CAPITALIZING ON HEALTH & WELLNESS TRENDS - AN OPPORTUNITY FOR FMCG COMPANIES TO PARTNER WITH CONSUMERS - Nielsen
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C A P I TA L I Z I N G
O N H E A LT H &
WELLNESS
TRENDS
AN OPPORTUNIT Y FOR FMCG
COMPANIES TO PARTNER WITH
CONSUMERS
Copyright © 2017 The Nielsen Company 1WELCOME
ANDREW MANDZY The retail environment is especially challenging these days. Growth
Director of Strategic is stagnant and consumers have more choices than ever. Retailers
Insights, Health & and manufacturers are seeking pockets of growth in a tough business
Wellness Growth & environment. To do that, they need to differentiate themselves and
Strategy 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
2 HEALTH AND WELLNESS 2020 REPORTSales 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.
Copyright © 2017 The Nielsen Company 3TOTAL STORE GROWTH
2.20%
1.60%
1.40%
0.90%
0.48%
2013 2014 2015 2016 2017
(Projected)
Source: Nielsen Scantrack
CONSUMERS
ARE DEMANDING
TRANSPARENCY
Generally 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.
4 HEALTH AND WELLNESS 2020 REPORTTOP ORGANIC FRESH CATEGORIES
(RANKED BY DOLLAR SALES)
TOMATOES PACKAGED SALAD
$161.7M $886.6M
17% 6%
LETTUCE BERRIES
$164.9M $479.5M
9% 25%
BANANAS CHICKEN
DOLLAR SALES ($ mil.)
$190.9M $295.5M
YEAR-OVER-YEAR CHANGE (%)
26% 15%
BEVERAGES APPLES
$244.4M $293.2M
14% 6%
CARROTS HERBS, SPICES AND SEASONINGS
$247.5M $259.5M
4% 13%
Source: Nielsen FreshFacts total U.S., 52 weeks ended Dec. 31, 2016
Copyright © 2017 The Nielsen Company 5While 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.
6 HEALTH AND WELLNESS 2020 REPORTUSING THE TOTAL
STORE TO MANAGE
AILMENTS
In 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.
NUTRITIONAL DIURETIC THROAT
DIET AIDS REMEDIES LOZENGES
PAIN SLEEPING
REMEDIES AIDS
FIVE OF THE TOP CATEGORIES
FOR BABY BOOMERS
Source: Nielsen Homescan panel, 52 week ended Dec. 3, 2016
Copyright © 2017 The Nielsen Company 7But 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
% OF HOUSEHOLDS WITH AN AILMENT SUFFERER (BY CONDITION)
43%
34% 33% 33%
28% 25% 23% 20%
ALLERGIES ACID HIGH IMPERFECT OBESITY CHOLESTEROL JOINT DEPRESSION
REFLUX/ BLOOD VISION PAIRS
HEARTBURN PRESSURE
Source: Nielsen Homescan Shopper Ailment Panel and TSV Panel, 52 weeks ended June 11, 2016
AILMENT SHOPPERS RETAIL SPENDING
GLUTEN LACTOSE
RANK DIABETIC OVERWEIGHT
NEGATIVE INTOLERANT
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
Source: Nielsen
8 HEALTH AND WELLNESS 2020 REPORTThe 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.
AILMENT SHOPPERS AND OTC RETAIL SPEND
150
120 124
123 120
119
90 100
INDEX
60
30
0
AVERAGE ALLERGY ACID CHOLESTEROL INSOMNIA
REFLUX
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.
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.
Copyright © 2017 The Nielsen Company 9TOP CATEGORIES WITH PROBIOTIC CL AIMS
PROBIOTIC CLAIMS SHARE OF CATEGORY
% SALES GROWTH SALES (%)
VITAMINS
AND SUPPLEMENTS
+26% +12%
YOGURT +3% +22%
REFRIGERATED TEAS +80% +5%
Source: Nielsen Scantrack 52 weeks ended Aug. 27, 2016
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.
10 HEALTH AND WELLNESS 2020 REPORTHOW CONSUMERS
ARE COPING WITH
RISING HEALTH
CARE COSTS
In 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
53%
50%
41% 39%
34%
30%
2014 2015 2016
DOCTOR VISITS RX
Source: Strategic Health Perspectives
Copyright © 2017 The Nielsen Company 11As 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.
THE HEALTH CARE TRADE-OFFS CONSUMERS ARE MAKING
27%
21% 20%
ASKED DOCTOR/ TOOK A TOOK AN OTC
PHARMACIST PRESCRIPTION MEDICATION
ABOUT A LESS LESS OFTEN BEFORE STARTING
EXPENSIVE THAN A RECOMMENDED
ALTERNATIVE RECOMMENDED MEDICATION
PRESCRIPTION
OTC—Over-the-counter
Source: Strategic Health Perspectives
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.
12 HEALTH AND WELLNESS 2020 REPORTRETAILERS ARE BECOMING HEALTH CARE PROVIDERS
35%
29%
26%
19%
U.S. AVERAGE HOUSEHOLDS HISPANICS MILLENNIALS
WITH
CHILDREN
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.
Copyright © 2017 The Nielsen Company 13BECOMING HEALTH
AND WELLNESS
PARTNERS WITH
CONSUMERS
There’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.
14 HEALTH AND WELLNESS 2020 REPORTABOUT 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
Copyright © 2017 The Nielsen Company 1516 HEALTH AND WELLNESS 2020 REPORT
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