| KN15243 |
| KEY NOTE HEALTH FOODS PLUS : JULY 2003 |
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This report covers: health foods, food supplements, foods for particular nutritional uses, natural cosmetics, functional foods, organic foods, vitamins, minerals, supplements, VMS, alternative remedies, sports nutrition, probiotic foods, functional drinks, cholesterol lowering products, multivitamins, fish oils, single vitamins, herbal remedies, aromatherapy products, homeopathic remedies, slimming aids, organic farming, slimming aids,Nandrolone, Kava Kava, amendments of the Medicines Directive,
Companies covered include: Nelsons, Aromatherapy Products, Boots, Cauldron Foods, GR Lane Health Products, Haldane Foods, Holland & Barrett, Peter Black Healthcare, Roche Holding (UK), Seven Seas, Vitabiotics,
| Executive Summary 1 |
| 1. Market Definition 8 |
| REPORT COVERAGE 8 |
| MARKET SECTORS 9 |
| Organic Foods 9 |
| Functional Foods 9 |
| Vitamins, Minerals and Supplements 10 |
| Alternative Remedies 10 |
| MARKET TRENDS 11 |
| Regulation and Legislation 11 |
| Corporate Activity 11 |
| Consumers and Lifestyle 11 |
| The Media 12 |
| ECONOMIC TRENDS 12 |
| Inflation 12 |
| Table 1: UK Rate of Inflation ( percent), 1998-2002 12 |
| Household Disposable Income 13 |
| Table 2: Index of Household Disposable Income (index 1971=100), 1997-2000 13 |
| MARKET POSITION 13 |
| The UK 13 |
| Table 3: The UK Market for Health Foods as a percentage of the Total UK Household Food Market by Value at Current Prices ( percent and £m at rsp), 2001 and 2002 13 |
| Table 4: The UK Market for Organic and Functional Foods as a percentage of the Total UK Household Food Market by Value at Current Prices (£m at rsp), 2001 and 2002 14 |
| Table 5: The UK Market for Vitamins, Minerals and Supplements as a percentage of the Total UK Market for OTC Medicines, by Value at Current Prices ( percent and £m at rsp), 2000 and 2002 14 |
| 2. Market Size 15 |
| THE TOTAL MARKET 15 |
| Table 6: The Total UK Health Foods Market by Sector by Value (£m at rsp and percent), 1998-2002 15 |
| by market sector 15 |
| Organic Food 15 |
| Table 7: The UK Organic Foods Market by Value at Current Prices (£m at rsp and percent), 1998-2002 16 |
| Table 8: The UK Organic Foods Market by Sector by Value at Current Prices (£m at rsp and percent), April 2001-April 2002 16 |
| Functional Foods 17 |
| Table 9: The UK Functional Foods Market by Value at Current Prices (£m at rsp and percent), 1998-2002 17 |
| Table 10: The UK Functional Foods Market by Sector by Value at Current Prices (£m at rsp and percent), 2002 17 |
| Vitamins, Minerals and Supplements 18 |
| Table 11: The UK Vitamins, Minerals and Supplements Market by Value at Current Prices (£m at rsp and percent), 1998-2002 18 |
| Table 12: The UK Vitamins, Minerals and Supplements Market by Sector ( percent), 2002 18 |
| Alternative Remedies 18 |
| Table 13: The UK Alternative Remedies Market by Value at Current Prices (£m at rsp and percent), 1998-2002 19 |
| Table 14: The UK Alternative Remedies Market by Sector by Value at Current Prices (£m at rsp and percent), 2002 19 |
| Overseas Trade 19 |
| 3. Industry Background 21 |
| INTRODUCTION 21 |
| Recent History 21 |
| Number of Companies 21 |
| EMPLOYMENT 21 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 21 |
| DISTRIBUTION 21 |
| Wholesale 21 |
| Retail 22 |
| HOW ROBUST IS THE MARKET? 22 |
| LEGISLATION 22 |
| Key Trade Associations 23 |
| Consumers for Health Choice 23 |
| Health Food Manufacturers' Association 23 |
| National Association of Health Stores 24 |
| Organic Food Manufacturers Liaison Group 24 |
| Proprietary Association of Great Britain 24 |
| Soil Association 25 |
| 4. Competitor Analysis 26 |
| THE MARKETPLACE 26 |
| MARKET LEADERS 26 |
| A Nelson & Co. Ltd 26 |
| Company Structure 26 |
| Current and Future Developments 26 |
| Financial Results 27 |
| Aromatherapy Products Ltd 27 |
| Company Structure 27 |
| Current and Future Developments 27 |
| Financial Results 27 |
| The Boots Company PLC 27 |
| Company Structure 27 |
| Current and Future Developments 27 |
| Financial Results 28 |
| Cauldron Foods Ltd 28 |
| Company Structure 28 |
| Current and Future Developments 28 |
| Financial Results 28 |
| GR Lane Health Products Ltd 28 |
| Company Structure 28 |
| Current and Future Developments 29 |
| Financial Results 29 |
| Haldane Foods Ltd 29 |
| Company Structure 29 |
| Current and Future Developments 29 |
| Financial Results 29 |
| Holland & Barrett Retail Ltd 29 |
| Company Structure 29 |
| Current and Future Developments 30 |
| Financial Results 30 |
| Peter Black Healthcare Ltd 30 |
| Company Structure 30 |
| Current and Future Developments 30 |
| Financial Results 30 |
| Roche Holding (UK) Ltd 30 |
| Company Structure 30 |
| Current and Future Developments 31 |
| Financial Results 31 |
| Seven Seas Ltd 31 |
| Company Structure 31 |
| Current and Future Developments 31 |
| Financial Results 31 |
| Vitabiotics Ltd 31 |
| Current and Future Developments 32 |
| Financial Results 32 |
| OUTSIDE SUPPLIERS 32 |
| Organic Farming 32 |
| Table 15: Organically Managed Land in the UK by Area (hectares and percent), April 2001 and April 2002 32 |
| Table 16: Number of Registered Organic Producers, April 1997-2002 33 |
| marketing activity 33 |
| Table 17: Main Media Advertising Expenditure on Health Foods by Sector (£000 and percent), Years Ending March 2002 and 2003 33 |
| Vitamin Preparations 34 |
| Table 18: Main Media Advertising Expenditure on Vitamins and Tonics (£000), Years Ending March 2002 and 2003 34 |
| Slimming Aids and Foods 36 |
| Table 19: Main Media Advertising Expenditure on Slimming Aids and Foods (£000), Years Ending March 2002 and 2003 36 |
| Organic Foods 36 |
| Table 20: Main Media Advertising Expenditure on Organic Foods (£000), Years Ending March 2002 and 2003 37 |
| Exhibitions 37 |
| Advertising Standards 37 |
| 5. Brand Strategy 38 |
| INTRODUCTION 38 |
| RESEARCH FINDINGS 38 |
| Table 21: Brands of Vitamins, Supplements or Herbal Remedies Taken on a Regular Basis ( percent of all adults), 1999, 2001 and 2003 39 |
| Table 22: Regular Usage of Vitamins, Supplements or Herbal Remedies by Sex, Age, Social Grade and Region ( percent of all adults,) 2001 and 2003 40 |
| Table 23: Brands of Supplements or Herbal Remedies Taken on a Regular Basis by Sex ( percent of all men and all women), 2003 42 |
| Table 24: Regular Users of Selected Brands of Supplements by Sex, Age, Social Grade and Region ( percent of all adults), 2003 43 |
| COMPANIES' BRANDS 44 |
| Seven Seas 44 |
| Roche (UK) Ltd 45 |
| Peter Black Healthcare 45 |
| Vitabiotics 45 |
| GR Lane Health Products 45 |
| Advertising and Promotion 45 |
| Table 25: Main Media Expenditure by Leading Advertised Brands of Vitamins and Supplements (£000), Years Ending March 2002 and 2003 46 |
| 6. Strengths, Weaknesses, Opportunities and Threats 48 |
| STRENGTHS 48 |
| WEAKNESSES 48 |
| OPPORTUNITIES 49 |
| THREATS 49 |
| 7. Buying Behaviour 50 |
| consumer PENETRATION 50 |
| Vitamins, Cod Liver Oil and Other Supplements 50 |
| Table 26: Penetration of Usage of Vitamins, Cod Liver Oil and Other Supplements ( percent of adults), 1998-2002 50 |
| By Sex 50 |
| By Age 50 |
| By Social Grade 51 |
| By Region 51 |
| Table 27: Penetration of Usage of Vitamins, Cod Liver Oil and Other Supplements by Sex, Age, Social Grade and Region ( percent of adults), 2001 and 2002 51 |
| By Frequency of Use 52 |
| Table 28: Frequency of Usage of Vitamins, Cod Liver Oil and Other Supplements ( percent of adults), 2001 and 2002 52 |
| By Type of Product 53 |
| Table 29: Penetration of Usage of Vitamins, Cod Liver Oil and Other Supplements Taken Regularly ( percent of adults), 2001 and 2002 53 |
| 8. Current Issues 54 |
| ORGANIC STANDARDS 54 |
| REGULATORY ISSUES 54 |
| The Food Supplements Directive 54 |
| FSA Report on Dietary Supplement Doses 54 |
| Traditional Herbal Medicinal Products Directive 55 |
| Amendments to the Medicines Directive 55 |
| Sports Nutrition 55 |
| Nandrolone 56 |
| Kava Kava 56 |
| Research 56 |
| Corporate Issues 56 |
| New Product Development 57 |
| 9. The Global Market 58 |
| EUROPE 58 |
| Vitamins and Supplements 58 |
| Organic Market 58 |
| Table 30: Organic Farms and Farmland in Selected European Countries by Area (000 hectares and number), 2001 58 |
| Table 31: Population and Organic Retail Sales in Selected European Countries (million and £m), 2001 59 |
| Company News 60 |
| The US 60 |
| Vitamins and Supplements 60 |
| Organic Market 60 |
| 10. Forecasts 61 |
| INTRODUCTION 61 |
| market growth 61 |
| Figure 1: The Total UK Health Foods Market by Value at Current Prices (£m at rsp), 2003-2007 62 |
| FORECASTS 2003 to 2007 62 |
| Table 32: The Forecast UK Health Foods Market by Sector by Value at Current Prices (£m at rsp), 2003-2007 63 |
| Future Trends 63 |
| Legislation 63 |
| The Corporate Environment 64 |
| 11. Company Profiles 65 |
| The Boots Company Plc 66 |
| Holland & Barrett Retail Ltd 68 |
| Roche Holding (uk) Ltd 70 |
| Vitabiotics Ltd 72 |
| 12. Company Financials 74 |
| 13. Further Sources 76 |
| Associations 76 |
| Publications 76 |
| General Sources 77 |
| Bonnier Information Sources 77 |
| Government Publications 78 |
Back to Top
| The value of the health food market covered in this report amounted to £2.08bn in 2002. This represented an increase of just over 10 percent on the 2001 figure, compared with considerably higher growth rates during the previous 2 years. The four key sectors consist of organic foods; functional foods; vitamins, minerals and supplements (VMS); and alternative remedies. |
| The slowdown was most marked in the organic and functional foods sectors, both of which have previously experienced unusually high growth, and are displaying some signs of maturation. The VMS sector has been growing slowly, while sales of natural remedies have continued to increase at a steady rate. |
| The prospect of European legislation has affected, or will affect, most sectors of the health food market in various ways, and has already taken up considerable resources, as manufacturers and retailers fight to make sure their views are properly represented. Arguably, the most urgent issue concerns the Food Supplements Directive, which covers ingredients and dosage levels in vitamin and mineral preparations, and is due to come into force in July 2003. A report from the Food Standards Agency, published in 2003, indicating that high doses of some vitamins and minerals could be harmful will deal a further setback to the specialist health foods industry. |
| On the corporate front, much of the activity during 2002 has indicated that it is the larger specialist companies that are in the best position to capitalise on the health foods market as it is at present. A number of large mainstream companies have scaled back their operations in health food sectors, while at the other end of the range there have been several acquisitions of small specialist companies by larger ones. |
| The current uncertainty in the market for vitamins, supplements and natural remedies is likely to have a negative effect on future sales, at least in the short term. Sales of organic food have begun to slow down as the market matures, while the market for functional foods will continue to grow at a steady, but unexceptional, rate. |
Text © 2003 Key Note
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Last updated by Amanda Porteous July 2003
