Healthy food in Australia: Three major trends to influence new product development revealed

Speaking at the Naturally Good 2019 Business Summit, Natural Products Consulting Principal Bob Burke and IRI Worldwide Chief Commercial Officer – Asia Pacific Alistair Leathwood discussed key factors and trends in the health foods market, and how businesses can take advantage of these.

Here are some of key takeaway points from the session:

1)      ​Interest in gut health is rapidly rising​

According to Leathwood, a growing interest has been observed in gut health management, and this is an area that companies can capitalise on when thinking about NPD.

“Fifty percent  of Australians experience gut problems, and one in seven experience distressing gut health symptoms, [which means that the market for products that could help ease this is large],”​ he said.

“[Whether it’s specialty companies] like the a2 Milk Company, [or those that go for the ‘mainstreaming’ concept] like Remedy or MOJO Kombucha, these companies with a focus on gut health have seen substantial growth over the past several years.”​

Burke highlighted that based on probiotics alone, this concept has been demonstrated over multiple categories of food products such as teas, functional beverages and single-serve bars such as the Nugo Dark Chocolate Crunch Bar.

“[Apart from being] high in rice protein at nine grams per serving, vegan and non-GMO certified, this bar also contains GanedenBC30 strain of probiotics to aid gut health. This showcases how the trend is cutting across multiple categories,” ​said Burke.

2)      ​Alternative protein sources ​

The market for protein sources besides meat, especially plant proteins, have been rapidly on the rise as of late, and Burke described this situation as being basically ‘plant-based everything’.​

“Research shows that plant-based products grew by a 62% CAGR from 2013 to 2017, and that plant based dairy, meat and egg alternatives reached a value of some US$4bn last year,”​ said Burke.

“The main reasons for this are not only for health concerns, but also a rise in environmental impact and animal welfare concerns.”​

To that end, upcycled products were also highlighted as a growing concept in product development, where bars could be made from upcycled beer grain that would otherwise be disposed such as made by Regrained.

In terms of snacks, plant-based protein snacks also lead the charge with over US$188mn in sales worldwide and a 20% in unit sales in in 2018, according to Leathwood.

“The interest in high-protein, no-added-sugar yoghurts has also surged, with the brands [Yopro and Fit together] hitting some US$57mn in value,”​ he added.

3)      ​Better-for-you also better for sales​

As a trend, better-for-you in product launches was also observed to be very much in the spotlight currently, as evidenced by strong growth and sales numbers.

“Although the traditional snacking market is still larger in terms of value (US$1.6mn) as opposed to the better-for-you brands (US$487mn), the growth rate in the latter outpaces the former by more than twice, at 5% vs 2%,”​ said Leathwood.

A key example of this trend was seen in ice cream, described as the ‘driving force in category growth’​. Low-calorie, gluten-free Halo Top brand leads the charge in this area, and is currently valued at some US$12mn.

“[The success of better-for-you ice cream] as seen by its strong sales is underpinned by appealing to health-conscious indulgers, and not dieters,”​ he added.