CAPITALIZING ON HEALTH & WELLNESS TRENDS · 2019-05-29 · 2. HEALTH AND WELLNESS 2020 REPORT....

1Copyright © 2017 The Nielsen Company

C A P I TA L I Z I N G O N H E A LT H & W E L L N E S S T R E N D SAN OPPORTUNITY FOR FMCG COMPANIES TO PARTNER WITH CONSUMERS

2 HEALTH AND WELLNESS 2020 REPORT

WELCOMEThe retail environment is especially challenging these days. Growth

is stagnant and consumers have more choices than ever. Retailers

and manufacturers are seeking pockets of growth in a tough business

environment. To do that, they need to differentiate themselves and

provide bottom-line value.

One way many are doing this is by tapping into health and wellness,

an area that has seen considerable growth and attention recently.

Sure, being healthy isn’t a new concept, but several macro factors have

changed how American consumers think about health:

• The aging population

• Increases in chronic diseases

• Rising health care costs

• Consumer demand for transparency

• Technology as an enabler of our health and wellness

So when we think about “what’s next,” it’s critical to know what’s

happening today and how this will affect clients and consumers

tomorrow. That means being able to answer the most pressing and

critical health and wellness business questions that our clients face.

In order to answer these important questions, you need the right data,

and you need the right insights. Nielsen’s data in health and wellness

is comprehensive and backed by science. As for the insights, well, you’ll

have to read this report to see for yourself.

Be well.

ANDREW

ANDREW MANDZYDirector of Strategic

Insights, Health &

Wellness Growth &

Strategy


Sales growth for manufacturers and retailers has been sluggish over

the past few years. And when we look at prospects for 2017, we’re

forecasting that sales will grow just 0.9%. So what does this mean

heading into a new year and beyond? It means that companies need

to find ways to differentiate themselves and find growth. And for many

brands, health and wellness is just what the doctor ordered.

Being healthy isn’t a new trend. After all, no one wants to be unhealthy.

How consumers approach their health, however, is distinctly different

from how they did in the not-too-distant past. In fact, it wasn’t too

long ago that taking care of your health simply meant keeping your

regularly scheduled doctor’s visits, minding your diet and getting some

exercise. While these basic principles still serve as a loose overarching

framework for general health and wellness, they fall well short of what

the average American strives for today.

Given the more comprehensive health and wellness aspirations of

today, most consumers are more interested in staying out of the

doctor’s office than they are about scheduling their next physical. That’s

because they have all the tools they need to monitor, maintain and

improve their health on their own. The explosion of information and

easy access to it puts knowledge within a finger’s reach, the internet

of things lets us track our health with every step we take (or don’t

take), and label transparency provides clear insight into what’s in—

and not in—the foods and supplements we eat. With the abundance

of resources available to them, consumers are using nutrition,

information and fitness to meet their health goals in personal,

meaningful ways that annual check-ups never could.

So what sparked this shift? We believe several factors have pushed

health and wellness to the forefront in recent years, ranging from the

information boom to a rise in self-care to combat escalating health care

costs. With a sharper focus on health, Americans are also living longer.

This is good news overall, but a Baby Boomer has a different set of

health needs than a Millennial. Consumer health risks are also evolving.

In fact, the World Health Organization projects that chronic diseases

will cause 73% of deaths by 2020, up from just 60% in 2001.

By keeping abreast of the strategies consumers are using to stay fit and

healthy—across all demographics—manufacturers and retailers can do

much more than simply help them meet their goals. They can become

partners with them at every step of their journey.


TOTAL STORE GROWTH

1.40%1.60%

2.20%

0.90%0.48%

2013 2014 2015 2016 2017 (Projected)

Source: Nielsen Scantrack

CONSUMERS ARE DEMANDING TRANSPARENCYGenerally speaking, food is often the first lever consumers pull when

they think about getting healthier. Today, food plays a growing role in

health and wellness. Not only are consumers looking for healthy meals,

they’re also using food to manage ailments and to prevent health

problems in the future.

At mealtimes, many consumers have adopted a back-to-basics mind

set, opting for products that are simple, fresh and contain fewer (or

no) preservatives or unnatural elements. In a recent Nielsen Strategic

Health Perspectives survey, 63% of Americans said they’re trying to

eat healthier, with 49% saying they consciously eat more fruits and

vegetables. Organic plays a big role in consumption today, and the

companies and retailers offering organic products are reaping the

benefits. Growth is also healthy among products that have transparency

claims like “natural,” “GMO free,” “no artificial ingredients,” and sales

have outpaced the average for the rest of the store as a result.


TOTAL STORE GROWTH TOP ORGANIC FRESH CATEGORIES(RANKED BY DOLLAR SALES)

Source: Nielsen FreshFacts total U.S., 52 weeks ended Dec. 31, 2016

TOMATOES$161.7M

17%

PACKAGED SALAD

BERRIES

BEVERAGES

BANANAS

LETTUCE

$886.6M

$479.5M

$244.4M

$190.9M

$164.9M

6%

25%

APPLES$293.2M6%

CHICKEN$295.5M15%

HERBS, SPICES AND SEASONINGS$259.5M13%

CARROTS$247.5M

4%

14%

26%

9%

DOLLAR SALES ($ mil.)

YEAR-OVER-YEAR CHANGE (%)


While the table above highlights the top-selling organic categories

across the store, several categories with fewer dollar sales are

experiencing even bigger growth percentages. For example, organic

cookies garnered 1,075.3% growth on $852,000 in sales in the year

ended Oct. 29, 2016, evidence that consumers love a good treat as

much they like their greens. Organic avocados, which racked up $65

million in sales last year, posted annual sales growth of nearly 40%,

while deli salads ($6.9 million) and deli snacks ($8.7 million) racked up

sales growth of 129% and 103%, respectively.

It’s also worth noting that even though many consumers associate

the word organic with fresh foods, it’s a term that isn’t bound to the

perimeter of the store. An array of foods and products can be certified

organic, and consumers aren’t limiting their organic purchasing to fresh

foods. In fact, U.S. volume sales of products with an organic claim grew

by 13.7% in the 52 weeks ended Nov. 26, 2016.


USING THE TOTAL STORE TO MANAGE AILMENTSIn addition to eating cleaner, consumers are eating smarter. And that

means they’re growing increasingly mindful of what’s in—and what’s

not in—the foods they eat. They’re doing this for an array of reasons,

such as to avoid artificial ingredients, stave off illness, strengthen their

immune systems, bolster the body as it ages and combat ailments.

In many ways, consumers are taking their everyday health care needs

into their own hands, and foods, personal care products, over-the-

counter (OTC) remedies and supplements play a big part of that,

especially in a country with a growing population of older consumers.

According to the Population Division of the U.S. Census Bureau, more

than 47 million Americans were 65 or older in 2015, representing about

15% of the U.S. population. By 2060, however, the U.S. Census Bureau

projects that number will grow to 98 million, which will represent

almost one-quarter of the country’s population. As the country’s older

generations (Baby Boomers and the Greatest Generation) look to stay

healthy, manufacturers and retailers will need to identify key health care

categories that meet their needs and focus on the ingredients they’re

looking for.

FIVE OF THE TOP CATEGORIES FOR BABY BOOMERS

NUTRITIONAL DIET AIDS

PAIN REMEDIES

SLEEPING AIDS

DIURETIC REMEDIES

THROAT LOZENGES

Source: Nielsen Homescan panel, 52 week ended Dec. 3, 2016


But it’s not just older consumers who are looking for functional foods,

greater transparency in product labels and foods with health benefits.

Across the U.S., a Nielsen Homescan shopper panel in mid-2016

found that 39% of Americans suffer from an ailment, many of whom

manage their ailments with diet. Forty-seven million households have a

consumer who manages their ailments with diet, and these households

spend more than $268 billion at food and retail stores each year.

ALMOST 4 IN 10 HOUSEHOLDS IN THE U.S. HAS AN AILMENT SUFFERER

AILMENT SHOPPERS RETAIL SPENDING

% OF HOUSEHOLDS WITH AN AILMENT SUFFERER (BY CONDITION)

43%

ALLERGIES ACID REFLUX/

HEARTBURN

HIGH BLOOD

PRESSURE

IMPERFECT VISION

OBESITY CHOLESTEROL JOINTPAIRS

DEPRESSION

34% 33% 33% 28% 25% 23% 20%

Source: Nielsen Homescan Shopper Ailment Panel and TSV Panel, 52 weeks ended June 11, 2016

Source: Nielsen

RANK DIABETIC GLUTEN NEGATIVE

LACTOSE INTOLERANT OVERWEIGHT

NO. OF HOUSEHOLDS 24.8M 3.9M 10.3M 34.2M

RETAIL SPEND $154.1B $26.1B $63.5B $208.6B

FOOD SPEND $92.2B $16.7B $38.9B $127.0B


ALMOST 4 IN 10 HOUSEHOLDS IN THE U.S. HAS AN AILMENT SUFFERER

AILMENT SHOPPERS RETAIL SPENDING

The more manufacturers and retailers know about distinct health

topics, the better equipped they’ll be to help consumers meet all of

their wellness goals. For example, Nielsen research has found that the

average consumer with diabetes takes 5.4 prescription medications

for this ailment. They also buy an assortment of specific health care

items disproportionately from the general public, such as digestive aids

and blood testing products. Sixty-five percent of these consumers also

use diet to help manage their conditions, and many do so by buying

items with reduced salt, sugar and fat. With a complete understanding

of consumers with specific needs, it becomes that much easier for

companies to become true partners with them.

This is particularly relevant for meeting the needs of ailment shoppers,

largely because they outspend the general population when it comes

to other health care products. So if manufacturers and retailers do

their part in connecting the front-end assortment to overall health and

wellness, shoppers will get exactly what they need without ever having

to stray elsewhere to find what they’re looking for.

But ailment shoppers aren’t the only ones looking to use specific foods

to stay healthy. On a larger scale, many Americans are looking to specific

foods to bolster, strengthen and improve their overall health and wellness.

For example, digestive health has become a sizable trend in the U.S.—one

that many consumers are addressing with probiotics—a type of good

bacteria that may help with digestion and offer protection from harmful

bacteria. In fact, Nielsen’s Homescan shopper panel recently found that

19.2% of U.S. households say that probiotics are important to them.

And from a sales perspective, it’s clear that products with probiotics are

winning at the register.

AILMENT SHOPPERS AND OTC RETAIL SPEND

100

0

30

60

90

120

150

119 123 124120

AVERAGE ALLERGY

IND

EX

ACID REFLUX

CHOLESTEROL INSOMNIA

Read as: Households with allergy sufferers spend 19% more on OTC remedies than the average household.

OTC—Over-the-counter.

*OTC spend per household among sufferer group divided by total OTC spend per household x100.

Source: Nielsen Health Survey 52 weeks ended June 2015.


For manufacturers and retailers looking for growth opportunity via

products with probiotics, it’s important to have a comprehensive

view of the landscape. Consumers are clearly using vitamins and

supplements as a way to ensure that they are the getting the probiotics

they need. The probiotic space is also expanding quickly, as the market

share of supplements with probiotic claims has grown to 12%, up 26%

in dollar sales from a year ago. As consumers look across the store to

meet their health and wellness needs, food can help supply the right

nutrients and digestive properties. Yogurt, for example, is a category

with a high concentration of probiotics, and a category like refrigerated

teas has also shown strong growth with products featuring probiotic

claims.

Fiber is another ingredient that consumers are looking for when

thinking about digestive health. In fact, 57% of consumers in a recent

Nielsen survey stated that fiber influences their decision making.

Therefore, it’s important for retailers and manufacturers to understand

this trend and to be able to communicate the health benefits of fiber

with consumers. According to Nielsen Product Insider, the Federal Food

and Drug Administration (FDA) has defined 60% of the products in the

canned bean category as an excellent source of fiber. Only 28% of those

products, however, include a fiber claim on the package. As consumers

continue to look for specific ingredients and attributes to aid them in

their overall health and wellness, communicating these benefits will

become critical to success.

TOP CATEGORIES WITH PROBIOTIC CLAIMS

Source: Nielsen Scantrack 52 weeks ended Aug. 27, 2016

VITAMINS AND SUPPLEMENTS

PROBIOTIC CLAIMS% SALES GROWTH

SHARE OF CATEGORYSALES (%)

YOGURT

REFRIGERATED TEAS

+26%

+3%

+80%

+12%

+22%

+5%


TOP CATEGORIES WITH PROBIOTIC CLAIMS HOW CONSUMERS ARE COPING WITH RISING HEALTH CARE COSTSIn addition to being proactive about their health, U.S. consumers

are growing increasingly aware of the rising costs associated with

traditional health care. According to the World Bank, U.S. health care

costs will amount to 20% of GDP by 2025 (up from 17.5% in 2014), the

highest in the world among industrialized countries.

While Americans’ drive to be independent, prevent disease/illness

and stay healthy has caused a spike in self-care, a recent Strategic

Health Perspectives survey found that health care costs remain the top

concern for consumers. While 19% of consumers said they’d like to

see improved quality of health care, 43% said reducing out-of-pocket

expenses is most important.

AMERICANS ARE FEELING THE PINCH OF RISING HEALTH CARE COSTS

% OF CONSUMERS WHO SAID THAT THEIR OUT-OF-POCKETS COSTS INCREASED FROM THE PREVIOUS YEAR

2014 2015 2016

34%41% 39%

53% 50%

30%

DOCTOR VISITS RX

Source: Strategic Health Perspectives


THE HEALTH CARE TRADE-OFFS CONSUMERS ARE MAKING

ASKED DOCTOR/PHARMACISTABOUT A LESS

EXPENSIVE ALTERNATIVE

PRESCRIPTION

TOOK A PRESCRIPTION

LESS OFTENTHAN

RECOMMENDED

TOOK AN OTC MEDICATION

BEFORE STARTINGA RECOMMENDED

MEDICATION

OTC—Over-the-counterSource: Strategic Health Perspectives

As a result of rising health care costs, consumers are making

adjustments in several ways: making trade-offs: taking less medicine;

taking an OTC medication first; asking for cheaper alternatives; and

side-stepping visits to the doctor altogether.

27%

21% 20%

Given the current environment, retail has a huge opportunity to affect

consumer lives like never before by supporting the medical needs that

influence purchasing. Retailers across all channels have already seized

the opportunity by using health and wellness as a growth strategy.

Initiatives include everything from prioritizing health foods in the

center of the store to emphasizing fresh foods around the perimeter

to training associates and hiring dieticians to be more knowledgeable

about healthy products. At a more involved level, many have opened

health clinics, a trend that has ramped up significantly over the past

two years.

Global consulting firm Accenture projects there will be more than

2,800 in-store retail clinics in the U.S. by the end of this year, up

47% from 2014, when there were just over 1,900. Given the ease of

access and convenience of these clinics, consumer acceptance and

use of them is growing. A Nielsen “Retail Health Care Services as

Total Growth Opportunity” survey in the fall of 2016 found that one

in five Americans visited a retail health clinic in the past year. Certain

demographics are visiting more than the overall average, however,

including Hispanics, Millennials and households with children.

RETAILERS ARE BECOMING HEALTH CARE PROVIDERS


THE HEALTH CARE TRADE-OFFS CONSUMERS ARE MAKING

RETAILERS ARE BECOMING HEALTH CARE PROVIDERS

19%

29%

35%

26%

U.S. AVERAGE HOUSEHOLDS WITH

CHILDREN

HISPANICS MILLENNIALS

Source: ‘Retail Health Care Services as Total Store Growth Opportunity’ survey

In addition to offering consumers an alternative to heading to the

traditional doctor’s office, retailers that understand the influence

that trips to retail clinics have on additional in-store purchases will

be best positioned to capitalize on additional spend potential. More

importantly, retailers also have an opportunity to increase customer

spend and loyalty by leveraging retail clinic interactions to influence

what consumers purchase across the rest of the store during their visit.

Nielsen’s Retail Health Care Services as Total Growth Opportunity

survey found that 53% of the adults who visited a health care were

influenced to buy a retail product as a result of their visit. Thirty-

six percent were influenced to buy an OTC medication, 27% were

influenced to buy a personal care item, 24% were influenced to buy

food and 18% were influenced to buy household cleaners.


BECOMING HEALTH AND WELLNESS PARTNERS WITH CONSUMERSThere’s no denying the rising importance of health and wellness among

consumers. This presents significant opportunity for manufacturers and

retailers to help them make better decisions about how and where they

spend their dollars.

Food remains a primary driver in health and wellness, but more than

70% of survey respondents agree that “eating right” is a challenge. The

upside for manufacturers and retailers, however, is that 70% agree that

they can manage their health and wellness through proper nutrition,

and that means they’re actively looking for an array of fresh items, clear

ingredient listings and transparency about nutrition facts/benefits.

Consumers also want simplicity and transparency, and sales of products

with health and wellness claims are rising as a result. For example,

products labeled “gluten free” experienced a combined average growth

rate (CAGR) of more than 11% over the year-year period ending Oct.

29, 2016, while products labeled “organic” saw CAGR of almost 15%.

Products labeled “natural” and “GMO free” also experienced double-

digit CAGRs.

Above all, there is no one-size-fits-all approach to health and wellness.

There are myriad circumstances motivating consumers, making health

and wellness a personal quest that varies from individual to individual.

Manufacturers and retailers have a true opportunity to partner with

consumers as health and wellness is of growing importance in their

lives, but generalized and ambiguous solutions won’t be helpful in

traversing a path to success.


ABOUT NIELSEN Nielsen Holdings plc (NYSE: NLSN) is a global performance

management company that provides a comprehensive understanding

of what consumers watch and buy. Nielsen’s Watch segment provides

media and advertising clients with Total Audience measurement services

for all devices on which content — video, audio and text — is consumed.

The Buy segment offers consumer packaged goods manufacturers

and retailers the industry’s only global view of retail performance

measurement. By integrating information from its Watch and Buy

segments and other data sources, Nielsen also provides its clients with

analytics that help improve performance. Nielsen, an S&P 500 company,

has operations in over 100 countries, covering more than 90% of the

world’s population.

For more information, visit www.nielsen.com.

Copyright © 2017 The Nielsen Company. All rights reserved. Nielsen and

the Nielsen logo are trademarks or registered trademarks of CZT/ACN

Trademarks, L.L.C. Other product and service names are trademarks or

registered trademarks of their respective companies. 17/10796

CAPITALIZING ON HEALTH & WELLNESS TRENDS · 2019-05-29 · 2. HEALTH AND WELLNESS 2020 REPORT....

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Transcript of CAPITALIZING ON HEALTH & WELLNESS TRENDS · 2019-05-29 · 2. HEALTH AND WELLNESS 2020 REPORT....