Estimated to have reached £495 million in 2010, health food retailers posted growth of 17% between 2005 and 2010, and 3% against 2009. Further growth of 17% is forecast for the next 5 years, taking the market to £577 million by 2015. This growth is forecast on the back of robust growth in key product categories, but under ongoing pressure from the non-specialists.
Within the market, free-from foods have experienced the greatest growth in the past 5 years (60%), sales set to increase a further 57% in the next 5 years. Meanwhile sales of complementary medicines increased 34% over the same period, with sales set to increase by 32% over the same 5 year period. Nuts, seeds and dried food sales increased by 26%, while meatfree foods, and VMS increased 18% and 11% respectively.
Despite the success of healthfood retailing, almost three in ten (28%) now feel that there is no need for specific health foods if you have a healthy diet. Meanwhile, just one in nine see health foods as an easy way to supplement their diet. Almost a quarter (23%) believe that health foods and supplements are expensive for what they are.
Nuts, seeds and dried fruit and bran are the most popular health food by a strong margin, almost half of Brits having bought some. Vitamins and supplements rank in second place, around four in ten (39%) having bought some, despite seeing overall usage fall in 2007 and 2008. Grocers’ own-label ranges have heated up competition. Honey, sugar and sweeteners make up the top three most popular products (32%)
One in four people have bought four or more health foods, with women, 25-34-year-olds, over-55s and ABs being the likeliest heavy users.
Standing testimony to their discretionary nature, health foods have not been immune to the recession, with nearly one in three of those that buy them cutting back in the last 12 months.
Price perception remains an issue, as nearly one in four people say that health foods are expensive for what they are, while just one in twenty see them as an economic way to ensure a wholesome diet.
In terms of distribution, the health food sector is polarised between Holland & Barrett, the only operator of size, and some 900 independent operators making up the rest of the sector.
The leading grocers have become major operators in various health food categories, thanks to their expanding product offer, competitive prices and the convenience they offer.
Chemists and drugstores capture a sizeable share of the vitamins, supplements and complementary medicines markets, helped by the strong store presence and trust in the leading operators.