France: e-commerce and aging population to rescue sales for food supplements

16-Nov-2009 - Last updated on 16-Nov-2009 at 08:39 GMT

Related tags Cent Dietary supplement France

Following years of robust double-digit growth, the market for food supplements in France could fall by 6 per cent this year, predicts market analyst Precepta.

Although this 'brutal shock' could be a catalyst for positive change, they assert.

The French firm reports that a small 3 per cent recovery is in sight for 2010: a figure that falls far short of the strident 20 per cent and 15 per cent growth levels recorded in 2003 and 2006.

"While the shock was brutal, and in general, not anticipated, it could be a veritable catalyst for the necessary reorganisation of the market," states the report.

Buoyed by growing demand for health and slimming products, the food supplement market in France raked in turnover of €1.1bn in 2008, growing at an average annual rate of 15 per cent between 2000 and 2007. But the global economic downturn fell hard on the industry this year, actually shrinking the market, on average, by 2.5 per cent in 2008 and 2009.

Despite the downward trend, the market researchers predict the market will bounce back next year and thereafter, drawing in growth of 4.5 per cent between 2010 and 2012. Again, far short of the surge at the start of the millennium, but growth nevertheless.

"The key challenge for businesses will be to reinforce brand strategies to diffuse brand awareness and to 'talk up' the market," claims the report.

Drivers for growth

In terms of drivers for growth in France, Precepta, a unit of french trend tracker Xerfi, points to the ageing population on the hunt for nutritional supplements that will support the market. Elsewhere, the notion of 'illness prevention' in the minds of the consumer is also set to give substance to sales.

And while barriers to market will come in the shape of tighter rules on health claims for firms - currently under the spotlight in Brussels - those that succeed will "have greater legitimacy" to tap into the market.

Weight-loss and health dominate

Women are far and away the biggest consumers of food supplements in France, representing 75 per cent of purchases.

In terms of market segmentation, weight-loss and health dominate the market, each with a 30 per cent slice, claims the report. Beauty and tonics each occupy a 15 per cent share of the market, with the remaining 10 per cent bundled under 'others' by the market researchers.

And there are still plenty of potential consumers ripe for the market, with the report estimating that today about 35 per cent of France's 60 million inhabitants are currently consuming food supplements, spending on average €15 a head.

Where do the French buy their supplements?

In 2008, pharmacies were the hot spot for acquisitions of food supplements in France representing 57 per cent of distribution points, the Precepta data shows. Specialist shops represented 10.7 per cent, followed by hypermarkets and supermarkets with 9.2 per cent, and para-pharmacies holding 8.1 per cent.

But, predicts the report, e-commerce will be the "most dynamic network on the food supplement market", set to grab distribution share from the pharmacies. In 2008, direct sales and e-commerce took 15.6 per cent of the sales.

"Online sales will continue to progress in double digit figures until 2012, a trend that is set to benefit the food supplement market," asserts the Precepta report.