CONSUMER
NEW PROFIT OPPORTUNITIES IN
HEALTH AND NUTRITION TO 2009
Changing consumer concerns and market influencers in
food and drinks
By Helen Lewis
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Helen Lewis
Helen has worked for Business Insights managing the Consumer Goods publishing
division for more than three years. Helen has a strong background in journalism, market
research and analysis and a Journalism BA (Hons) from City University in London. She
has written for numerous lifestyle and food and drinks websites including www.a-z.com
and www.crushguide.com and worked for MORI. Helen is currently studying nutrition
and will be a fully qualified practising nutritionist in mid-2005.

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and drinks
Executive Summary 10
Identifying consumers’ health concerns 10
Profitability hotspots and innovation opportunities 11
New product development 12
Conclusions and profit opportunities by market category 13
Chapter 1 Introduction to the Report 16
Aim of the report 16
Identifying the main health-related issues influencing the food and drinks
industry at present 18

Chapter 2 Identifying Consumers’ Health
Concerns 22

Summary 22
Introduction 23
Obesity 23
A definition 23
The unhealthy facts 24
Nutritional influence 25
Who/what is accountable for the rising levels of obesity? 26
Adults versus children 27
What factors are causing obesity in children? 27
What factors are causing obesity in adults? 28
Obesity case study: Weight Watchers’ reinvention 28
Diabetes 30
A definition 30
The unhealthy facts 31
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The United Kingdom 54
Asia 54
Russia 55
Africa 56
Australia 56
The United States 57
Are consumers likely to accept GM foods into their daily diet over the next
five years? 57

Chapter 3 Profitability Hotspots and
Innovation Opportunities 60
Summary 60
Introduction 61
Steady market growth expected for the healthy food and drinks market 61
How successful in terms of sales do you believe the next five years
will be globally for the health food and drinks market? 61

Most profitable target audiences for health food and drinks 62
The most successful healthy food and drinks sectors to 2009 65
Functional food and drinks 67
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Future success potential of functional food and drink products 67
With all this activity, are consumers prepared to pay a premium price for
functional products? 68

Functional versus organic 68
Senior consumers are ready and waiting for functional and healthy products

Germany: vitamin-enhanced spreads 90
South Africa: the first prebiotic brand in the UK 90
United States: low calorie ready meals 91
United States: fortified berries 91
United States: soy burger to replace veggie burger 91
Anti-ageing products 91
Lessons to be learned by the food and drinks industry from the
growing skincare market targeting consumers’ age concerns 92

Antioxidants for anti-ageing 93
Omega-3 94
The research 94
The health benefits of omega-3 95
Sources of omega-3 96
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Products sold on their omega content 96
Focus on salt reduction 97
Arguments for salt 97
Arguments against salt 98
The food and drink industry’s reaction and future action 99
Sodium reductions already made in some processed food sectors 100
Sid the slug campaign 101
Retailers’ reactions: The Co-op 102
Manufacturer’s reactions 102
Next on the agenda – sugar 103
Vegetarian and meat-free products 104
The future potential for vegetarian/meat-free products in the next five years 104

Canned vegetables 126
Definitions 127
Index 129
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List of Figures
Figure 1.1: Highly important consumer concerns with a view to the potential future impact on
food and drink development 20

Figure 2.2: How long is the typical diet? 39
Figure 2.3: What are the most popular diets according to the consumers? 40
Figure 2.4: Is the GI diet set to become the next big dieting trend? 43
Figure 2.5: The Australian GI symbol 46
Figure 2.6: Is exercise as important as dieting to consumers? How often do consumers exercise
per week? 50

Figure 2.7: What impact do you believe food scares such as BSE/CJD and bird flu have had on
consumers’ perceptions of the food and drinks industry? 50

Figure 2.8: Are consumers increasingly likely to accept GM foods into their daily diet over the
next five years? 58

Figure 3.9: How successful in terms of sales do you believe the next five years will be globally for
the health food and drinks market? 62

Figure 3.10: Age groups expected to experience the most NPD activity over the next five years 63
Figure 3.11: What do you perceive to be the most profitable health food and drinks sectors over the
next five years? 66


Table 2.3: How important do you consider the following factors in the controversial debate on
rising levels of obesity in children? 27

Table 2.4: How important do you consider the following factors in the controversial debate on
rising levels of obesity in adults? 28

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Table 2.5: Prevalence of diabetes in the seven major markets 31
Table 2.6: Which of the following diets have consumers tried in the past? 40
Table 2.7: What impact do you believe food scares such as BSE/CJD and bird flu have had on
consumers’ perception of the food and drinks industry? 51

Table 3.8: How successful in terms of sales do you believe the next five years will be globally for
the health food and drinks market? 61

Table 3.9: Age groups expected to experience the most NPD activity over the next five years 63
Table 3.10: What do you perceive to be the most successful health food and drinks sectors over the
next five years? 66

Table 3.11: Future success potential of functional food and drink products 67
Table 3.12: Profitability hotspots in the healthy food and drinks arena at present 73
Table 3.13: Profitability hotspots in the healthy food and drinks arena by 2009 75
Table 3.14: Low carb versus low calorie competition assessment 77
Table 4.15: Have you purchased any products from the following companies/brands in the past 12
months? 83


 Breakfast is highlighted as a crucial meal for diabetics and as a result, a number of
products such as jam and marmalades have been launched to cater for this market.
 Manufacturers and retailers have a responsibility to inform consumers about what
they are eating and drinking, this can be anything from how much sugar and fat the
product contains to the glycaemic index.
 Despite the high level of interest in new diet concepts such as Atkins, nearly 60% of
UK consumers surveyed had tried a low fat/low calorie diet.
 The Glycaemic Index diet (the GI diet) is expected to increase in popularity over the
next five years with a predicted growth of 18% in terms of ‘high profitability’.
 The varying degree of food scares however does mean that some situations remain
at the back of consumers’ minds more than others and nearly a quarter of
respondents stated that food scares do have a long-term negative impact.
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 The industry appears to be quite uncertain as to the future of GM foods – the mixed
message is being translated to the consumers.
Profitability hotspots and innovation opportunities
 90% of industry executives believe functional food and drinks are likely to be highly
or fairly profitable over the next five years.
 One out of every 10 persons is now 60 years or above; by 2050, one out of five will
be 60 years or older; and by 2150, one out of three persons will be 60 years or older.
 Glico Dairy Products in Japan has introduced a new yoghurt that meets the demands
of consumers seeking both healthy and indulgent foods. The company has
introduced a probiotic yogurt with bifidobacterium, made with whole blueberries (a
source of antioxidants), plus five fruit juices (lemon, apple, raspberry, grapefruit and
passion fruit), finished off with white rum.
 ‘Low carb’ is the most profitable hotspot at present with 42% of industry executives
believing it to be ‘highly profitable’ and 37% citing it as ‘profitable’.

consumers; with an ageing population comes a natural desire to prevent the ageing
process, however, it is only recently that the food and drinks industry has started to
recognise this potential and begun to promote the anti-ageing properties of specific
products.
 Omega-3 fatty acids are a form of polyunsaturated fats, one of four basic types of fat
that the body derives from food. All polyunsaturated fats, including the omega-3s,
are increasingly recognised as important to human health.
 Not all anti-ageing products have to be ‘super-foods’ that are enhanced with new
ingredients and technology. Fresh fruit and vegetables contain many of the
antioxidants, vitamins and minerals that are essential for a healthy balanced (anti-
ageing) diet.
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Conclusions and profit opportunities by market
category
 Making health claims can be a legal minefield, with differing rules in different
countries, but highlighting that products contain specific ingredients will be helpful
to consumers who are already increasingly building the knowledge of which
ingredients are linked to which concerns and push your product to the front of their
shopping list.
 Dairy foods containing health-promoting bacteria are an important segment of the
functional foods market. Wide ranges of health benefits have been attributed to
specific strains of lactic acid bacteria (e.g., Bifidobacterium, Lactobacillus) or foods
containing these probiotic cultures.
 Consumers are often more attracted to the idea of supplementing their diet naturally
than through nutraceuticals and chemically enhanced products/supplements.
 Making health claims when promoting alcohol is a controversial and often ill-advised
step for alcoholic drinks companies. In the United States, wine labels promoting

specific products and identifies future concerns and issues that are expected to influence
their purchasing and eating habits – being aware of the potential future consumer trends
and concerns will not only enhance NPD success but also assist in targeted, intelligent
marketing and advertising plans.
Health is a ‘glocal’ concern - while many food and drinks issues and regulations remain
local, health continues to be a global worry. Consumers want to live longer, healthier
and happier and often turn to food and drink products for the answers. Consumers are
increasingly refer to nutrition instead of, or as well as, medicine in an attempt to prevent
and cure a range of illnesses and ailments from allergies and skin disorders to diabetes.
Food and drinks manufacturers are strongly advised to take heed of this growing
consumer interest in nutrition and enhance this by promoting the product’s health
benefits where possible.
Consumers are aware of the influence of what they eat and that it makes a big difference
to energy levels, mood and self-esteem. However, the notion that food and drink is
positive rather than negative, fattening, unhealthy or expensive is still not fully
understood by consumers or the industry itself. When we choose foods rich in protective
factors such as fruits and vegetables we are also doing something positive for our health
and wellbeing – this positive image can be portrayed through the ‘4 P’s’ of marketing to
encourage new customers and customer loyalty.
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Understanding consumers’ health concerns and the relationship between nutrition and
purchasing habits unlocks the door to new profit opportunities and growth strategies.
Consumers are becoming increasingly self-aware and self-medicating. More and more
people understand the effects of probiotics, the health benefits associated with a meat-
reduction diet and the role of antioxidants in ageing and skincare. The industry needs to
not only keep up with consumers’ requirements and education but also help continue
this positive relationship with food and drinks through new product development,

There are clearly more health-related issues that consumers could be concerned about
than there is space for in one report, however, 11 major concerns have been identified
that have an effect on varying sectors of the population. This report will address the
following with a strong focus on the first eight:
 Diabetes;
 obesity, overweight and associated dietary issues;
 skincare;
 anti-ageing;
 heart disease;
 cancer;
 allergies;
 wellbeing;
 mental health – stress;
 mental health – depression;
 pre and antenatal care;
 bone health;
 eating disorders such as anorexia bulimia.
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The three most important consumer concerns with a view to the potential future impact
on food and drink development are obesity, heart disease and cancer. Globally, the
increasing weight of the population is the ‘hot’ issue at present, fuelled by the media
interest, particularly in light of the rising numbers of obese children. 77% of industry
executives believe obesity to be highly important in terms of the future development of
the food and drinks world.
The order of importance is demonstrated in the following table, with obesity being
classified as the most important and influential compared to just 11% of respondents
regarding skincare as highly important.

70%
80%
90%
100%
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adoption of unhealthy diets, obesity and sedentary lifestyles.
 Breakfast is highlighted as a crucial meal for diabetics and as a result, a number of
products such as jams and marmalades have been launched and are now well
established to cater for this market.
 Manufacturers and retailers have a responsibility to inform consumers about what
they are eating and drinking, this can be anything from how much sugar and fat the
product contains to the glycaemic index.
 Despite the high level of interest in new diet concepts such as Atkins, nearly 60%
of UK consumers surveyed had tried a more traditional low fat/low calorie diet.
 The Glycaemic Index diet (the GI diet) is expected to increase in popularity over
the next five years with a predicted growth of 18% in terms of ‘high profitability’.
 The varying degree of food scares means that some situations remain at the back
of consumers’ minds more than others and nearly a quarter of respondents stated
that food scares do have a long-term negative impact.
 The industry appears to be quite uncertain as to the future of GM foods – this
mixed message is being translated to the consumers.
TLFeBOOK23
Introduction
This chapter considers some of the primary consumer health concerns from a food and
drinks manufacturer, retailer and supplier perspective: obesity, diabetes, dieting (with a
focus on the glycaemic index diet), exercise – or rather the lack of exercise, food scares
and genetically modified food.
Obesity
A definition
Overweight refers to increased body weight in relation to height, when compared to
some standard of acceptable or desirable weight. Obesity is defined as an excessively
high amount of body fat or adipose tissue in relation to lean body mass.

obese according to figures released by the Food Standards Agency and the
Department of Health;
 in Germany, 17.2% of men and 19.3% of women are classified as obese, with 19%
of Finnish men and women also obese. Interestingly, while 27.9% of Russian women
are obese, only 10.8% of men there are
ii
;
 countries with lower obesity rates include France (9.6% of men, 10.5% of women),
the Netherlands (8.4% of men, 8.3% women) and Italy (6.5% of men, 6.3% of
women);
 short-term treatment of obesity with pharmaceutical drugs is seldom warranted
because obesity is a chronic condition that requires long-term treatment. Only three
drugs are currently available: phentermine, a short-term therapy, and orlistat and
sibutramine, both suitable for long-term treatment. This explains the current drive i
American Obesity Association (AOB)
ii
International Obesity Task Force
TLFeBOOK25
towards ‘healthy eating’ and diet plans for people who are overweight and obese
and want to see quick results such as the Atkins Diet;
 the current obesity healthcare market is worth just less than $800 million and has the
potential to expand to around $1.6 billion by 2010. Expansion will primarily be
driven by the reimbursement and wider availability of anti-obesity therapies, based
on the growing realisation that treatment leads to a reduction in expensive co-