The World Market for Health and Wellness Packaged Food

Changing consumer health preferences towards “more natural” is driving growth in the HW food industry

Consumers are looking for a more holistic approach to a healthy diet and natural is the most sought-after feature. The big winners of this trend are organic and free from foods, particularly in Western Europe and North America, where fashionable eating habits and health-conscious consumers are the key drivers of growth. In the case of organic foods, safety reasons are also crucial, especially in emerging countries such as China.

M&A is the key answer to compete in the HW space

The dominance of the top packaged food companies has been challenged in recent years by the growth of regional and independent companies active in the HW segment. Many consumers have signalled distrust of the established food industry, which, coupled with fast-changing consumer preferences towards HW foods, has resulted in rapid shifts in category and brand portfolios on the part of leading manufacturers, resulting in active M&A activity in the space.

Fortified/functional challenged in the Western world while booming in emerging countries

Fortified/functional (FF) has lost traction in Western Europe and North America for its perception as a more artificial and processed offering, coupled with a crackdown on probiotic health claims in the EU in 2013 that cost the yoghurt industry billions. However, FF is showing an outstanding performance in emerging markets, which stems from its need to minimise nutritional gaps and from probiotics remaining a hot topic in APAC.

Shopping reinvented: internet retailing and subscription services pivotal in the HW industry

Digital connectivity is continuing to alter methods of doing business with digitally-inspired models emerging rapidly in the foods industry. Internet retailing is the fastest-growing channel for HW foods in key developed markets (US, Canada, UK, Germany) together with China. In addition, subscription meal boxes aimed at consumers looking for only organic foods or dairy/gluten-free offerings are booming in the Western world.