While Australians are expected to consume less alcohol, spend less on tobacco, and consume more fruit and vegetables over the next five years, obesity levels are set to rise as people participate less in sporting activities.
To quantify the Australian public’s receptiveness to a healthy diet and lifestyle, IBISWorld has compiled an index of health indicators, known as the health consciousness index. The health indicators used in this index include alcohol consumption, smoking rates, fruit and vegetable consumption, obesity levels, and participation in sports and physical recreation activities. Health consciousness is presented as an index with a base year of 2012-13, with an increase in the index representing a rise in health consciousness. Health consciousness has risen over the past five years and this trend is expected to continue over the next five years.
The smoking rate tracks the changing attitudes of Australians towards smoking. IBISWorld expects the share of total household expenditure spent on tobacco to decrease by 0.09 percentage points in 2017-18, to total 1.2%. ‘The first increase in the tobacco excise in September 2017 is expected to continue encouraging smokers to quit due to the high cost of tobacco. An increase in the tobacco excise is also expected to negatively affect sales for the tobacconists and specialised grocery retailing industry,’ explained IBISWorld industry analyst Bao Vuong.
The popularity of smoking is anticipated to continue declining over the next five years. As expenditure falls, the rate of decline is expected to slow as remaining smokers are likely to be those that have difficulty quitting or are unaffected by rising cigarette prices. When the indexation excise increases end in 2020, the Federal Government will likely implement additional excise increases if the current planned increases effectively reduce smoking rates.
Per capita alcohol consumption
IBISWorld expects that alcohol consumption will decrease by 0.1% during 2017-18, to total 9.72 litres per capita. Government-led programs aiming to reduce alcohol consumption will also likely influence alcohol consumption in the current year.
However, alcohol consumption is changing. While consumption of beer, wine, spirits and RTDs has declined over the past five years, consumption of cider has surged. Cider sales have strongly grown as successful marketing campaigns have expanded the demographics of cider's consumer base and new flavours have spurred renewed interest in cider products. ‘Consumer tastes are projected to continue shifting towards locally produced premium products from craft cider breweries over the next five years, contributing to solid growth in the cider production industry,’ said Bao Vuong.
IBISWorld expects Australian obesity levels for those aged 18 and over to rise by 0.9 percent over 2017-18, to reach to 65.2%. However, rising awareness of the individual and social costs of obesity has constrained growth in the obesity rate.
The ageing population is anticipated to continue driving growth in the obesity rate over the next five years. The social problems caused by obesity have led to several initiatives that have constrained rising obesity levels. Over the next five years, factors that could potentially constrain rising obesity levels include regulating advertisements that promote unhealthy foods during children’s TV programming, and potentially introducing a tax on fat or sugar, which would lead to unhealthy foods becoming more expensive.
‘As obesity levels in Australia increase, more consumers will become more likely to consider weight loss options. This is anticipated to benefit operators in the weight loss services industry,’ explained Bao Vuong.
Fruit and vegetable consumption
Apparent fruit and vegetable consumption is expected to fall by 1.4% in 2017-18, to total 98.8 kilograms per capita. Greater awareness of health diets generally leads to healthier eating among consumers, which involves increasing fruit and vegetable consumption. However, the availability of vegetables is expected to weaken in the current year, following two years of favourable weather conditions. Less favourable weather is anticipated to cause vegetable prices to rise, and fruit and vegetable consumption to fall.
Australia’s ageing population will likely boost fruit and vegetable consumption over the next five years. Older individuals typically consume a higher volume of fruit and vegetables compared with young and middle-aged individuals. As the proportion of Australia’s population aged over 50 increases over the next five years, average per capita fruit and vegetable consumption is also likely to rise.
‘Anticipated increases in per capita fruit and vegetable consumption are projected to drive demand for the fruit and vegetable retailing industry,’ stated Bao Vuong.
Participation in sport
Sport participation figures indicate the share of Australians aged 15 and over that participate in sports and physical recreation activities. Levels of participation in sport are expected to increase by 0.2 percent in 2017-18, to reach 59.5%. Government initiatives, such as VicHealth’s program to increase female participation in sport, have helped bolster sport participation in the current year.
Participation in sport and physical recreation is expected to decline slightly each year over the next five years. As people of all age groups continue to spend their time on alternate activities, participation in organised sport and other forms of physical activity is anticipated to fall.
‘Declines in sport participation are projected to reduce the pool of potential consumers for the sport and equipment retailing industry, hindering revenue growth,’ explained Bao Vuong. ‘However, government campaigns and other similar initiatives to boost sport and recreation activities participation are projected to become more prevalent over the next five years. This trend is expected to partially offset weaker participation over the period,’ added Bao Vuong.
For more information on sectors referenced in this release, visit www.ibisworld.com to access the following reports:
R9112 Sports and Physical Recreation Clubs in Australia