Navigating the Growing Healthy Living Industry
Increasingly more companies are focused on health and wellness. The paths of two divergent sets of consumers – boomers and seniors who are living to older ages and managing new health challenges, and millennials, who pay attention to not only the food and beverage they consume but where the food and beverages comes from – have positioned the industry well for future growth. With consumers of all ages more health conscious than ever before and more demanding of products and services that cater to their healthy lifestyles, the industry is growing at a rate of more than double the U.S. economy and is anticipated to reach $1 trillion by 2017, according to estimates from Euromonitor.
But as the industry grows bigger, so does the number of players in the category. Everyone – from major corporations to family businesses to startups – wants a piece of the healthy living pie. In 2014, Natural Foods Merchandiser reported sales of natural products at retail grew approximately 9%, with the double-digit increases in fruits and vegetables, beverages and supplements. You’ll be hard-pressed to find a food or beverage company, that doesn’t offer some kind of “healthy” or “better-for-you” alternative. Furthermore, consider Nielsen’s 2015 Global Health & Wellness Survey, which suggests that the consumer mindset about healthy foods has shifted, with some 88% of those polled in indicating that they are ready to pay more for products that claim to boost health and weight loss. Consumers’ increasing focus on making healthier choices is an opportunity for engagement and building brand loyalty.
While companies in the healthy living sector have tremendous market opportunity, they also face fierce competition and an increasingly stringent regulatory environment. When companies across industries label themselves as “healthy living”, positioning and differentiation in the market is critical to valuation and longevity from both a consumer and investor perspective. Companies need to carve out a niche for themselves by targeting a specific consumer group and tailoring their messaging and product marketing to that demographic. The healthy living companies that resonate with consumers and investors are those who can combine the knowledge of who they are, the understanding of their customers’ health and fitness goals, and ability to communicate how their offerings can help them meet their goals, with a strong financial performance.