Health Food Retailing - UK - April 2010

ISSUES IN THE MARKET
Key themes
Definitions
Abbreviations
FUTURE OPPORTUNITIES
 THE LOCAL HEALTH SHOP
(Not just) hemp seeds and apple cider vinegar
 A BACK-TO-BASICS APPROACH TO BEAUTY
Beauty from the outside in
Earthy beauty
MARKET IN BRIEF
Sector size and forecast
New EU regulation impacts health claims
Demographic changes benefit health foods
Health foods vs healthy foods
Health food sector lacks innovation
A fragmented sector under pressure from non-specialists
Nuts and seeds top, VMS second
Tesco and Holland & Barrett top outlets for health food
Price and convenience drive choice of outlet
Health foods are discretionary
INTERNAL MARKET ENVIRONMENT
Key points
Regulatory changes
EFSA steps in to regulate health claims
The food supplements directive
The Traditional Herbal Medicinal Products Directive
Recession exacerbates busy lifestyles
Figure 1: Attitudes to personal health, 2007-09
Alternative medicine small but steady
Figure 2: Attitudes to alternative medicine and health foods, 2007-09
The press effect
Figure 3: Agreement with the statement that “News on food influences my dietary habits”, 2009
BROADER MARKET ENVIRONMENT
Key points
One in four in healthy finances
Figure 4: Trends in how respondents describe their financial situation
Demographics to boost health foods
Figure 5: Trends in the age structure of the UK population, 2010-15
Growth in health-aware ABs
Figure 6: Changes in adult population, by socio-economic group, 2010-15
COMPETITIVE CONTEXT
Key points
Figure 7: UK retail sales of various health foods and products that compete with them, 2005-09
A healthy diet
Figure 8: Change in intakes of selected nutrients derived from food and drink for UK households, 2001-08
Functional food
OTC medication
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING
Key points
Holland & Barrett tests new format
Not just a store
Online space underused
SECTOR SIZE AND FORECAST
Key points
Health food specialists’ sales grow
Figure 9: UK health food retailers' sales, and index of growth, 2005-15
Figure 10: UK health food retailers' sales, at current and constant prices, 2005-15
Figure 11: Estimated sales growth in key product categories sold at health food stores, 2005-10
Strong growth forecast in key product segments
Figure 12: Forecast growth in key product categories sold at health food stores and for all retail, 2009-14
...but can the specialists tap into it?
Factors used in the forecast
RETAIL COMPETITOR ANALYSIS
Key points
Health food – a sector of two halves
Grocery multiples dominate health foods
Chemists add to pressure on specialists
Figure 13: Leading retailers’ store numbers in the health food sector and competing areas, 2007-09
COMPANIES AND PRODUCTS
Holland and Barrett
Figure 14: Holland & Barrett background Information, 1997-2009
Figure 15: Holland & Barrett key financial performance, 2004-08
Figure 16: Holland & Barrett: UK Outlet data, 2004-08
Julian Graves
Figure 17: Julian Graves: key financial performance, 2004-08
Figure 18: Julian Graves: Stores, 2004-08
Boots
Figure 19: Alliance Boots UK Health and Beauty Division: Financial performance, 2004-08
Figure 20: Alliance Boots UK Health and Beauty Division: Outlet data, 2004-08
Figure 21: Alliance Boots UK Health and Beauty: Sales mix by major product category, 2008/09
Superdrug
Nutri Centre @ Tesco
National Association of Health Stores
The Health Store
Alternative medicines specialists
Few online health food retailers of size
Less familiar e-tailers strong in visit numbers
Figure 22: Top 20 health care retail websites visited by UK residents, February 2010
CONSUMER – HEALTH FOOD PURCHASES
Key points
Nuts and vitamins are top purchases
Figure 23: Products bought in the last 12 months, December 2009
Nuts, seeds, dried fruit
Vitamins and mineral supplements
Tea
Speciality foods
Quarter use four or more health foods
Figure 24: Repertoire of products bought in the last 12 months, December 2009
Preferences of light and heavy users differ
Figure 25: Products bought from health food stores in the last 12 months, by light users (1 type) and heavy users (5+ types), December 2009
CONSUMER – OUTLETS USED FOR HEALTH FOOD PURCHASES
Key points
Outlets used for health food purchases
Figure 26: Shops visited to buy health food products in last 12 months, December 2009
Convenience makes grocers popular
Figure 27: Stores regularly used for grocery shopping, December 2009
Health specialists lag in ranges
Online still niche
Who shops where?
Figure 28: Repertoire of shops visited to buy health food products in the last 12 months, December 2009
CONSUMER – ATTITUDES TO SHOPPING FOR HEALTH FOOD
Key points
Attitudes to shopping for health foods
Figure 29: Attitudes towards shopping for health foods, December 2009
Price and convenience drive choice of store
Figure 30: Demographic groups most and least likely to agree on selected statements on price, convenience and special offers when shopping for health foods, December 2009
Own-label trusted more than bought
Figure 31: The demographic groups most and least likely to agree on selected statements on own-label products when shopping for health foods, December 2009
Advice is for the minority
Ranges a non-issue
CONSUMER – ATTITUDES TO HEALTH FOOD
Key points
Attitudes to health food
Figure 32: Attitudes towards health foods, December 2009
Price perception an issue
Health food and healthy food
TARGET GROUPS
Key points
Positives (13%)
Holistic healthy (28%)
Apathetic (59%)
APPENDIX – INTERNAL AND BROADER MARKET ENVIRONMENT
Figure 33: Agreement with selected lifestyle statements on health, by gender, 2007-09
Figure 34: Agreement with selected lifestyle statements on health, by demographics, 2009
Figure 35: Trends in how respondents describe their financial situation
Figure 36: Trends in how respondents describe their financial situation (Continued)
Age
Figure 37: Trends in the age structure of the UK population, by gender, 2005-15
Socio-economic groups
Figure 38: Forecast adult population trends, by socio-economic group, 2005-15
APPENDIX – CONSUMER: HEALTH FOOD PURCHASES
Figure 39: Products bought in the last 12 months, December 2009
Figure 40: Most popular products bought in the last 12 months, by demographics, December 2009
Figure 41: Next most popular products bought in the last 12 months, by demographics, December 2009
Figure 42: Repertoire of products bought in the last 12 months, December 2009
Figure 43: Repertoire of products bought in the last 12 months, by demographics, December 2009
Figure 44: Types of products bought in the last 12 months, by repertoire of products bought in the last 12 months, December 2009
APPENDIX – CONSUMER – OUTLETS USED FOR HEALTH FOOD PURCHASES
Figure 45: Shops used to buy health food products in last 12 months, December 2009
Figure 46: Most popular shops used to buy health food products in last 12 months, by demographics, December 2009
Figure 47: Next most popular shops used to buy health food products in last 12 months, by demographics, December 2009
Figure 48: Repertoire of shops used to buy health food products in last 12 months, December 2009
Figure 49: Repertoire of shops used to buy health food products in last 12 months, by demographics, December 2009
Figure 50: Shops used to buy health food products in last 12 months, by repertoire of shops used to buy health food products in last 12 months, December 2009
APPENDIX – CONSUMER ATTITUDES TOWARDS SHOPPING FOR HEALTH FOOD
Figure 51: Attitudes towards shopping for health foods, December 2009
Figure 52: Most popular attitudes towards shopping for health foods, by demographics, December 2009
Figure 53: Next most popular attitudes towards shopping for health foods, by demographics, December 2009
APPENDIX – CONSUMER ATTITUDES TO HEALTH FOODS
Figure 54: Attitudes towards health foods, December 2009
Figure 55: Most popular attitudes towards health foods, by demographics, December 2009
Figure 56: Next most popular attitudes towards health foods, by demographics, December 2009
APPENDIX – TARGET GROUPS
Figure 57: Attitudes towards health foods, by target groups, December 2009
Figure 58: Target groups, by demographics, December 2009
Figure 59: Statements on healthy lifestyles, by target groups, December 2009
Figure 60: Attitudes towards shopping for health foods, by target groups, December 2009