Shanghai, China, January 27,2015 — The battle against the bulge and the rising awareness of health is a rising consumer trend in Chinese market, and this could translate into real opportunity for manufacturers, according to a new study by Nielsen, a leading global provider of information and insights into what consumers watch and buy.
Nearly 45% of the Chinese respondents in Nielsen’s Global Health & Wellness Survey consider themselves overweight. Obesity rates around the world are accelerating and China is not an exception. The 2013 Global Burden of Disease Study estimated that 2.1 billion people (nearly 30% of the global population) were overweight or obese. In China, a survey on 2013 Chinese health by the General Administration of Sport of China showed nearly 35% of the Chinese population were overweight, with nearly 13% reporting obesity.
The good news is that the consumers are taking charge of their health—49% said they were actively trying to lose weight. The weight loss method of choice was good old fashioned physical exercise (81%), followed closely by diet (75%).
“There is a tremendous opportunity for food manufacturers and retailers to lead a healthy movement by providing the products and services that consumers want and need,” said Kiki Fan, senior vice president of Nielsen China. “While diet fads come and go overtime, innovative, back-to-basics foods that taste good are easy to prepare and provide healthful benefits will have staying power. The first step is knowing where to put your product development efforts.”
The Nielsen Global Health & Wellness Survey polled 30,000 online respondents in 60 countries to identify how consumers feel about their body image and the steps they’re taking to get healthier.
WHICH HEALTHY ATTRIBUTES ARE CONSUMERS LOOKING FOR?
The Nielsen global survey finds China, along with many developing markets in the world, show a higher percentage of consumers who not only regard health attributes important in the foods they purchase, but are also willing to back up their sentiments with their wallets.
When it comes to the foods we eat, consumers are going back to the basics. In China, the top desirable attributes are fresh, natural and minimally processed. Foods without artificial colors (49%), without Modified Organisms or GMO’s (49%), artificial flavors (48%) and all natural ingredients (45%) top the list of a total of the 26 attributes as most desirable. Food made from vegetables and fruits are also regarded as very important among 36% of Chinese respondents. More than one-third said that organic (39%) ingredients are very important in their purchasing decisions.
In addition, consumers said they were looking for functional foods that provide benefits that can either reduce their risk of disease and/or promote good health. About 3 in 10 seek foods that are high in fiber (32%) and high in protein (31%), that have whole grain (28%) or food with local herbs/ingredients (28%) to fulfill their special needs.
Less is more for roughly one-third of Chinese respondents who say it’s very important that foods are low in salt (36%) and cholesterol (35%). More than one quarter believe the foods that are low in sugar (29%), carbohydrates (28%) and fat (27%) are very desirable. In addition, about than 3 in 10 believe the absence of caffeine (32%) and high fructose corn syrup (28%) is very important and one fifth rate foods that are gluten free (19%) as very important.
For most attributes, there is a gap between the percentage of respondents that say a health attribute is very important and the percentage that are very willing to pay a premium. For example, 49% of global respondents say the absence of GMOs is very important in the foods they purchase, but only 39% are very willing to pay a premium for these products—a 10-percentage point difference.
But for some heathy attributes, this gap can be reversed. Take food that is all natural for example, 45% of Chinese respondents say “all natural” are very important, 47% are very willing to pay a premium for these products. Same trends can also be found in organic food (39% vs. 40%), whole grain food (28% vs. 31%) and gluten free food (19% vs. 24%) and calcium fortified foods (26% vs. 27%).
And there are also some attributes for which the two percentages stand the same or very close, including foods that are high in protein (31% vs. 30%) and with natural flavors (29% vs. 28%), as well as minerals fortified food (26% vs. 25%).
“These figures are also backed up by Nielsen’s recent Chinese Consumer Confidence Index that Health had exceeded income to become the top concern of Chinese urban consumers,“ said Fan. “Thanks to the rising awareness of health among Chinese people, we believe more and more Chinese consumers would be willing to pay more for food with healthy attributes in order to keep fit.”
THE POWER OF THE PACKAGE LABEL
According to Nielsen’s survey, as many as 81% of Chinese respondents would read packaging labels carefully for nutrition content, while nearly 70% trust health claims on food packages.
“When adding health and wellness claims to products, manufacturers must first understand how consumers perceive their products,” said Fan. “If the product is perceived as healthy, any claims regarding the health benefits of a product are likely to resonate with consumers. For semi-healthy and indulgence categories, however, manufacturers must be more selective and choose claims that address a particular product attribute. For example, while consumers may be skeptical of heart-health claims for potato chips, they may be more open to claims about low or reduced sodium because this is compatible with their view of chips as a salty indulgence.”
DO CONSUMERS PRACTICE WHAT THEY PREACH?
The answer is yes. Nielsen’s retail tracking data shows that while the overall food market only grew 5% year-on-year, the categories with health concepts outperformed other categories significantly with an annual growth of 15% in sales value by Q3 2014.
Taking beverages for example, natural and functional drinks enjoyed double-digit year on year growth in 2014. In particular, mineral and nature water grew by 23% in November 2014, against the 14.3% growth for packaged water as a big segment. Vitamin drinks grew by 30% and energy drink had a growth rate of 21%.
“There is room for both healthy foods and occasional treats in consumers’ diets. To drive growth for these offerings, manufacturers should look for areas where they can improve the nutritional profile of foods and highlight the health benefits their products provide to consumers,” Fan noted.
HOW ARE CONSUMERS LOSING WEIGHT?
Both in China and around the globe, the majority of respondents rely on tried-and-true methods to lose weight—diet and exercise. Eight in 10 Chinese respondents who are trying to lose weight plan to exercise and three quarters (72%) plan to change their diet. Sixteen percent say they will take diet pill/bars/shakes, 8% use medicine prescribed by their doctor and 5% use other methods.
Among those who are changing their diet to lose weight, more than 70% (73%) say they are cutting down on fats, 62% are eating less chocolate and sugary sweets and more than half (57%) are expanding their diets with more natural, fresh foods.
Eating less processed foods is the diet method of choice for four-in-10 global Chinese respondents (39%) and nearly as many are choosing to follow a low-carbohydrate, high-fat diet (38%). One-in-five (28%) respondents are following another non-specified diet plan, and are opting for a smaller portion.
WHAT THE FUTURE HOLDS
Given the high interest in getting healthier, “good-for-you” products are strongly positioned for growth. More than half of the Chinese respondents said that they plan to buy more fruit (53%), while as many as 45% said they planned to buy more vegetables in the next six months. In addition, around one-third planned to buy more yogurt (33%), fish and seafood (31%) and cereal (30%). One quarter planned on buying more nuts and seeds (24%), juices (23%), meat and poultry (22%) and water (22%).
While respondents intend to eat healthier in the next six months, everyone needs a treat sometimes. The Nielsen survey showed that the largest percentage of respondents expected to buy the same amount in many categories including indulgences such as cookies and cakes (48%), sugar candy (42%), chocolate candy (37%) and ice cream and frozen novelties (37%).
Meantime, Nielsen’s sales data shows that rather than a high growth in all product segments, health-featured snacking segment enjoys a stronger growth in 2014 compared with its other peers. Take potato chips for example, non-fried potato chips enjoyed a higher year-on-year growth rate of 12.5% in China, against the overall growth of 8.4% for potato chips.
“Thanks to the increasing disposable income of Chinese consumer and their stronger pursuit for a healthy life, we believe the HEALTH-driven trend will continue to be a key highlight in Chinese market for 2015. No matter its retailers or manufacturers, whoever takes actions to ride on the trend have bigger chance to win the hearts of minds of more Chinese consumers,” said Fan.
About the Global Survey
The Nielsen Global Health & Wellness Survey was conducted between Aug. 13 and Sept. 5, 2014, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6%. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands.