Competition in the health and wellness market is more intense than ever, as the COVID-19 pandemic has increased e-commerce use and thus the availability of smaller brands. Meanwhile, economic uncertainty has strengthened demand for private label, which in some markets has seen strong innovation and taken share from global leaders. In addition, the localisation trend in China has improved the position of domestic manufacturers, bringing Feihe International into the top 10 players list.
This report comes in PPT.
With less attachment to traditional foods, young consumers are set to be the key target audience for brands exploring innovative ingredients. As this group’s purchasing power is anticipated to increase as they get older, demand for milk, meat and seafood alternatives is set to rise. Consequently, both large companies and small innovators are seeking to introduce affordable, multipurpose and tasty products. Free from is one of the smaller categories in the market, and offers growth opportunities as a key area for future investment.
Demand for immunity support is pivoting towards a more holistic approach to health. Prolonged periods of anxiety and isolation have led to difficulties sleeping, digestion issues, etc. New product launches are thus set to offer wider functionality and ingredients addressing multiple consumer concerns. Developed countries, in particular, will see the influence of this trend, as multiple benefits are perceived to be worth paying extra for, and thus higher profit margins will be secured by market players.
Competition between naturally healthy and better for you products will continue. Consumers choosing naturally healthy products are searching for trusted food items with simple ingredient lists, and are motivated not just by health implications, but also by food safety. Meanwhile, the reduction of undesirable nutrients is intensifying among market players, offering balanced product versions not just for health-orientated consumers, but also for those concerned about extra weight gained due to less mobile life and work routines.
Sustainability through flagship products, such as Nestlé’s vegan Kit Kat or Yili’s organic Satine milk, with a recyclable, plant-based cap, are marking the direction for packaged food in the future. Consumers are increasingly selective, as e-commerce and local brands innovate, and private label organic offers are expanded. Thus, organic products from the market leaders need to offer additional sustainability values to reassure consumers that choosing well-known brands is a viable option not just personally but also environmentally.
Emerging markets with growing populations and larger proportions of young consumer groups offer vast potential for foods with well perceived nutritional values. PepsiCo has stated that it is approaching some emerging regions from a perspective of social responsibility, with plans to provide more affordable and nutritious product variants. Meanwhile, growing purchasing power and interest in additional health qualities of packaged food in China encouraged Nestlé to describe China as its key business opportunity market.
Health and wellness is the aggregation of organic food and beverages, fortified/functional food and beverages, naturally healthy food and beverages, better for you food and beverages and food intolerance products.
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