CHICAGO – Jan. 31, 2006 – In an effort to both anticipate and respond to consumer health and wellness needs, consumer packaged goods (CPG) manufacturers have delivered an extraordinary level of innovation, particularly in the food and beverage categories.
The reformation of products to remove trans fat, the creation of new ingredients to provide whole grain benefits without sacrificing taste, and the introduction of innovative packaging to help consumers manage caloric intake have empowered the industry to take a huge leap forward to provide healthier alternatives to consumers, according to the latest Times & Trends report, “Healthy Eating Trends: Innovative Solutions to Evolving Consumer Needs,” from Information Resources, Inc. (IRI), the leading global provider of enterprise market solutions for the CPG, retail and healthcare industries.
“CPG manufacturers recognize that translating ‘better for you’ initiatives into profitable sales growth requires an understanding of the complexities of consumers’ eating behaviors and ongoing identification and monitoring of untapped opportunities,” said IRI Global Chief Marketing Officer Janet Eden-Harris. “This IRI report is designed to help CPG manufacturers and retailers see profitable new health-oriented growth opportunities, act on these opportunities through continued innovation and win at the shelf.”
Drivers of Change
Today, consumers have embraced many “healthier” new products, but overall, dietary changes have been slow and gradual. New products, such as Nabisco 100 Calorie Packs and Sara Lee Heart Healthy Bread, have been met with strong success and illustrate the market potential for convenient, healthy solutions. However, more than half of consumers continue to take a haphazard approach to healthy eating, and the majority continues to integrate healthy with less healthy fare. Thus, the complexities of consumer eating behavior create significant challenges for marketers of healthier products.
The study reports that consumers with health conditions manage their diets more aggressively than mainstream consumers. While weight management is the number one reason that consumers control their diet, as illustrated by consumers who follow low-fat and low-carbohydrate diets, a substantial number of consumers manage their diet to control health conditions, such as high cholesterol, diabetes and heart disease. These segments represent strong target markets for healthier products and are poised for substantial growth as baby boomers age and face increased incidence of chronic disease.
During the past year, there have been major new government initiatives designed to help consumers eat better and make informed purchase decisions. New label requirements for both trans fat content and the presence of food allergens became effective on Jan. 1, 2006. The U.S.D.A. also issued the new food pyramid—MyPyramid—which reflects the new 2005 Dietary Guidelines for Americans. The guidelines recommend the need to reduce saturated and trans fats and consume more whole grains. These initiatives and recommendations have had and will continue to have a significant impact on consumer consumption behavior and industry innovation.
Industry Impact
As a whole, consumers continue to eat many favorite foods that lack nutritional value and may be counter to weight management efforts. However, consumers are gravitating toward “light” product offerings. According to an IRI analysis of 17 major food and beverage categories offering “light” alternatives, light product sales growth, while still modest, is far outpacing total category growth when low-carbohydrate products are excluded.
“Light” products currently represent a small share of salty snacks, cookies, ice cream and sherbet, and juices and drinks, but despite slow category growth, these products are growing at double- and triple-digit rates. Hit particularly hard by the decline of the low carbohydrate diet craze, light chocolate candy is experiencing large declines.
According to the study, whole grain foods offer continued growth potential. While nearly half of all consumers are trying to include whole grains in their diets, the vast majority are not eating the recommended three servings per day. Products that offer whole grain goodness without sacrificing taste and texture will be well-received by consumers—especially those over age 50.
Finally, traditional retailers’ innovative new formats and private label lines are transforming the high-growth natural and organics segment. With 13 percent dollar sales growth, the natural organic market is far outpacing total CPG growth. The strong growth has prompted many traditional retailers to significantly increase the presence of this segment through new formats, including stand-alone stores and new private label lines. The net effect will be greater accessibility for consumers and lower prices.
About the Report
Findings presented in Times & Trends: “Healthy Eating Trends: Innovative Solutions to Evolving Consumer Needs,” are based upon an extensive analysis of consumer data from the IRI Consumer Network™ Household Panel, IRI MedProfiler™ Health & Wellness Survey, IRI Attribute Drivers, IRI BehaviorScan® and IRI AttitudeLink. For an in-depth view of the report, click on http://www.infores.com/public/us/newsEvents/
thoughtleadership/tt_jan06.pdf.
About Information Resources, Inc.
Information Resources, Inc. (IRI) is the world’s leading provider of enterprise market information solutions and services, empowering its clients to grow their business profitably in a complex marketplace. Driving the transformation of the consumer packaged goods (CPG), retail, and healthcare industries, only IRI provides a unique combination of real-time market content, advanced analytics, enterprise performance management software, and professional services. The company’s portfolio of services, solutions, and technology enable leading retailers and their suppliers around the globe to see what they are missing, act faster with greater confidence and win at the shelf. Ninety-five percent of the FORTUNE Global 500 in CPG and retail leverage IRI to power their business. For more information, visit www.infores.com.