Functional and organic foods drive $100bn health and wellness boom

The US health and wellness sector surged 15 percent in 2007 and broached the $100bn mark for the first time, according to the Natural Marketing Institute (NMI).

And double-digit growth will continue with projected sales of $170 billion by 2012. The Pennsylvania-based market analyst said its statistics related to health and wellness packaged good sales across both retail and direct-to-consumer channels and were part of its 2007 US survey conducted among more than 6000 households.

NMI noted functional and fortified foods and beverages made up the largest part of the sector with organic and natural personal care products registering the greatest growth at a robust 29 percent. There were 842 organic and natural personal care product launches in 2007. Organic and natural foods and beverages also demonstrated strong growth of 25 percent with 2107 product launches in 2007. But it is functional foods that dominate the health area in terms of sales volumes.

"Functional and fortified foods/beverage continue to comprise the largest segment within the health and wellness category," said NMI President Maryellen Molyneaux.

"It represents more than one-third of all industry sales - up 12 percent versus 2006. This category will continue to grow, driven by consumers' desire for increased management of their health and more health options, and the high number of new product introductions across food and beverages that answer those needs."

1. By sector, NMI put 2007 sales at:
   
2. Functional/Fortified Foods & Beverages : $38.6 (12 percent)
   
3. Vitamins, Minerals, Herbal & Dietary Supplements: $21.7 (7 percent)
   
4. Organic Foods/Beverages: $19.0 (25 percent)
   
5. Natural Foods/Beverages: $14.1 (4 percent)
   
6. Natural/Organic Personal Care: $7.8 (29 percent)
   
7. Natural/Organic General Merchandise: $1.5 (21 percent)

Amarjit Sahota, director of Organic Monitor, told FoodNavigator-USA.com recently that large multi-nationals were coming onboard in organics, with the main areas being fresh fruit, vegetables, meat and dairy, along with beverages such as tea coffee and juices and organic soy milk. The demand has created a shortage of organic ingredients and organic foods, despite healthy margins. The length of time it takes to convert to organic produce is thought to be one factor in supply being sluggish to meet demand.

Sahota said: "The biggest issue in the US is that production there is not keeping pace with demand. We are seeing more and more supply of organic foods and ingredients coming from Latin America and from other regions."

"Even though consumers would prefer to buy locally produced organic foods it is just not possible."

3 July 2008, Foodnavigator-usa.com