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Wellbeing: A Cross Category Approach To Nutrition, Health And Beauty
Business Insights, Jan 2002
Wellbeing: A cross category approach to nutrition, health and beauty
By Siddika Moosa
As consumers are demanding products that satisfy multiple health concerns, industry boundaries
are becoming increasingly blurred so that the previously separate categories of medicine, nutrition
and beauty are now interlinked. Wellbeing: A cross category approach to Health, Nutrition
and Beauty is a new management report providing you with a complete
understanding of the underlying dynamics driving the Wellbeing trend, as well as it's
impact across the fast moving consumer goods industry. The report defines Wellbeing and the
push and pull factors determining it's growth. Discover the opportunities and constraints that are
present in the food, drinks and cosmetics industry and identify the best practices in new product
development and successful retail strategies.
Siddika Moosa is a freelance consultant, having worked previously for Datamonitor's Consumer
Goods Business Unit and Cap Gemini Ernst and Young. She has worked extensively on FMCG
and eCommerce strategy issues including detailed studies of functional confectionery, natural
and organic products, marketing to children, online marketing, business-to-business and business-
to-consumer eCommerce as well as the changing retail landscape. In addition, Siddika has
worked on numerous client defined strategy consultancy projects. Siddika Moosa is a freelance
consultant, having worked previously for Datamonitor's Consumer Goods Business Unit and Cap
Gemini Ernst and Young. She has worked extensively on FMCG and eCommerce strategy issues
including detailed studies of functional confectionery, natural and organic products, marketing to
children, online marketing, business-to-business and business-to-consumer eCommerce as well
as the changing retail landscape. In addition, Siddika has worked on numerous client defined
strategy consultancy projects.
Siddika Moosa
Table of Contents
Executive Summary 10
Introduction 10
The wellbeing concept 10
Market dynamics 12
Category innovation 13
Delivering wellbeing 14
Case studies 15
Industry opinion 16
Conclusions 17
Chapter 1 The Wellbeing Concept 20
Summary 20
Defining wellbeing 21
Health and wellbeing interlinked 21
You are what you eat 22
Health products increasingly target different health concerns
simultaneously 23
Wellbeing is about physical and mental health 23
Beauty and external wellbeing 26
Mental wellbeing 27
Chapter 2 Market Dynamics 30
Summary 30
Introduction 30
What is fuelling growth of wellbeing products? 31
Push factors 31
Manufacturers must deliver on innovation and price 31
The media is a powerful influencer 33
Retailers stake their claim in wellbeing 34
Pull factors 36
Increased health awareness 36
Prevention is better than cure 38
Linking wellbeing with living space 38
Who are the wellbeing consumers? 41
What are they buying? 43
Food as medicine 44
Breakfast cereals 45
Functional confectionery 47
Functional dairy 48
Fats and spreads 50
Functional beverages 52
Organic food and drinks 54
Vitamins, minerals and supplements 57
Mental wellbeing 58
Anti-depressants 58
Herbal remedies 59
Aromatherapy 61
Beauty 65
Cosmeceuticals 65
Other trends in cosmetics 68
Beyond health and beauty 69
Home hygiene 69
Chapter 3 Category Innovation 74
Summary 74
Introduction 74
Health positioning 75
New product launches by category 77
Low and light food and drinks 77
Functional and fortified food and drinks 79
Natural and organic food and drinks 81
Beauty 83
Examples of innovative products 87
Chapter 4 Delivering Wellbeing 98
Summary 98
The wellbeing channels to market 99
Wellbeing products now have mainstream status 99
Specialist stores and emerging formats 101
Mail order and direct sales 104
Supermarkets 105
Commitment to wellbeing 105
The emotional factor 105
Own label and category management intiatives 106
The online channel 108
The fit between wellbeing and eCommerce 108
The wellbeing online retail opportunity 110
Manufacturer online activities 112
Market size 113
Best practice in online retail 114
Chapter 5 Case Studies 118
Summary 118
Introduction 118
Company background 119
Structure 119
Expertise 119
Financial positioning 121
Product offering 121
Security and privacy 122
Acquisitions 123
Advertising 123
Offline ventures 123
Competitive dynamics 124
Overseas expansion 125
Partnerships 126
Conclusion 126
Background 127
Organisational structure 127
Content alliances - Mayo clinic 128
The wellbeing offering 128
Conclusion 129
Red Bull GmbH: Red Bull 130
Product History 130
Positioning 131
Cross-category appeal 131
Varied appeal yet generic positioning 131
SWOT Analysis 132
South Beach Beverage Co: SoBe 134
Brand history 134
Positioning 135
SoBe targets new consumer base 135
SWOT analysis 136
Performance brands: Beauty Bites 137
Company background 137
Product history 137
Marketing strategy 138
SWOT analysis 138
Chapter 6 Industry Survey 142
Summary 142
Introduction 142
Interpreting the graphs 143
Drivers of wellbeing 143
Underlying industry trends 145
Category development 146
Key target audiences 147
Retail development 148
Chapter 7 Conclusions 152
Introduction 152
Key issues 152
Movement of wellbeing into mainstream markets 152
High growth across wellbeing categories 153
Key changes in reaching the wellbeing consumer 155
Index 159
List of Figures
Figure 0.1: Definition of wellbeing 11
Figure 1.2: Health concerns 21
Figure 1.3: Defining wellbeing 25
Figure 2.4: Wellbeing dynamics 31
Figure 2.5: Sainsbury’s wellbeing zone 35
Figure 2.6: The Swedish Farm Assured ‘One Corridor Trace Scheme’ 40
Figure 2.7: Over 55’s as a percentage of overall population 1995—06 42
Figure 2.8: Convergence of pharmaceuticals and nutrition 45
Figure 3.9: New product launches by region and health positioning (% of new products with health
positioning), 2000—01 75
Figure 3.10: Range of fortification ingredients used in new products, 1999—01 76
Figure 3.11: Fortification ingredients used by product category 2001 77
Figure 3.12: Number of low and light new product launches by category and region, 2000—01 78
Figure 3.13: Number of functional and fortified new product launches by category and region,
2000—01 80
Figure 3.14: Number of natural and organic new product launches by category and region, 2000—
01 82
Figure 3.15: Number of beauty new product launches by category and health positioning, 2000—01
84
Figure 3.16: Health positioning of beauty products by category 85
Figure 4.17: Distribution options for wellbeing products 100
Figure 4.18: Safeway’s own label herbal and VMS products 107
Figure 4.19: Wellbeing distribution channel evolution 109
Figure 4.20: Growth in users of leading online content, 1997—99 110
Figure 5.21: ThinkNatural.com 120
Figure 5.22: Red Bull, competitive positioning 132
Figure 5.23: Red Bull SWOT analysis 134
Figure 5.24: SoBe SWOT analysis 136
Figure 5.25: Beauty Bites SWOT analysis 139
Figure 6.26: Key drivers of wellbeing 143
Figure 6.27: Key underlying industry trends 145
Figure 6.28: Wellbeing category development 147
Figure 6.29: Key wellbeing target audiences 148
Figure 6.30: Key retail channels for wellbeing products 149
Figure 6.31: Wellbeing regional development 150
List of Tables
Table 2.1: Functional breakfast cereal value sales (US$m), 1995—99 46
Table 2.2: Functional confectionery value sales (US$m), 1995—99 48
Table 2.3: Functional milk and yoghurt, value sales (US$m), 1995—99 49
Table 2.4: Functional fats and spreads, value sales (US$m), 1995—99 51
Table 2.5: Sports and energy drinks, value sales (US$m), 1995—99 53
Table 2.6: Organic market values (US$m), 1995—00 55
Table 2.7: Per capita expenditure on organic food (US$/head), 1995—05 56
Table 2.8: Vitamin and mineral supplements, value sales (US$m), 1996—00 57
Table 2.9: Depression prevalence by country, (number affected) 1998—05 59
Table 2.10: Anti-depressants, per capita expenditure (US$/head), 1997—98 59
Table 2.11: Herbal supplements and OTC medicine value sales (US$m), 1995—99 60
Table 2.12: Essential oils and their properties 63
Table 2.13: Aromatherapy, sales by country (US$m), 1996—99 64
Table 2.14: Overall personal care, value sales by country (US$m), 1995—00 65
Table 2.15: Overall value of US cosmeceuticals market by category (US$m), 1995—99 67
Table 3.16: Percentage of low and light product launches, by category and region, 2000—01 79
Table 3.17: Percentage of functional and fortified new product launches, by category and region,
2000—01 81
Table 3.18: Percentage of natural and organic new product launches, by category and region,
2000—01 83
Table 3.19: Percentage of cosmeceutical new product launches, by category, 2000—01 86
Table 3.20: Examples of low and light product launches, 2001 87
Table 3.21: Examples of functional and fortified product launches, 2001 88
Table 3.22: Examples of natural and organic products 89
Table 3.23: Examples of natural and organic products 90
Table 3.24: Examples of cosmeceutical hair care product launches, 2000 91
Table 3.25: Examples of cosmeceutical makeup product launches, 2000—01 92
Table 3.26: Examples of cosmeceutical skincare (body) product launches, 2000—01 93
Table 3.27: Examples of cosmeceutical skincare (body) product launches, 2000—01 94
Table 3.28: Examples of cosmeceutical skincare (face) product launches, 2000—01 95
Table 3.29: Generic share of pharmaceutical markets by value 96
Table 4.30: Online personal care, value sales (US$m), 2000—05 113
Table 4.31: Online vitamin and mineral supplements, value sales (US$m), 2000—05 114
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