Euromonitor’s take on functional foods from Finland to Ireland
The information below is taken from a series of Health and Wellness reports published by the market researcher Euromonitor in July 2010.
The economic downturn had quite an impact on health and wellness foods in Finland, particularly for drinks, which recorded a “large decline” in sales. This decline is expected to continue through 2010, but an increase is expected from 2011 onwards, boosted by the forthcoming tax on sweet and soft drinks that the government will introduce at the end of this year.
Consumers are likely to increasingly turn towards functional foods in search of something new. “The fact that better for you products are now available within all health and wellness areas means that they are no longer perceived as being innovative,” said Euromonitor.
For this reason, innovation in the market is crucial, as consumers are no longer satisfied with low-fat or vitamin-fortified options. However, people do tend to prefer existing local brands, making it a tough – but not impenetrable – market for new entrants.
Norwegian consumers are also very partial to domestic products, a preference which recently led to the introduction of the Nyt Norge certificate, which guarantees that a product was locally manufactured.
The market for health and wellness products in Norway was not greatly affected by the tightening economy, with the category outperforming regular food and beverages, which themselves continued to record strong growth during 2009.
Moving forward, health and wellness products will record “steady but slower” growth, partly due to the increasing maturity of the market and partly due to consumer price sensitivity. However, functional products do not make the spotlight, with focus instead expected to be on organics.
Functional foods are shaking off their niche status in order to enter the mainstream in Russia, with consumers increasingly looking for products with added beneficial nutrients.
“Many consumers now understand that the adoption of healthier eating habits is a form of preventative healthcare, in that by changing their diets they can improve certain aspects of their health while also reducing their risk of some diseases.”
This consumer shift is driven by a focus on promoting healthy eating in the mass media in Russia, including educational TV programmes and instructions on healthy diets.
- These trends underpinned rising demand for several types of health and wellness packaged food and beverage products, and are expected to continue to do so over 2009-2014.
Products that performed particularly well included those containing probiotics and prebiotics, plant sterols and fibre. Energy and immunity were also two areas highlighted in the report.
UK and Ireland
The recession impacted consumer spending on food in both the UK and Ireland. However, while it resulted in low to negative growth in some health and wellness categories in the UK, the Irish market for these products appeared to be “recession proof”.
Irish consumers did cut back on shopping expenditure due to lower disposable incomes, but health and wellness product sales continued to grow.
In the UK, recovery from the economic downturn is expected to be slow and could be hampered by a double-dip recession, said Euromonitor, forecasting that UK consumers will likely remain price-conscious and continue to cut down spending on non-essential items.
The new EU health claims regulation is also likely to have a strong impact on the market in the UK, deterring many manufacturers from investing in new products unless they are sure of EFSA approval. Nevertheless, health and wellness is expected to deliver positive growth in constant value terms over the forecast period, albeit at a much slower pace than during the review period, said Euromonitor.
In Ireland, consumers are increasingly looking for healthy products particularly as obesity rates increase and people try to maintain healthier lifestyles.
Although Irish consumers still want to indulge, they are now paying more attention to their bodies and are becoming more health conscious and turning to healthier food and beverages.
To read about health and wellness trends in continental Europe, click here.