Does health and health driven innovation offer the only route to future profitability in the food market? - UK

Published by: Mintel International Group Ltd.

Published: May. 1, 2008 - 157 Pages

Table of Contents

Issues in the Market

Abbreviations

Market in Brief

A balancing act

Profit from market access

Turning attitude into behaviour

New products have a job to do

Future profits from ethics

Internal Market Environment

Key points

Health delusions

Outsource the chopping

Healthy mind and healthy body

Healthy Eating

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

Make media work

Navigating the regulation minefield

Broader Market Environment

Key points

Waste not want not

Figure 2: PDI and consumer expenditure, at constant 2002 prices, 2003-13

Affordable ethics

Living longer but in poor health?

Promotions for smaller households

Anti-social working

Strengths and Weaknesses in the Market

Strengths

Weaknesses

Healthy Food Innovations

Key points

5-a-day boosts vegetarian

Figure 3: Number of new products by leading claim made, Jan 2006-Dec 2007

Figure 4: Product claims as a share of new food products launched, 2006-07

A shift to natural

Borrowing health from ingredients

Figure 5: Number of new products with a health claim by category, Jan 2006-Dec 2007

Ready meals get re-formulated

Re-educating British tastes

Figure 6: Number of new products with a health claim by category and leading health claim, Jan 2006-Dec 2007

Speed is king

Figure 7: Number of new products with a health claim by launch type, Jan 2006-Dec 2007

New products boosted by local strategy

Credibility considerations

Technical issues

Figure 8: Number of new products with a health claim by launch type and sub-category, Jan 2006-Dec 2007

Ready meals not keeping interest

Figure 9: Number of new products by retailer brand, Jan 2006-Dec 2007

A healthy conscience costs money!

Future NPD Potential

Mind and body merge

Functional has natural focus

Active weight management

Profitability

Key points

Which market position?

Figure 10: Different market sectors for healthy foods

What do shoppers value?

Confusion pricing

Figure 11: Price comparisons of selected Tesco products, +/- % price difference based on pence per gramme

Weighing up costs

Figure 12: Some important factors affecting the profitability of healthy foods

The growth of convenience options

Figure 13: Product launches with the food claim “convenient”*, 2006-07

Figure 14: Retail sales of selected convenience foods, 2003-08

Segment Performance

Key points

Signs of maturity?

Figure 15: Market value of healthy foods by product category, 2003-07

Slimming foods slip back

Success of organic foods

But go easy on science

Free to choose

Ethereal ethics

Retailer Strategy

Key points

A focus on balance

Figure 16: Selected retailer brands competing in the healthy food market, April 2008

Shelves could work harder

Attitudes to Health

Key points

Figure 17: Agreement with selected lifestyle statements about health and healthy lifestyles, March 2008

Young get into ‘healthy conscience’

Familiarity for oldies

Figure 18: Agreement with selected lifestyle statements, by age group, % point +/- average, March 2008

Family pack sizes

Confusion reigns - or does it?

Attitudes to health foods

Figure 19: Agreement with selected lifestyle statements, by gender 2003-07

Postive attitudes to health foods

Make work easy

Factors Impacting Food Purchase

Key points

Figure 20: Factors taken into account when buying food, March 2008

Will the macronutrient trend come to an end?

Tide turning for men?

Figure 21: Attributes taken into account when buying food, responses for men and women, March 2008

Profit may be holding back ethics

Figure 22: Factors taken into account when buying food, response by selected socio-economic groups, March 2008

Children have a peripheral effect

Are we environmental?

Attitudes and Motivations for buying “Healthy Eating” Ranges

Key points

Figure 23: Categories in which consumers are willing to buy supermarket own-label healthy eating products, March 2008

Trading benefits

Sausages sizzle with opportunity

No brainers

Borrowing healthy credentials

Ready meals

Attitudes to Food and Food Related Issues

Key points

Figure 24: Attitudes to food and food shopping, March 2008

Education opportunities

Short cut heroes

Switching men on

Shock the ‘Fed Ups’

Figure 25: Agreement with statements about food and food related issues, March 2008

Nanny taking charge

Genetic foods may have their day

A problem of trust

Keep ethics simple and add health

Figure 26: Agreement with statements about food and food related issues, by preferred retailer, % point +/- average, March 2008

Further Analysis

Key points

Chilled gives retailers a profit advantage

Figure 27: Repertoire of healthy own label supermarket foods bought, march 2008

Figure 28: Repertoire of healthy own label foods bought by type of food bought, March 2008

Soupermarket opportunity

Driving categories harder

Figure 29: Efficiency* with which food products convert intention to buy into actual purchase, March 2008

Targeting consumer groups

Figure 30: Attitudinal groups based on attitudes to health, march 2008

Health practitioners (50%)

Unconcerned about health (20%)

Health hypocrites (15%)

Anti the health hysteria (15%)

Healthy delusions - mind the gap

Figure 31: Attitudinal groups crossed by agreement with selected health statements

Appendix

Advertising data

Appendix: Broader Market Environment

Figure 32: UK population, by socio-economic group, 2003-13

Figure 33: Trends and projections in UK population (‘000s), by age group, 2003-13

Figure 34: Changes in UK Household sizes, 2003-13

Figure 35: Working population, by gender, 2003-13

Appendix : Healthy Food Innovations

Figure 36: Number of new products with a health claim by leading claim made, Jan 2006-Dec 2007

Figure 37: Number of new products with a health claim by category, Jan 2006-Dec 2007

Figure 38: Number of new products with a health claim by category and leading health claim, Jan 2006-Dec 2007

Figure 39: Number of new products with a health claim by launch type, Jan 2006-Dec 2007

Figure 40: Number of new products with a health claim by launch type and sub-category, Jan 2006-Dec 2007

Figure 41: Number of new products with a health claim by retailer brand, Jan 2006-Dec 2007

Appendix: Profitability

Figure 42: Prices of selected Tesco products, April 2008

Figure 43: Prices of selected Tesco products, April 2008

Figure 44: Prices of selected Tesco products, April 2008

Figure 45: Price comparisons of selected Tesco products, +/- % price difference based on pence per gramme, April 2008

Appendix: Attitudes to Health - Detailed Demographics

Figure 46: Agreement with selected lifestyle statements on health, by demographic sub-group, 2007

Figure 47: Agreement with selected lifestyle statements about health and healthy lifestyles, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 48: Agreement with selected lifestyle statements about health and healthy lifestyles, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 49: Agreement with selected lifestyle statements about health and healthy lifestyles, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Appendix: Factors Impacting Food Purchase - Detailed Demographics

Figure 50: Factors taken into account when buying food, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 51: Factors taken into account when buying food, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 52: Factors taken into account when buying food, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Appendix: Attitudes and Motivations for buying “Healthy Eating” Ranges - Detailed Demographics

Figure 53: Categories consumers are willing to buy supermarket own-label healthy eating products, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 54: Categories consumers are willing to buy supermarket own-label healthy eating products, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 55: Categories consumers are willing to buy supermarket own-label healthy eating products, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 56: Categories consumers are willing to buy supermarket own-label healthy eating products, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 57: Categories consumers are willing to buy supermarket own-label healthy eating products, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 58: Categories consumers are willing to buy supermarket own-label healthy eating products, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 59: Categories consumers are willing to buy supermarket own-label healthy eating products, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 60: Categories consumers are willing to buy supermarket own-label healthy eating products, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Appendix: Attitudes to Food and Food Related Issues - Detailed Demographics

Figure 61: Attitudes to food and food shopping, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 62: Attitudes to food and food shopping, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 63: Agreement with statements about food and food related issues, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Figure 64: Agreement with statements about food and food related issues, by gender, age, region, social grade, daily newspaper readership, weekend newspaper readership, gross household income, age of own children, personal Internet usage, supermarket used, mobile phone network provider and TV reception, March 2008

Appendix: Further Analysis

Figure 65: Repertoire of own brand supermarket food buying, March 2008

Figure 66: Repertoire of those who did not buy supermarket own brand food products but expressed a willingness to do so in the future, March 2008

Figure 67: Repertoire of those who did not buy supermarket own brand food products but expressed a willingness to do so in future, crossed by type of food products willing to buy, March 2008

Figure 68: Repertoire of those who have not bought supermarket own label food products but expressed a willingness to do so in future, by demographics, March 2008

Figure 69: Repertoire of those who have not bought supermarket own brand food products and are unwilling to do so in future, March 2008

Targeting consumer groups

Figure 70: Attitudinal groups crossed by their attitudes to healthy eating, March 2008

Figure 71: Demographics of attitudinal groups, March 2008

Figure 72: Attitudinal groups crossed by other health statements, March 2008

Figure 73: Attitudinal groups crossed by factors which consumers take into account when they buy food, March 2008

Figure 74: Attitudinal groups crossed by attitudes to food related issues, March 2008

Figure 75: Penetration of own label food consumption amongst attitudinal groups, March 2008

Figure 76: Willingness to buy own label food products amongst attitudinal groups, March 2008

Figure 77: Unwillingness to buy amongst attitudinal groups, March 2008

Abstract

This special report is one of a series of investigations into key developments affecting the UK food industry. In contrast to the majority of Mintel reports which focus on individual markets or sectors, this report looks at current trends in the food industry with industry-wide implications, drawing upon case studies to put the analysis into context.

The report examines the hypothesis that health and health-driven innovation offers the only route to future profitability in the food market?

Key themes of the report:

• How healthy eating trends are evolving and what this means for the future.
• Whether consumers are developing a ‘healthy conscience’, and what the role of food ethics is in driving profitability.
• If new products can be a force for developing healthier habits amongst younger adults, especially as many healthy new products launched have a feminine bias.
• Whether consumers are confused or just bored with being told what to eat.
• If profitability is sustainable in products positioned as healthy.

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