Coronavirus drives demand for immune-boosting foods
To help understand the likely impact of the current health crisis on demand for function foods in South Korea we have analysed the impact of the 2009 flu pandemic and 2015 MERS epidemic.
The analysis was based on actual consumer purchase data in the fast-moving consumer goods (FMCG) categories of 5,000 household Worldpanel panelists in 2009 and 2015.
The swine flu crisis in June 2009 led to a significant increase in red ginseng which grew by 57% in the six months following the outbreak, with a particular surge from new consumers.
In contrast, the 2015 MERS outbreak led to an increase in vitamins and health food other than red ginseng, with an increase of 26% in the 12 months that followed. Red ginseng didn’t grow as much, but did still achieve an 8% increase in purchases.
As public interest broadened to other products, consumers became more engaged in a wider range of health food categories and educated themselves on various immune boosters.
In 2017, two years after the MERS epidemic, red ginseng accounted for 35% of total spend in the health food category, with its share slipping to 31% in 2019. During the same period, probiotics’ share increased from 11% to 15%, quickly establishing itself as a key segment in the health food market. Red ginseng still has the highest penetration at 43%, but probiotics has been rapidly gaining ground, with penetration jumping from 24.4% in 2017 to 39.8% in 2019. South Korea’s health food market as a whole expanded about 11% between 2017 and 2019, with penetration reaching nearly 80% of the population.
In terms of where they buy, consumers are shifting rapidly from delivery and agency stores to online. The internet is now the most important channel, responsible for 43% of all purchase occasions in the health food market.
It is still early to be able to show the effects of the novel coronavirus outbreak in 2020 o this market, but it is again well poised for sharp growth. Regardless of this, the maturity of the health food market means consumers are now better informed to pick and choose products with certain functions and attributes that meet their specific needs. In line with the overall trend toward personalized consumption, more buyers are expected to make highly individualistic choices when making health food purchases.
“Korea’s health food market in 2020 is projected to grow a conservative 5% to 9%, when excluding external factors like diseases,” said Kim Ji-Won, Client director at Worldpanel Division, Kantar. “To attract the ever-fickle customers, marketers need to go beyond the traditional function-focused communication approach and look to FMCG and other categories for benchmarking ideas. Each brand should be backed by a suite of different formulations, channels and functional needs, with the brand’s business and marketing strategy mapped out according to its unique market position and capabilities.”
Regardless of the external factor such as outbreaks, it is clear that the educated consumer is very interested in health and functional foods so the category is well placed for growth in the future.