Nov 26 2020
Amid the ongoing COVID-19 pandemic, Australia is suffering from an obesity epidemic, with over one million Australians becoming obese over the past five years. Overall, 70.3% of Australians aged over 18 are expected to be overweight or obese in 2020-21.
‘Increasingly time-poor lifestyles among consumers, and rising demand for fast foods, takeaway foods and ready-to-eat meals, which are typically low in nutritional value, has added to the obesity rate,’ said IBISWorld Senior Industry Analyst Liam Harrison.
A major driver of obesity is the ageing population, as older individuals are more likely to live a sedentary lifestyle compared with their younger and more active counterparts. The share of the Australian population aged over 65 is expected to rise to 16.4% in 2020-21, up from 9.6% in 1980-81. However, while obesity is on the rise, Australians are becoming increasingly health conscious. The IBISWorld Health Consciousness Index is expected to rise by 0.9% in 2020-21, with this improvement driven by declining household expenditure on tobacco products. Consumers are also expected to increase their fruit and vegetable consumption by 0.9% in 2020-21, to total 174 kilograms per capita.
‘The share of total household expenditure spent on tobacco products is expected to fall to a historic low of 1.56% in 2020-21, continuing a long term decline from 17.74% in 1980-81. However, this is expected to be offset by a slight rise in per capita alcohol consumption,’ said Mr Harrison.
Industries to watch
As Australians become more aware of their health, several industries will likely benefit from a surge in demand. Revenue for the Weight Loss Services industry, which provides counselling, diet planning and supplements, is expected to grow at an annualised 2.1% over the five years through 2025-26, to $516.4 million. Revenue for the Health Snack Food Production industry is expected to grow at an annualised 2.3% over the same period, to $626.9 million.
‘The COVID-19 pandemic has given many Australians time to break unhealthy dietary habits and take up new exercise regimes. These effects are anticipated to continue over the next five years, supporting the Personal Trainers industry and the Gyms and Fitness Centres industry,’ said Mr Harrison.
For Australians that continue to eat unhealthy foods, demand is anticipated to rise for premium desserts and snacks, rather than cheaper offerings. Revenue for the Chocolate and Confectionery Manufacturing industry is forecast to decline at an annualised 0.6% over the five years through 2025-26, as consumers increasingly demand premium and healthy products.
‘Confectionary manufacturers are anticipated to offer an expanding range of healthy products to cater to an increasingly health-conscious population, which will likely limit industry revenue declines,’ said Mr Harrison.
Fermented drinks on the rise
The Functional Beverage Production industry, which produces health beverages and sport drinks, is projected to grow at an annualised 3.0% over the five years through 2025-26, as Australians increasingly focus on healthy dietary habits following the COVID-19 pandemic. Functional beverage sales are expected to rise by 0.4% in 2020-21, to $45.6 million.
‘Health consciousness among Australians has consistently risen over the past decade, supporting demand for health-related functional beverages and fermented drinks, such as kombucha and kefir,’ said Mr Harrison.
Fermented drinks such as kombucha contain live cultures and probiotics that are perceived as being good for gut health. Sales of fermented drinks have risen considerably over the past five years, to account for $123 million in annual sales. While kombucha is the stand out performer and has become common in supermarket aisles, other drinks including kefir, switchel and tepache are also becoming increasingly popular.
Despite Australians becoming more aware of the importance of good health, the overall rate of obesity across the nation is forecast to continue rising. In 2025-26, 76.9% of the population aged above 18 is anticipated to be overweight or obese. This growth, which is attributable to the ageing population, is expected to force policymakers to invest more in preventative health programs, such as those promoting more exercise.
‘The negative effects of an increasingly obese population are projected to become more prevalent over the next five years, driving a greater push from state and federal governments to support healthy habits,’ said Mr Harrison.
IBISWorld reports used to develop this release:
- Weight Loss Services in Australia
- Health Snack Food Production in Australia
- Personal Trainers in Australia
- Gyms and Fitness Centres in Australia
- Chocolate and Confectionery Manufacturing in Australia
- Functional Beverage Production in Australia
For more information, to obtain industry reports or to arrange an interview with an analyst, please contact:
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3647