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Functional Foods - UK - March 2008

Published by: Mintel International Group Ltd.

Published: Mar. 1, 2008 - 87 Pages


Table of Contents



ISSUES IN THE MARKET

Definition

Excluded

Vitamin and Mineral fortification

Superfoods

Exclusions to the excluded

Others

Four key themes

Abbreviations

MARKET IN BRIEF

Market growth slows…

… as natural products come to the fore

Promotional support lower

Market outlook positive

INTERNAL MARKET ENVIRONMENT

Key points

Consumers proactive in managing their health

Figure 1: Agreement with selected lifestyle statements, 2003-07

Prevention better than cure

Figure 2: Attitudes towards healthcare, 2003-07

Too busy to be healthy?

Figure 3: Agreement with selected lifestyle statements, 2003-07

BROADER MARKET ENVIRONMENT

Key points

Changing population dynamics setting a backdrop

Figure 4: Effect of the changing make-up in demographics of the UK population on the market for functional foods, 2007

More regulation of health claims

COMPETITIVE CONTEXT

Key points

So many ways to be healthy

Figure 5: Market size and growth for selected healthful foods, 2002-07

Superfoods a more direct competitor

Vitamins and mineral supplements

Costs to the NHS

STRENGTHS AND WEAKNESSES IN THE MARKET

Strengths

Weaknesses

MARKET VALUE AND FORECAST

Key points

Market growth slows

Figure 6: Market value for functional foods, 2002-07

Figure 7: UK retail sales of functional food and drink products, by sector and value, 2005-07

Yogurt drinks

Yogurt pots

Yellow fat spreads

Breakfast cereals

Juice, drinks and bottled water

Soya dairy-alternative products

Eggs

Other products

THE FUTURE

Functional vs. naturally healthy

Consumers want more credibility

FORECAST

Healthy but slower growth

Figure 8: forecast of the functional foods market, 2002-12

Health to remain a crucial market driver

Demographic changes to promote growth

Beauty products to aid future growth

Slower growth predicted

Factors used in the forecast

PRODUCT POSITIONING

Key points

Premium yogurt claims command premium price

Figure 9: Prices of pot yogurts with functional claims compared with other yogurts, 2008

Price premium less obvious in newer markets

Figure 10: Prices of selected grocery products with functional claims compared with other conventional product, 2008

COMPANIES AND PRODUCTS

Key points

PRINCIPAL FUNCTIONAL FOOD BRANDS

Figure 11: Leading functional food brands with a heart health claim, 2008

Figure 12: Leading functional food brands with a digestive health claim, 2008

Figure 13: Leading functional food brands with a general health claim, 2008

Figure 14: Leading functional food brands with other health claims, 2008

COMPANIES WITH MAJOR FUNCTIONAL FOOD BRANDS

Danone SA

Actimel

Activia

Danacol

Essensis

McNeil Nutritionals

Benecol

Unilever UK (Flora)

Flora

Müller Dairy (UK) Ltd

Vitality

Müller Corner

Müllerlight

Provexis

Yakult UK

COMPANIES WITH FUNCTIONAL FOOD VARIANTS

Conival plc

Kellogg

Allied Bakeries

Noble Foods Ltd

Alpro

Dairy Crest

So Good International

Tropicana (PepsiCo International)

Warburtons

Yeo Valley

BRAND COMMUNICATION AND PROMOTION

Key points

Adspend big but on the decline

Figure 15: Promotional spend on main functional food brands, by category, 2003-07

Yogurt spend reducing

Flora dominates spreads spend

Promotional spend on liquid milks drops substantially

Breakfast cereals and breads pushing hard

Cheese the new growth area?

CHANNELS TO MARKET

Key points

A considered purchase

Figure 16: Estimated retail sales of functional food and drinks, by distribution channel, 2003-07

Own-label has not developed

CONSUMER - PURCHASING BEHAVIOUR

Key points

Yogurts and spreads lead the way

Figure 17: Functional Food product purchased, January 2008

ABC1s prefer yogurts and C2s go for spreads

Consumers don’t define functional foods

The functional breakfast for younger consumers?

Functional for children

REPERTOIRE ANALYSIS

Figure 18: Number of different types of functional foods bought for self, January 2008

APPENDIX: INTRODUCTION

Glossary of terms

Advertising data

APPENDIX - INTERNAL MARKET ENVIRONMENT

Figure 19: Agreement with selected lifestyle statements, by demographic sub-group, 2007

Figure 20: Agreement with selected lifestyle statements, by demographic sub-group, 2007

APPENDIX 2: BROADER MARKET ENVIRONMENT

Changing population dynamics

Figure 21: UK population changes in socio-economic status and age, 2002-12

Figure 22: UK population changes in household size, 2002-12

Figure 23: Health conditions controlled or prevented through my diet, by socio-demographics, January 2008.

Figure 24: Health conditions controlled or prevented through my diet, by socio-demographics, January 2008.

APPENDIX - THE CONSUMER - PURCHASING BEHAVIOUR

Figure 25: Functional foods ever purchased, by detailed demographics, January 2008

Figure 26: Functional foods ever purchased, by detailed demographics, January 2008

Repertoire analysis

Figure 27: Number of functional foods bought for self, January 2007 (row %)

Figure 28: Number of functional foods bought for self, by health conditions respondents try to control/prevent through diet, 2008 (column %), January 2008

Figure 29: Number of functional foods bought for self, by types of products bought, January 2008 (column %)

APPENDIX: RESEARCH METHODOLOGY

Abstract

Never before have consumers been so conscious of the impact of their lifestyle on their health and so exposed to information extolling the virtues of following a balanced and healthy diet. This has resulted in the rapid expansion of the healthy eating market, covering everything from superfoods and organic through to more conventional products that are lower in fat, calories or sugar.

Functional foods offer more than most healthy eating products. Product claims include lower cholesterol, improved gut health, improved immune system, better memory, improved eyesight, even better complexions, but not all believe these claims, and consumers are becoming increasingly sceptical about the benefits that they deliver.

The market has shown strong growth in recent years, although 2007 saw a reduction in growth rates of NPD and promotional spend. This report considers whether 2007 is only a temporary blip on the onward march of functional foods or whether it marks a change in attitudes towards these products by consumers, who are increasingly turning to foods with naturally occurring health benefits.


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