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Tuesday, September 25, 2012

Move Over, Multivitamins: A Focus on Function

When you think of nutritional supplements, “multivitamin” may first come to mind. Although multi-vitamin/mineral/supplement pills that cover various nutritional sins remain the most commonly used type of product, the nutritional supplement market has broadened its horizons and raised its sights. Today, information-driven consumers often know specifically what they want, and that means a focus on function.

Just as in the functional foods market, consumers are seeking supplements that help address specific health conditions and concerns. In fact, many have turned to ingredients that at times sound like pantry items: turmeric and cinnamon, for example, are two of the hot ingredients in the supplement market. Others are not as appetizing (probiotic bacteria, anyone?) but remain desirable nonetheless for specific digestive maintenance properties.
Consumers are also looking for supplements that keep their promises. Efficacy and credibility have never been more important than in the age of Google searches, media broadsides against dodgy products and deceptive active ingredient claims, and the product pans of consumers who are both disappointed and angry. Supplement developers are increasingly relying on scientific evidence supporting the benefits of specific nutritional ingredients to bolster the industry’s image in the eyes of consumers and the healthcare practitioners who advise them.

The most successful supplement marketers will be those who feature products with supportable claims, including those targeting specific concerns such as joint, brain, and heart health. While the outdatedly named "multivitamins" will remain industry workhorses, function-focused new products featuring marquee ingredients will be the thoroughbreds that drive industry growth.

Supplement marketers must keep their sights squarely focused on target marketing, including those age 65+ and the do-it-yourself-healthcare prone Baby Boomers who have begun swelling the senior ranks. Targeting younger adults whose supplements usage rates have been falling is also critical to the market’s longer-term future, as is reaching the emergent Hispanic population, whose supplement usage rates are below average.

During 2012, supplement sales rose 7% to $11.5 billion, according to Packaged Facts estimates presented in our recent report on Nutritional Supplements in the U.S. Given the decay of all flesh in an aging society and the reassurance of solid scientific support, we forecast the market to reach $15.5 billion by 2017.

For more information on our full report:

Thursday, September 20, 2012

Pizza Industry Doesn't Have to Throw Health Under the Bus

When it comes to eating more healthfully, it's long been obvious that while consumers may talk the talk, they may not walk the walk. But the needle has nevertheless shifted: the health trend is real. Is it leaving pizza behind? The survey say “yes.”

Proprietary survey results analyzed in our Pizza Market in the U.S.: Foodservice and Retail report indicate a clear food consumption trend toward healthier options and home-based cost savings, at the expense of pizza.  With respect to the 17 foods and food types we asked about, consumers are most likely to be “eating more” of those with stronger general health attributes and with home-based cost savings. Unfortunately for pizza purveyors, consumers are less likely to be eating more pizza, whether its restaurant pizza, frozen pizza, or fresh/refrigerated pizza.

Sales trends are correspondingly lukewarm. We forecast U.S. pizza restaurant 2011-2014 compound annual growth of 3.3%, lagging projected restaurant industry growth. Pizza is also loosening its hold on the restaurant menu, with menu penetration falling by 4% from 2008 to 2012. We also forecast U.S. frozen and refrigerated retail pizza 2011-2014 compound annual growth of -0.1%, lagging projected retail food sales growth (estimates are unadjusted for inflation).

Of course, nobody is counting pizza out--you can't swing a pepperoni stick without hitting a pizza lover.  With usage penetration at restaurants and retail alike well above 90%, pizza remains an American staple. But after riding the recession-driven value wave, pizza is losing steam.
Even so, menu trends reveal a wealth of cuisine-driven growth opportunity, from pushing more mileage out of fusion cuisine to sauce experimentation to leveraging a wider variety of niche cheeses. Each of these approaches increases taste variety, opening up sales opportunity.
But health must play a more central role. While health claims are often woven into menus, pizza is simply not in step with the health-driven terminology: only 2.3% of restaurants serving pizza as an entrée associate pizza with “gluten free” on the menu; “low fat” and “organic” are associated with only 1.9% and 1.1%.   Restaurant operators surely can experiment more with healthful claims that resonate with pizza eaters.
And the industry already has vegetables in its corner. A slew of vegetable toppings are available at restaurants serving pizza entrées, ranging from the more ubiquitous olives (at 69%) to broccoli (30%) and arugula (10%), demonstrating strong mainstream and niche appeal. As an inherently healthy food, vegetables provide an ideal vehicle for purveyors to ratchet up pizza’s health profile without having to aggressively sell on nutritional merits to consumers, who already order pizzas with vegetables in abundance.
The bottom line is that the pizza industry doesn't have to throw health under the bus, especially if it wants to grow sales: Some 4 in 10 consumers say healthier pizza options would entice them to eat pizza more often.

Friday, September 14, 2012

Green Cleaners: Not Mopping Up, But Outperforming in Growth

 "Green"  (eco-friendly) cleaners, once used primarily by hard-core green consumers, have expanded their appeal to mainstream consumers who typically use non-green cleaners.   Initiatives over the last five years by both marketers and retailers served to broaden the base of green cleaners.   Mass retailers including supermarkets and general merchandisers such as Walmart and Target significantly expanded their selection of green cleaning products in response to consumer demand.   Sales grew rapidly in these channels, such that they displaced health and natural product stores as the leading venue for green cleaning product sales.   To a degree, a sort of caste system developed:  mass marketers such as Clorox, Dial, and Church & Dwight entered the green market with a flurry of new products that competed at lower price points against venerable green leaders such as Seventh Generation with natural products channel cred.   Increased competition grew the overall market, and reinvigorated new product and marketing activities of green marketers. 

Consumers do say they want green cleaning products.   In an online Packaged Facts consumer survey conducted in August 2012, 41% of respondents indicated that they had purchased or used natural, organic, or eco-friendly household cleaning/laundry products within the previous 12 months, up from 38% in February 2009.    Nonetheless, many consumers find green cleaners too expensive and question whether they work as well as traditional products.   Price has become ever more important during difficult economic times.  It’s a challenge marketers must face in the coming years.  What’s the value of green cleaners to mainstream consumers?   Hard-core green consumers are already sold, and have their trusted brands.   Yet they are a relatively small niche.   Mainstream consumers must be convinced, or continue being convinced, that a green cleaning product, whether from a mass marketer or an "alternative" green marketer, is a good value and the right solution.

In the long-term, green cleaning products are poised to continue outperforming conventional cleaners in sales growth, given the slowly but steadily coming-to-a-boil consumer interest in sustainability,  loyal usage by core and converted consumers, and higher price points.  Growth will accelerate if and when economic conditions improve.

Friday, September 7, 2012

Latinos and Prepaid Cards: It's About Overbanking, Not Underbanking

Prepaid debit cards are growing in popularity among Latino Consumers.  Packaged Facts' new report Consumer Payments in the U.S.:  The Latino Market reveals that between 2011 and 2012 the number of Latinos using prepaid cards increased by 7.2%.  At the same time, the total number of consumers using prepaid cards grew by only 1%, and use of prepaid cards by non-Latinos declined by 0.5%.  Thus, Latinos drove the growth in prepaid card use during this period.

It might be expected that the popularity of prepaid cards among Latinos would be due to the higher propensity of Latinos to use cash, and relatedly to their lower propensity have checking accounts.  The results of a survey of Latino prepaid card users published in 2011 by Washington, D.C.-based National Council of La Raza (NCLA) provide some support for this view.  The NCLA study found that 26% of Latinos obtaining a prepaid card did so because “it was cheaper than going to a check casher.” Nearly half (48%) said that what they liked most about prepaid cards is that “I didn’t have to carry cash.”

However, NCLA found that the top benefit of prepaid cards as reported by Latino users relates to a desire to manage spending rather than a desire to find a replacement for cash.  More than 60% of those participating in the study liked using prepaid cards because “I could only spend the amount of money that I had.”  The fact that using a prepaid card “was convenient/saved time” was a benefit noted by 42% of respondents.

As our Consumer Payments in the U.S.:  The Latino Market report notes, 20% of Latinos with checking accounts used a prepaid card in the last 12 months, compared to only 14% of Latinos without checking accounts.  Therefore, Latino use of prepaid cards seems to be less about being underbanked and not having checking accounts and more about avoiding being overbanked and falling prey to credit card debt.