How the cost-of-living crisis is impacting health and wellness purchases

Rising living costs and economic uncertainty have seen consumers re-evaluating their purchasing priorities Mike, head of research and insight at FMCG Gurus, will examine the impact of this trend on the health and wellness sector, and discuss key lessons for brands

While the consumer health trend predates Covid-19, the global pandemic undoubtedly accelerated a fundamental change in attitudes. And though the initial fear of Covid-19 has greatly diminished, consumers are as keen as ever on maintaining and improving their wellbeing.

“The pandemic enabled consumers to re-evaluate their lifestyle, and many felt that they were not as healthy as they should be,” says Hughes. “Many people have since made improvements, and they want to maintain this.

“At the same time of course, rapidly rising costs and food inflation have forced many consumers to reevaluate their purchasing habits, with price having a huge influence. Many consumers are having to make changes to their lifestyle, purchasing habits and socialising patterns.”

Prioritising value for money

As a result, many consumers see themselves as being at a crossroad. They still want health and wellness products, but are far more cost-conscious. Hughes predicts that over the next 12 months, consumers will continue to move away from focusing on preventing long-term illness and disease to more day-to-day issues such as dealing with emotional wellness, stress and anxiety, and weight management.

“Consumers are going to prioritise,” he says. “They will make savings on some products in order to justify spending money on others. While an attitude-behaviour gap needs to be taken into account, when consumers say they would cut out indulgence over wellness purchases, it does show that health is still an issue.

“I think we’ll see consumers increasingly seeking out products that are seen as good value for money. This means having multiple health claims, various ingredients, and evidence.”

Focus on essentials

Hughes believes that industry needs to focus on being value-oriented, and help consumers maintain their current level of proactiveness when it comes to health – without this being seen as too challenging or expensive.

In practice, this means developing products that are seen as fairly priced; aligned closely with what consumers want; and easy to incorporate into everyday diets.

“While certain sectors deemed as non-essential might struggle, there are core products that people will continue buying,” he says. “Brands therefore need to think about defining their product as essential, and moving it away from being some magic bullet or luxury item.

“Products that are seen as being integral to everyday diets will be key. We are going to see a move towards functional and fortified products in everyday categories such as dairy, cereal, plant-based and juice. This is where the key battleground will be over the next 12 months or so.”

What we are going to see in other words, says Hughes, is a sort of dietary ‘back to basics’: three meals a day, a reduction in snacking and expensive additions, with some market segments at the more extravagant end likely to take a hit. He points out that people are far less likely to scrimp on what they deem as daily essentials, and this is where consumer interest in health and wellness can really be targeted.

“Until consumers feel confident, they will be cost sensitive,” says Hughes. “For brands, the key is to focus on fairness and transparency, understand key consumer health goals and target those product categories where consumers are less likely to compromise on price. And they also need to demonstrate compassion.”

Vitafoods Europe Content Partner