The U.S. Market for Nutraceutical Foods and Beverages

Published by: Packaged Facts

Published: Aug. 1, 2002 - 214 Pages

Table of Contents

Executive Summary


• The Scope of This Report
  
• Report Methodology
  
• Nutraceutical Defined
  
• Seven Main Categories
  
• Sales Exceeded $17 Billion in 2001
  
• Table 1-1: U.S. Retail Dollar Sales of Nutraceutical Foods and Beverages, 1997-2001 (dollars; percent)
  
• Nutraceuticals Expected to Reach over $22 Billion by 2006
  
• Table 1-2: Projected U.S. Retail Dollar Sales of Nutraceutical Foods and Beverages, 2001-2006 (dollars; percent)
  
• Figure 1-1: U.S Retail Dollar Sales of Nutraceutical Foods and Beverages, 1997-2006 (dollars; percent)
  
• Tempestuous but Thriving Market
  
• Infant Nutritionals and Cereals Account for over 42% of Sales
  
• Table 1-3: Share of Retail Dollar Sales of Nutraceutical Foods, by Product Category, 2001 (percent): 7 categories
  
• Perhaps 800 Marketers
  
• You First and "Me First" Modes
  
• Many Niches with Little Marketer Competition
  
• Growth to Enable Entry into Market
  
• Nutraceutical Ad Dollars at $485 Million in 2001
  
• Variety of Distribution Channels
  
• Nutraceuticals Spread throughout Store
  
• In-Store Pharmacies Play Role
  
• Reasons for Controlling Diet
  
• Table 1-4: Number of Adult Americans Controlling Diet by Reason, 2001 (number; percent): 14 reasons
  
• Factors Favoring Control of Diet
  
• Table 1-5: Demographic Factors Favoring Control of Diet, 2001 (listing): 12 factors

II. The Products

Introduction


• The Scope of This Report
  
  
  
• Nutraceutical Defined
  
• Glossary of Nutraceutical Terms


The Products



• Seven Categories
  
  • Cereals
    
  • Comprehensive Nutritional Drinks (CNDs)
    
  • Confections
    
  • Dairy and Dairy Substitutes
    
  • Infant Nutritional Products
    
  • Other Beverages
    
  • Other Food


Regulatory Issues



• The Agencies Involved
  
  • Food and Drug Administration (FDA)
    
  • United States Department of Agriculture (USDA)
    
  • Federal Trade Commission (FTC)
  
  
  
• Key Legislation
  
  • Nutrition Labeling and Education Act of 1994 (NLEA)
    
  • Dietary Supplement Health and Education Act of 1994 (DSHEA)
    
  • Orphan Drug Act of 1983 (ODA) and Orphan Drug Amendments of 1988
  
  
  
• The FDA’s Approved Health Claims
  
• Disclaimers
  
• Lack of Patent Protection
  
• Generally Recognized as Safe (GRAS)
  
• Pending: Nutraceutical Research and Education Act

III. The Market

Market Size and Growth


• Sales Exceeded $17 Billion in 2001
  
• Table 3-1: U.S. Retail Dollar Sales of Nutraceutical Foods and Beverages, 1997-2001 (dollars; percent)
  
• Tempestuous but Thriving Market
  
• Figure 3-1: U.S Retail Dollar Sales of Nutraceutical Foods and Beverages, 1997-2006 (dollars; percent)
  
• Wide Range of Market Estimates




Factors in Future Growth



• Educating the Public
  
• Consumer Health Concerns Increasing
  
• Personalized Nutrition of the Future
  
• Scientific Research Becoming More Commonplace
  
• Internet Acts as a Boost to Market Growth
  
• Nutraceuticals Institute and Others Help to Promote Growth
  
• Consumers Desire Health and Convenience
  
• New Technologies
  
• Consumers Look to "Alternative Medicines"
  
• Consumers Look to Self-Help Medicines


Outlooks for Particular Categories



• Cereals
  
• Comprehensive Nutritional Drinks
  
• Confections
  
• Dairy and Dairy Substitutes
  
• Infant Nutritional Products
  
• Other Beverages
  
• Other Foods


Projected Sales



• Nutraceuticals Expected to Reach over $22 Billion by 2006
  
• Table 3-2: Projected U.S. Retail Dollar Sales of Nutraceutical Foods and Beverages, 2001-2006 (dollars; percent)
  
• Figure 3-2: Projected U.S Retail Dollar Sales of Nutraceutical Foods and Beverages, 2001-2006 (dollars; percent)


Market Composition



• Infant Nutritional Products and Cereals Account for over 42% of Sales
  
• Table 3-3: Share of Retail Dollar Sales of Nutraceutical Foods, by Product, 2001 (percent): 7 categories
  
• Grocery Channel Controls More than Half of Sales

IV. The Marketers

The Marketers


• Perhaps 800 Marketers
  
• Types of Marketers
  
• Marketers Sometimes Focus on Specific Retail Channels
  
• Table of Marketers and Brands
  
• Table 4-1: Selected Nutraceutical Food Marketers and Their Brands, 2001 (listing): 48 marketers, 95 brands


Marketer and Brand Shares



• Note on Share Data
  
• Slim-Fast Holds Strong in Comprehensive Nutritional Drinks
  
• Table 4-2: Share of U.S. Retail Dollar Sales of Comprehensive Nutritional Drinks, 2000-2001 (percent): 7 marketers; 18 brands
  
• Mead Johnson Dominates Liquid Concentrated Infant Formula
  
• Table 4-3: Share of U.S. Retail Dollar Sales of Infant Formula in Concentrated Liquid Form, 2000-2001 (percent): 3 marketers; 9 brands
  
• Mead Johnson Rules in Powdered Infant Formulas
  
• Table 4-4: Share of U.S. Retail Dollar Sales of Infant Formula in Powdered Form, 2000-2001 (percent): 3 marketers; 14 brands
  
• Abbot/Ross Controls RTD Infant Formula
  
• Table 4-5: Share of U.S. Retail Dollar Sales of Infant Formula in Ready-to-Drink Form, 2000-2001 (percent): 3 marketers; 13 brands
  
• Pedialyte Synonymous with "Electrolyte Balancers"
  
• Table 4-6: Share of U.S. Retail Dollar Sales of Infant Electrolyte Balancers, 2000-2001 (percent): 3 marketers; 13 brands
  
• Unilever and J&J Lead in Nutraceutical Margarines
  
• Table 4-7: Share of U.S. Retail Dollar Sales of Nutraceutical Margarines, 2000-2001 (percent): 2 marketers; 3 brands
  
• Share Perspective: Cold Cereals
  
• Share Perspective: Quaker’s Stake in Cereals
  
• Share Perspective: Quaker’s Reign in Hot Cereals
  
• Share Perspective: Westsoy Holds its Own in Soy Milks
  
• Share Perspective: Lactaid
  
• Share Perspective: So Be and Arizona Rx Bottled Drinks


The Competitive Situation



• “You First” and “Me First” Modes
  
• Many Niches with Little Marketer Competition


Competitive Profile: Abbot Laboratories/Ross Products



• Net Sales of $16.3 Billion in 2001
  
• Corporate Overview
  
• Focus on R&D
  
• Ross Products and the Ensure/PediaSure Brands




Competitive Profile: Bristol-Myers Squibb
Company/Mead Johnson Nutritionals



• Sales of $19.4 Billion
  
• Corporate Overview
  
• Mead Johnson Nutritionals
  
• Other Products


Competitive Profile: Forbes Medi-Tech, Inc.



• Sales of C$7.9 Million in Fiscal 2001
  
• Forbes Medi-Tech Covers for Altus Food Company


Competitive Profile: The Hain Celestial Group, Inc.



• Sales of $412 Million in Fiscal 2001
  
• Corporate Overview
  
• Westsoy
  
• Other Hain Celestial Group Products


Competitive Profile: Johnson & Johnson



• Sales Jump Past $33 Billion in 2001
  
• Corporate Overview
  
• The Famed Benecol Food Ingredient
  
• Other Popular J&J Products


Competitive Profile: Kellogg Company



• Sales of almost $9 Billion in 2001
  
• Corporate Overview
  
• Kellogg’s Take on Nutraceuticals
  
• Other Kellogg Products


Competitive Profile: Nutraceutical Clinical
Laboratories International, Inc.



• Behind the Scenes in the Nutraceutical Market


Competitive Profile: PepsiCo, Inc./Quaker Foods North America



• Net Sales of $27 Billion in 2001
  
• Acquisition of The Quaker Oats Company
  
• Famous PepsiCo Brands


Competitive Profile: Traditional Medicinals



• Corporate Overview


Competitive Profile: Unilever/Slim-Fast Foods Co.



• Sales of $46.7 Billion in Fiscal 2001
  
  
  
  
• Unilever’s Five Business Segments
  
• Corporate Overview
  
• Unilever Steps up to Web Challenge
  
• Unilever’s Nutraceutical Ventures
  
• Famous Unilever Brands


Marketing and Product Trends



• Educating the Public
  
• Ensuring Product Reliability
  
• Growth to Enable Entry into Market
  
• Eye Health
  
• Genetic Profiling
  
• Other New Technologies to Foster New Products
  
• Taste Matters
  
• New Product Types
  
• Convenience-Oriented Products Sought
  
• Innovative Packaging
  
• Table 4-8: Selected Nutraceutical Foods Introductions, 2000-2001 (listing): 37 marketers, 47 brands


Consumer Advertising Expenditures



• Nutraceutical Ad Dollars at $485 Million in 2001
  
• General Mills Spends $133 Million on Cheerios and Other Cereals
  
• PepsiCo spends $113 Million to Tout Its Quaker Brand
  
• Kellogg Spends $65 Million
  
• Abbot Spends $50 Million
  
• Philip Morris Spends $49 Million to Help Post and Balance
  
• Nestle Allocates $40 Million in Support of Infant Formula
  
• Unilever Spends $18 Million on Advertising for its Slim-Fast Meal On-the-Go Diet Bars
  
• J&J Spends $14 Million in 20001
  
• Bristol-Myers & Squibb Slashes Spending to $1.5 Million


Consumer Advertising Positioning



• Ads Aimed at Educating
  
• Advertising to Specific Group
  
• Hype versus Subtlety
  
• Kellogg’s Novel Approach to Weight Loss
  
• General Mills Banks on Humor
  
• Doctors’ Offices Friendly to Nutraceuticals




Consumer Promotions



• Coupons
  
• Free Samples
  
• In-Store Promotions
  
• Free Medical Tests


Trade Shows/Conferences



• Trade Shows and Conferences Abundant
  
• Functional Foods 2002
  
• EyeforFood USA 2002
  
• NNFA MarketPlace 2002

V. Distribution And Retail

Distribution


• Variety of Distribution Channels
  
• Two Main Distribution Paths: Traditional and DSD
  
  • Traditional Path
    
  • Direct Store Delivery
  
  
  
• Sales Forces Target Doctors
  
• ECR Operations


At the Retail Level



• Retail Margins on Nutraceutical Foods Vary
  
• Nutraceuticals Spread throughout Store
  
• Retailers Taking a More Healthful Stance
  
• In-Store Pharmacies Play Role
  
• Health Food Stores

VI. The Consumer

The Consumer: America’s Major Illnesses


• Nutraceuticals Driven by Demographics of Illness
  
• Fatal Illness in the United States
  
• Table 6-1: Deaths in the United States, by Cause: 2000 (number): 5 causes
  
• Cardiovascular Disease
  
• Cancer
  
• Diabetes
  
• AIDS
  
• Other Illnesses (Obesity and Bone Disease)




The Consumer: Lifestyles and Attitudes



• Notes on Sources—The Simmons Consumer Survey
  
• Consumer Data Are Limited
  
• Factors Favoring Control of Diet
  
• Table 6-2: Demographic Factors Favoring Control of Diet, 2001 (listing): 12 factors
  
• Reasons for Controlling Diet
  
• Table 6-3: Number of Adult Americans Controlling Diet, by Reason, 2001 (number; percent): 14 reasons
  
• Table 6-4: Demographic Factors Favoring Control of Diet, by Reason, 2001 (listing): 12 factors; 13 reasons
  
• Methods for Controlling Diet
  
• Table 6-5: Demographic Factors Favoring Control of Diet, by Method, 2001 (listing): 12 factors; 8 methods


The Consumer: Brand Use of Nutraceuticals



• Demographic Factors for Choosing Cold Cereal, by Brand, 2001
  
• Table 6-6: Demographic Factors Favoring Cold Cereal Consumption, by Brand, 2001 (listing): 12 factors; 5 brands
  
• Demographic Factors for Hot Cereals
  
• Table 6-7: Demographic Factors Favoring Quaker Hot Cereal Consumption, by Type of Cereal, 2001 (listing): 12 factors; 2 brands
  
• Comprehensive Nutritional Drinks
  
• Table 6-8: Demographic Factors Favoring Comprehensive Nutritional Drinks, by Brand, 2001 (listing): 12 factors; 2 brands

Appendix I: Examples Of Consumer Advertising
And Promotions

Appendix II: Addresses Of Selected Marketers

Abstract

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