Today’s consumers are ditching sugar for spiralisers, junk food for juicing and tobacco for e-cigs. This is the ‘post-addiction age’, where the spectre of health problems is leading us to adopt more virtuous lifestyles.
Swathes of FMCG and lifestyle brands are working to take advantage of our changing priorities. But two of the biggest potential winners are Big Food and Tobacco; the very businesses who supplied our bad habits in the first place. How?
Increased opportunity
According to a November 2015 report from ASH, smoking rates have more than halved since 1974 – while the results of a recent Mintel survey showed that nearly two-thirds of Britons are on a diet ‘all or most of the time’. We’re also seeing a small decline in the number of people that drink alcoholic beverages in the UK, and in those who drink heavily on at least one day in the week.
Instead of sitting back and accepting this drop in revenue, however, there are certain big players in the food, drink and tobacco industries who have invested in solutions to solve – and profit from – the health issues and consumer fears that they have benefited from in the past.
Sugar-coating
Swiss giant Nestlé has had a huge impact on the way we eat, ever since its beginnings in 1867. The largest food company in the world in revenue terms, its history lies primarily in chocolate: a foodstuff linked with acne, weight gain and other negative health effects.
With the US, the UK and other countries increasing taxation on sugary foods, it’s bad news for manufacturers of sweet treats – in fact, Nestlé’s confectionery sales figures have fallen every year since 2012.
Enter Nestlé Health Science, created in 2011 as a subsidiary of the brand. Its focus? “Advancing the therapeutic role of nutrition to change the course of health management”. This move has positioned Nestlé as a nutrition, health and wellness company, employing scientists to create a variety of nutritional therapies covering everything from Alzheimer’s Disease to gastrointestinal health. In essence, they’re creating products that help consumers get over the effects of excessive sugar consumption, as well as a range of other dietary problems. In doing so, Nestlé has created a secondary marketplace that will exist for far longer than their traditional offering.
Kicking the habit
Tobacco firms are facing a number of challenges. It’s not just that fewer people are now smoking: changes in regulation mean that plain packaging is soon set to be the order of the day, with only the brand name distinguishing one cigarette company from another. Restrictions on the sale of e-cigarettes are also coming into force: a licence will be required for manufacturers to be able to market them as smoking cessation aids. At the time of writing, only one such licence had been granted – to tobacco firm British American Tobacco (BAT).
The decision to create “less risky alternatives to regular cigarettes” by BAT highlights how an apparently negative market shift can become a positive. By taking an approach that shows that they know the risks, understanding that adults make their choices and providing them with less harmful alternatives to cigarettes, BAT’s years of experience in the tobacco industry and honest, open approach have put them at the forefront of market changes.
Historically, we’ve seen other tobacco brands acquiring seemingly contradictory companies: in 2009, Reynolds American acquired Niconovum, a firm specialising in nicotine replacement therapy. While the move confused many, the purchase makes sense: the business has the potential to make significant profits whether smoking levels decrease or increase over coming years.
Innovate to survive
Innovation will be key to those big brands looking to take advantage of the post-addiction age. Design-led thinking will help tobacco giants overcome the challenge of plain packaging – perhaps by offering reuseable cigarette sleeves, for example. Creating healthfood products that fit into consumers’ new healthy lifestyles will be essential for the likes of Nestlé.
For intelligent food, drink and tobacco brands, the future looks bright for exactly the reasons many will have written them off. Striving for good health and the body perfect is addictive – and addiction, as tobacco, alcohol and sugar giants all know, can be big business.
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