IBISWorld’s recently released ‘health-consciousness index’ which indicates that while Australians are expected to drink and smoke less, obesity levels are set to rise as people participate less in sporting activities.
The health indicators used in the index include those for 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 – a trend expected to continue over the next five years.
According to the index, the share of total household expenditure on tobacco is expected to decrease by 0.09 percentage points in 2017-18, to total 1.2 per cent.
“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,” IBISWorld Industry Analyst Bao Vuong said. “An increase in the tobacco excise is also expected to negatively affect sales for the tobacconists and specialised grocery retailing industry.”
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 because remaining smokers are likely to be those that have difficulty quitting or are unaffected by rising cigarette prices.
IBISWorld says that when the indexation excise increases end in 2020, the federal government will probably implement additional excise increases if the current planned increases effectively reduce smoking rates.
Alcohol consumption is expected to decrease by 0.1 per cent during 2017-18, to total 9.72 litres per capita, according to the index, with government-led programs aimed at reducing alcohol consumption also likely to influence alcohol consumption in the current year.
However, alcohol consumption is changing. IBISWorld says that while consumption of beer, wine, spirits and ready-to-drink beverages has declined over the past five years, consumption of cider has surged 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,” Mr Vuong said.
Australian obesity levels for those aged 18 and over are expected to rise by 0.9 per cent over 2017-18, to reach to 65.2 per cent, IBISWorld says, despite rising awareness of the individual and social costs of obesity constraining such growth.
The ageing population is anticipated to continue driving growth in the obesity rate over the next five years.
IBISWorld says 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 such 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,” Mr Vuong said. “This is anticipated to benefit operators in the weight-loss services industry.”
Apparent fruit and vegetable consumption is expected to fall by 1.4 per cent in 2017-18, to total 98.8kg per capita.
IBISWorld says greater awareness of health diets generally leads to healthier eating among consumers, which involves increasing fruit and vegetable consumption. However, it warns that the availability of vegetables is expected to weaken in the current year, following two years of favourable weather conditions, with vegetable prices expected to rise and fruit and vegetable consumption to fall.
Australia’s ageing population is likely to boost fruit and vegetable consumption over the next five years, with older individuals typically consuming a higher volume of fruit and vegetables compared with the young and middle-aged.
Mr Vuong says that 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,” he said.
Sport participation figures in the IBISWorld index 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 per cent in 2017-18, to reach 59.5 per cent. 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 are expected to decline slightly each year over the next five years, however, as people of all age groups continue to spend their time on alternative activities.
“Declines in sport participation are projected to reduce the pool of potential consumers for the sport and equipment retailing industry, hindering revenue growth,” Mr Vuong said. “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.”
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