France presents a challenging environment for fortified and functional foods. Simone Baroke of Euromonitor International considers some of the opportunities, as well as the pitfalls, of this enigmatic market
Compared to other highly developed packaged food markets, the French fortified and functional foods sector is poorly developed. According to Euromonitor International’s health and wellness market data, fortified and functional foods value sales in France amounted to almost e1.7 billion in 2007. At first glance, this may sound impressive, but when compared to neighbouring markets – Germany’s e2.7 billion, the UK’s £2.5 billion (e3.8 billion) and Spain’s e2.1 billion – France is behind in the market. French consumers’ per capita spend of e27.5 was less than a third of what Irish consumers spent on fortified and functional food in 2007.
Considering the underdeveloped nature of the fortified and functional foods categ-ory in France, its value growth rate of just under 6% leaves much to be desired, when compared to The Netherlands’ impressive 18% and Ireland’s and the US’s 12%, especially when taking into account the already very high per capita expenditure levels of consumers in the latter two countries.
A challenging terrain
There are several reasons for France’s reluctance to embrace fortified and functional offerings. National food culture is a big deal in France, and French consumers exhibit a particularly strong preference for traditional foods, regional products and French brands. In March 2008, President Sarkozy even submitted a proposal attempting to get his nation’s delectable cuisine onto the UNESCO World Heritage list.
French consumer reticence towards functional products is poignantly illustrated by sales data pertaining to fortified/functional bread. Value sales in 2007 amounted to a mere e8 million. Germany’s and the UK’s, by contrast, soared to e310 and e413 million (£275 million), respectively. In France, traditional bread, baked freshly every day, is a national institution, and added functional ingredients tend to be viewed as an ‘adulteration’. For the same reason, functional cheese is unlikely to be a winner in France, despite catching on in the UK, Finland, Spain and Ireland.
Due to the prevailing focus on French products and brands, multinational packaged food players find that their overtly global strategies frequently backfire. Often they fall at the first hurdle of getting their products listed in one of France’s major retailers. According to Euromonitor International research, France’s six biggest retailers hold a 45% share of the grocery market, and considering that 58% of fortified and functional foods and beverages (by value sales) are distributed through the supermarkets and hypermarkets channel, the importance of gaining a listing is obvious. Even if a listing is achieved, in-store product sampling and promotions are rare in France, and this constitutes another serious hurdle for functional products.
A further obstacle is presented by French consumers’ steadfast belief that their future medical treatments will be provided paid for indefinitely by France’s all-inclusive healthcare system. This means that the drive towards taking preventative measures is not as strong as in other countries. However, reality is starting to set in that as a country with a progressively ageing population, France’s health care budget is not a bottomless well after all.
Also, the French perception that chronic diseases, such as cardiovascular disease, obesity and diabetes, do not affect them is gradually eroding in the face of overwhelming evidence to the contrary. And because quality of life is so important to French consumers, they show increasing motivation to make healthy choices. These shifts are helping to break down consumer resistance to health-and-wellness-positioned foods, including fortified and functional offerings.
Fortified and functional dairy
Dairy claimed a huge 47% chunk of total fortified and functional food value sales in 2007. Danone, with its Activia and Actimel brands’ combined sales of e371 million, accounted for almost half of fortified/functional dairy sales. Dairy is the only sector where health and wellness offerings are widely accepted in France, and Danone, as a home-grown French brand, enjoys a strong consumer support.
However, although probiotic yoghurts were very well received by French consumers, not even the mighty Danone is immune from consumer scepticism towards functional products. Danone Essensis, the company’s much hyped ‘beauty yoghurt’, launched in February 2007, is still suffering from teething problems, despite French consumers’ general fondness of beauty and cosmetics products. Danone spent e7 million on advertising in the first half of 2007, but volume sales declined from 160 tonnes in March to just 45 tonnes in July.
Gum and snack bars
After dairy, confectionery is the next biggest fortified and functional food sector with 2007 value sales of e464 million. The success of the category is in large part due to the rising popularity of functional gum, which managed to increase its value sales from just e59 million in 2002 to e175 million in 2007. Wrigley ranks as France’s number two fortified and functional food player with a 9% market share. The company made the most of the run-up to the smoking ban (implemented in France in January 2008) by promoting functional brand extensions with tooth whitening and other oral health benefits, which enjoy high credibility and popularity with French consumers.
Sector penetration of fortified and functional foods is still very low in France, and key opportunities exist, for example in snack bars. Value sales of fortified and functional snack bars amounted to €e46 million in 2007, and although value growth was negligible over the review period, the underlying reason for this stagnation is about to shift.
Snacking was highly stigmatised in the past not only for being an ‘unhealthy and fattening’ habit, but also because it was considered as yet another Anglo-Saxon cultural intrusion into French food culture. But despite the current government-led Manger-Bouger healthy eating campaign, which issues slogans proclaiming that snacking between meals is bad for health, cultural norms are gradually changing in favour of snack food consumption. Contrary to many sweet and savoury snacks, snack bars lend themselves particularly well to health positioning. Snack bars make ideal carriers for virtually all types of functional ingredients, including omega-3, vitamins, minerals and fibre, as well as sophisticated weight management ingredients, such as hydroxycitric acid and conjugated linoleic acid.
The indulgence sectors
As illustrated with the example of fortified and functional bread, care must be taken not to waste time, energy and money on introducing functional products which the French market is not yet ready for. Such cultural roadblocks are particularly prominent in the indulgence sectors, such as ice cream, cake and chocolate confectionery. Indulgence products and functional, health-positioned ingredients are a notoriously bad combination, and in a country like France, novel offerings like probiotic chocolate and ice cream are dead in the water.
Although France is best described as a developing market in terms of health and wellness foods, the outlook is generally positive. As a first step, manufacturers need to build much better rapport with retailers in order to foster a more favourable attitude towards functional products. The continued involvement of big players experienced in handling the idiosyncrasies of the French market, such as Danone, Unilever and Nestle, will be vital in furthering the evolution of the country’s fortified and functional category.
Conclusion
In September 2008, Nestle France announced the establishment of a Nutrition Foundation with an annual budget of e1.5 million, designed to promote health and wellness foods and healthy eating habits. Nestle is a trusted and popular brand in France, and the company’s current strategic focus is the development of functional foods targeted at children and older people – two target groups, which are currently not sufficiently catered for in France’s fortified and functional food market.
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