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MP15343
MAPS : Healthy Eating: January 2003

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This report covers: healthy eating, organic, vegetarian, reduced fat, reduced sugar, milk and cream, vegetables, fats and oils, fruit, cost of healthy eating, reduced salt, sodium, Food and Drink Federation, Soil Association, The Vegan Society, The Vegetarian Society, organic food, dairy products, multi-ingredient products, cereals and baked goods, baby foods, meat, organic farming,reduced-fat, products, reduced-sugar,

Companies covered include: Dairy Crest, Group, Haldane Foods, HJ Heinz, fHorizon Organic Holdings, Marlow Foods, fmars, UK, Northern Foods, Raynor Food Group,fUnilever Bestfoods, The, Yeo Valley,Organic Company, ASDA, Mars, Marks and Spencer, Safeway, Sainsbury, Tesco, Waitrose,

EXECUTIVE SUMMARY

Executive Summary
Since the early 1980s, household eating habits have been moving steadily towards healthier eating — less fat and sugar and more fruit. This trend has been prompted by a number of factors, including encouragement from government health campaigns and marketing initiatives by manufacturers and retailers, which have had a beneficial effect on a number of markets, including organic, vegetarian and reduced-fat and reduced-sugar foods. However, the topic of healthy eating has also attracted controversy (including conflicting research findings) and in 2001 and 2002, some adverse publicity linked to 'healthy' food sectors such as organic food.
Predictably, the meteoric rate of growth in sales of organic food has begun to slow as the market matures: the sectors that have grown most strongly since the year ending April 2000 have been organic meat and baby food.
The market for vegetarian food has been fuelled both by an increase in the number of consumers who do not eat meat at all, and by changing attitudes towards meat among non-vegetarians. This market has seen some adverse effects due to the strong growth of the organic sector, as well as the fact that some of the less dedicated vegetarians and meat-reducers have turned to non-vegetarian organic food as a way of addressing their concerns about the safety and healthiness of factory-farmed meat. It is also the case that most organic ready meal ranges include totally meat-free dishes. However, the specialist vegetarian sector has countered this with a number of launches of organic vegetarian products, and the market recovered during 2002.
The market for reduced-fat and reduced-sugar products has shown steady but unremarkable growth since 1998. General concern about obesity (in the UK and beyond) — and in particular about its effect on health and the cost of this to the nation in terms of healthcare and sickness absence — has meant that the Government is likely to take more active steps to encourage healthy eating in future.
Consumer research exclusive to Key Note has revealed that consumers are generally sceptical about healthy eating advice from food manufacturers and supermarkets. However, a relatively high proportion are prepared to pay a premium for healthy food, but the vast majority are unwilling to make sacrifices in terms of taste.
The organic foods market is forecast to continue growing at a vigorous rate between 2003 and 2007, although growth will be slowed by the combination of a decrease in the price premium of organic foods and a maturation of the market. The vegetarian foods market will also show considerable growth during this period, with manufacturers of specialist vegetarian foods continuing the trend of repositioning products with the emphasis on taste and health benefits in an attempt to further the appeal to non-vegetarians. In contrast, sales of reduced-fat/reduced-sugar products will show only modest growth.

TABLE OF CONTENTS

Executive Summary 7
1. Introduction 8
BACKGROUND 8
DEFINITIONS 8
Organic 8
Vegetarian 9
Reduced Fat 9
Reduced Sugar 9
2. Strategic Overview 10
THE CASE FOR HEALTHY EATING 10
HOUSEHOLD EATING HABITS 10
Table 1: The Consumption of the Main Food Groups in Great Britain (grams† per person per week), 1987, 1997, 1999 and 2000 11
Table 2: Expenditure for Main Food Groups in Great Britain (pence per person per week and %), 1987 and 2000 12
Milk and Cream 12
Table 3: The Consumption of Milk and Cream in Great Britain (millilitres per person per week), 1987, 1997, 1999 and 2000 13
Table 4: Expenditure on Milk and Cream in Great Britain (pence per person per week and %), 1987 and 2000 13
Fats and Oils 14
Table 5: The Consumption of Fats and Oils in Great Britain (grams† per person per week), 1987, 1997, 1999 and 2000 15
Table 6: Expenditure on Fats and Oils in Great Britain (pence per person per week and %), 1987 and 2000 15
Vegetables 16
Table 7: The Consumption of Vegetables in Great Britain (grams per person per week), 1987, 1997, 1999 and 2000 17
Table 8: Expenditure on Vegetables in Great Britain (pence per person per week and %), 1987 and 2000 17
Fruit 18
Table 9: The Consumption of Fruit in Great Britain (grams† per person per week), 1987, 1997, 1999 and 2000 19
Table 10: Expenditure on Fruit in Great Britain (pence per person per week and %), 1987 and 2000 19
THE COST OF HEALTHY EATING 20
Table 11: The Average Cost of Regular and Healthier Foods (£ and %), 1988, 1995 and 2001 20
Figure 1: The Average Cost of Regular and Healthier Foods (£), 1988, 1995 and 2001 20
ORGANISATIONS AND PRESSURE GROUPS 21
Food Standards Agency 21
'Lite'/'Light' 21
'Low Fat' and 'Fat Free' 21
'No Added Sugar' and 'Unsweetened' 21
'Organic' 21
'Reduced Salt/Sodium' 22
Healthy Eating Logos 22
Food & Drink Federation 22
The Food Commission 22
Soil Association 23
The Vegan Society 23
The Vegetarian Society 23
3. Organic Food 25
BACKGROUND 25
MARKET SIZE 25
Table 12: The UK Organic Foods Market by Value (£m and index 1998=100), 1997/1998-2001/2002 26
SEGMENTATION 26
Table 13: The UK Organic Foods Market by Sector by Value (£m), 1999/2000 and 2001/2002 26
Figure 2: The UK Organic Foods Market by Sector by Value (£m), 1999/2000 and 2001/2002 28
Table 14: The UK Organic Food Market by Sector Share by Value (%), 1999/2000 and 2001/2002 28
Fruit and Vegetables 29
Dairy Products 29
Multi-Ingredient Products 29
Cereals and Baked Goods 30
Baby Foods 30
Meat 30
ORGANIC FARMING 30
Table 15: Number of Registered Organic Producers in the UK, April 1997-April 2002 30
DISTRIBUTION 31
Table 16: UK Organic Sales by Type of Outlet (%), 1999/2000-2001/2002 31
Figure 3: UK Organic Sales by Type of Outlet (%), 1999/2000-2001/200 32
MARKETING ACTIVITY 32
ADVERTISING 32
Table 17: Main Media Advertising Expenditure on Selected Organic Products (£000), Year Ending September 2002 33
CONSUMER TRENDS 33
Table 18: Attitudes Towards Organic Foods (% of respondents), 2002 34
4. Vegetarian Food 36
BACKGROUND 36
MARKET SIZE 36
Table 19: The UK Vegetarian Foods Market by Value (£m and index 1998=100), 1998-2002 37
SEGMENTATION 37
Table 20: The UK Vegetarian Foods Market by Sector Share by Value (%), 1999 and 2002 38
Figure 4: The UK Vegetarian Foods Market by Sector Share by Value (%), 1999 and 2002 38
MARKETING ACTIVITY 39
ADVERTISING 39
Table 21: Main Media Advertising Expenditure on Selected Vegetarian Ranges (£000), Year Ending September 2002 39
CONSUMER TRENDS 40
Table 22: Vegetarians and Vegetarian Households, (% of respondents), 1998, 2001 and 2002 40
5. Reduced-Fat/Reduced-Sugar Foods 41
BACKGROUND 41
MARKET SIZE 42
Table 23: The UK Market for Reduced-Fat and Reduced-Sugar Products by Value (£m at rsp and index 1998=100), 1998-2002 42
Figure 5: The UK Market for Reduced-Fat and Reduced-Sugar Products by Value (£m at rsp), 1998-2002 43
SEGMENTATION 43
Reduced-Fat Products 43
Reduced-Sugar Products 44
MARKETING ACTIVITY 44
ADVERTISING 44
Table 24: Main Media Advertising Expenditure on Selected Reduced-Fat and Reduced-Sugar Products (£000) Year Ending September 2002 45
CONSUMER TRENDS 45
Table 25: Attitudes Towards Slimming and Losing Weight (% of respondents), 2002 46
6. International Perspective 48
OBESITY: A GLOBAL PROBLEM 48
The Health Implications of Obesity 48
EUROPE 48
Health Background 48
Market Developments 49
THE US 49
Health Background 49
Market Developments 49
7. PEST Analysis 51
POLITICAL FACTORS 51
ECONOMIC FACTORS 51
SOCIAL FACTORS 51
TECHNOLOGICAL FACTORS 51
8. Consumer Dynamics 52
OVERVIEW 52
Table 26: Consumer Attitudes Towards Healthy Eating (% of respondents), 2002 52
ATTITUDES TOWARDS HEALTH CLAIMS 54
"High Street Supermarkets Displaying A Healthy Own-Brand Range Of Foods Means It Is Easy To Be Sure The Food You Are Buying Is Good For You" 54
"I Don't Always Believe What Food Manufacturers And Supermarkets Say About How Healthy Foods Are" 55
Table 27: Attitudes Towards Supermarkets' Healthy Own Brands and Manufacturers' and Supermarkets' Claims About Healthy Foods (% of respondents), 2002 56
"There Is So Much Conflicting Advice About Which Types Of Food And Drink Are Healthy And Unhealthy For You That You May As Well Just Eat What You Like" 58
"I Think Nowadays People Make Too Much Fuss About Whether Food And Drink Is Healthy Or Not" 58
Table 28: Confusion Over and Scepticism About Healthy Food and Drink (% of respondents), 2002 59
DO CONSUMERS READ FOOD LABELS? 61
"When I Buy Food And Drink I Usually Check The Labels To Find Out The Fat Content" 61
"When I Buy Food And Drink I Usually Check The Labels In Case There Are Any Ingredients I Wish To Avoid; For Example, Additives Or Colourings, Etc." 61
Table 29: Those Who Check Food Labels for Fat Content and for Ingredients to Avoid (% of respondents), 2002 62
"When I Buy Food And Drink I Never Check The Ingredients On The Label" 64
Table 30: Those Who Do Not Check Food Labels (% of respondents), 2002 65
WHAT WILL CONSUMERS SACRIFICE FOR HEALTHY FOOD AND DRINK? 67
"I Think It Is Worth Purchasing Food And Drink Which Is Healthy, Even If It Doesn't Taste As Good" 67
"I Think It Is Worth Purchasing Food And Drink Which Is Healthy, Even Though It May Cost A Bit More" 67
Table 31: Purchasing Healthy Food Even if the Taste is Less Good, and at a Higher Price (% of respondents), 2002 68
"I Eat Meat But Have At Least Four Meat-Free Main Meals Each Week" 70
"I Eat Meat But There Is At Least One Other Person In My Household Who Does Not" 70
Table 32: Non-Vegetarians Who Eat Meat-Free Meals and Non-Vegetarians With Vegetarians in Their Household (% of respondents), 2002 71
"I Do Not Eat Meat But There Is At Least One Other Person In My Household Who Does" 73
"I Do Not Eat Meat, Nor Does Anyone Else In My Household" 73
Table 33: Vegetarians in Meat-Eating and Vegetarian Households (% of respondents), 2002 74
ORGANIC FOOD AND FARMING 76
"I Am Concerned About Pesticide Residues In Food" 76
"I Buy Organic Food Whenever Possible" 76
Table 34: Concern Over Pesticide Residues in Food and the Purchase of Organic Food Whenever Possible (% of respondents), 2002 77
"Most Organic Food Is Too Expensive" 79
Table 35: Those Who Think Most Organic Food is Too Expensive (% of respondents), 2002 80
9. Company Profiles 82
INTRODUCTION 82
MANUFACTURERS/PRODUCERS 82
Dairy Crest Group PLC 82
Financial Results 82
Haldane Foods Ltd 82
Financial Results 82
H.J. Heinz Company Ltd 83
Financial Results 83
Horizon Organic Holdings Incorporated 83
Financial Results 84
Marlow Foods Ltd 84
Financial Results 84
Mars U.K. Ltd 84
Financial Results 84
Northern Foods PLC 84
Financial Results 85
Rayner Food Group Ltd 85
Financial Results 85
Unilever Bestfoods UK Ltd 85
Financial Results 85
The Yeo Valley Organic Company Ltd 86
Financial Results 86
RETAILERS 86
ASDA Group Ltd 86
Financial Results 86
Marks and Spencer PLC 87
Financial Results 87
Safeway PLC 87
Financial Results 87
J Sainsbury PLC 87
Financial Results 88
Tesco PLC 88
Financial Results 88
Waitrose Ltd 88
Financial Results 88
10. The Future 89
ENCOURAGEMENT FOR HEALTHY EATING 89
ORGANIC FOOD 89
Table 36: The Forecast UK Organic Foods Market by Value (£m and index 2003=100), 2003-2007 90
VEGETARIAN FOODS 91
Table 37: The Forecast UK Vegetarian Foods Market by Value (£m and index 2003=100), 2003-2007 91
REDUCED-FAT/REDUCED-SUGAR PRODUCTS 91
Table 38: Forecast UK Sales of Reduced-Fat and Reduced-Sugar Products by Value (£m at rsp and index 2003=100), 2003-2007 92
11. Further Sources 93
Associations 93
General Sources 93
Bonnier Information Sources 94
Government Publications 95

Text © 2003 Key Note

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