Consumer products companies need to fundamentally rethink the way they approach health and wellness, according to AlixPartners survey

13 June 2018

One-size-fits-all approach isn’t working –  value chain insights are critical to determining specific areas for investment in the business

SINGAPORE and NEW YORK (JUNE 13, 2018) – AlixPartners, the global consulting firm, today announced the results of a unique new study of the consumer products industry entitled, “Cracking the code on consumers’ health-and-wellness preferences.” Highlights of the study are being presented today during a Special Session at the Consumer Goods Forum Global Summit 2018 in Singapore by AlixPartners Managing Directors David Garfield and Michael McCool. 

The firm surveyed consumers in China, the US, Germany, France, and the UK to evaluate what consumers respond to in terms of product attributes at the segment and category levels. *

AlixPartners’ ground-breaking analysis revealed that consumer preferences on different product attributes vary in very specific ways across product categories, geographic regions, age groups and at stages of the value chain. More than ever, when deciding business strategies manufacturers must know their consumers’ preferences and pay attention to these differences.  

The preferences of consumers are different depending on which product segment, country, value chain stage, and demographic group is being targeted. This cannot be predicted and must be discovered.  AlixPartners’ innovative multidimensional model provides valuable insights into areas for investment by consumer products companies.

“Soaring demand for ‘better-for-you products’ has pushed competition in the health and wellness market to new heights,” said David Garfield, Managing Director and Global Co-Lead, Consumer Products at AlixPartners. “To capture—and defend—market share, it’s critical that consumer products players understand what consumers really want, which attributes they are willing to pay for, and how their preferences differ by country.” Garfield added, “It’s also essential for companies to understand whether consumers care more about ingredients, the manufacturing process, packaging, or other stages in the value chain in order to make the right strategic investments.” 

Looking at the most significant regional variations of consumer preferences, when it comes to price, Chinese consumers are more concerned about the benefits of eating healthy and are willing to pay more for desirable attributes. The greatest barrier for Chinese consumers to purchasing is availability of products and confusion over whether these products are good for you. Similarly, French consumers are willing to pay more for products with clean/healthy attributes. On the other hand, US consumers showed the greatest gap between the desire for healthy products and always or often purchasing these products, with 73% saying price is a big barrier.

German and French consumers strongly prefer locally sourced products, while Chinese consumers give high importance to imported products, which is likely a consequence of earlier tainted product and food scandals, and high levels of air, water, and soil pollution in that country.

Clean/healthy products, defined as non-GMO in food, are more important in France than in any other country tested. In the UK, for example, organic and non-GMO do not appear to carry the same level of importance as in other countries and are not part of the definition of clean/healthy.

Global themes

  • Having a healthy lifestyle matters to consumers around the world and is increasing in importance due to global health issues, food quality concerns, and environmental pressures (such as pollution).
  • Consumers around the globe want “less unhealthy” at varying stages in the supply chain.
  • In health & beauty products, consumers place an emphasis on natural ingredients, preservative free, allergen free.
  • For household products, how the product is sourced and packaged is almost as important as the product itself in terms of healthy perceptions.
  • Environmentally friendly packaging is the top attribute in the US, UK and Germany, while France and China favour natural ingredients over packaging.
  • There’s a real sense of confusion when consumers shop for healthy products, with 31% of global consumers reporting that it is difficult to figure out what products are good or bad for them.

“With growing global concern about food sources and sustainability, and millennials placing a higher importance on all things healthy, the desire for healthy products may be less of a trend and more of an indicator of the future,” said Michael McCool, Managing Director, APAC Consumer and Retail at AlixPartners. “By understanding patterns in consumers’ preferences at these more granular levels, companies stand the best chance of crafting the right strategies for the future.” McCool added, “Furthermore, companies will need to adjust their marketing strategies across all product categories to be more education-focused, as consumers are demanding more transparency and genuine authenticity in identifying the quality of ingredients.”  

Click here to view highlights of the study.

*In 2017 and 2018, AlixPartners surveyed more than 4,500 people in the United States, the United Kingdom, France, Germany, and China on issues related to health and wellness.

About AlixPartners  

In today’s fast-paced global market, timing is everything. You want to protect, grow or transform your business. To meet these challenges, we offer clients small teams of highly qualified experts with profound sector and operational insight. Our clients include corporate boards and management, law firms, investment banks, investors and others who appreciate the candor, dedication, and transformative expertise of our teams. We will ensure insight drives action at that exact moment that is critical for success. When it really matters