The global health and wellness (HW) market continues to outpace standard foods and beverages. Multinationals follow the UN’s sustainable development goals (SDGs) and link their business strategies towards the provision of healthy and nutritious food and this is reflected in the reformulation of specific brands and acquisitive activity. Regulatory challenges such as labelling of probiotic products remain an issue in some markets despite the growth potential.

The new global briefing is in two parts. The first part discusses multinationals’ commitments towards provision of health and wellness products and the impact on brands, and their acquisitive activities. The second part discusses specific strategies to achieve their goals. It is noted that HW marketers operate in a stricter regulatory environment than players offering standard products. They need to think and move ahead of those regulations. This is important particularly when they wish to expand into unfamiliar geographies or categories. For example, China’s regulation and enforcement of law differs from the EU.

Portfolio management is linked to corporate diversification strategies, which requires assessment of the balance between standard products and HW ranges, followed by the allocation of resources (R&D investment etc). Brand extensions need to decide between going for functional or natural, or a combination of both. TCCC has core carbonates but is also complemented by a range of HW brands, including Honest Tea and Innocent.

Action on SDGs Reflected in Brand Activity

Source: Euromonitor International

Implications of the above growth characteristics

Disruptive: Start-ups can be disruptive and their collective energy and activities can trigger multinationals’ adjustment of corporate activities as the competitive landscape changes.

Fragmentation: The HW market will continue to see fragmentation in brands as “big food” supports small brands and smaller brands also collaborate with each other. As major companies are called to maintain and defend core businesses, there is a need to be agile to avoid missing growth opportunities, for example, the possible incorporation of probiotic, ancient grains or free-from attributes.

Complexity of product and brand portfolios: Growth issues are becoming complicated, including the security and understanding of HW ingredients/botanicals, labelling, compliance with regulation governing nutrition (Nordic Keyhole, USDA and EU, etc) and health claims. When acquisition is happening in an unfamiliar market or category, understanding and compliance with local regulatory bodies is important.

HW marketers need to establish or refresh and/or have an innovation, science-led capacity to lead or look out for the latest industry trend. Early birds spotting a booming category will yield great return.