Consumer industries are converging around a holistic, purpose-driven understanding of wellbeing that blurs the distinction between the consumer health and food and beverage (F&B) sectors. Major players are well-placed to serve physical wellbeing needs but struggle with emotional and social aspects, which are increasingly important to consumers. This Viewpoint sets out an approach to improving R&D performance in wellbeing, from fundamental science to new product commercialization.
Consumer packaged goods (CPG) companies are evolving their approach to wellbeing — expanding beyond physical health to embrace emotional and social dimensions (see Figure 1). F&B and consumer health businesses are converging in product categories such as dietary supplements, nutraceuticals, and functional foods as a way to prevent disease and support physical health through various life stages. This holistic approach involves moving beyond clever marketing to focus on fundamental science and technology applications that deliver genuine emotional and social benefits.
As consumer awareness of the importance of food and nutrition expands, a category of consumer products aimed at improving physical wellness has emerged. Many of these target specific life stages (e.g., healthy aging or infant nutrition) or lifestyle choices (e.g., sports beverages). Figure 2 shows the market size of items like functional foods and supplements and their projected growth.
Companies offering healthier product portfolios see higher profit margins than those focused on conventional options. Food companies with healthier food portfolios generate profit margins of around 15.2%; those with less healthy portfolios operate at around 13.4%. Unsurprisingly, many large F&B companies are buying health-oriented brands (e.g., Mars’s purchase of KIND and PepsiCo’s purchase of poppi).
Thus far, most of the scientific understanding around feeling better and being better has focused on physical wellbeing. Emotional and social wellbeing (see Figure 3) remain largely overlooked in the CPG sector, often limited to superficial marketing gestures. Foundational understanding of emotional wellbeing — such as mood regulation and stress management — is minimal, typically confined to simplistic herbal solutions like chamomile tea for sleep. Meanwhile, scientific engagement with social wellbeing — encompassing community, relationships, and loneliness — is virtually absent.
One reason is the difficulty in determining the demonstrable impact that food, beverage, and consumer products like supplements might have on emotional and social wellbeing. For instance, there is a relatively straight line between isotonic drinks and improved hydration (and athletic performance), but what products, with what ingredients, might noticeably improve the mood of a stressed-out mom or anxious business executive?
Consumer awareness reinforces this focus: products that provide fast relief for a short- or medium-term issue tend to be successful (e.g., pain and allergy relief, dry skin improvement). (The over-the-counter segment is predicted to grow at 7.92% until 2030, outcompeting most other consumer segments.) Consumers find less appeal in products that promise a long-term benefit (beyond the occasional dietary supplement), and many patients don’t even finish a course of prescription drugs, let alone continue taking a supplement they are skeptical about.
Traditional “hard health” players such as Haleon and Reckitt and “physically focused” snacking players like Hershey and Mondelēz are converging from their separated positions into the holistic wellbeing space where businesses like Danone, Unilever, and Procter & Gamble are already present, in part due to legacy product portfolios (see Figure 4). Figure 5 describes specific examples of products from companies that are moving into the holistic health space.
Similarly, industries like sports/fitness and entertainment are moving into the social and emotional wellbeing space. Companies like Peloton differentiate their physical wellbeing offer by focusing on community. Nike uses its fitness apps to build social communities, specifically tying emotional wellbeing to physical movement. Whoop, which manufactures fitness wearables, promotes holistic health through its platform featuring personalized coaching tips and community leaderboards.
Traditional F&B companies and healthcare businesses that focus more on cures than prevention will continue to face disruption from a congested marketplace of overlapping businesses striving to help people become healthier.
Arthur D. Little (ADL) created a roadmap for businesses wishing to successfully compete in this space. Companies must first deliver some quick wins, then build future capabilities and ways of working, and finally plan for the future with targeted investments (see Figure 6).
cloud technology axon
Headquartered in France with an established footprint across the Unite...
