Consumer trends: Spare cash goes on looking good by, Euromonitor International
Consumers across the globe are spending more of their hard-earned income than ever before on image and health enhancing products, according to a new report from Euromonitor International, “Spending choices: Discretionary Income Patterns to 2015”.
Health & beauty industries feel the benefit Consumer goods industries are currently enjoying buoyant sales as consumers pay out a greater share of their free cash on products that will improve their image. The premium cosmetics and toiletries industry in particular is benefiting from this trend, with Euromonitor International reporting an increase in value sales of more than 45% over the last 6 years, as consumers develop ever-more sophisticated tastes.
Similarly, growth in the packaged food industry has been driven by a surge in demand for health and wellness products, which often come with a premium price tag. From 2000 to 2006, global value sales of health and wellness packaged food (including organic, fortified, and low-fat products) have increased by a dramatic 72%, generating a total of US$ 245.2 billion in 2006 alone. Euromonitor International's research also shows that the global per capita spend on health and wellness food has risen from US$26 in 2002 to US$37.8 in 2006, a growth of 45.5%.
A healthy economy leads to healthy consumers Euromonitor's “Spending choices: Discretionary Income Patterns to 2015” reports that increased consumer spending on discretionary items, particularly those related to beauty, health and wellness, is the result of economic factors and rising health consciousness.
Primarily, an increase in credit levels has led to the development of a consumer with less-cautious spending behaviour; benefiting economies, retailers, manufacturers and service providers alike. This in turn, has led to a rise in disposable incomes, enabling more consumers to acquire the purchasing-power to decide what they spend their money on.
Furthermore, consumer awareness of the link between diet and health has increased dramatically over recent years. Consumers are now choosing to spend their extra income on products with health-enhancing qualities, largely at the expense of items previously considered to be essential. Consequently the health and wellness trend has become one of the key drivers of consumer markets in the 21st Century. This is exemplified by the fact that the global sales of health and wellness beverages actually overtook those of standard drinks in terms of value within the past 5 years.
Consumer spend looks set to continue Consumer markets are expected to remain dynamic through to 2015, as consumer spend becomes less inhibited, according to forecasts from Euromonitor's "Spending choices: Discretionary Income Patterns to 2015." Growth will be strongest in emerging markets, particularly in China and India, thanks to rising per capita income, increased use of credit and debt and the expansion of modern, retailing facilities.
Euromonitor International predicts that the global spend on discretionary products will reach US$3.1 trillion by 2020. The average American consumer will have approximately US$280 to spend on these items per week, compared to US$200 in 2002, an increase of 40%.
While health and indulgence will continue to be top priorities for consumers, it is forecast that consumers will begin to dedicate larger amount of their income to technology and education, as they realise the value of further qualifications.
For further detail about this article and other related findings, please visit Euromonitor International by clicking here.