HEALTH FOOD → Finished Goods
KEY MARKET FIGURES
In 2004, the global health food market had a turnover of between €55 and 96 billion euros, depending on the strictness of the definition of the term ‘health foods’. Over the next ten years, it should see annual growth of 20%. By 2011, 6% to 10% of the total food market will be represented by health foods. This fast-growing market is supported by high consumer demand. According to a Crédoc survey (French centre for research and observation of living conditions, 1999), 77% of French people are willing to pay high prices for products which are beneficial to their health.
The French health food market has been continually expanding and diversifying for the last 15 years, with a very high growth rate of between 10% and 20% per year. Today, all sectors are involved in this market: ultra-fresh dairy products, oils and margarines, fruit juices, and so on. Even meat and deli meat products are now advertised as "free from...", "less..." or "enriched in...".
In 2008, the market experienced growth of 10% with a sales volume of 8 billion euros. According to the ANIA (National Association of Food Manufacturers), this increase is higher than the general food market, which only rose by 7%. However, the health food market still holds a marginal place in overall food consumption in France (3.4%).
THE PREDOMINANCE OF FUNCTIONAL FOODS
If we look at the distribution of sales according to product type, we can see that functional products* represent the largest share of the French health food market, as they account for nearly half of sales, double that of organic products and more than triple that of dietary supplements.
EXCELLENT GROWTH PROSPECTS FOR MANUFACTURERS
According to ANIA, by 2012 the health food market will have a sales volume of around 10 billion euros.
According to Preceta (strategy simulator firm), the highest growth will come from functional foods. Dietary supplements will see sustained growth, but “two-figure growth rates will not continue". Organic products also “have good days ahead”. However, the forecast for dietetic products is for low growth.
Health foods are popular with manufacturers, as they deliver high added value to a product, a genuine asset at a time of low purchasing power, coupled with an increase in the price of raw materials.
French consumers are aware of the consequences of a poor diet, and now share the belief that the best way to be healthy is to eat well. At the end of 2007, 52% of French consumers said they were concerned about the effects of the food they ate on their health.
They prefer to focus on the quality of their everyday food and buy functional and/or enriched foods, rather than take dietary supplements or vitamins. This trend can be seen in the market by the rise in sales of enriched foods, and the slight fall in sales of dietary supplements.
French consumers prefer to maintain a healthy weight and optimum general health by eating good food, rather than using dietary supplements such as meal replacements, sports nutrition products or vitamins.
However, French people are increasingly interested in health and well-being foods, and this market increased by 3.5% between 2008 and 2009.
In France, the main market segments targeted by health and well-being products are women and adults with children (not so much men or children). Women are the largest market as they are more concerned about maintaining a healthy weight and looking after their physical appearance.
MAIN CONCERNS OF HEALTH FOOD CONSUMERS
- HEALTH & WELL-BEING
- BEAUTY & FIGURE
- PREVENTION OF LIFESTYLE AND AGE-RELATED RISKS
In general, French consumers are known for being very demanding and sceptical about health claims. They only buy if the arguments are convincing, the price is affordable and the taste of the product is good.
KEY MARKETS : THREE KEY SECTORS (DRIVERS)
1 - DIETETIC FOODS MARKET
Definition
The dietetic foods market is aimed at specific targets (athletes, people trying to lose weight etc.).
The slimming foods category includes meal replacements and high-protein snacks, aimed at people who want to lose weight. They are also suitable for men and women who want to control their weight and keep their figure trim. Generally used as part of a low-calorie diet, they provide a guarantee against the risk of deficiency in essential nutrients (proteins, essential fatty acids, vitamins and minerals) that might result from a low calorie intake, which is important for protecting health and staying fit.
Specially formulated to meet specific nutritional needs, dietetic foods are an efficient, safe and appropriate aid in responding to specific nutritional needs and expectations.
- Weight loss and stability (EFSA Opinion 2010): effectiveness of low-calorie meal replacements.
- Preventing risks of deficiency caused by restrictive diets (ANSES Report Nov 2010).
- Safety of allergen-free foods (CNA Opinion January 2010): safe dietary management for people suffering from allergies or food intolerances.
- Guaranteed absence of (unintentional) doping substances (contamination) in foods for athletes.
Key market figures
Total turnover (production + import + export) in 2010: €297 million.
Consumer trends
Unlike British and American consumers, who take a functional approach to food and are willing to use meal replacements for long periods, French people prefer to integrate their diet into their lifestyle and food preferences (dieting “à la française”). Meal replacement products are only be used for a short, initial phase, and not exclusively (alongside normal meals), in order to maintain the social aspect of eating. Meal replacements then become a minor part of the diet, as French consumers prefer to follow a controlled but varied diet in order to continue participating normally in family, social or business meals. They then complement the fruit and vegetables they eat with part meal replacements or snacks with a high nutritional density, to avoid deficiencies.
Two types of high-protein snacks available in pharmacies, health and beauty counters and supermarkets :
High-protein “part meal replacements”
Often presented in reconstituted form, drinks or soups (omelettes, bread, pâtés, purée, creams, desserts etc.), these products must be complemented by ordinary food (vegetables, fruit, dairy products) to achieve a satisfying, balanced meal.
High-protein snacks
Usually presented in bar or biscuit form, they are used both to start the day and to satisfy any cravings between meals.
2 - ENRICHED AND FUNCTIONAL FOODS MARKET
Definition
“Generally, these are foods intended for consumption as part of a balanced diet, which contain biologically active ingredients that can improve health or reduce the risk of illness.” These are foods to which health ingredients have been added. Functional foods and drinks must have a specific physiological function, or be enriched with products they do not normally contain, in order to achieve the benefits added to their basic nutritional value. They are represented by the following categories: functional foods enriched in calcium, vitamins and minerals, functional foods which boost the digestive and immune systems, as well as bone health.
Consumer trends
In France, consumers prefer to buy products already containing vitamins, minerals and other health ingredients, rather than buying vitamins and dietary supplements separately. Enriched or functional products are very popular, and are providing strong competition to the nutraceutical market.
Enriched or functional dairy products are the products most in demand in the functional foods market, and carbonated drinks in the functional drinks market. Sales of enriched or functional dairy products reached 1.9 billion euros in 2009, an increase on the value of 1.8 billion euros recorded in 2008.
The abundance of enriched or functional foods in the French market has given rise to the expression “alicament”, a combination of the French words “aliment” (food) and “médicament” (medicine), meaning foods to which health ingredients have been added.
From 2008 to 2009, energy drinks recorded the highest growth rate among enriched or functional drinks; at 26% (Redbull occupies 8.5% of the market share in energy drinks).The most popular functional ingredient in functional fruit juices and nectars is multi-vitamins.
Types of functional ingredients contained in new enriched or functional products launched in France between 1998 and 2009 (Source: MINTEL 2010)
- Omega 3 (8)
- Wheat or oat fibres (33)
- Probiotics (53)
- Magnesium (138)
- Aromatic Herbs (150)
- Prebiotics (170)
- Aromatic herb extracts (175)
- Potassium (202)
- Vitamin D (222)
- Iron (282)
- Vitamin A (295)
- Sodium (327)
- Calcium (361)
- Vitamin E (396)
- Group B vitamins (2995)
3 - DIETARY OR NUTRITIONAL SUPPLEMENT MARKET
Definition
Dietary or nutritional supplements are products used as a complement to ordinary food, in order to compensate for real or supposed insufficiency in daily intake.
Substances or food parts benefiting from medicinal properties with a preventive or curative effect on certain illnesses can be incorporated into a diet by eating certain foods in the form of dietary supplements. Generally, dietary supplements claim to prevent chronic illnesses, improve health, slow down ageing and increase life expectancy. They are represented by the following categories: vitamins, sports nutrition products, plant-based products, meal replacements and slimming products.
Consumer trends
For several years, the French dietary supplements market, which is still relatively young, has seen rapid, uninterrupted growth. The number of consumers of dietary supplements, keen to take control of their health and well-being, has continued to increase. Progress in nutritional research and consumer awareness of the link between food and health have encouraged the development of medicines focused more on prevention, maintaining a good state of health, and seeking benefits and/or protection in terms of well-being or beauty. The consumption of dietary supplements has become commonplace, and is one of the market’s solutions to the specific new demands of consumers.
This aspiration for total well-being (physical and mental) is even more relevant given that the environment, in particular the work environment, is perceived as increasingly stressful, with continual demands to “perform”.
Taking dietary supplements is a demonstration of nutritional awareness. Conscious of the difficulties of modern lifestyles, consumers of dietary supplements seek to reduce the inevitable gap between the nutritional ideal and the reality.
Consumers of dietary supplements are people who take care of themselves, not only in their diet, but also in their general daily health.
Dietary supplements are taken by people of all ages, mostly women, the rate increasing along with the level of education. These people are aware of the issues surrounding food and health and wish to act preventively to safeguard their health, well-being or beauty.
Dietary supplements are usually taken over a specific period of time, and sometimes seasonally.
Key figures in the French market
In 2006, the global dietary supplements market was estimated at 45 billion euros, shared between the US market (37%), Europe (30%) and Asia (28%), which is dominated by Japan.
The European market is dominated by four countries, which represent two-thirds of the market:
- Italy (21% of market share), equal with Germany
- The UK (13% of market share)
- France (12% of market share)
Up to 2007, the growth rates were in two figures (+20% in 2003 and +16% in 2004). However, for the last two years, this trend has been reversing. The economic crisis shrank the market by around 1% in 2008 and 6% in 2009.
This decrease in segments which had previously been market drivers can be explained by the poor performance of slimming products, which represent nearly one-third of the dietary supplements sold in pharmacies. This reversal in trend is the sign of profound changes in the market, which until now seemed to have unlimited potential. To combat this phenomenon, the majority of pharmaceutical companies who have the financial resources to do so have invested in scientific and clinical trials to attempt to demonstrate the efficacy of the ingredients in the dietary supplements they sell.
The changes in our health system and the growing desire of French people to be in control of their health have led to an essential restructuring in the dietary supplements market. According to a survey by Xerfi, published in October 2009, this market, which was estimated at 1.1 billion euros in 2008, should nevertheless grow by 5% by 2011/2012.
In France, the nutraceuticals market was worth 960 million euros in 2010 (-5% vs 09), its distribution concentrated in the pharmacy network, which holds 70% of the market share (570 million euros).
It is a very scattered market with around 300 companies, although seven of these represent 52% of the market share: Arkopharma, Merck, Phythea, Oenobiol, Forte Pharma, Omega Pharma, PF.
Vitamins and minerals are the most popular supplements. Vitamins and minerals (alone, together or combined with other substances) represent 63% of products consumed in France.
Three main promises sought by consumers :
- Slimming
- Well-being / Health (Tonics, Digestion, Joints, Menopause, Bone strengthening, Anti-stress, Sleep / Relaxation, Sight, Immune system, Genito-urinary health, Cardiovascular problems, Pregnancy, Circulation, Balance, Memory)
- Beauty (Hair/nails, Skin, Suncare)
Key success factors :
- Scientific credibility of products
- Focus on key promises (Main segment: Health / Well-being): Anti-ageing, Antioxidants, Bone strengthening, Nutritional balance, Anti-stress, Anti-depression, Sexual vitality, Joints, Sleep.
- Gain new target consumers (Men, Senior citizens, Young people aged 15-25) by innovating and diversifying the product range in line with changes in lifestyle and mentality
- Educate consumers and use visuals to convey credibility
GROWTH FACTORS IN THE FRENCH HEALTH FOODS MARKET
- Increase in the prevalence of obesity and excess weight : In 2006, 20 million people suffered from weight problems (2/3 overweight, 1/3 obese), 2.3 million more people than in 1997.
- The slimming craze : Four in ten French people want to lose weight, even if 50% of them do not really need to do so to improve their health.
- The ageing population : According to INSEE’s estimates, by 2020 France should have nearly 17 million people aged 60 or more. Six million people will be 75 or over, which is 9% of the total population.
- Consumers are increasingly preoccupied with their health (prevention) and well-being: The 2007 Health Study showed that all French households consume food products “with health promises”. They spend on average 139 euros per year (+7 euros compared to 2006) on these products, which they buy regularly, between two and three times a month. Although “slimming” products dominate this market, more and more consumers are buying products with other promises, particularly those relating to digestion (68% of households).
- Increase in self-medication : The self-medication market is in full growth: in 2007, this sector recorded growth of over 4%.
- Growing interest of retailers in these high-margin products.
- Structure of the market, with the formation of relatively large groups.
- Development of innovations in this sector and development of the scientific basis (health claims) of these products.
SOURCES :
Pôle de Compétitivité Nutrition Santé Longévité, Syndicat de la Diététique et des compléments Alimentaires, ANIA, Agriculture et agroalimentaire Canada, Blog “About Marketing”, EUFIC, Ministère de l’Economie, des Finances et de l’Industrie, SubstanceDiet, IRIPS, Bretagne-Innovation, E-marketing.fr, Thesis “Le marché des alicaments” Hiba El Dahr (2003), “Dossier Santé : Les compléments alimentaires” by L. Caro, C. Cayrol, E. Dalem, S. Esseghir (2010).
