Health food sector strong

While not everybody subscribes to the Atkins or South Beach diets, or even bothers with diets at all, it seems Australians are becoming increasingly selective about the foods they are eating.

At least that’s the view of many in the health food industry.

The near-obsessive focus in some sections of the media on poor eating habits and their role in obesity seems to be getting through to a public facing an acknowledged health crisis.

The issue, especially childhood obesity, also dominated Federal politics for several months earlier this year.

Whether it’s carbohydrates, sugars, vegetables or fats, consumers in Western Australia are seeking out information about food categories and the processes by which they are prepared and/or cooked. 

Among direct beneficiaries are health food stores, which are returning to revenue growth seen prior to the Pan Pharmaceuticals scandal.

From vitamin supplements to protein powders, consumers are seeking out better food alternatives.

And, later this month, a number of health food stores will begin stocking Dr Atkins branded food products.

Stay Healthy owner CK Liyu said while there was demand for low-carb foods, supplements and other products that provided health benefits also rated well with consumers.

“I think people are more concerned about what they eat and come in and read the labels and understand what they need,” he said.

“The natural health sector has been growing and business is good. It’s back to strong growth and we really have rebounded from Pan.”

Five years after entering the industry Mr Liyu and his family have acquired three stores and are looking to buy a further two.

“I think we will see double-digit growth,” he said.  “At the moment brand names are not very strong in health foods because they are a lot of small operators, but in 10 years it will be like the pharmacies; there will be the bigger players and then local community shops.”

Good Life Health Stores general manager Garry Jowett said growth in the Western Australian health food sector was strong.

The group’s revenue across its 20-store cooperative was just less than $25 million last year.

“The sector is strong because generally people are more aware of what they eat,” Mr Jowett said.

“Up until Pan [April 2003] it was growing at about 8 per cent and I would say we’ve returned to those levels. It’s a pretty good recovery seeing as the vitamins made up 40 to 50 per cent of our turnover.

“I think the industry will continue to grow and grow at about 8 per cent.”

Mr Liyu said that while some players would benefit from the surge in consumer health food consumption, competition from major supermarket chains and pharmacies would affect small operators.

Better Health

• Local health food players believe the industry has returned to pre-2003 growth levels.
• Dr Atkins branded food, already available on the east coast, will be available in WA in three to four weeks.
• Increasing competition for health store operators from pharmacies and supermarket chains eager to capitalise on the consumer demand for nutritional supplements and health food alternatives.