Annaleena Soult: European food industry markets focus on health

Fads come and go, some faster than the others. This is also true of food industry markets, where exotic specialties, regional delicacies, and fair-trade and organic products compete for shelf space in our groceries. But there is one trend that is above all others: health.

 A trend that was once launched through light and organic products has extended to include products that lower cholesterol and blood pressure as well as various other functional foods.  

The health trend is underpinned by not only demographic factors, such as the ageing of the population, stressful lifestyles, increasingly common allergies and obesity, but also pressure from the public sector. Educational campaigns have aimed at improving public health through healthy nutrition.  

The food industry has actively improved and widened its ranges – new ingredients and product categories are emerging on a continuous basis. To some extent we could say that the boundaries between the food, pharmaceutical and even cosmetics industries are becoming fuzzy. The French have already introduced a concept, cosmétofood, which refers to foodstuffs that have favourable effect on physical appearance! For example, the Essence yoghurt launched last year by Danone is claimed to improve the consumer’s hair and skin, and it has been marketed at department store beauty counters in addition to the conventional channels. The markets for free from products, or those that have had most common allergens removed, have quadrupled in the UK over the past five years.  

What next?  

The health trend is targeted increasingly towards children. One reason is the mounting obesity among children, but also better general awareness of health issues.  Kidfresh, the first-ever food retail chain targeted exclusively to children, or rather their parents, has already been launched in the US. Kidfresh provides only healthy foods, mainly ready-made meals and snacks for children of all ages.   Finns have always paid attention to children’s healthy eating and, as a showcase, the high standard of Finnish school meals has attracted wide international acclaim. The typical breakfast of French schoolchildren – a baguette stuffed with chocolate – would be unheard of in Finland! Finland is working towards maintaining its track record in this area through, for example, the Smart Snacks project which encourages children to choose healthier snacks.  

A healthy diet has long been a priority in Finland, and functional foods have entered Finnish markets at an even pace, without any noticeable booms. We have long invested resources in food research and development, significantly more than the European average. This in turn is manifest in the number of innovations produced in the field, only a few of which have been commercialised as exportable products.  

The products that have been internationally launched have already created a good reputation for Finnish competence in the food industry. Our catering industry is also a pioneer when it comes to serving people with various food allergies.  

Carpe diem – timing is everything 

When entering the competitive European food industry markets, timing is crucial. One has to be able to offer products to the more rapidly growing sectors.   

There is no point launching basic products, no matter how exquisite, to compete with the strong, established brands over carefully allocated shelf space. The logistics costs alone will discourage even the hardiest, if the listing fees have not already done so. Producing something different and novelties will carry the day, which makes the weakest link of Finnish food products, the relative obscurity of the manufacturer and brand, redundant. The time is right for Finns – the markets for healthy foods is expanding rapidly, retail chains are competing over innovations and nearly each chain is launching their own healthy and free from product families. Countries outside the Nordic countries are only now beginning to acknowledge lactose-intolerance as a condition, and they have a very limited selection of lactose-free products. However, gluten-free products are, for example in the UK, the fastest growing free from segment. This became evident in the wide interest that the ongoing test marking project carried out by Sitra’s Coeliac mini-cluster in the UK has roused.  Interest has been shown both retail chains and the restaurant business, which is under strong demands to begin acknowledging food allergies when planning menus.  

In addition to innovative products, what is also needed is flexibility, readiness to tailor products according to local tastes and packaging styles, and understanding of local markets. Perhaps the commercialisation phase of new products would also require better support from the public sector, because so far this element has received much less attention than the technological side of research and development.    

Annaleena Soult
Senior Consultant
Finpro