Indiantelevision.com Team

(8 March 2007 8:00 pm)

MUMBAI: The latest study of the food and beverage categories states that beverages that support healthy diets are among the world's fastest-growing food and beverage categories.

The Executive News Report, titled What's Hot Around the Globe - Insights on Growth in Food & Beverage Products noted that Drinkable Yogurts in particular was the fastest-growing food and beverage category purchased by consumers worldwide.

Nine product categories grew by double digits compared to 2005, with Drinkable Yogurts topping the list. In six of the nine categories, value sales totaled more than US $1 billion globally:

Drinkable Yogurts exhibited year-over-year growth in 40 of the 45 markets measured, with 29 of these markets scattered around the world growing at more than 10%. China topped the list with a year-over-year growth rate of 49%. In markets as diverse as Greece, Romania, Finland, and Italy, Drinkable Yogurt grew by more than 40% Interestingly, in the United States, drinkable yogurt showed growth of only five percent.

Other Dairy-Based drinks (which included items such as fruit flavored milk and kefir-based drinks) also had strong growth across the board, with 32 markets (of the 42 measured) exhibiting growth. In most of these 32 markets, the growth was in double digits.

What has helped the growth of these beverage categories in some cases is marketing. In some cases, Drinkable Yogurt and Dairy Based Drinks have used licensed characters to appeal to children, while the health benefits (and in the case of yogurt, the active cultures) appeal to parents.

In markets such as Spain, Israel and Great Britain, for example, drinkable yogurt and pro-biotic yogurt were positioned in the marketplace as "heart healthy" with the results seeing strong category growth.

Freshness Was a Key Element for Consumers

Of the nine top categories listed, four categories were in the fresh arena - Fish and Seafood, Ready-to-Eat Salads, Soup, and Herbs/Spices. Many of these categories grew due to new product availability as well as more space being allocated in fresh/refrigerated sections of the store. In comparison, the frozen and shelf-stable varieties of the above items showed slower growth than their fresh counterparts did, and in the case of soup, actually showed a decline.

"It is clear that private label dominates many of the fresh categories in retail stores," said Perrin. "Retailers are focused on their consumers' needs, and some have even created specially designed in-store areas for fresh and prepared foods. Consumers can quickly and conveniently shop for the meal components they need for their families."

Convenience Also Helped Drive Growth

Other product categories that showed fast growth were those that made consumers' lives more convenient. Ready-to-Eat Salad, Baby Formula and Frozen Meal Starters all were among the fastest growth categories and had an element of convenience to them. Similar performance was seen within markets.

In China for example, Baby Food and Formula were fast growing because of focused marketing efforts on promoting these products as more 'convenient' for younger families. In Hungary, meat-based baby food products drove the growth while 'wet' baby food in jars were key drivers in Czech Republic and Slovakia.

Finally, the Frozen Meal Starters category was driven primarily by the large year-over-year growth of these products in North America, particularly with new "breakfast starter" products. A relatively new category in many markets, this category again addresses the consumers' need for quickly prepared meals for their families.

Western Indian Lifestyles contrast Traditional Gastric Juices

The F&B market in India is valued at 5,640 million US dollars. About half of the sales measured came from the Edible Cooking Oils, Biscuits and Tea (non RTD) categories. This clearly indicates the huge Indian appetite for fried foods, biscuits and tea.

Although the RTD beverage category has yet to gather critical mass, the Healthy beverage segment was amongst the fastest growing led by Energy/ Sports drinks reinforcing the global phenomenon of the emerging trend of consumer focus on health. It would be noteworthy to mention here that Edible Cooking Oils command a fifth of the total F&B market and display amongst the highest share of growth driven primarily by oils positioned on the health platform.

With RTD and RTE (Namkeens, Noodles, and Biscuits) products also displaying amongst the highest growth rates, the global trend for convenience is well reflected in India.

"Although Indians are on the forefront of most advanced industries we continue to be quite traditional in our eating habits. The challenge for FMCG marketers then lies to either revolutionize tradition or to offer products that appeal to the Indian taste buds whilst respecting the traditional affinity" said ACNielsen Global Services in India Senior Manager Bijal Jadav.

**Fastest Growing Overall Category

The ACNielsen survey What's Hot around the Globe - Insights on Growth in Food & Beverage Products measured 66 markets around the world across more than 100 categories, comparing mid-year 2006 with mid-year 2005. These 66 markets account for more than 90% of the world's real GDP and over 75% of the world's population. The markets were grouped regionally into five areas (in order of market size): Europe, North America, Asia Pacific, Latin America, and Emerging Markets. Previous studies have focused on Household Products, Private Label and Personal Care products.

The report was based on purchase information from retailers in grocery, drug and mass merchandise outlets and generally excludes kiosks or vending machines. In a few markets, sales from convenience stores may be included. Both total category and private label information was collected for the report.