Has the organic explosion been a key driver in the growth of the health food market?

What are consumers' shopping habits and outlet preferences for purchasing health food and related products?

Consumer spending on health foods continues to grow strongly, increasing by 73% over the past five years to an estimated £2.6billion.

Mintel last examined the Health Food Retailing sector in September 1998. Much has changed since the last report - organic products have entered the mainstream and health food retailers, led by Holland & Barrett, have switched the emphasis of their business to vitamins and minerals as traditional health food products are taken over by the supermarkets. New retail formats are developing: corporate money is backing the expansion of the organic supermarkets, while GNC is firmly established as the specialist supplier of sports nutrition and diet products. As the high street becomes ever more competitive, chemists are taking a greater interest in more specialist VMS (Vitamins and mineral supplements) along with herbal supplements and complementary medicines to compensate for the loss of RPM (retail price maintenance) on more mainstream single VMS products. Independent health retailers will have to become more professional and invest in their businesses in order to survive, but many will sell their businesses in the next few years as the generation behind the health store expansion of the 1970s and 1980s now look forward to retirement. Public interest in food and diet, health matters and complementary medicines has never been higher, but the convenience factor is the real driver in consumer motivation. Health food retailers will need to provide the right offer in the right location with the right advice - and preferably in a welcoming, inspiring in-store environment - if they are to maintain their niche. Amid all these competitive pressures, the sector faces two new threats: one is draft European directives which could potentially result in a severe reduction in the number of specialist VMS, herbal and homeopathic products which can be sold in the UK; the other are new initiatives by Boots the Chemist and the grocery multiples which are taking them into the rapidly growing complementary medicines market.

While concentrating on the effect of competition in the marketplace, the report details other trends, including consumer expenditure, demographics and outside issues such as legislation to give an overall view of the health food retail market in 2001. The trade's own point of view on current trends is set out in a section compiled from exclusive interviews with representatives of leading players. Consumer shopping habits and outlet preferences for purchasing health food and related products are shown in the Consumer Shopping section which includes exclusive research commissioned by Mintel especially for this report.

Other Mintel reports which may be of relevance include:

- Meat-free (Vegetarian) Foods, Market Intelligence, December 2001

- Organic Foods, Market Intelligence, November 2001

- Food Retailing, Retail Intelligence, August 2001

- Sports Drinks & Energy Supplements, Market Intelligence, August 2001

- Thai, Mexican and Emerging Ethnic Foods, Market Intelligence, June 2001

- Fresh Fruit and Vegetables, Market Intelligence, May 2001

- Vitamins and Mineral Supplements, Market Intelligence, May 2001

- Special Report, Healthy Lifestyles, April 2001

- Complementary Medicines, Market Intelligence, March 2001

- Attitudes Towards Ethical Foods, Market Intelligence, February 2001

- Organic Food and Drink Retailing, Retail Intelligence, June 2000

- The Vegetarian, Market Intelligence, June 2000