and 19% weight control. Even more offer in-store screening for blood pressure testing (91%); blood glucose monitoring (67%); cholesterol testing (64%) and osteoporosis screening (58%).
With 49 million Americans already age 60 and older, the market for foods formulated for special dietary needs will continue to grow. Savvy marketers will continue to re-invent multi-claim high-protein supplements and meal replacements designed to meet a diversity of aging needs from bone health and increased vitality to stemming sarcopenia or muscle wasting and blood pressure control currently through whey peptides. Mead Johnson's MCT Oil (medium chain triglycerides) substitutes for fat calories for those who poorly digest fats, while Japan's Megmilk Glucosamine Yogurt is yet another option for arthritis and joint pain sufferers.
But aging won't be all doom and gloom. With more time for relaxation and entertaining, Boomers are helping to drive spirit, wine and light beer consumption to a level not seen in a generation, and they are also looking for healthier options. Willamette Valley Vineyard's 2002 Vintage Selection Pinot Noir is the first wine to receive government approval to label resveratrol content. Beringer Blass Wine Estates' White Lie Early Season Chardonnay, which is naturally lower in alcohol and calories, is designed for waist-watching women.
Boomers are also turning to pets-especially cats-for companionship, catapulting pet ownership and pet food sales to an all-time high. Packaged Facts, New York, NY, in its Pet Food report predicts pet food sales will reach over $16 billion by 2008. Boomers are increasingly imposing their own health values on their pets, sending sales of kosher, weight-directed, all-natural/organic pet foods, supplements and even bottled pet water soaring. And with 90 million cats and 73 million dogs that's a market worth watching!
At the other end of the age spectrum, Gen Y adults are also surprisingly focused on health and nutrition, but primarily from a performance and weight management standpoint. According to Multi-Sponsor Surveys, the number one reason Gen Yers made a dietary change, went on a nutrition regimen or added a food/beverage to their diet was to increase performance (63%), followed by weight management (50%)-only one in three Gen Y adults and teens is satisfied with his/her weight!
With 43 million Americans currently aged 18-24, and four million turning age 18 every year for the next 10 years, Gen Y will drive a surge in the sports, performance and energy markets. NMI reports that this age group is the one most interested in the sports nutrition market, with 44% using energy/sports drinks, 20% sports nutrition bars, 18% protein powders and 11% sports supplements (Figure 2). HealthFocus reports that one-quarter of Gen Yers always/usually chooses foods and beverages daily to improve performance, 28% to improve energy, 24% to meet their body's different levels of activity and 15% to address mental performance.
In the July 2005 Energy Drinks report, published by Mintel, Chicago, IL, it was estimated that the sales of energy drinks in the U.S. surpassed the $1 billion mark, without including sales from Wal-Mart or health food stores! Convenience stores accounted for half of all off-premise sales in 2004, while supermarkets were responsible for 26% of sales.
According to Simmons Market Research data, 55% of those who use energy beverages aged 35 and older agree that mental alertness is a reason for using them, and 40% of those under 35 represent a potentially strong market for everyday mental concentration. Watch for hybrid energy beverages (alcoholic and non-alcoholic), such as Annheuser-Busch's B-to-the-E energy beer or Hansen's juice-based energy drink, Rumba, to make significant dents in the market.
At the Institute of Food Technologists (IFT) meeting in July, The Netherlands-based Innova new product tracking group introduced a new beverage concept-Breakfast Boost, an orange-flavored morning energy drink formulated with guarana, which is designed as a convenient morning pick-me-up, an alternative to coffee and a healthier option than Red Bull. In stores it would be positioned as a full meal replacement, packaged in a slim, trendy pouch-like bottle with a sports cap that can fit into a pocket or purse.
Mintel's September 2005 Energy Supplement report projects that the overall energy market-drinks, bars and protein drinks-will reach $8 billion by 2008 and post 43% annual growth. Its May 2005 Nutrition & Energy Bars report estimates nutrition and energy bar growth at 21% for the two-year period 2005-06 and notes that one in five (21%) consumers are regular users. Among the 79% of consumers not eating nutrition or energy bars regularly, 39% have never tried an energy bar, while the remainder who sampled them had concerns about expense, taste or didn't consider a bar "real food." IRI has identified older adults, ethnic groups and non-dessert like bars for children as potential "mega market" opportunities (Figure 3).
Just about six in 10 (58%) Gen Y adults are making an effort to manage their weight according to NMI, and are reading labels for fat and calories. And, they're super motivated too. This is probably because, as HealthFocus reports, four out of 10 Gen Yers are extremely/very concerned about their weight.
In a 2004 Buzzback (New York, NY) survey of teens and young adults, 58% placed extra energy food and 56% as a source of vitamins among the top five factors when deciding what to eat-right behind fresh, easy/fast to prepare and on-the-go foods. Despite their more limited budget, 30% of Gen Yers think it is worth it to pay more for food and beverages that have added herbals, such as ginseng, echinacea or ginkgo biloba, which is higher than any other age group, according to Yankelovich. Along with Gen X, Gen Yers are the most interested in organic foods. Gen Y will also drive interest in vegetarian foods. Aramark, Philidelphia, PA, reports that 27% of college kids want more vegan options on the menu and NMI reports that 27% of Gen Yers consider themselves occasional vegetarians. Despite weight concerns, Gen Y adults are the most frequent snackers, grazers and indulgence/pleasure-seekers. In fact, 81% eat indulgent desserts or snacks most or some days, so low calorie options would be a welcome treat.
Lastly, as Gen Yers begins to have their own children, the pre-natal and infant markets are set to surge. Look for a new range of fortified meal replacements, such as Vincent Foods Oh Mama! bar, claimed to be the first nutrition bar formulated specifically to meet the needs of women who are trying to conceive, who are pregnant, or who are breast-feeding. The bar contains docosahexaenoic acid (DHA) and 14 vitamins and minerals. In the same vein, Abbott Laboratories has launched Ensure Healthy Mom shakes and bars to help pregnant women successfully curb their cravings for sweets. The shakes are fortified with 20 vitamins and minerals.
High Blood Pressure (HBP). With one-third or 65 million Americans over age 18 afflicted with hypertension-nearly half of all Black women-and 45.5 million with pre-hypertension, it was only a matter of time before the blood pressure market moved center stage. And the problem is only going to get worse. Multi-Sponsor Surveys indicates that the incidence of HBP will increase another 18% for women and 19.5% for men by 2013. From various combinations of B vitamins and minerals to a diversity of whey peptides and blood pressure-lowering supplements and foods, this is going to be a very hot market, especially as consumers try to avoid prescription options.
Currently, the American Heart Association (AHA) and the National Heart, Lung and Blood Institute (NHLBI), part of the National Institutes of Health (NIH), recommends vigorous treatment of pre-hypertension with a minimum of two prescription medications. At the same time, it continues to draw more attention to the sodium content of products. HealthFocus reports over one-third of shoppers (36%) are trying to reduce their salt/sodium intake-31% of mothers-and 32% always/usually maintain a low sodium diet. On the food side, Stouffer's Lean Cuisine has taken a leadership role by educating customers about sodium on the back of its packages. Lastly, Yankelovich reports 83% of adults had their blood pressure checked in the last 12 months.
Controlling Blood Sugar. The low-carb movement helped to focus the spotlight on possibly one of the largest nutraceutical markets of all time-blood sugar management. This market goes beyond diabetes, as it offers a means of managing weight, energy levels, mood swings, appetite and improving concentration. And a multifaceted market it will be.
The Centers for Disease Control & Prevention (CDC) estimates that 47 million U.S. adults and one million kids already have "Metabolic Syndrome," 49-69 million are insulin resistant and 41 million have "pre-diabetes." Considered an epidemic, with 1.5 million new cases diagnosed each year, 13.8 million Americans are now diagnosed with diabetes and one in three Americans born in 2000 are projected to be afflicted during their lifetime-230 million worldwide by 2020.
Blood sugar management is a new and fast emerging mass market (commercialization) opportunity in the U.S., according to Sloan Trends' TrendSense Model. In fact, blood sugar control has been a viable market among very health conscious consumers and shoppers in the health food and specialty channels (popularization) for most of the decade. However, it was never appropriately marketed to the mainstream channel until diabetes became an epidemic and the low-carb diet craze started to fizzle out.
NMI reports that nearly four in 10 U.S. adults now express a desire for foods that can help manage blood sugar levels. In 2004, almost one-quarter of consumers added some foods to their diet to keep blood sugar stable, while one-third avoided some foods. ACNielsen reports that globally 11% of consumers check food and beverage labels with the Glycemic Index (GI) in mind; 7% in the US. However, unlike markets in Australia and the U.K., interest and understanding of GI is still not a mass market opportunity (Figure 4). The GI trend has only recently crossed the Medical Threshold signaling the beginning of a long-term, sustainable trend. However, it is a very fast moving market. While currently a viable market among very health conscious consumers and those shopping the health food/specialty channels, the real question is how fast the consumer understanding curve will develop to drive attitudes into behavior. At the current rate, it will likely approach the mass market phase over the next nine months to a year.
NMI has observed that although one-third (33%) of adults say they have heard of the term Gl, their depth of understanding is questionable. Secondly, while 22% state the importance of having packaged foods that have a low Gl, this number is very low compared to other measures and may be over stated due to lack of understanding. Lastly, only 2% check for GI on food/beverage labels, which indicates low meaningfulness and relevance. But, interest appears to be increasing. HealthFocus' 2005 Trends Report confirms that six in 10 consumers want more information on blood sugar control and 50% want to learn more about Gl.
More than 150 supplements targeted at blood sugar management are now available, including Nature's Plus' Glucotrim Rx-Blood Sugar, Ridgecrest's Blood Sugar Balance and Nature's Benefit's Syndrome X Caps. Bristol Meyers Squibb's Glucerna line of bars, beverages and snacks that help diabetics manage their blood sugar have broadened into the weight loss market with Glucerna Weight Loss Shakes.
Kids' Risk Factors. For the first time, Sloan Trends, Inc. is seeing the emergence of mass markets focused on reducing risk factors for chronic diseases in kids. With the incidence of HBP tripling in kids/teens over the last decade, it's not surprising that managing and preventing HBP in kids is already a mass market opportunity.
With the American Academy of Pediatrics and NIH setting new blood pressure standards for children and recommending pediatricians monitor blood pressure from age three on, this market will grow very quickly. Childhood obesity and cholesterol control are other mass market opportunities. With omega 3 foods and beverages well ensconced in the school lunch program in Texas, products that foster kids learning is another fast growing segment. Kashi's Might Bites whole grain cereal containing a unique blend of choline, iron, zinc and vitamin C for developing minds is a breakthrough idea. Some mom's are also substituting organic staples like milk and pasta sauce in their kids' diets, according to a new Ragu survey, and44% of parents occasionally buy organic.
Finally Phytochemicals. As consumers continue to opt for natural goodness, phytochemical markets have begun to move mainstream. HealthFocus reports that three-quarters (73%) of shoppers in 2004 strongly agreed/agreed that some foods contain active components that help with current health, such as improving digestion. Further, more than two-thirds (69%) now believe that some foods contain active components that reduce the risk of disease and improve long-term health, while just over half (52%) think that foods can be used to reduce their use of some drugs or medical therapies. More than half of shoppers now believe that red wine is an excellent source of phytochemicals that may reduce the risk of heart disease. And polyphenols, flavonoids, lycopene, lutein, carotenoids and resveratrol are all moving beyond the health and specialty channel, according to Sloan Trends Inc. HealthFocus reports 48% of shoppers have increased their consumption of fruits and vegetables over the past two years. Broccoli and tomatoes top the list of foods consumers are eating more of to help prevent disease (Figure 5).
Vend-able Nutrition. With more than seven million vending machines and 100 million Americans using them every day, the $33 billion vending industry has the power to provide almost instant access to dietary supplements, healthy foods, meals, snacks and beverages, and the potential to achieve astronomical growth in the next decade. High-tech machines allow fresh food to stay fresh longer, frozen foods to be heated and beverages to be mixed "just for you." Over one-third of vending machines are located in manufacturing settings. Sodexho reports that 25% of elementary school kids and 87% of high school children have access to school vending; while 50% use school stores/snack bars-77% of children use them at least once a week.
Stonyfield Farm's vending machines contain only organic and natural products, in a tie-dyed machine. But healthy vending isn't just for kids. The Compass Group, Surrey, U.K., has launched "Balanced Choices," which is a vending system that offers only better-for-you foods and beverages. Vended milk is also a big hit with adults. In a Fluid Milk Strategic Thinking Initiative (FMSTI) multi-channel milk study, post installation sales remained high in actual machines at nearly 80% compared to an industry average of 50-60%. In fact, those vendors that carried seven or more SKUs sold more than twice as much as those who carried only four products.
Earthy Product Values. Food purity and social/earth-friendly values represent another market gaining momentum. According to NMI's 2005 LOHAS Consumer Trends Database, almost one in four Americans say that when given the chance they make decisions based on the impact their purchase will have on the health and sustainability of the world, its environment and people. This concept exemplifies the 55 million LOHAS consumers who demand products that have a meaningful sense of environmental and social responsibility and incorporate those values into their purchase decisions. Indeed, they are more than twice as likely to pay 20% more for LOHAS-related products. Nearly two-thirds of consumers over age 25 believe that locally grown foods, as well as foods from farms practicing sustainable agriculture, are important in their food purchase decisions, and just about half care about Fair Trade Practices.
Restaurant Row. Undoubtedly, one of the most exciting developments in the nutraceutical area is the movement of healthy and fortified foods into restaurants, food service and convenience stores. Technomic Inc. reports that about half of diners thought about health in 2004. Expanding on that trend, Mintel's Insights group reported that low-carb, vegetarian, low fat, light, healthy, organic and trans fat free top the list of health claims appearing on restaurant menus. Pasta, salad dressings tortillas and mayonnaise were the most likely products to carry a health descriptor.
The future looks bright for the nutraceuticals industry. Mintel projects sales of functional foods to rise 23%, functional beverages 27% and vitamins and minerals 13%, after adjusting for inflation, by 2009. The two largest generational segments-Boomers and Gen Y-will skyrocket condition-specific, risk-reducing, sports nutrition and energy foods, beverages and supplements, as nutraceuticals find new markets in restaurants, convenience stores and sports stadiums too!NW
About the author: Dr. A. Elizabeth Sloan is the president of Sloan Trends & Solutions, Inc., Escondido, CA, which is a consulting firm that offers trend-tracking and predictions, strategic counsel and business-building ideas for food, supplement and pharmaceutical marketers. She can be reached at 760-741-9611; Fax: 760-741-9711; E-mail: sloantrend@sbcglobal.net.
ACNielsen, Schaumburg, IL, reports that health became the number one driver of the global food industry in 2004, ahead of convenience and private label (Table 1). Polyphenols were credited with a 14% increase in chocolate/confectionary sales worldwide, a switch to healthier and lower calorie cooking basics pushed oil and artificial sweetener sales up 7% and 10%, respectively, and non-dairy beverages soared 31%, while drinkable yogurt grew nearly 20%!
Omega 3 fatty acids were the front-runners in the overall dietary supplement market; FDA approved a qualified health claim for chromium picolinate to reduce the risk of insulin resistance and possibly type 2 diabetes, and enzymes, whey protein and essential fatty acids quietly moved center stage.
This year health also started to become a top priority for convenience stores and restaurants, the latter of which recently started sporting health claims on menus. In addition, White Castle became the first fast food restaurant to introduce an energy beverage to its customers by offering Coca-Cola's Full Throttle energy beverage free to late night diners; Dunkin' Donuts launched Turbo Ice coffee beverages and McDonald's added PowerAde to its menu. Also active on this front is leading convenience store chain 7-Eleven, which recently joined forces with Natural Precepts to introduce Yes! (short for "Your Essential Source"), which is a drink that promises a 75% absorption rate-five times the absorption rate of multivitamins-for 12 vitamins, eight antioxidants, 10 minerals, 70 trace elements and 22 amino acids. It also recently launched its own functional foods and beverages under the name Formula 7.
Demographic Redirection
Over the next 10 years, dramatic demographic changes will refocus the supplement and healthy food and beverage industries. With "Gen X," now aged 29-40, 35% smaller than the "Baby Boomer" generation and 30% smaller than their younger "Gen Y" counter parts, marketers will be faced with a smaller pool of active, healthy, middle-aged adults and families with children under age 18. Youth-directed products aimed at busy families, such as aseptic juices, packaged dinners and kids' multivitamins, will face a tight market over the next five to seven years, until Gen Y adults and larger ethnic families begin to grow the pool of children again. In the meantime, marketers must cater to the larger pool of aging-and aged-Americans; better understand the needs of the 43 million surprisingly health conscious Gen Y young adults and find products for which Gen Xers will pay a premium price.
What Ails Us Now?
Over past 30 days, 85% of Americans said that they had at least one day where they did not feel very healthy and full of energy, according to a soon-to-be-released Monitor study from Yankelovich, Chapel Hill, NC. Among this group, 60% had one or more days where their physical or mental health kept them from doing their usual activities. Nearly six out of 10 (58%) were hampered by low energy/extreme tiredness/fatigue; 49% by a common cold, flu or stomach virus; 31% had back/neck pain/problems; 28% suffered from depression/anxiety/emotional distress/sadness; 27% complained of joint pain/stiffness and 18% of arthritis/ rheumatism. Led by weight loss and getting enough sleep, Yankelovich also identified and prioritized health-related product opportunities by quantifying the gap between goals that consumers care about and those that they have actually put into practice (Table 2).
Similarly, the Natural Marketing Institute (NMI), Harleysville, PA, through its Healthy Aging Boomer Database, has identified several key strategic opportunities among the 76 million Baby Boomers based on unmet need states. Among the largest gaps between very important today and very satisfied with the job they are doing, are also having enough energy (a 54-point gap), preventing disease (a 46-point gap) and maintaining proper weight (a 36-point gap).
More than half of Boomers (57%) and two-thirds of "Matures" (67%) are making a lot of effort to eat healthier versus 45% of Gen X and 33% of Gen Y, according to the Food Marketing Institute (FMI), Chicago, IL. Health has a lot of impact on about half of Boomer shoppers' selections, compared to 59% of Matures, 43% of Gen Xers and 42% of Gen Y-still very big segments!
According to the "Fall 2004 Simmons National Consumer Survey," three-quarters of respondents aged 55+ take vitamin or mineral supplements, compared to well under half of those aged 18-34. Those over age 55 are also more likely to take more than one supplement.
Modern Maturity
With the nation's 76 million Boomers at an age when they are most likely to experience a chronic illness for the first time, coupled with the increasing practice of self-treatment among all age groups, the demand for condition-specific, OTC drug products and risk-reducing foods and supplements will continue to grow (Figure 1). HealthFocus International, St. Petersburg, FL, recommends targeting older Boomers (aged 50-59) as they are more likely than younger Boomers (age 40-49) to suffer from, and be concerned about, chronic health conditions and to purchase disease-related products (Table 3 page 54).
As Boomers confront lifestyle issues associated with middle age, they will look for more products to help with digestive ailments. NMI reports that 30% of households have a member managing/treating acid reflux, 19% indigestion, 14% constipation and 12% lactose intolerance. With one-third of female Boomers going through menopause, women will seek more natural products for symptom relief, and with the incidence of erectile dysfunction in men projected by Gallup Multi-Sponsor Surveys (Somerville, NJ) to increase another 22% by 2013, so will men. Non-prescription sleep-inducing, relaxation and natural remedies for depression, anxiety and pain will also be in high demand. And, for the first time, longevity-enhancing, anti-aging and inner beauty are now viable mass market opportunities.
Boomers account for 43% of all obese food shoppers and Matures make up 33%. Together these groups make up the majority of shoppers (69%), who want to lose weight, followed by Gen Y (56%) and Gen X (54%), according to FMI. Moreover, 43% of dieters, primarily Boomers and Matures, are trying to lose weight for health reasons, according to NMI. In fact, Gallup Multi-Sponsor Surveys found that high blood pressure (HBP) became the top reason for health-directed dieting last year, while those motivated by diabetes nearly doubled. Products that address more than one risk factor will have strong appeal (e.g., 73% of diabetics also have HBP). Products like Quaker Oats' Heart to Heart cereal are well suited for weight, blood pressure and cholesterol control. Diabetes, high cholesterol and obesity sufferers are far more likely than the general population to be on specific diet plans, according to Informationa Resources Inc., Chicago, IL.
Moving into Medical Markets
With cholesterol sufferers a larger target than the coveted Hispanic market, new strategies for marketing to ailment-specific consumers are quickly emerging. IRI has observed that 56% of consumers who fill a prescription at a grocery, drug or mass merchandiser store also purchase related "connector" products while shopping. For example, low-calorie soft drinks; 1- and 2-letter vitamins, multivitamin and mineral supplements; antacid tablets; and skim/low-fat milks are among the items most frequently purchased with a heart-related prescription. IRI estimates heart-connector products to be a $71-billion untapped supermarket opportunity, pain/muscular/joint $40 billion, gastrointestinal reflux $21 billion, menopause $16 billion, diabetes $14 billion and arthritis $14 billion. In addition, diabetic households spend significantly above average on soda ($155 vs. $118 per year), packaged deli meats, cookies, soup and frozen novelties, according to ACNielsen.
And, tapping into these prescription-driven markets is easy. FMI reports that 85% of supermarket pharmacies offer disease management programs for diabetes, 48% hyperlipidemia, 33% hypertension, 30% asthma, 22% women's health and 19% weight control. Even more offer in-store screening for blood pressure testing (91%); blood glucose monitoring (67%); cholesterol testing (64%) and osteoporosis screening (58%).
With 49 million Americans already age 60 and older, the market for foods formulated for special dietary needs will continue to grow. Savvy marketers will continue to re-invent multi-claim high-protein supplements and meal replacements designed to meet a diversity of aging needs from bone health and increased vitality to stemming sarcopenia or muscle wasting and blood pressure control currently through whey peptides. Mead Johnson's MCT Oil (medium chain triglycerides) substitutes for fat calories for those who poorly digest fats, while Japan's Megmilk Glucosamine Yogurt is yet another option for arthritis and joint pain sufferers.
But aging won't be all doom and gloom. With more time for relaxation and entertaining, Boomers are helping to drive spirit, wine and light beer consumption to a level not seen in a generation, and they are also looking for healthier options. Willamette Valley Vineyard's 2002 Vintage Selection Pinot Noir is the first wine to receive government approval to label resveratrol content. Beringer Blass Wine Estates' White Lie Early Season Chardonnay, which is naturally lower in alcohol and calories, is designed for waist-watching women.
Boomers are also turning to pets-especially cats-for companionship, catapulting pet ownership and pet food sales to an all-time high. Packaged Facts, New York, NY, in its Pet Food report predicts pet food sales will reach over $16 billion by 2008. Boomers are increasingly imposing their own health values on their pets, sending sales of kosher, weight-directed, all-natural/organic pet foods, supplements and even bottled pet water soaring. And with 90 million cats and 73 million dogs that's a market worth watching!
Performance and Positive Thinking
At the other end of the age spectrum, Gen Y adults are also surprisingly focused on health and nutrition, but primarily from a performance and weight management standpoint. According to Multi-Sponsor Surveys, the number one reason Gen Yers made a dietary change, went on a nutrition regimen or added a food/beverage to their diet was to increase performance (63%), followed by weight management (50%)-only one in three Gen Y adults and teens is satisfied with his/her weight!
With 43 million Americans currently aged 18-24, and four million turning age 18 every year for the next 10 years, Gen Y will drive a surge in the sports, performance and energy markets. NMI reports that this age group is the one most interested in the sports nutrition market, with 44% using energy/sports drinks, 20% sports nutrition bars, 18% protein powders and 11% sports supplements (Figure 2). HealthFocus reports that one-quarter of Gen Yers always/usually chooses foods and beverages daily to improve performance, 28% to improve energy, 24% to meet their body's different levels of activity and 15% to address mental performance.
In the July 2005 Energy Drinks report, published by Mintel, Chicago, IL, it was estimated that the sales of energy drinks in the U.S. surpassed the $1 billion mark, without including sales from Wal-Mart or health food stores! Convenience stores accounted for half of all off-premise sales in 2004, while supermarkets were responsible for 26% of sales.
According to Simmons Market Research data, 55% of those who use energy beverages aged 35 and older agree that mental alertness is a reason for using them, and 40% of those under 35 represent a potentially strong market for everyday mental concentration. Watch for hybrid energy beverages (alcoholic and non-alcoholic), such as Annheuser-Busch's B-to-the-E energy beer or Hansen's juice-based energy drink, Rumba, to make significant dents in the market.
At the Institute of Food Technologists (IFT) meeting in July, The Netherlands-based Innova new product tracking group introduced a new beverage concept-Breakfast Boost, an orange-flavored morning energy drink formulated with guarana, which is designed as a convenient morning pick-me-up, an alternative to coffee and a healthier option than Red Bull. In stores it would be positioned as a full meal replacement, packaged in a slim, trendy pouch-like bottle with a sports cap that can fit into a pocket or purse.
Mintel's September 2005 Energy Supplement report projects that the overall energy market-drinks, bars and protein drinks-will reach $8 billion by 2008 and post 43% annual growth. Its May 2005 Nutrition & Energy Bars report estimates nutrition and energy bar growth at 21% for the two-year period 2005-06 and notes that one in five (21%) consumers are regular users. Among the 79% of consumers not eating nutrition or energy bars regularly, 39% have never tried an energy bar, while the remainder who sampled them had concerns about expense, taste or didn't consider a bar "real food." IRI has identified older adults, ethnic groups and non-dessert like bars for children as potential "mega market" opportunities (Figure 3).
Just about six in 10 (58%) Gen Y adults are making an effort to manage their weight according to NMI, and are reading labels for fat and calories. And, they're super motivated too. This is probably because, as HealthFocus reports, four out of 10 Gen Yers are extremely/very concerned about their weight.
In a 2004 Buzzback (New York, NY) survey of teens and young adults, 58% placed extra energy food and 56% as a source of vitamins among the top five factors when deciding what to eat-right behind fresh, easy/fast to prepare and on-the-go foods. Despite their more limited budget, 30% of Gen Yers think it is worth it to pay more for food and beverages that have added herbals, such as ginseng, echinacea or ginkgo biloba, which is higher than any other age group, according to Yankelovich. Along with Gen X, Gen Yers are the most interested in organic foods. Gen Y will also drive interest in vegetarian foods. Aramark, Philidelphia, PA, reports that 27% of college kids want more vegan options on the menu and NMI reports that 27% of Gen Yers consider themselves occasional vegetarians. Despite weight concerns, Gen Y adults are the most frequent snackers, grazers and indulgence/pleasure-seekers. In fact, 81% eat indulgent desserts or snacks most or some days, so low calorie options would be a welcome treat.
Lastly, as Gen Yers begins to have their own children, the pre-natal and infant markets are set to surge. Look for a new range of fortified meal replacements, such as Vincent Foods Oh Mama! bar, claimed to be the first nutrition bar formulated specifically to meet the needs of women who are trying to conceive, who are pregnant, or who are breast-feeding. The bar contains docosahexaenoic acid (DHA) and 14 vitamins and minerals. In the same vein, Abbott Laboratories has launched Ensure Healthy Mom shakes and bars to help pregnant women successfully curb their cravings for sweets. The shakes are fortified with 20 vitamins and minerals.
Emerging 'Mega Markets'
High Blood Pressure (HBP). With one-third or 65 million Americans over age 18 afflicted with hypertension-nearly half of all Black women-and 45.5 million with pre-hypertension, it was only a matter of time before the blood pressure market moved center stage. And the problem is only going to get worse. Multi-Sponsor Surveys indicates that the incidence of HBP will increase another 18% for women and 19.5% for men by 2013. From various combinations of B vitamins and minerals to a diversity of whey peptides and blood pressure-lowering supplements and foods, this is going to be a very hot market, especially as consumers try to avoid prescription options.
Currently, the American Heart Association (AHA) and the National Heart, Lung and Blood Institute (NHLBI), part of the National Institutes of Health (NIH), recommends vigorous treatment of pre-hypertension with a minimum of two prescription medications. At the same time, it continues to draw more attention to the sodium content of products. HealthFocus reports over one-third of shoppers (36%) are trying to reduce their salt/sodium intake-31% of mothers-and 32% always/usually maintain a low sodium diet. On the food side, Stouffer's Lean Cuisine has taken a leadership role by educating customers about sodium on the back of its packages. Lastly, Yankelovich reports 83% of adults had their blood pressure checked in the last 12 months.
Controlling Blood Sugar. The low-carb movement helped to focus the spotlight on possibly one of the largest nutraceutical markets of all time-blood sugar management. This market goes beyond diabetes, as it offers a means of managing weight, energy levels, mood swings, appetite and improving concentration. And a multifaceted market it will be.
The Centers for Disease Control & Prevention (CDC) estimates that 47 million U.S. adults and one million kids already have "Metabolic Syndrome," 49-69 million are insulin resistant and 41 million have "pre-diabetes." Considered an epidemic, with 1.5 million new cases diagnosed each year, 13.8 million Americans are now diagnosed with diabetes and one in three Americans born in 2000 are projected to be afflicted during their lifetime-230 million worldwide by 2020.
Blood sugar management is a new and fast emerging mass market (commercialization) opportunity in the U.S., according to Sloan Trends' TrendSense Model. In fact, blood sugar control has been a viable market among very health conscious consumers and shoppers in the health food and specialty channels (popularization) for most of the decade. However, it was never appropriately marketed to the mainstream channel until diabetes became an epidemic and the low-carb diet craze started to fizzle out.
NMI reports that nearly four in 10 U.S. adults now express a desire for foods that can help manage blood sugar levels. In 2004, almost one-quarter of consumers added some foods to their diet to keep blood sugar stable, while one-third avoided some foods. ACNielsen reports that globally 11% of consumers check food and beverage labels with the Glycemic Index (GI) in mind; 7% in the US. However, unlike markets in Australia and the U.K., interest and understanding of GI is still not a mass market opportunity (Figure 4). The GI trend has only recently crossed the Medical Threshold signaling the beginning of a long-term, sustainable trend. However, it is a very fast moving market. While currently a viable market among very health conscious consumers and those shopping the health food/specialty channels, the real question is how fast the consumer understanding curve will develop to drive attitudes into behavior. At the current rate, it will likely approach the mass market phase over the next nine months to a year.
NMI has observed that although one-third (33%) of adults say they have heard of the term Gl, their depth of understanding is questionable. Secondly, while 22% state the importance of having packaged foods that have a low Gl, this number is very low compared to other measures and may be over stated due to lack of understanding. Lastly, only 2% check for GI on food/beverage labels, which indicates low meaningfulness and relevance. But, interest appears to be increasing. HealthFocus' 2005 Trends Report confirms that six in 10 consumers want more information on blood sugar control and 50% want to learn more about Gl.
More than 150 supplements targeted at blood sugar management are now available, including Nature's Plus' Glucotrim Rx-Blood Sugar, Ridgecrest's Blood Sugar Balance and Nature's Benefit's Syndrome X Caps. Bristol Meyers Squibb's Glucerna line of bars, beverages and snacks that help diabetics manage their blood sugar have broadened into the weight loss market with Glucerna Weight Loss Shakes.
Kids' Risk Factors. For the first time, Sloan Trends, Inc. is seeing the emergence of mass markets focused on reducing risk factors for chronic diseases in kids. With the incidence of HBP tripling in kids/teens over the last decade, it's not surprising that managing and preventing HBP in kids is already a mass market opportunity.
With the American Academy of Pediatrics and NIH setting new blood pressure standards for children and recommending pediatricians monitor blood pressure from age three on, this market will grow very quickly. Childhood obesity and cholesterol control are other mass market opportunities. With omega 3 foods and beverages well ensconced in the school lunch program in Texas, products that foster kids learning is another fast growing segment. Kashi's Might Bites whole grain cereal containing a unique blend of choline, iron, zinc and vitamin C for developing minds is a breakthrough idea. Some mom's are also substituting organic staples like milk and pasta sauce in their kids' diets, according to a new Ragu survey, and44% of parents occasionally buy organic.
Finally Phytochemicals. As consumers continue to opt for natural goodness, phytochemical markets have begun to move mainstream. HealthFocus reports that three-quarters (73%) of shoppers in 2004 strongly agreed/agreed that some foods contain active components that help with current health, such as improving digestion. Further, more than two-thirds (69%) now believe that some foods contain active components that reduce the risk of disease and improve long-term health, while just over half (52%) think that foods can be used to reduce their use of some drugs or medical therapies. More than half of shoppers now believe that red wine is an excellent source of phytochemicals that may reduce the risk of heart disease. And polyphenols, flavonoids, lycopene, lutein, carotenoids and resveratrol are all moving beyond the health and specialty channel, according to Sloan Trends Inc. HealthFocus reports 48% of shoppers have increased their consumption of fruits and vegetables over the past two years. Broccoli and tomatoes top the list of foods consumers are eating more of to help prevent disease (Figure 5).
Vend-able Nutrition. With more than seven million vending machines and 100 million Americans using them every day, the $33 billion vending industry has the power to provide almost instant access to dietary supplements, healthy foods, meals, snacks and beverages, and the potential to achieve astronomical growth in the next decade. High-tech machines allow fresh food to stay fresh longer, frozen foods to be heated and beverages to be mixed "just for you." Over one-third of vending machines are located in manufacturing settings. Sodexho reports that 25% of elementary school kids and 87% of high school children have access to school vending; while 50% use school stores/snack bars-77% of children use them at least once a week.
Stonyfield Farm's vending machines contain only organic and natural products, in a tie-dyed machine. But healthy vending isn't just for kids. The Compass Group, Surrey, U.K., has launched "Balanced Choices," which is a vending system that offers only better-for-you foods and beverages. Vended milk is also a big hit with adults. In a Fluid Milk Strategic Thinking Initiative (FMSTI) multi-channel milk study, post installation sales remained high in actual machines at nearly 80% compared to an industry average of 50-60%. In fact, those vendors that carried seven or more SKUs sold more than twice as much as those who carried only four products.
Earthy Product Values. Food purity and social/earth-friendly values represent another market gaining momentum. According to NMI's 2005 LOHAS Consumer Trends Database, almost one in four Americans say that when given the chance they make decisions based on the impact their purchase will have on the health and sustainability of the world, its environment and people. This concept exemplifies the 55 million LOHAS consumers who demand products that have a meaningful sense of environmental and social responsibility and incorporate those values into their purchase decisions. Indeed, they are more than twice as likely to pay 20% more for LOHAS-related products. Nearly two-thirds of consumers over age 25 believe that locally grown foods, as well as foods from farms practicing sustainable agriculture, are important in their food purchase decisions, and just about half care about Fair Trade Practices.
Restaurant Row. Undoubtedly, one of the most exciting developments in the nutraceutical area is the movement of healthy and fortified foods into restaurants, food service and convenience stores. Technomic Inc. reports that about half of diners thought about health in 2004. Expanding on that trend, Mintel's Insights group reported that low-carb, vegetarian, low fat, light, healthy, organic and trans fat free top the list of health claims appearing on restaurant menus. Pasta, salad dressings tortillas and mayonnaise were the most likely products to carry a health descriptor.
The future looks bright for the nutraceuticals industry. Mintel projects sales of functional foods to rise 23%, functional beverages 27% and vitamins and minerals 13%, after adjusting for inflation, by 2009. The two largest generational segments-Boomers and Gen Y-will skyrocket condition-specific, risk-reducing, sports nutrition and energy foods, beverages and supplements, as nutraceuticals find new markets in restaurants, convenience stores and sports stadiums too!NW
About the author: Dr. A. Elizabeth Sloan is the president of Sloan Trends & Solutions, Inc., Escondido, CA, which is a consulting firm that offers trend-tracking and predictions, strategic counsel and business-building ideas for food, supplement and pharmaceutical marketers. She can be reached at 760-741-9611; Fax: 760-741-9711; E-mail: sloantrend@sbcglobal.net.