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Thought Leadership for Healthy Food & Beverage Brands​

The Future of the Better-for-You F&B CPG Industry

Where is it heading now? Is it thriving or flailing?

By Victoria Walling

Globally, people are now being proactive in taking a stand in choosing their respective lifestyles. There are many who are shifting to living and eating healthier. Whether it is influenced by their beliefs or principles or just the general desire to be healthier, more and more are drawn to consuming healthy food and beverages. But before anything else, how do we define healthy food and beverages?

Healthy food is a diet meant to improve and enhance one’s overall health. It’s an important choice for many as it’s an excellent source of health and nutrition – macronutrients, micronutrients, fluids, and even ample food energy. Eating healthy food and drinking healthy beverages that have less sugar, salt, saturated fat, and trans-fat are important factors to live a long life. Having a well-balanced food incorporated into our daily lives can help lower tension and stress. Sounds like a dream come true, right?

The better-for-you F&B CPG industry sounds promising in this context. Let’s take a step back first and understand how the whole healthy food and beverage industry fairs amid the pandemic and other economic hits. What drives the growth of the global health food market in the first place?

Thriving Better-for-You F&B CPG Industry

Brand Essence Research came out with a study in 2021 entitled, “Global Health Food Market: Global Size, Trends, Competitive, Historical & Forecast Analysis, 2021-2027" that revealed that the health food market globally was valued at USD 936.7 billion in 2021, and is expected to reach USD 1,326.84 billion by 2028 with a CAGR of 5.20% over the forecast period. With this data alone, it’s evident that there is potential and continuous growth for the global health food market that new players can come into, regardless of the challenges that may exist across the world.

More and more people are shifting their preferences and are choosing healthy eating habits. For instance, according to MoveHub 20 April 2021, people believe that consuming healthy food and drinks allow people to live longer by keeping their skin, teeth, and eyes healthy. This helps people avoid several illnesses as they age. Life expectancy, for example, in Japan is around 84.2 years while Switzerland is at 83.8 years, two of the healthiest countries in the world that have rallied for healthy living for decades now.

Aside from just the demand for healthier food and drinks today, there is also an increase in disposable income spent on healthy food products. Amidst the global issues of inflation and prices increasing everywhere in the world, many are still striving to purchase healthier products. What’s more surprising is the rise in number of plant-based protein sources that supplement the market growth. The growth of plant-based protein market is based on the increasing consumption of organic plant-based diets all over the world. People are more cognizant now of what they should intake to achieve that healthier, well-balanced life.

The changing preferences of people to choose plant-based protein over animal protein is helping drive the plant-based protein market even further. Brand Essense Research’s Global Plant-Based Protein Market study shared that the plant-based protein market was valued at USD 16.45 billion in 2018 and is expected to reach USD 40.53 billion by 2025.

Current Challenges Seen in the Industry

While there are great opportunities for many to support healthier eating habits, there are also looming challenges that communities face when it comes to supporting this lifestyle. These include higher prices of healthy food and beverages and the growing number of regulations on healthy food and beverage products.

Global Market Insights published its “F&B Industry Managers to Deal with Fresh Challenges in the Wake of COVID-19 and its Variants” study in 2022 showing that the F&B industry is very stringently governed by regulations imposed by organizations such as the Food and Drug Administration, Environmental Protection Agency, Occupational Safety and Health Administration, and Federal Trade Commission when it comes to launching healthy products.

The increasing prices of better-for-you F&B CPGs are putting a damper on the growth of the industry per se. We want to encourage more to choose healthy and to want to be healthy, but why is supporting a healthier eating lifestyle not easy on the pocket? Let’s try to put a bit more context to this by zeroing in on the current economic situations across the globe.

Global food prices have surged 65% since the beginning of the pandemic and has jumped up 12% in 2022 alone since the news of the Russian invasion of Ukraine broke, as data from the United Nations’ Food and Agriculture Organization revealed. The war has affected food supply chains across the globe, causing an increase in energy prices, agricultural products, fertilizers, and shipping costs, to name a few. Truth be told, food supply has always been problematic even prior to the pandemic and the Russia-Ukraine war. But how so?

Many agricultural countries support organic, non-GMO, and natural fertilizers in their produce but it requires longer time to grow nutrient-filled but less ‘beautiful’ products. This takes a lot more effort to ensure that these organic, farm-to-table staples are brought straight to consumers in groceries and fresh markets.

What it Means for the Asia Pacific Market

From a more regional standpoint, the Asia Pacific (APAC) is expected to witness a lucrative growth in the market for healthy food due to the increase in number of fitness institutions, healthy eating food habits, and disposable income plus the growing awareness when it comes to healthy food in the region. The popularity of organic food has helped grow the healthy food market in APAC by 15% per the Asia Pacific Food Industry 2019. Many countries like China, Korea, Vietnam, Thailand, Indonesia, and even the Philippines are all gradually realizing the benefits of living a healthier lifestyle, leaving the norm of just sticking to animal-based products and shifting their mindset and diet to a much healthier one.

With more businesses also realizing the potential growth of the healthy food and beverage industry in the region, there is room for more companies to introduce new products and stake a claim in this thriving and growing industry.

Better-for-You F&B CPG Brands: Striking While the Iron is Hot

Now that we know the potential growth of the better-for-you F&B CPG industry across the world, it’s high time that companies who are looking at entering the better-for-you F&B sector to start leveraging their positions. But how does one get started in a market where there are many players that have already been there for many years?

There are many ways to do this such as by studying your own local economy, local supply, and the current demand of the consumers in their country. Some questions to ponder on:

  • Where is the current mindset of our intended audience?

  • Are they ready to take the leap and support a healthy lifestyle after the pandemic has raised many health-related questions in many countries?

  • Will our product address their need for a healthier and more balanced diet?

  • What do we bring beyond just offering healthier alternatives?

  • What can we do to positively affect and empower more people to transform their lives?

  • How can we cut through the swarm of unhealthier but more desired F&B choices?

While there are many considerations to be made and situations to be studied prior to launching a new better-for-you F&B CPG product, opportunities abound for new players to enter this thriving industry and for older players to continue to grow. The key direction for companies right now within the better-for-you CPG sector is to capitalize on the interest and demand for healthy products – be where the demand is present; create clamor over the benefits and impact that your products provide; stand out from the shelves and get noticed over your competitors. The only way to move forward and thrive in this growing global health market is if more companies see these potentials from a new perspective. The demand is there, the products are available, and now the real challenge is on differentiating and standing out from the rest of the products in this category. Ask your team, “how do we make sure we connect with our intended audience on a deeper level so they keep choosing us?”

Undeniably, the better-for-you F&B CPG industry still faces various challenges but changing consumer spending habits, increasing demand, new market players, and global appetites for better-for-you F&B CPG products can help change and improve the sector in the coming years.

Many market research firms have revealed that despite the challenges that face the industry, there is huge potential for growth in the next few years. At The Vineyard, we know this to be true. We’ve seen it happen with many other new healthy brands being introduced even more so during the pandemic.

The bottom line – the global better-for-you F&B CPG industry is thriving. The important question now is, are you ready to take on and be part of this promising future?

2022 The Vineyard. All Rights Reserved.​

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