Table of Content
3. Analysis of the findings
4. Business strategy
6. Recommendations for Product and Services
7. 1 Analysis Tools
Porters 5 Forces Analysis
7. 2 Market forecast
Market forecast for Nutraceutical Market, Functional Food
and Beverage Market and Personalized Nutrition Market
This report has been generated for Venture Investors to locate a promising new market, in which it is recommended to invest in. Research pointed out that Personalized Nutrition is a fast growing market. The personalized nutrition market is emerging out of the functional food market (beneficial food) because of new innovations in nutrigenomics.
“Nutrigenomics is the study of interactions between genetic and dietary factors and their influence on health and disease.” (http://genome.wellcome.ac.uk/ 2006) It gives an insight of how food interacts with human genes and that an incorrect diet can be responsible for diseases. Nutrigenomics drives the market for functional food to a new level where beneficial food can be personalized.
The report analyses the market and its environment and discusses about Business and Investment opportunities within the market using a screening method. An examination of the successful development and launch of the real world outcomes will be given and recommendation for New Venture Plc. for equity investment made.
This Report is based on examination of primary and secondary research.
The primary research was carried out by a critical PESTLE and SWOT analysis and Michael Porters five forces strategy to evaluate the competitive advantage.
As a source of secondary research journals have been used. The scientific information has been collected from www.sciencedirect.com. Research materials about the current future market have been taken from www.marketline.com and www.businessinsight.com. A range from other online resources has been listed in the bibliography.
3. Analysis of the findings
Datamonitor estimated that the functional food & beverage market in the US, Western Europe and Asia Pacific is worth $72.3bn (£43.4bn). Forecasts on sales growth are 5.7% per year until 2012. This is 1.6% of the entire World food industry and the value is expected to triple until 2016. (http://www.marketlineinfo.com/ A, 2008)
This trend is driven by numerous factors:
- Consumer are becoming more conscious about their health and appearance,
- Rising consumer awareness of the interaction of diet and health
- Increasing use of beneficial food by health professionals to prevent diseases (Sutton and Nutrigenomics New Zealand (2007) p.117-121)
- Mounting obesity
- Increasing health care needs of an aging population
- Rising tendency to self-medication,
- Healthcare providers want to pass the cost to the individual. (http://www.bi-interactive.com/ A, 2003)
Dietary components have different effects on individuals because of everybody’s specific genetic makeup. (http://www.marketlineinfo.com/ B, 2001) New technological discoveries in Nutrigenomics give the possibility to generate an individual genetic nutritional profile. In foreseeable future it will possible, that with the unique genetic makeup of a person, food can be manufactured to address a person’s health issues or prevent diseases or to personalize its diet. The food market is changing and non benefit products will be displaced from the market. This development is promoting the demand for functional ingredients and commercial applications of nutrigenomics. Future profits in the food market will come out of products and services which help to improve the consumer’s health and wellbeing through personalized nutrition. (http://www.bi-interactive.com/ B, 2007)
Personalized food will blur the edge between food and pharmaceutical market, because of the health benefits by consuming personalized food. (http://www.bi-interactive.com/ C, 2007) The pharmaceutical market is already using genetic information to personalize its products (Nutraceuticals). The Nutraceutical Market in the UK has current a market volume of $4.1bn (£2.5bn) and forecasted to increase by 40.6% to $5.8bn (£3.5bn) in the next five years. (http://www.marketlineinfo.com/ B, 2004)
The chart below shows the development in the nutraceutical and functional nutrition Markets over the next 7 years. The total which is indicated as Personalized Food Market shows a consistent increase of 40.4 %. For a Capital investment of £2m in this area for 25% of equity, this means a valuation of £8m. Companies operating in this market such as GeneLink Inc. generated a profit of 80% of the Companies worth. (http://www.marketlineinfo.com (C) 2009) With this future profit prospects New Venture Plc. would have a return on investment in 8 years.
illustration not visible in this excerpt
(Chart Appendix 2)
Science and technology in this sector is continuously advancing, new patents and licensing agreements minimize the risk of imitations and low-cost products. (http://www.bi-interactive.com/ B, 2008)
Besides promising market forecasts and the rapid development in nutritional and genetic science, challenges have to be faced to secure the success of new innovations in functional food.
Social implications, based on ethical and moral issues are not excluded. Firstly, the discussion about if personalized nutrition would be a luxury good. In the beginning it will be launched at a premium price because of higher production cost which lower income families find hard to afford. New innovations, such as mobile phones and computers, generally started on a higher price level till the product cycle reached maturity level and improvements made it accessible to a wide market.
- Quote paper
- Corinna Schmidt (Author), 2009, Report for Venture Investors , Munich, GRIN Verlag, https://www.grin.com/document/144729