In recent years, with the improvement of living standards and the popularization of health concepts, people's demand for healthy nutrition products has grown rapidly. The health and nutrition industry is at a critical point in development: on the one hand, the scale of the industry continues to expand, new players continue to pour in, and competition is gradually fierce; on the other hand, issues such as channel differentiation and changes in consumer demand have also put forward higher requirements for brands. How can companies break through smoothly? How can they serve diversified consumers more accurately? How to open up a second growth curve in a complex market competition environment?
Through professional research and data analysis, the development status and future direction of the health and nutrition industry are shown from multiple dimensions such as industry overview, channel changes, consumption trends and product innovation. This article is based on the content of the "2024 Health and Nutrition Industry Brand Channel Development Insights" report in Asia for an in-depth interpretation, helping readers to more clearly understand the core trends and potential opportunities of industry development, and provide a reference for companies to participate in market competition more effectively.
1. The industry structure tends to be stable, and brands are actively exploring the second growth curve.
Data shows that in the past year, 70% of companies have maintained a revenue fluctuation range of ±20%.
50% of companies maintained sales growth in 2023, accounting for 3.9% more than in 2022. Among them, 33% of companies had a sales growth rate of 1% to 19%, accounting for 9.1% more, but the number of companies with a growth rate of more than 50% decreased significantly. 18% of companies had sales that were the same as the previous year, and 31% of companies had declining sales. The overall industry structure tended to be stable.
This phenomenon shows that the growth trend of the health and nutrition industry is still maintained, but the overall slowdown has slowed down. As the industry shifts to a stable period, competition will become more intense. In order to stand out from the competition, some companies are no longer satisfied with simple scale expansion, but focus on product differentiation and innovation.
The report pointed out that many companies are actively exploring the second growth curve. 36% of companies choose to promote business growth by launching new products, while 35% of companies focus on opening up new sales channels. These two measures are becoming the mainstream strategy for companies to seek breakthroughs.
Raising product sales prices (6%) and trying new marketing methods (4%) accounted for a low proportion, indicating that most companies still find it difficult to get rid of the pressure of price competition. But on the other hand, it also shows that brands that take the lead in innovating marketing strategies may stand out in future competition.
2. Agents accelerate transformation and gradually enhance downstream control capabilities
In 2024, the top three businesses that agents plan to open and strengthen are developing private brands to increase profit margins (23.29%), improving marketing services (20.13%), and developing social e-commerce new retail (16.32%). These data reflect that agents are gradually getting rid of the role of pure channel functions and transforming into brand operators and marketing service providers.
The highest proportion of developing private brands shows that agents hope to obtain higher profit margins through branded operations, and also shows their expectations for increasing downstream control capabilities of the industrial chain. This transformation helps agents enhance their market voice.
The focus on improving marketing services also reveals that agents are increasingly aware that the traditional distribution model alone is no longer sufficient to meet the needs of brand owners. Only by providing more professional services, such as data support, content marketing, etc., and linking more resources can higher added value be obtained.
In addition, the development of social e-commerce new retail also shows that agents are actively adapting to the trend of digital transformation and communicating directly with consumers through social e-commerce. This new retail model can not only expand sales coverage, but also help agents better understand the needs of end users, thereby helping the business to develop better.
3. Absolutely strong channels are disappearing and omni-channel layout is becoming a trend
In terms of changes in the share of each channel, the report pointed out that the absolutely strong channels are disappearing, the share gap between different channels is gradually narrowing, and the market is moving towards a more diversified and decentralized direction.
First, the traditional pharmaceutical chain channel still maintains a leading position in sales share, but its share has decreased by 6.1% year-on-year. This change shows that although the pharmaceutical chain channel still occupies an important position in the health and nutrition market, with the change of consumer purchasing habits, the advantages of the traditional pharmaceutical chain channel are gradually weakening.
In the past, many consumers of health and nutrition products mainly relied on pharmacies and medical institutions for purchases, but now more and more consumers are turning to online channels, especially emerging channels such as social e-commerce, vertical e-commerce, and live streaming, which provide consumers with more convenient and personalized choices.
At the same time, the sales share of emerging channels such as social e-commerce, private domain e-commerce, vertical e-commerce and live streaming has also declined to varying degrees, reflecting the fierce competition among channels. Emerging channels that once showed strong growth momentum have also begun to face the challenge of fading platform traffic dividends.
The phenomenon that the shares of major channels are approaching each other shows that the health and nutrition industry is gradually bidding farewell to the era of "single channel dominance" and turning to "multi-channel coexistence", and consumers' choices are more diversified. Brands are also becoming more flexible in their layout of sales channels, and more omni-channel sales strategies are being adopted to reach a wider target population and adapt to the needs of different consumer groups.
In addition, data shows that private domain e-commerce (21.5%) and live streaming (22.8%) are replacing traditional offline retail and becoming the channel types that brands pay the most attention to. Private domain e-commerce, through WeChat communities, corporate accounts and other means, enables companies to reach consumers with higher efficiency and interactivity, helping brands gain advantages in fierce market competition, while live streaming has won the favor of brands with real-time transactions and high conversion rates.
Rehabilitation and elderly care (20.3%) is also a major channel that brands pay attention to. With the acceleration of the aging process in many Asian countries, the potential of the rehabilitation and elderly care market has become increasingly apparent, especially in the field of health and nutrition. Brands are gradually expanding this market, using nursing homes, rehabilitation centers, geriatric hospitals and other platforms to make precise layouts and meet the needs of middle-aged and elderly consumers for health products in a targeted manner.
It should be emphasized that the rehabilitation and elderly care channel can provide brands with a relatively long-term and stable market, which has the advantages of stable conversion and high stickiness. By cooperating with professional institutions such as nursing homes and rehabilitation centers, brands can not only increase the market penetration of their products, but also obtain long-term consumer support from the elderly population.
4. The proportion of direct purchases at the terminal is rising rapidly
Product features and advantages are the most concerned dimensions in product selection
In the field of terminal retail, the cooperation model between brands and retailers has also changed significantly. The proportion of direct purchases is rising rapidly, while the proportion of complete reliance on agents has dropped to 19%. This trend shows that brand owners have increased their initiative and control over sales channels, and more brands choose to improve profit margins and market response speed by simplifying the circulation links.
From the perspective of terminal retail product selection preferences, product features and advantages are the dimensions that retailers pay the most attention to, accounting for as high as 41.9%. This shows that in the current competitive market environment, retailers are more inclined to choose products with unique selling points and innovative functions, and products with strong market competitiveness will be more favored by terminal retailers.
Product profit margin (16.9%), brand awareness (13.2%) and product market share (12.1%) ranked behind, reflecting that with the expansion of the health and nutrition market, the cooperative relationship between brands and retailers is also gradually deepening. Retailers hope to find products with high profit margins, excellent market performance and stable sales to ensure that sales returns can be achieved quickly.
However, the proportion of brand support (8.8%), certification qualifications (4.4%) and product retail price (2.7%) is relatively low, indicating that these factors have little impact on terminal retail product selection decisions. Although brand support (such as promotional activities, marketing, etc.) and certification qualifications (such as product quality certification, industry certification, etc.) can help improve the market competitiveness of products to a certain extent, retailers pay more attention to the actual sales and profit margins of products when selecting products.
It can be seen that product price ranks last when terminal retailers select products and is not the most critical factor, especially in high-end health and nutrition products. Consumers' requirements for efficacy and quality are often higher than their sensitivity to price. Therefore, retailers will not have too many concerns about high-priced products when selecting products.
5. Significant demand for professional and precise functional supplements
The consumption upgrade trend of health and nutrition products is obvious
In the categories of brand management, the top three are immune enhancement (24.7%), probiotics (21.5%), and comprehensive nutrition (20.3). Next are regulating the three highs (17.7%), anti-aging (17.1%), sleep nutrition (15.7%) and heart and brain health (15.2%). The third echelon, which also accounts for more than 10%, is special diet, joint bones, oral beauty, name and intelligence, liver and kidney nourishment.
From the trend of change, the report points out that the concept of enhancing basic immunity and comprehensive nutritional supplements has declined, which shows that consumer demand is shifting from basic health improvement to more professional and targeted functional supplements. For example, consumers' attention to single functional supplement products such as probiotics, regulating the three highs, sleep nutrition, joint bones, etc. has increased significantly.
This reflects consumers' refined demand for health management. More and more people are beginning to pay attention to personalized solutions for specific health problems, rather than just relying on comprehensive basic supplements. Brands need to adapt to this trend and develop more professional and targeted products to meet the specific needs of different consumer groups.
Changes in consumer groups have brought new growth points to the industry. The report points out that in the consumption scenarios and population structure of product positioning, compared with 2022, the proportion of middle-aged and elderly people, men, and office workers will increase significantly, while the proportion of infants and pregnant women will decrease.
The male group is paying more and more attention to health management, especially in the fields of cardiovascular health, liver protection products and sports nutrition. Male consumers are gradually becoming an important target group that cannot be ignored.
The increase in the proportion of office workers is due to the modern fast-paced lifestyle. They are more inclined to choose more convenient and more effective health products to relieve stress and improve sub-health status, which provides new directions for brand owners in product development and brand communication.
From the perspective of changes in the overall customer unit price, the health and nutrition industry shows a clear trend of consumption upgrading. Data from China show that the proportion of products in the 200-500 yuan range has increased significantly by 23%, while the proportion in the 50-100 yuan range has dropped significantly, accounting for 27%. This data shows that consumers' acceptance of mid-to-high-end products and periodic products is increasing. Under this trend, brand owners need to further optimize their product structure, enter the high-unit-price market through differentiated innovation, functional enhancement and added value enhancement, and capture the opportunities brought by consumption upgrades.
6. New entrants have diverse backgrounds
Cross-industry integration, broad space for product innovation
In the health and nutrition industry, new entrants have diverse backgrounds. Among them, the pharmaceutical industry is one of the important sources of new players, accounting for 25%. With their advantages in R&D, production and medical channels, pharmaceutical companies have a certain natural convenience in entering the field of health and nutrition. The professional knowledge and technology they have accumulated in the process of drug research and development can provide strong support for the development of nutritional supplements, functional foods, etc.
Enterprises in the sports and fitness industry account for 20%, ranking second. With people's pursuit of a healthy lifestyle, the connection between sports and fitness and nutritional supplements is becoming increasingly close. Sports and fitness companies entering the health and nutrition market can achieve industrial synergy and provide consumers with one-stop health solutions. Based on the needs of sports scenes and fitness people, companies can develop sports nutrition drinks, protein bars, fitness supplements and other products to meet consumers' nutritional needs in different sports scenes and help improve sports effects and physical recovery.
New entrants in the fast-moving snack industry account for 18%. Fast-moving snack companies usually have strong marketing capabilities, extensive sales channels and keen consumer insight. Their entry into the health and nutrition industry helps to integrate the concept of health into traditional snack products and develop snack products that are rich in nutrients and have specific functions. For example, many companies have launched products such as nuts, yogurt, and biscuits with vitamins, probiotics, and plant extracts to meet consumers' pursuit of health while enjoying delicious food.
Enterprises in the daily beauty industry account for 15%. There is a certain overlap and complementarity between the daily beauty and health and nutrition industries, especially in the field of oral beauty. As consumers' pursuit of beauty extends from external skin care to internal conditioning, daily beauty companies have begun to enter the nutritional health products market and launched products with ingredients such as collagen peptides, sodium hyaluronate, and oral hyaluronic acid. These products improve the skin condition from the inside by supplementing nutrients, forming a synergistic effect with external skin care products, and providing consumers with more comprehensive beauty solutions.
These emerging players from different fields have not only brought more innovative products and services to the health and nutrition industry, but also promoted cross-border integration of the industry. Consumers will also enjoy more diversified and personalized healthy and nutritious products, which also prompts brands to constantly seek breakthroughs and innovations in product research and development, marketing and consumer education.
Overall, the health and nutrition industry is at a critical node of rapid development, with increasingly fierce market competition and more diverse consumer needs. With the continuous emergence of major brands and emerging players, the industry is moving towards a more segmented and professional direction. At the same time, the rapid changes in various channels have also prompted companies to constantly adjust their business focus to cope with the increasingly complex market environment.
Under this change, companies need to maintain keen market insight and respond flexibly. In addition to accelerating product innovation and diversified layout, companies also need to strengthen brand building, attract more consumers through the implementation of more precise and effective brand strategies, and stand out in the ever-changing market competition environment.
References:
Report on "2024 Insights into Brand Channel Development in the Health and Nutrition Industry"
