Last week, my colleague Tom Pirovano wrote about how the economic downturn has slowed the growth of organic products to almost a standstill. Looking at the broader health and wellness category, we are seeing similar patterns. Grouping health and wellness claims Nielsen tracks through its LabelTrends service into three tiers based on annual growth rates, retailers and manufacturers will notice some interesting developments.
Tier 1 (15 percent to 26 percent annual sales growth): Just one claim - omega - showed any dollar growth in the last four weeks, racking up a more than 30 percent increase. On a unit basis, products with flax or hemp seed, plant sterol, less sugar claims and probiotic claims showed poor performance in the last four and thirteen week periods.
Tier 2 (8 percent to12 percent): There were less severe declines in this group, and with the exception of antioxidants, all of the categories continued to show growth, albeit more slowly, with “No MSG” leading the way with dollar growth of 12 percent in the last four weeks.
Tier 3 (-4 percent to 8 percent): Versus the other tiers and average food department growth rates, Tier 3 generally made up the worse performers. Only products with reduced calorie claims performed better than average on dollar and unit terms, while cholesterol, soy and GMO-free products showed the sharpest declines.
With continued disturbing news about obesity in the U.S., as well as an aging population, health and wellness products should not be viewed by consumers as a luxury affordable only during strong economies. The challenge for manufacturers and retailers is to drive sales and value messaging in addition to health claims to at the very least retain existing consumers and hopefully win new converts as well.
Todd Hale, Senior Vice President, Consumer & Shopper Insights
Source: Nielsen Wire