Selling Science: How to Market Functional Foods
Products in the Nestlé and Novartis folds are just two of the casualties in the functional food market documented on just-food.com in recent months. Raisio's Benecol is having a tough time outside Finland and any number of smaller companies are struggling. It is widely believed that functional foods are the next big thing, but how can manufacturers pushing back the frontiers of this new market get the right message across?
Industry experts speaking at last week's Marketing Week conference Marketing Functional Foods and Dietary Supplements in London had a number of important recommendations for manufacturers and distributors of functional foods. One of the most striking features of the day was the unusual degree of consensus between most of the speakers, whether from a product development, branding or consulting background. This reflects the sector in which they operate: it's small, dynamic, and its leaders are likely to be in touch with each other's ideas.
They are also united to some extent in their shared frustration at the slow pace of change in regulation governing health claims. David Richardson, head of nutrition science and communication at Nestlé UK and a consultant in nutrition and food science, reminded delegates that there is no reference to the term 'functional food' in the regulatory framework of any country, although moves are afoot within the EU's Codex Alimentariusi which should see the topic move towards the head of the agenda soon.
What makes a food 'functional'?
"All foods are functional but some are more functional than others," commented Richardson with apologies to George Orwell. Although an official definition of functional foods is still lacking, a generally accepted definition is "any modifiedii food or food ingredient that may provide a health benefit beyond the traditional nutrients it contains."iii This is a key point - functional foods have had something beneficial added to them, contrasting with the "debit" culture informing much new product development in recent decades. Fat-free, low-calorie and reduced-sugar labels are being challenged by claims such as calcium-enhanced, vitamin enriched and cholesterol-lowering. This subtle difference has struck functional food makers the world over. To quote Ruth Isaak, communications director of the US National Sunflower Association: "The good news with functional foods is that what you eat can be more important for your health than what you don't eat."
Richardson referred to a sea change in the role of nutrition that is driving the growth in demand for functional foods. Consumers are taking more responsibility for their own well being and actively seeking to improve their health through their dietary choices. Many have gone beyond looking to food simply to maintain their normal health, they are now seeking to optimise their performance and wellness as well as reduce the risk of disease.
Make science palatable
Manufacturers need to tap into this drive without blinding consumers with science. An anecdote: a couple of years ago at the UK press launch of a new probiotic drink, the key scientist behind the product was invited to speak. He proceeded to wax lyrical about the healthy state of his bowels since partaking of the product on a daily basis. So graphic was his description that even hardened food trade journalists felt queasy. Had the same strategy been employed when marketing to consumers it is doubtful the product would be enjoying its current success.
It is this type of scenario that Swedish brand consultant Peter Wennström urged delegates at the Marketing Week conference to avoid. It is true that manufacturers cannot sell a functional food product by stealth, by hiding its unique selling point. Consumers need to be informed about the science if they are to choose the product over others, especially since functional foods generally carry a premium price. Nevertheless, "Don't take the science out of the product, but present it in a palatable way," suggests Wennström.
This is the strategy used by Yakult Honsha, which time and again during the conference was held up as a shining example. The bulk of the Japanese company's advertising efforts are funnelled into a unique door-to-door distribution network. The now infamous 'Yakult ladies' take time to chat with potential purchasers and explain the benefits of the products. Educational leaflets are distributed and in Europe face-to-face samplings and information sessions are held in supermarkets. It is important to give consumers the "science" when they have time and inclination to digest it - not bombard them with technical detail when they are least receptive.
Differentiate your brand, not just your product
Mary Cawley of Brandhouse WTS had an interesting perspective to offer food producers looking to market their functional foods sensitively. She highlighted the importance of brand integrity, particularly if the science behind the brand is complicated, and suggested some of Benecol's problems may be attributable to it "behaving like a product, not a brand." When it was launched outside its native Finland, marketing emphasis was placed on Benecol's cholesterol-lowering ingredients. Without the advantage of the brand loyalty the company already enjoyed at home, the brand has struggled on international markets. Product differentiation is hard to sustain, Cawley stressed, as new products can be copied by competitors within weeks. Rivals will find it more difficult to undermine an existing brand if consumers have an emotional attachment to it. Where Benecol is feeling the squeeze from Unilever's rival cholesterol-lowering spread, Yakult has thus far withstood the pressure from new entrants to the little bottle market, because, as Cawley suggested, "Health is at the heart of Yakult's corporate soul," and the brand has become associated with a genuine concern to deliver health benefits to people at an affordable price.
Big is not necessarily beautiful
When launching new products, smaller companies are traditionally hampered by accordingly smaller marketing budgets, yet they may have a crucial advantage. It is easier for a small company to keep the brand or core range of products at the heart of its business. It may therefore be easier to convince cynical consumers of its brand's integrity. This can be compared with the organics market - consumers are more easily impressed by a company that only produces organic food than by a major multinational that has a foot in the non-organic camp, begging the question "If organics are better for me and the environment, how come they still make non-organic food too...?" This gives larger, diversified companies even more reason to focus on the brand, suggests Cawley.
Functional foods have as yet to develop a lifestyle connotation in the same way as organics or vegetarian foods, commented Dorothy MacKenzie of the Dragon brand consultancy. She cited these two categories as compelling rivals to functional foods for the "wellness" market. Both have strong philosophies and have become much more than a diet. For many vegetarians or organics fans, concerns about the planet, the environment or animal welfare are likely to be a part of their philosophy. As the functional food market matures, it may develop its own intrinsic aspirations, but as yet they are not in place.
Where the product to be marketed is an extension of an existing (and successful) range, this has not mattered too much - for example, Tropicana's calcium-enriched line. But when new brands or categories are to be created, attention to what MacKenzie calls 'holistic branding' is vital. Questions marketers should address in their promotional activity include: Where does the brand come from? What does it mean? Why should I believe in it? and significantly, Do I like the people behind it? Demonstrating an inspiring commitment to the brand is just as important as pressing home specific health claims.
To cite an example which contrasts beautifully with the probiotic press launch recounted above, MacKenzie highlighted Ocléa, the fruit-based little bottle drink that Novartis launched with the message "Wake up beautiful and happy" - far more enticing to consumers than the bluntly didactic "Improve your gut health." The message Novartis pitched at its target audience went far beyond the specific health benefit the product offered to intimate concern that the consumer was generally well and happy.
Life or death marketing
Dr Michael Heasman took up this theme with his comparison of 'life marketing' as opposed to 'death marketing.' Some of the companies which have struggled to convert a niche consumer base to a mass market used 'death marketing' strategies. This would include focusing on a disease or medical condition, for example products which promise to reduce the risk of disease, such as those that lower elevated cholesterol.
This focus on the active ingredients or science behind a products contrasts with the ethos behind 'life marketing,' where the focus in squarely on health rather than sickness and designed to promote the quality of the diet and the well being of the individual. 'Life marketing' focuses on the everyday needs of the mass of consumers. It arguably holds out greater promise of success - allowing manufacturers to target consumers without health problems as well as those who are concerned about disease. A further danger of specifically targeting people with known health problems is that they will often turn not to food but to medicine for a solution.
As legislation catches up with the science driving the growth of the functional foods sector the task of the marketer may become easier. Manufacturers will be able to make more specific health claims to educate the public about their products. But this will not make their products any less complex, and the suggestions and insights offered by the experts cited above will still be as valid as ever.
i Just-food.com recently published a feature on Codex Alimentarius. To read it, please click here.
ii Modified in this context should not be confused with the occasional usage of the term as shorthand for 'genetically modified.'
iii American Dietetic Association, 1995, quoted in The Functional Foods Revolution: Healthy people, healthy profits? Michael Heasman and Julian Mellentin (2001), London, Earthscan Publications, p5. To see more information or to buy a copy, click here.
The just-food.com Research Store offers a number of reports on functional foods. To view them click here.
To find out more about Michael Heasman and Julian Mellentin's book The Functional Foods Revolution: Healthy People, Healthy Profits? please click here.
To find out about other Marketing Week conferences, please click here.
The organic market appears to be going from strength to strength, especially if this year's BioFach exhibition is anything to go by. With over 2,000 exhibitors from 70 countries and more than 30,000 v...
Natraceutical, a spin-off of Spanish food group Natra-Zahor, has unveiled ambitious expansion plans, spurred on by growth in the functional foods market. With such high levels of interest in healthy f...
The Australian state of Victoria is investing in a programme to identify new opportunities for its food and agriculture industries. As part of this initiative the government conducted extensive resear...
Innovation is king - or is it? Fear of legislation or simple lack of imagination has depressed innovation in the food sector for a couple of years. Brand extensions and me-too copycats are not the sam...
US packaged foods company ConAgra has announced two new organic products to be launched under its Hunt's and Orville Redenbacher's brands....
Nestlé UK has announced that from June 2005 every box of Nestlé breakfast cereals will be made with whole grain....
Nestlé sales in the first quarter of 2005 were up and on target to reach the company's full year goals it said today (Monday)....
US biotech company Senomyx has announced that it has reached agreement for a three-year extension of the collaborative research phase under its initial discovery and development agreement with Swiss f...
- Price an underlying tension across European FMCG
- Analysis: Tyson's shrewd investment in Beyond Meat
- Interview: UK trade body on Brexit's policy impact
- It won't just be Unilever to push for Brexit hikes
- Danone's Q3 sales - what the analysts say
- Nestle lowers outlook on "softer environment"
- Bel takes majority stake in MOM Group
- Mars launches Maltesers in the US
- Metropoulos invests in Utz Quality Foods
- Abbott sees international nutrition sales fall
- The Big 15: Strategies and Priorities of Top Packaged Food Players in Comparison
- Omega-3 in Food and Beverage:Time for a Reboot?
- Packaged Food: Quarterly Statement Q3 2016
- Global Food Packaging: Innovating for Greater Convenience and Quality Image
- Constellation Brands, Inc. (STZ) - Financial and Strategic SWOT Analysis Review