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Competitor Strategies in Health and Nutrition

March 2021

With health top of mind, consumers are interested in health and wellness (HW) products more than ever amid the coronavirus (COVID-19) pandemic. Packaged food, soft and hot drinks players enjoy sales increase among HW variants which continue to outperform non-HW products. This report analyses business strategies in the HW and nutrition space and explores the opportunities. Leading HW players focus on key trends including immunity support, mental and sleep health and plant-based products.

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Key Findings

Most of the top 10 players in HW had a successful year in 2020, thanks to the growing attention to healthy diets

HW packaged food and beverage players enjoyed a sales increase for HW products in 2020. COVID-19 encouraged consumers to choose healthier options when purchasing their food and drinks. As a result, in food and beverage industries, HW products outperformed non-HW variants in 2020, and are expected to do so over the forecast period.

Improving their immune system is a foremost concern for consumers

Consumer demand for immunity support is a high priority during the COVID-19 pandemic. Products linked to boosting immunity health saw sales soar. Probiotics experienced new heights, while expanding applications to wider food and drink products.

Key players in HW expand product portfolios through acquisitions and partnerships with innovative brands

The acquisition of brands across industries is a common strategy among players in HW to expand their product portfolios. For example, with the acquisition of fairlife, a dairy brand in North America, Coca-Cola expanded its product portfolio to HW packaged food categories including free from lactose milk and ice cream.

Top HW players invest in plant-based alternatives

Driven by the increasing demand for sustainable sourcing and nutritional benefits, plant-based alternatives continue growing. Nestlé is about to launch its first vegan Kit Kat and PepsiCo and Beyond Meat will create plant-based snacks.

Expansion of geographical coverage opens growth opportunities

With HW products often priced at the higher end compared to non-HW products, naturally global HW sales have been concentrated in developed markets. However, expanding geographical coverage is essential for further growth. As of 2020, Nestlé, Mondelez and Danone are the only companies with sales from emerging and developing markets exceeding or almost matching sales from developed markets.

Introduction

Scope
Key findings

Competitive Environment

COVID-19: impact on health and nutrition
COVID-19 sets new indicator when shopping: effect on immunity support
Six among top 10 players enjoy revenue from both HW food and drinks
HW will outperform non-HW products in all food and drinks industries
Long-term growth potential in emerging markets despite challenges in 2020
Traction from big food players to smaller ones
FF dominates but free from and organic rapidly rising
Major source of sugar: shift from sugared products to fruits
Being overconsumed, protein transitions from quantity to quality

Opportunities in Health and Nutrition

Five key health and wellness trends in 2021
Probiotics and mushrooms in support of the immune system
Strong potential for prebiotic fibre especially in symbiotic approach
Immunity boosting and localised milk formula recipes are emerging
Rise of organic and special baby food
PepsiCo expands to mental wellness and sleep aid
Collagen booms while new ingredients for beauty claims are emerging
COVID-19 pandemic accelerated the growth of flexitarianism
Growing flexitarianism hints at potential for synergetic claim approach
Plant-based claims remain niche compared to vegetarian and vegan
Localisation for flavour adaptation and higher affordability
“Plant-based”, not just a cliché

Business Strategies

Top six HW players in the spotlight
Aiming to be “a total beverage company”, Coca-Cola expands to dairy
PepsiCo enters free from meat snacks and beverages with Beyond Meat
Danone focuses on digestive health and free from dairy
Nestlé’s various new HW product launches focus on plant-based
Further expansion in Asia Pacific is key for Red Bull GmbH
Kellogg Co looking into organic and NH breakfast cereals

Conclusions

Recommendations
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