Sales of dietetic foods will continue to grow as several global trends raise consumer demand for such products. A new report from market analyst Euromonitor suggests that despite variation in different markets, increasing consumer awareness of health issues, as well as a growing ageing population is likely to positively impact sales of dietetic foods, such as sports nutrition, slimming foods and vitamins and dietary supplements, in many markets in the future.
The report, which analyses the sector in 19 countries, shows that the US was by far the largest retail market for dietetic foods in 2001, reflecting the established consumer practice of self-medication in the country. Japan ranked in second position, although still far behind the US and tends to concentrate on sports nutrition and slimming foods. China was the only other country to record sales of dietetic foods above US$1 billion in 2001, despite remaining relatively underdeveloped in terms of consumer purchasing of dietetic foods.
Overall factors driving sales development for dietetic foods include longer life expectancy, particularly in developed economies, where the growing problem of obesity and sedentary lifestyles lead to increased risk of major diseases, such as cancer or cardiovascular disease. There is also growing consumer awareness, and medical diagnosis, of food intolerances, which require changes to a normal diet, sometimes in the form of product alternatives and growing awareness of nutritional issues.
The report also highlights that healthcare is subject to increasing economic pressures which has a direct impact on the availability of dietetic foods. Continuing pressure on healthcare budgets will mean the development of a wider retail presence for medical foods, although the continuing availability of free or reimbursed products through the healthcare system will constrain this process in many countries, notes the report. Even if products are not reimbursed, many consumers will remain reluctant to switch to purchasing a product which they have traditionally expected to receive at minimal or no cost.
In several sectors of the dietetic foods market manufacturers have driven sales development by launching innovative product formulations, frequently under the banner of a globally promoted brand identity. Manufacturer involvement in the market will continue to consolidate in the hands of multinational companies which will make significant investment in marketing support for international brands, notes the report. Global or multinational branding will become an increasingly important feature of this market.
In prescription sales, China recorded the largest figures in 2001, significantly ahead of the UK and India. In both China and the UK, this sales value included dietetic foods for institutional use, which are funded through the prescription system. Germany was the only other significant prescription market for dietetic foods and these products were not prescribed at all in the US, Canada, France or the Czech Republic.
Norway recorded particularly strong prescription sales growth between 1997 and 2001, due largely to the successful launch of new prescription slimming drugs. In Australia, Spain, the Netherlands and Sweden, the decline in prescription sales of dietetic foods typically reflected the attempts of healthcare funders to limit prescribing on non-drug products.
Japan dominated the country ranking for what the report defines as 'institutional sales' of dietetic foods, reflecting the widespread use of medical foods to improve nutrition and aid convalescence in hospitals and nursing homes. The US and Canada also recorded well-developed institutional demand for dietetic foods.Levels of institutional sales growth for dietetic foods were at more modest levels than for retail or prescription sales, reflecting intensifying pressures on product pricing in a highly competitive supply environment. While a positive momentum was maintained in relatively affluent countries, such as Hong Kong, US and Canada, this resulted in a negative sales trend in many countries.
In retail sales, the UK reported the highest growth rate between 1997 and 2001, more than doubling during that period. This was predominantly due to the explosive growth of sports nutrition sales, particularly sports drinks. The US, in common with other relatively mature markets in North America and Western Europe, also generated positive sales expansion, resulting from manufacturers' promotion of brand values and their implementation of range extension strategies.
Strong sales expansion in countries such as the Czech Republic, China or India, on the other hand, reflected the still developing nature of the retail environment for dietetic foods in those countries. Negative growth trends were recorded in Germany and France - mainly attributed to local currency weakness against the US dollar.
In the retail market for dietetic foods, per capita spending in 2001 was at its highest in the Netherlands, US, Japan and Hong Kong, all relatively affluent markets. Per capita spending also increased strongly across the review period in the US, and in the UK - due to the surge in popularity of sports drinks. Indeed sports nutrition along with the slimming foods sectors typically accounted for 60 - 90 per cent of retail sales in 2001.
In the future, more stringent regulatory processes on the manufacture and sale of dietetic foods is likely to generate improved consumer confidence and encourage increased purchasing. Distribution of dietetic foods will continue to extend from specialist outlets to mass-market channels, such as supermarkets/hypermarkets, which will become increasingly professional in their presentation and promotion of dietetic foods. Specialist distribution channels, such as sports outlets, healthfood stores, direct sales and vending, will extend the opportunity for consumer purchase of dietetic foods to compensate.
Increased consumer awareness of the health risks associated with obesity will encourage more people to lose weight and control their weight, thus boosting sales of slimming foods. Usage of slimming foods is also likely to become more widespread among male consumers, in many countries.And as the role of exercise in maintaining good health is increasingly recognised, the industry will see higher sales of sports nutrition products, enhanced by new added-value, convenience products.
The report also anticipates an increase in cross-over product usage, as with the consumption of sports drinks by non-athletes or the use of lactose-free products for general health benefits.
The Euromonitor study covers all areas of the sector, including sports drinks, meal replacements, lactose-free and diabetic products, nutritionally complete foods, vitamins and functional foods.