Health and Convenience Continue to Drive Global Food and Beverage Product Growth, According to New ACNielsen Study

Latest Global Study Reveals Soy-Based Drinks, Drinkable Yogurts Once Again Among the Fastest Growing Categories

Strongest Growth Coming From Smaller, Less Developed Markets

26 January 2005
New York, NY

Food and beverage products that support healthy diets, weight loss and on-the-go lifestyles are among the world’s fastest growing, according to a new global study from ACNielsen, a leading provider of consumer and marketplace information.

ACNielsen’s latest executive news report, What’s Hot Around the Globe – Insights on Growth in Food and Beverages 2004, shows that, of the seven categories that experienced double-digit revenue growth in the last year, five offered perceived health or weight-loss benefits (see Table 1). The top two growth categories were Soy-Based Drinks (+31%) and Drinkable Yogurts (+19%), both of which were among the fastest growing in a similar 2002 study.

“Our study shows that consumers the world over are concerned about diet and health, particularly with all of the media attention on issues such as obesity and diabetes,” noted Jane Perrin, ACNielsen managing director, Global Services and author of the report. “It shows that food and beverage companies that develop healthy products which also meet consumer demand for good taste and convenience will find a receptive market for these products.”

Table 1 – Fastest Growing Food & Beverage Categories: Eight Appeared in Both the 2002 and 2004 ACNielsen Executive News Report

Fads or Long-Term Leaders?
A closer examination of the fastest-growing food and beverage categories reveals that consumer interest in high-protein/low-carbohydrate (“low-carb”) diets, particularly in more developed markets, was a major factor in category growth. The popularity of these diet plans, and resulting food and beverage purchases, was identified in numerous regions as a key growth driver for certain categories, while negatively impacting others. Eggs, for instance, grew 16% globally, while none of the 10 “Non-Sweet Carbohydrates” categories grew by more than 4%.

“What is still in question is whether the low-carb phenomenon will take root as an important sub-sector of a number of food and beverage categories, or be just a passing fad,” Perrin said. For example, in the U.S., where the phenomenon began, there is evidence that interest in products with low-carb claims is losing steam, Perrin pointed out.

One former star category that seems to be fading is Prepared Alcoholic Beverages (such as “malternatives”). Identified as the fastest-growing global category in the 2002 study at +33%, it is now only growing at 2%, well below the rate of those that made the 2004 hot growth list.

“Product innovation can drive excitement and trial in categories, but only those enhancements that meet more sustainable consumer needs, particularly health and convenience, will enjoy long-term success,” explained Perrin.

Product categories that are apparently meeting those needs include Drinkable Yogurts (+19%), Fresh Ready-to-Eat Salads (+8%) and Bottled Water (+6%), all of which were found to be hot growth categories in both the 2002 and 2004 studies.

Higher Growth Rates Found in Less Developed Markets

Overall, the global growth rate for the 89 categories in the 59 markets studied by ACNielsen was +4%. This relatively low growth rate was largely influenced by the slow growth rates of the larger, more developed markets of Europe (+2%) and North America (+4%).

Growth was much stronger in some of the smaller, less developed economic regions. In the Emerging Markets region (see table 2 for country list), the total growth rate was +10%, with more than one-third of the categories experiencing double-digit growth. For example, the Cereal/Muesli/Fruit Bar category grew by +47% in this region, with product launches in Eastern Europe helping drive sales.

“Global marketers of food and beverage products need to ensure that they are positioned to capture the many growth opportunities that exist in these developing markets, or risk being left behind,” noted Perrin.

Methodology
The study’s findings are based on retail purchases in 89 categories across 59 markets spanning Asia Pacific, the Emerging Markets, Europe, Latin America and North America (see Table 2) that account for more than 93% of the world’s gross domestic product and more than 77% of the world’s population. Information was collected for the 12 months ending July 2004 and compared to the previous 12 month period.

Table 2: Markets Included

About ACNielsen
ACNielsen, a VNU business, is the world's leading marketing information company. Offering services in more than 100 countries, the company provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.

ACNielsen is part of the VNU Marketing Information group. VNU is a global information and media company with leading market positions and recognized brands in marketing information (ACNielsen), media measurement and information (Nielsen Media Research) and business information (Billboard, The Hollywood Reporter, Computing, Intermediair). VNU is active in more than 100 countries, with headquarters in Haarlem, the Netherlands and New York, USA. The company employs 38,000 people. Total revenues amounted to EUR 3.8 billion in 2004. VNU is listed on the Euronext Amsterdam (ASE: VNU) stock exchange. For more information, please visit the VNU website at www.vnu.com.

Editor's Note - for the complete text (pdf format) of the ACNielsen Global Services Executive News Report: What's Hot Around the Globe - Insights on Growth in Food and Beverages 2004, click here.