10 Key Trends in Food, Nutrition & Health 2011 Key Trends in Food, Nutrition & Health 2011 by Julian...

10 Key Trends in Food, Nutrition & Health 2011

by Julian Mellentin

www.new–nutrition.com

DECEMBER 2010 / JANUARY 2011 ISSN 1464-3308

VOLUME 16 NUMBER 3

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INTRODUCTION3-6 10 Key Trends in Food, Nutrition & Health 2011

10 KEY TRENDS7-14 Key Trend 1: Digestive health – the biggest growth opportunity

15-18 Key Trend 2: Energy – a wealth of new opportunities?

19-21 Key Trend 3: Feel the benefit – the most powerful marketing message

22-24 Key Trend 4: Fruit – the future of food and health

25-29 Key Trend 5: Weight management

30-33 Key Trend 6: Naturally healthy and ultra-convenient

34-36 Key Trend 7: Packaging and premiumisation

37-40 Key Trend 8: Antioxidants: popular but future uncertain?

41-43 Key Trend 9: Immunity’s regulatory and marketing speed-bumps

44-46 Key Trend 10: Bones and movement

MICRO-TRENDS47-49 Micro-Trend 1: Protein

50-51 Micro-Trend 2: The reinvention of dairy

52-53 Micro-Trend 3: The rise of vitamin D

54 Micro-Trend 4: Ageing population, good science lift cholesterol-lowering

55-56 Micro-Trend 5: The kids market – where natural and convenient beat fortification

57 Micro-Trend 6: Probiotics’ new niches

58-59 Micro-Trend 7: Stress, relaxation and sleep

60-61 Micro-Trend 8: Omega-3 needs better technology to achieve break out

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5-Hour Energy .......................................16,17,18,20Amp.......................................................................17Applied Nutritional Research ...............................49Bimbo ...............................................................13,14Biothera Wellmune GP .........................................41BLIS Throat Guard ..............................................57Booster Broccoli ...............................................30,31Brassica Protection Products .................................34BroccoSprouts .............................................30,31,34Campbells Soups ...................................................27Coca-Cola .............................................................17Compal Essencial ..................................................24Danone Actimel .....................................41,42,43,57Danone Activia ...................7,8,9,10,11,14,20,21,36Danone Danacol ...................................................54Danone Danimals .................................................55Danone Danino ....................................................60Danone Dan-o-nino ........................................55, 56Danone Densia .....................................................46Danone Essensis ....................................................21Danone Vitalinea Safisfaccion ..............................28Danone Zen ..........................................................58Danone .............................................7,9,10,20,23,55Drank ....................................................................59Dream Water ........................................................59

Elations ........................................................20,44,45Ella’s Kitchen ..................................................55, 56Emminent .............................................................17Ezaki Glico GABA ................................................58Fonterra Anlene ......................19,20,21,36,44,45,46Fonterra ..............................19,20,21,36,44,45,46,49Fortitech ................................................................59Gefilus .........................................................24,43,57General Mills Fiber One ..........................7,11,12,14James White Drinks’ Beet It .......................30,31,36Joint Juice .........................................................44,45Kellogg Fiber Plus .........................................7,10,12Kelloggs Special K ..................19,20,21,25,28,29,49Liptons ..................................................................58Living Essentials ....................................................16Mary Jane’s Relaxing Soda ...................................59Mini Chill ..............................................................59Monster Hitman ...................................................17Nature’s Plus Animal Parade Tooth Fairy ............59Naturlinea .............................................................29Nescafé Green Blend ............................................39Nestlé Boost Kid Essentials ...................................42 Nestlé .................................................23,38,39,42,58NeuroTrim ............................................................27Norrmejerier Gainomax Recovery .......................51

NOS ......................................................................17Oasis Health Break ...............................................43Ocean Spray Craisins ......................................22,24Paramount Farms.............................................32,33PepsiCo .................................................................17Pom Wonderful ...........................................23,37,38Probake50 .............................................................49Progresso High Fiber ...........................................14Provita ...................................................................49ProViva .................................................7,9,10,23,57Quorn ..............................................................47,48Red Bull ......................................................17,18,19Sara Lee Soft & Smooth Plus ...............................60Shamrock Farms Rockin’ Refuel ..........................51Sirco ......................................................................54SlimFast ............................................................27,28Vacation in a Bottle ...............................................59Valio .................................................................43,57Vitaminwater ........................................................53WeightWatchers ..........................................25,26,28Wonderful Pistachios ........................................32,33Yakult .................................................................7,14Yoplait Yo Plus ..................................................7,8,9


At the end of each year we publish our annual forecast of the 10 key trends in the business of food, nutrition and health.

These are the trends that are the underlying key drivers for our industry – not fads or short-term developments which quickly appear and disappear. They are the important trends which will shape the business of food and health not only in the 12 months ahead, but for many years beyond that. It’s because we only include those with staying power that our list of trends doesn’t change dramatically from year-to-year. This long-term focus enables companies to formulate their plans, innovation and strategy around our trends analysis, as many companies tell us they do.

For us a key trend is one which is very clearly a growth opportunity – something that a company can connect to in order to earn additional volumes, additional sales and extra profi ts.

When trying to identify which trends your company should connect to, it’s essential to distinguish between those that are big, well-established and have little or no growth potential, and those which have high growth potential.

Consumer research often identifi es consumer insights – which are then used as guides to strategy – that are in fact only descriptions of trends that have already reached maturity and have no more upside potential. What it doesn’t do often enough is spot the issues which matter to only a small group of people – perhaps only 30% of consumers. Counter-intuitively, it is these


10 Key Trends 2011

KEY TRENDS FOR 2011

1. Digestive health

2. Energy

3. Feel the benefi t

4. Fruit: the future of food and health

5. Weight management

6. Naturally healthy and ultra-convenient

7. Packaging and premiumisation

8. Antioxidants

9. Immunity

10. Bones and movement

MICRO-TRENDS FOR 2011

We also identify and analyse the Micro-Trends – the secondary growth opportunities and the growth opportunities which are perhaps stalled or only growing very slowly at present pending developments in technology or marketing which can accelerate growth.

These are developments which are not yet signifi cant but we think could become so:

1. Protein power2. The reinvention of dairy3. Vitamin D4. Cholesterol-lowering5. Kids’ nutrition – naturalness rules6. Probiotics’ new niches7. Relaxation/stress8. Omega-3

Free-from artificial additives is not a trend: By our definition, a trend is something that you can connect to in order to earn higher sales and profits. Being “all-natural” used to be such a trend, but is no longer. It’s now a standard consumer requirement of foods and beverages in all categories and it’s by far the most common message in the supermarket – and it won’t give you a point of difference. A trend without the potential for growth is not a trend, it’s just an observation.


insights which are often the key trends that will drive your business.

Let’s take two trends as an example – digestive health and “all natural”. In one sense, it is true that consumers’ desire for foods to be “as natural as possible” is the biggest trend. In detail it means that consumers want foods to be free-from everything they think is bad – usually interpreted as free-from artifi cial preservatives, colours or fl avours. It has become a common message in the mass market, with every brand that can do so now reformulated to deliver the free-from “bad ingredients” promise.

But in fact it’s a trend of no commercial value; it has become a “category standard” for the food and beverage industry, something that almost every brand must do

if it can, but it is no longer a point of difference (as it was seven or more years ago). Delivering a “free-from” or “natural” product will not give you any extra sales volume or a higher price, it’s just what consumers expect you to do. A trend without the potential for growth – through differentiation, to achieve higher volume or higher value – is not a trend, it’s just an observation.

By contrast, digestive health remains an area where sales of products with that benefi t are growing – indeed have proven to be recession-proof in many countries.

We are confi dent that, like many companies all over the world that already use our trends research to inform their innovation, R&D and marketing strategies, you will fi nd our 2011 trends report an invaluable weapon in your armoury.

10 Key Trends 2011

METHODOLOGYTo pick which trends truly offer growth opportunities, we analyse data from a broad range of sources, listed below. This is just a snap-shot of a complex, 12-month-long process that we’ve been developing since 1995.

Consumer research: what consumers say they believe, what they say they need and what they say they are going to do. We use consumer research from a wide range of sources.

Retail sales in the supermarket: what consumers actually do (often very different from the above), using data from Symphony IRI, Nielsen and fi gures supplied to us by companies.

Nutrition science: what is emerging in nutrition science that will lead to new opportunities to communicate new benefi ts, to better substantiate existing ones or to change the way we think about everyday foods and beverages.

Technology: what are the constraints in terms of ingredients and technology which might limit the consumer appeal of a certain type of food product – and what developments are allowing companies to create new products with new benefi ts or improve those already on the market and so create growth potential.

Regulation: what you can and can’t say. What you might not be allowed to say in future, and how to get round that – and what you might be allowed to claim that you weren’t expecting to.

Marketing innovations: what are the innovations in marketing and packaging and communications across all categories and can they be applied to the trend under examination to create rapid growth?

Strategies: what successful strategies can be applied to the trend under examination. Is it executable? Is it possible to “borrow” strategies from other categories to make it work? Regular readers of our work will know that we follow the research of leading business thinkers carefully, from Clayton Christensen (the father of the concept of “disruptive innovation”) to CK Prahalad and Gary Hamel.

Consumer psychology: what are the consumer beliefs in relation to a certain category or health benefi t? There are few food psychologists but each year we interview the leading thinkers in the fi eld, such as Professor Brian Wansink, director of the Food & Brand Lab at Cornell University and an adviser on the psychology of food and health to companies and governments.

Business psychology: what does industry believe about this trend or category that will cause companies to follow a trend or ignore it. Are there any “white space” opportunities that are being ignored or overlooked – perhaps because they don’t fi t with existing strategies?

Industry executives: our 450-500 interviews a year with executives in food, beverage and ingredients that enable us to understand what their priorities, challenges, successes and failures and opportunities are. We look at how these can be applied across trends and categories.


Chart 1: The top consumer health concerns (things that affect them personally)

Health Focus International’s studies in 32 countries around the world are probably the food industry’s most-respected and most widely-used insights into consumers’ food and health beliefs. The chart below summarises the key areas that are highest on consumers’ agendas.

Note that Digestive Problems and Tiredness/Lack of Energy are also the biggest segments of the functional foods market and the two which our own research indicates have the most signifi cant growth potential (see Key Trend 1 and Key Trend 2).

Overweight is also consistently, and unsurprisingly, a major area of consumer interest – and is still a signifi cant growth opportunity (Key Trend 5).

All of the other areas represent future growth opportunities – the common factor preventing Stress and Sleep (see Micro-Trend 7) from being a major market is only that no one has yet worked out an effective marketing strategy to address these consumer needs, nor has anyone yet settled on effective technology.

Frequent colds/fl u – immune health – is an important area (Key Trend 9), but regulatory, marketing and technical challenges have so far prevented it from fulfi lling its potential. Note that for any products which address the concerns identifi ed by Health Focus research to be successful with consumers, they would need to deliver a “feel the benefi t” advantage (see Key Trend 3).

Source: Health Focus International

10 Key Trends 2011


Chart 2: The nutrional product life cycle – where the trends sit

The chart below was developed to aid understanding of brand positioning and the evolution of markets. Many products start out on the left, targeting consumers who have a need for a product that has effective technology. They sell in low volumes at premium prices but over time their appeal increases and they move down the price curve to the right, eventually becoming mass-market products. Few functional foods have yet made this transition – many companies deliberately target the lifestyle area as a way of creating a defensible niche and maintaining premium prices. Below we show where some of the Key Trends and the Micro-Trends – and the brands that are working with these trends – currently sit on the life-cycle. The stages of the life cycle are:

Technology consumers – These are the early adopters, people who have a near-medical need for a product. They need the technology of the functional food to address their health condition. They see products in a medicalised context and, as with drugs, they will pay a substantial premium for something that addresses their condition.

Lifestyle consumers – They are interested in maintaining their wellness, not fighting illness. They will adopt new brands and will pay a premium for a product but only if it supports their lifestyle.

Mass-market consumers – They are motivated when a benefit becomes a standard and is available in products with low or no premiums, ideally from well-known and trusted brands.

Source: Mellentin & Wennström, The Food & Health Marketing Handbook

TECHNOLOGY CONSUMERS

LIFESTYLECONSUMERS

MASS-MARKETCONSUMERS

Solid line = sales volumes

Broken line = unit selling price

6% - 8% of consumers 20% - 25% of consumers 67% - 74% of consumers

SALES

TIME

Omega-3

Protein

Bones &movement

Fruit & superfruit

Weight management

Energy

Digestive health

Heart & cholesterol

Naturally healthy

10 Key Trends 2011


THE DIGESTIVE HEALTH SUCCESS STORY

The market for products that offer the benefit of improved digestive health has developed into an enduring success story. It’s now the biggest segment of the functional foods market – after energy drinks – and looks set to stay that way. It is also possibly the fastest-growing segment of health and the evidence is that its growth will continue.

Worldwide, the value to consumers of products that can help them maintain good digestive health is reflected in the outstanding performance of the few brands that have made delivering this benefit their cornerstone. Consider the following:

• Danone Activia grew its sales by 14% in the US yoghurt market (in a category that grew 7%) to a total of $438.5 million (€329.4 million).

• In markets such as Germany and the UK, Activia maintained its growth, increasing sales by 10% in the UK to become the country’s biggest yoghurt

brand with $380 million (€285.4 million) in sales, despite the brand no longer using any overt health claim.

• General Mills Fiber One’s growth slowed to 2% after years of meteoric growth (see Chart 5). However, the core products of breakfast cereals and bars still grew 4%, the overall figure being reduced by the poor performance of over-ambitious brand extensions into different categories, few of which can be expected to survive.

• Kellogg Fiber Plus, the fast-emerging rival to Fiber One in the US, grew its sales 47% to $66 million (€50 million).

• Sales of Yakult grew by 40% in the US and 18% in most parts of Asia with a 27% jump in Indonesia, already one of the world’s biggest markets for Yakult.

• ProViva probiotic juice grew 8% in 2010 in Sweden to 28 million litres, making it one of Europe’s most successful functional beverages (see below).

• Sales of probiotic dietary supplements grew 29% to $530 million (€389 million) in the US market.

10 Key Trends 2011 Digestive Health

SUMMARY• Recession proof: Products for digestive health have recently proven themselves to be almost recession-proof, even when selling

at premium prices. It has become clear that while consumers are willing to economise in some areas, maintaining good digestive health is one area where committed consumers remain loyal to brands that they can trust, even when they are premium-priced. This is a testament to the power of “feel the benefit” (see Key Trend 3).

• Be first to market: A key lesson from the experience of the digestive health market is that in every category there’s usually only room for one or at most two significant brands with digestive health benefits. In the US, for example, Danone Activia is 10 times the size of its next-biggest competitor Yoplait YoPlus, with all other brands trailing even further behind.

• Dairy well-established: In probiotic products, dairy is dominant and it will remain so. The dairy category is now well-established and in most countries there are few – or no – opportunities for new probiotic dairy brands. Any new player in dairy will effectively be a me-too and any brand that finds itself in third place in the market today will probably fail to climb up the rankings.

• Probiotic fruit juice promise: In probiotics for digestive health the biggest growth opportunity lies in probiotic fruit juice, an opportunity proven in Scandinavia and now reinforced through Danone’s move into the category in 2010.

• Digestive juice the big opportunity: Juice for digestive health – whether it’s probiotic or fibre-fortified – is the emerging biggest opportunity of the next decade. Juice will not rival dairy but it will take a large niche position. No other food forms will have more than a toehold.

• “Proven effective” products will stand out: Fibre is at last coming of age and added fibre will become an industry standard in many categories such as bread. That means there’s a clear opportunity – and need – for products to make claims based on human clinical studies which demonstrate their effectiveness and help differentiate these “clinically proven” products from the many products fortified with low levels of fibre which are flooding onto the market.

• Be an expert brand: The biggest opportunity in fibre lies in the potential to create fibre “expert brands” – similar to the probiotic “expert brands” Activia and Yakult – which deliver an effective dose of fibre so that people can “feel the benefit”. Such brands should also be supported by adequate marketing investment. The first one to emerge was General Mills Fiber One, which has achieved 20% annual growth even at premium prices and even in a recession.

Digestive health – the biggest growth opportunityKey Trend 1:


Consumers need help with digestion

It is also worth noting that the most successful digestive health brands have succeeded despite being sold at premium prices. The benefit of good digestive health is one for which a sizeable minority of consumers are willing to pay.

Digestive disorders (ranging from diarrhea to constipation, bloating and discomfort) are felt by everyone from time-to-time, owing to a range of factors including diet, stress and demanding lifestyles.

The most common gut health issue worldwide is constipation and its high prevalence and adverse implications on quality of life and health state “make constipation a major public health issue” acco rding to the largest study of the literature, by Peppas et al, published in the journal BMC Gastroenterology. According to medical literature the reported constipation rate worldwide is 17.1%. Among women the incidence of constipation is three times that found among men. Some studies have found the prevalence of constipation as high as 35% and it’s as common a problem in Asia as in Europe and the US.

While digestive health has wide appeal, the core buyers of such products are:Women. Women are three times more likely than men to suffer from constipation. Bloating is a pervasive issue for women worldwide. Advertisements for Activia have cleverly used an image of a balloon inflating to convey bloating and then deflating to convey Activia’s part in solving the problem. Over-40s. Digestive health becomes a more important issue for people as they age. Episodes of constipation become more frequent, this trend being continuous in women and more marked in men over the age of 60. For example, a study (Chiarelli et al) showed

constipation prevalence among 18–23 year olds was 14.1%, rising to 26.6% among 45–50-year-olds. Just look at the demographics: the rapid aging of the baby-boomer cohort (most Asian countries have a rapid rise in over-50s, just as the West does, as Chart 3 shows) makes it clear that the digestive health market will continue to thrive.

PROBIOTICS AND DIGESTIVE HEALTH

Probiotics in dairy

The dairy category is now well-established and in most countries there are few – or no – opportunities for new probiotic dairy brands. Any new player in dairy will effectively be a me-too and any brand that finds itself in third place in the market today will struggle to climb up the rankings.

A key lesson from the experience of the digestive health market is that in every category there’s usually only room for one or at most two significant brands with digestive health benefits. All other brands are seen by consumers as me-toos and perform as me-toos – in most markets none have been able to challenge the leadership of Activia, for example, in large part because they bring no point of difference, nor do any of these rival brands’ marketing strategies incorporate any of the best-practices which have been developed around Activia.

One of the best examples of the failed me-too probiotic dairy strategy is Yoplait YoPlus yoghurt in the US market. Launched in 2007, YoPlus shows signs of having achieved just $40 million (€29 million) in sales by mid-2010, giving it a share of just 1% of America’s $3.9 billion (€3.16 billion) yoghurt market, compared to a robust 10.46% for Activia (see Chart 4).

TABLE 1: “ADDED FIBRE” PRODUCTS, GLOBAL LAUNCHES 2005 AND 2010

2005 2010 Percentage changeBakery 72 133 85%Beverages 43 75 74%Breakfast cereals 45 125 170%Confectionery 33 17 -48%Dairy 25 53 112%Desserts & ice cream 7 21 200%Fruit & veges 6 24 300%Meals/meal centres 2 22 1000%Side dishes 7 10 43%Snacks 42 102 142%Soup 14 14 0%

TABLE 2: “HIGH FIBRE” PRODUCTS, GLOBAL LAUNCHES 2005 AND 2010

2005 2010 Percentage changeBakery 143 245 71%Beverages 35 63 80%Breakfast cereals 145 272 88%Confectionery 5 13 160%Dairy 20 48 140%Desserts & ice cream 2 8 300%Fruit & veges 30 59 96%Meals/meal centres 12 31 158%Side dishes 24 41 71%Snacks 121 223 84%Soup 15 17 13%

Mintel GNPD data shows huge growth in products talking about their fi bre content



YoPlus’s problem was that it brought nothing new to the segment, and hence it has fallen behind Danone irreversibly in the battle for supremacy in the US probiotic yogurt category.

There is a legitimate concern in Europe that the EU’s track-record of declining health claims for probiotic products will mean the disappearance of probiotic health claims. That is almost certainly the case. It will become a barrier-to-entry for new brands and will actually benefit established brands, such as Activia and ProViva, which have a high level of consumer belief because of their “feel the benefit” advantage (see Key Trend 3).

Success, fortunately, isn’t just about health claims. It’s worth noting that ProViva, one of Europe’s most successful probiotics, has never carried a digestive health claim on its label – the product just works very effectively, and the experience of the benefit becomes the reason to purchase. And Activia has not seen any let-up in its sales growth, despite scaling back or dropping the use of its health claim, partly because the brand gives a clear effect and partly because Danone has continued to bring out new variants, such as “Intensely Creamy”, an indulgent product which became an immediate success in Germany and the UK, and Snack Pots, which increase the brand’s convenience appeal. Danone has also cleverly added new services, such as a personal training programme, in many countries, which take the brand beyond a product into the arena of a service.

Probiotics in solid foods

Seeing how Activia and other brands dominate probiotic dairy and how that category now has few gaps, many companies have reasoned that the next big opportunities for probiotics for digestive health might lie in bars, ice cream, cheese or other solid foods. Unfortunately, they don’t. These are all formats that have been tried again and again in European markets – and have universally failed or at best had very modest sales. A similar story is unfolding in the US market, with bars and most other probiotic solid foods producing weak sales. Probiotic solid foods are a blind

alley for product developers.

JUICE: THE NEXT DIGESTIVE HEALTH GROWTH OPPORTUNITY

The next big transformation in probiotics for digestive health will also be driven by Danone, this time with the global roll-out of a Swedish innovation which has become one of the most successful functional brands in Europe.

It’s not a dairy product but a probiotic fruit juice, called ProViva. It has grown its sales consistently every year since it debuted in Sweden in 1994, even growing 8% in the depths of the recession to total sales of over

NEW NUTRITION BUSINE

Chart 3: Ageing populations drive digestive health market growth in Asia as well as Europe and the US

20% of Asia is >50 years old now, rising to 40% by 2030

The core consumer for health is aged 40-60 (esp 50+). They have high disposable income and when it comes to health, they are not price-sensitive – provided a product delivers a benefi t that they see as relevant and credible. Ageing populations = continuing growth for products with health benefi ts.

EW NUTRIT



$75 million (€55 million) – impressive in a country with just nine million people (pro rata those sales to the US and ProViva would be a $2.1 billion annual-sales brand, as big a success as Danone’s blockbuster Activia brand). During the economic downturn consumers could have switched to a 25% cheaper, non-probiotic

juice from the same manufacturer, but ProViva’s digestive health benefit was compelling enough to keep their loyalty.

Now Danone has signed a 10-year license agreement with Swedish probiotic science company Probi – which developed and markets the L. plantarum 299v probiotic strain, the active ingredient in ProViva – which allows Danone to use Probi’s technology in probiotic fruit drinks for digestive health. Simultaneously, Danone also acquired 51% of the ProViva brand from the Swedish dairy co-operative which owns the brand. It sets the stage for a global roll-out of a brand which is one of the most innovative and successful of the past decade.

There’s no secret to ProViva’s success – a clinically-proven digestive health benefit that you can quickly feel, an innovative and truly differentiated product, and taste so good that by itself it’s a reason for people to buy the product, have attracted a huge following even in a country that’s traditionally highly dairy-focused.

In fact juice for digestive health – whether it’s probiotic or fibre-fortified – is the emerging opportunity of the next decade. Juice drinks can do what almost no other category can do and deliver digestive health benefits in a highly-convenient, drinkable format.

It’s our belief that fruit juice for digestive health is one category that can provide consumers with a viable

Kellogg’s Fiber Plus bars, which deliver a dose of 9g of fiber from inulin per bar – or 35% of the RDV – are showing signs of being able to rival Fiber One in the expert brand stakes. Marketed with the message Tastes Better than Fiber One! provocatively placed on the front of the package, Fiber Plus bars achieved first year sales of over $50 million (€26 million).


Chart 4: The rise and fall of Yoplait YoPlus – and the rise and rise of Danone Activia

In the wake of Danone Activia’s immediate success in 2006, the year it debuted in the US, Yoplait launched its me-too, YoPlus. Yoplait had missed the opportunity to pioneer and lead the market.

Source: Infoscan Reviews, SymphonyIRI Group - the leading global provider of enterprise market information solutions

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alternative to dairy. The factors that favour juice:• First a cross-over with the big fruit trend (see Key

Trend 4). Fruit appeals to all types of consumers, has little or no negatives associated with it and can be delivered in highly convenient packages to allow individual, on-the-go consumption – advantages that few other categories can match.

• Fruit juice also has the advantage that in consumers’ minds fruit is already associated in a natural and credible way with the digestive health message. Fruits such as fig, pear, prune, plum, kiwi, rhubarb – and many others – have a traditional association with digestive health in many countries.

• For the sizeable niche of consumers who would like to consume products with digestive health benefits but want them in a non-dairy form there are currently no convenient, good-tasting alternatives available. There are significant groups of consumers, particularly in Asia and Africa, who perceive dairy products as having disadvantages in terms of their content of fat or lactose or who just want to have a plant-based diet or who simply aren’t used to the taste of dairy.

Key to success in juice will be:

• Delivering an effective dose of fibre or probiotic bacteria so that people can “feel the benefit” (Key Trend 3).

• Making sure the package is eye-catching and extremely convenient (see Key Trend 7).

• Supporting the brand with adequate marketing and a long-term growth plan.

Danone is developing the probiotic juice segment with a well-proven product concept, but there is no equivalent successful fibre-fortified juice – a clear opportunity for someone.

FIBRE – THE BIGGEST UNTAPPED OPPORTUNITY

In fact, fibre is arguably a bigger opportunity than probiotics. Products that make a virtue of their fibre content are being launched in ever-increasing numbers (see Tables 1 and 2).

But the almost universal approach taken with fibre by most brands (perhaps 95% of all products launched) has been along the lines of the “fibre make-over”. But while adding a small quantity of fibre – perhaps going as high as 20% of the RDI per serve – may add a little to the health halo of your product, it doesn’t create a compelling reason to purchase. Your competitors’ products can also easily offer the same quantity of fibre and after an initial period of consumer interest your point of difference will disappear.

It’s a low-risk but also low-return strategy – and the evidence is that in many categories and markets it does very little in terms of either increasing volumes of existing products or getting better profit margins.

But in many – perhaps most – countries, although there are many, many brands making nutrition content

Chart 5: Recession-proof digestive health – the rise and rise of Fiber One

Sales are in US supermarkets (excl. Wal-Mart)

Source: Infoscan Reviews, Information Resources, Inc. (IRI)

General Mills’ Fiber One has become the first “expert brand” in the benefits of fibre. Its extraordinary growth, despite a recession, shows the value to consumers of a digestive health brand that enables you to “feel the difference”.



claims such as “high in fibre”, there’s little evidence that using such claims acts as more than a reassurance message that consumers like to see on pack. In practice it does not have much impact in terms of better sales or margins, nor does it create a point of difference.

Despite the thousands of such products on the market, the digestive-health-from-fibre market remains an under-developed opportunity since very few brands make it a core benefit. The huge success of brands that do, such as General Mills’ Fiber One, which delivers 35% or more of the RDI of fibre per serve, shows the scale of the opportunity.

Fibre’s five advantages

Today it makes more sense to make fibre and digestive health a core benefit than at any previous time. Fibre has some very clear advantages:

Advantage 1 – better technology, better taste. It’s easier to formulate fibre into foods and beverages, and as a result of advances in technology, high-fibre foods taste better than ever before, with none of the notes of cardboard that marked out high-fibre foods in the past.

Advantage 2 – consumers need more fibre and increasingly they know it. Modern diets are deficient in fibre (on average Americans and Europeans alike only consume 15g of fibre a day, compared to a recommended intake of over 25g a day). The benefits of fibre in the diet are communicated by health professionals – which means it has much more credibility than less well-known ingredients and most people recognize that they need more fibre in their diet. About 80% of Americans are trying to increase their

intake of fibre, according to a study by Tate & Lyle, up from 70% two years ago.

Advantage 3 – an ingredient that’s easy for consumers to accept and a benefit they easily understand. Fibre is one of the easiest food ingredients for consumers to accept and its benefits are easy to understand. Fibre is up there with calcium and protein as a macro-nutrient that everyone has heard of, with appeal in the mass market. This is in sharp contrast with probiotics, which are still “new” to consumers in many countries and hence their appeal in many countries is still strong only among the early adopters. For some consumers fibre is of itself a benefit, but for the majority it’s not fibre that’s the benefit, but fibre’s promise of the benefit of good digestive health. That’s true even when advertising makes no reference to digestive health, focusing only on fibre – the link is already explicit in the mind of the consumer. According to the study by Tate & Lyle, 87% of US consumers identify healthy digestion as the main benefit of fibre.

Advantage 4 – a “feel the benefit” promise. Marketers of products with a digestive health platform have a big advantage on their side, compared to most other health benefits, which is that consumers are most persuaded by and most loyal to products where they can feel an almost immediate benefit (see Key Trend 3). With digestive health you very quickly know if a product gives you the benefit of better digestive health and, therefore, an improvement in your quality of life. The lesson from probiotics – which also seems to apply in fibre – is that giving an effective dose that works attracts the most motivated consumers, and by giving a benefit they can feel this boosts consumer loyalty and creates a compelling reason to purchase.


Chart 6: Sales surge for Kelloggs Fiber Plus digestive health “expert brand”

Total sales in US supermarkets, drugstores, and mass merchandise outlets (excluding Wal-Mart).

Source: Infoscan Reviews, SymphonyIRI Group

Sales ($

millions)

0

$3.673(€2.756)

$44.752(€33.590)

$56.692(€42.551)

10

20

30

40

50

60

70

2008 2009 Latest 52 Weeks Ending Oct 3, 2010

$9.287(€6.970)

Kelloggs Fiber Plus ready-to-eat cereal

Kelloggs Fiber Plus Bars


Advantage 5 – regulation: Europe’s restrictive health claims regulation means that many companies remain reluctant to innovate in ways that might necessitate making a health claim petition. That’s unsurprising since more than 80% of health claims have thus far been rejected by the European Food Safety Authority (EFSA). Happily, fibre and digestive health is one of the few areas in which it may be possible to create new products that deliver benefits based on science that EFSA may approve. Encouragingly for companies focused on digestive health, EFSA appears to be looking favourably on such claims and at the time of writing EFSA had published a draft guidance document which sets out its criteria for approving claims in relation to digestive health, as well as immunity. Broadly, it sets out its views on acceptable approaches to digestive health under two headings:

1. Claims on bowel function: EFSA begins by focusing on constipation (“associated with longer transit time, less frequent bowel movements, reduced faecal bulk and harder stools and may contribute to diverticular disease”).

2. Claims on gastrointestinal discomfort: EFSA says that: “Reducing gastrointestinal discomfort is considered a beneficial physiological effect”.

The term “prebiotic” on the other hand, could well disappear from use on labels. The commonly-accepted definition of prebiotic refers to a fibre’s ability to promote the growth of beneficial intestinal bacteria. But essentially EFSA doesn’t like the prebiotic concept and in its latest guidance says that: “A clinically measured increase in levels of beneficial bacteria in the intestinal tract will not be enough to validate a health claim. Instead, EFSA would prefer to see

evidence of significant reductions in pathogens or toxic microorganisms.”

In North America, while it is true that regulators are becoming more demanding in their requirements for substantiation, there is still more flexibility than under Europe’s highly-restrictive system. One approach that companies can take is to use a “structure/function” claim. Such claims describe the role of a nutrient or dietary ingredient intended to affect normal structure or function in humans, for example, “calcium builds strong bones.” In addition, they may characterize the means by which a nutrient or dietary ingredient acts to maintain such structure or function, for example: “fibre maintains bowel regularity”.

LOGICAL CATEGORIES FOR FIBRE

The success of Fiber One clearly shows the potential in breakfast cereals and bars (although bars are notably more popular in the US than Europe and are not favoured by consumers in many markets in Asia).

Another logical place in the consumer’s mind for fibre is bread. In some countries there’s limited scope for a high-fibre benefit platform for bread, such as the Scandinavian countries where the consumers are used to darker, more traditional breads and hence the bread-fibre link is already well-established, and consumers expect all breads to already be high in fibre.

It may be a different story in countries in South America and Asia where packaged bread is relatively new. One example is Mexico, where the Bimbo brand, which dominates the packaged bread market, has made a huge success with high fibre breads such as Pan Integral and Bimbo Doble Fibra, the latter selling 25 million loaves in 2009, worth $75 million (€57 million) at retail.


“PREBIOTIC” IS NICHE

Awareness of fibre can be said to be at mass-market levels in many markets and this may help explain the rapid success of some of the brands featured in our case studies.

However, if you choose to use a term such as prebiotic – meaning a fibre that promotes the growth of beneficial intestinal bacteria – to describe the benefits of your product then this immediately positions you firmly in the early adopter market.

Anyone wanting to use the term prebiotic is going to have to take a long-term (decade-long) view of educating the consumer about what it means and what the benefit is. That means that the target group for the prebiotic message will be early adopters, who are actively interested in health and willing to accept new ingredients. Prebiotic’s appeal will remain niche for some time to come.

Similarly, when you are bringing a product to market which is delivering fibre in an format that may be unfamiliar to consumers – such as a fibre-fortified juice drink – then you will also have to begin in the lifestyle market and build up awareness and acceptance of your products.

The idea of a fibre-fortified drink for digestive health is a new concept to most consumers and the rate of adoption in the mass-market will be very slow – and it could take too long to create consumer acceptance.


Bimbo’s breads brought a new point of difference to the bread market. But it is also worth noting that this brand had the advantage of being a trusted brand with a dominant position in the market.

It’s also worth noting that Mexico is very well-established for probiotics for digestive health. Yakult sells three million bottles a day there – around a billion bottles each year – and it is Yakult’s third-biggest market, worldwide, after Japan and Korea. Moreover Yakult is just one of many dairy digestive health brands on the Mexican market. So Bimbo had the advantage of talking to consumers who are already educated and informed about digestive health but for whom there was no non-dairy digestive health product available. Sales of consumer brands such as Yakult or Activia, or products such as laxatives, are a useful indicator for whether there’s a potential market for your non-dairy high-fibre product.

Beyond categories such as bakery and cereals it becomes harder to make fibre work as an ingredient. A category where it is being tried – so far without success – is in meals, an area which is virgin territory for fibre, and much more challenging than a category such as breakfast cereals.

General Mills-owned Progresso aimed to use the benefits of fibre to stake out new territory in the US soup business, rolling out a new sub-brand, called High-Fiber. The four flavours include at least 7g of fibre per serving, more than a quarter of the RDV.

Progresso came to believe that fibre could be an appealing benefit based in part on the success of the

General Mills Fiber One brand. “Consumers are used to high-fibre products not tasting good – and that’s why Fiber One has been successful. Progresso, in consumers’ minds, is the strongest ‘taste’ brand [in soups], so we knew that it would be a good fit for high-fibre positioning too.”

But Progresso High-Fiber soups earned a modest $11 million (€8.4 million) in sales in Symphony/IRI-measured outlets for the 52 weeks ended March 21 2010 – paling in comparison with $351 million (€269 million) in sales for Progresso’s regular product line over that period.

There’s also the nature of the consumption occasion to take into account – a lunch or dinner is about pleasure and about filling yourself up. Health is usually associated with start-of-day products. And while dairy and juice are well-established in the consumer’s mind as credible carriers of specific health benefits, and breakfast cereals and baked products are credible sources of fibre, meals do not have that advantageous starting point.

Anyone who takes a high-fibre route in meals or soups is committing themselves to a long-term effort to create consumer acceptance.

One way to initiate business would be a product specifically targeting seniors – the need for fibre becomes increasingly important as people age and their digestive system breaks down. Such a market might be niche to begin with, but with the ageing of populations in most countries (even in Asia), it would be a growing niche.

SOLUBLE OR INSOLUBLE – DO CONSUMERS CARE?

Fibre comes in two forms, soluble and insoluble. Each acts differently in the intestines and benefi ts the body in different ways. However, consumers are not aware of the difference between the two types, and their perception of how fi bre works in the body owes more to their perception of how insoluble fi bre works, as one consumer researcher explains it: “People think of fi bre like a brush – it cleans out your intestines daily.” There is, at least for the foreseeable future, little marketing advantage to be gained from communicating to the consumer whether the fi bre in your product is soluble or insoluble. That may change in time, but can only happen after a long period of consumer education – a process that will take a decade or longer.


RULES FOR SUCCESS IN DIGESTIVE HEALTH

1. Use technology that works. Specifically, use a fibre or a bug that is sufficiently scientifically well-established and in a sufficient dose to deliver a digestive health benefit that consumers can actually feel. As stated before, it’s digestive health products’ ability to make consumers “feel the benefit” quickly that is one of the significant competitive advantages. This benefit is one of the key ways of creating brand loyalty. In the light of the EU tightening of health claim regulations EU companies will be forced to focus on a specific benefit. In a lot of markets, yoghurt manufacturers have cheapened the message by including general bacteria, at non-specified levels, which may or may not have a probiotic effect (since the term “probiotic” is not defined in regulations).

2. Demonstrate the effect. This is where marketing initiatives such as the Activia 2-week challenge, now widely copied, have been effective. Products that can be felt to work in a very short time frame – that offer immediacy – will be more successful.

3. Be an expert brand. Danone Activia has achieved dominance in digestive health in much of Europe because of superior marketing effort, as has Fiber One in the US. To do this you need a clear and uncompromising “expert brand” position with a clear and consistent benefit statement supported by long term marketing expenditure linked to consumer education.


As forecast last year, 2010 has been another “year of the energy shot” – and 2011 promises more of the same. The astonishingly rapid success of energy shots – a market which has grown in the US from zero to over $1 billion in retail sales in six years – reflects the extent to which there are huge areas of untapped opportunities in products for energy. There are opportunities to create new brands, new segments and new categories through strategies focusing on one or more of the following:

• Groups of consumers who aren’t served by the energy drink brands currently available.

• New ingredients with a higher “natural and healthy” score than found in the current energy drinks.

• New carriers – something other than caffeinated beverages – with better health credentials, such as dairy and fruit juices.

What energy drinks (such as Red Bull) and energy shots (such as the market-leading 5-Hour Energy) have accomplished is to fix the benefit of “energy” in consumers’ minds as one that is defined by beverages more than any other product type. The energy message

has already been transferred to a small extent to bars but it is proving a difficult-to-impossible stretch to take the message to many other categories.

The energy drinks market is one of the biggest success stories of the functional food revolution that began in Japan in the 1950s – and it’s worth noting that even today in Japan, energy is still dominated by beverages. A lack of energy is consistently named by consumers among their top four interests. Hence it isn’t surprising that the global market for energy drinks and shots already exceeds $12 billion (€9 billion) in sales.

The opportunities to increase that number are immense since in the West, although the number of consumers drinking energy drinks has grown, the core consumer has remained the same: overwhelmingly males aged 15- to 24-years-old. This is partly a result of the positioning of energy drinks, with names such as Monster, Power Horse, Freak or Red Bull, whose packaging and marketing messages are uncompromisingly designed for the high-testosterone young male.

The market potential lies in developing products for all the unserved consumer segments – busy mothers, overworked executives – people of all ages who can fi nd no product aimed at them that will give them a quick feeling of energy (and

10 Key Trends 2011 Energy

SUMMARY

• Feel the benefit advantage: One of the biggest advantages a product can have is to deliver a benefit that consumers can quickly see or feel. Energy drinks deliver a benefit that is immediately effective and detectable and this benefit explains much of their global success.

• Category defined by beverages: The energy drinks market is one of the biggest success stories of the functional food revolution that began in Japan in the 1950s – even today in Japan, the biggest functional brand is still an energy drink.

• Top-4 consumer need: “Lack of energy” is a key consumer interest for stressed executives trying to stay on top of their responsibilities, for harassed and time-pressed mothers, for older people who want to stay active, or for anyone struggling to get through a sleepy afternoon in the office.

• Opportunities to create new markets, find new opportunities with fruit, dairy and “naturalness”: Because of the focus – in the West at least – of the brands in the established energy drink category on males aged 18-24, there remains a wealth of untapped opportunities.

• Super-premium, super-convenient concentrated dose: “Shots” are creating a new category in the US and the UK, with the US market alone soaring to perhaps $1 billion (€660 million) in retail sales between 2004 and 2009. The shot format has still a huge potential to be fulfilled, primarily from creating brands and concepts with better appeal to older consumers – and particularly women.

• New ingredients and carriers: There are a wealth of opportunities to develop new product formats, use new ingredients with a higher “natural and healthy” score than found in the current energy drinks and use new carriers – something other than caffeinated beverages – with better health credentials, such as dairy and fruit juices.

Energy – a wealth of new opportunities?Key Trend 2:


they are not going to drink any of the brands currently available). The areas of untapped opportunity are huge.

Meeting the unserved needs of mature consumers was the driver behind the creation of 5-Hour Energy, the pioneer in energy shots – providing a convenient 2oz (59ml) dose of liquid with zero calories, B vitamins, amino-acids and caffeine to perk people up when they need it. The originator of the category – pioneering start-up company Living Essentials – still has an 85% share of the US energy market, which continues to grow by strong double digits overall, nearly two years after it met new competition from some of the biggest beverage makers on the planet.

Retail sales of 5-Hour Energy topped $1 billion (€750 million) for 2010, yielding corporate revenues of about $500 million (€373 million), Carl Sperber, a co-founder of the Novi, Mich.-based company, and its creative director, told New Nutrition Business.

The brand’s 85% market share (see Chart 8), has actually grown in the two years since competing mainstream shots came into the market.

How has this startup managed to maintain and even build such dominance, even as it also has continued to drive an expansion of the category overall?

“They’re fierce competitors,” said one industry-leading consultant who declined to be identified. “They’re smart enough to know there are lots of others out there trying to invade their space, but they’re very

good about holding position. And I don’t see anything changing anytime soon. They’re already the ‘Kleenex’ of this category, and I think they will continue to be.”

The company is a group of chemists and engineers who thought they could improve energy drinks by

5-Hour Energy has driven the creation of the new energy shots category from zero to as much as $1 billion in five years and dominates it with an 85% market share. It’s very common in the business of food and health that the most successful brands are the ones which create new categories or segments – and the pioneer usually remains the dominant brand.


Chart 7: Energy drinks are premium-priced but daily dose energy shots are super-premium

US energy drink prices compared with one-another and with a “standard” mass-market non-energy product such as Coca-Cola Classic

Source: Wal-Mart, Albertsons, Walgreens

Price per 32 fl.oz. (approximately

1 litre)

0CocaCola Classic

1 litre $2.19

$2.195

10

15

20

25

30

35

40

Monster Energy Drink

16 fl.oz. $2.29

$4.58

Red BullEnergy Drink

8.3 fl.oz. $2.09

$8.06

Cranergy12 fl.oz. $3.99

$10.64

Living Essentials

5-Hour Energy Shot12 pack $33

2 fl.oz. bottles

$41.25

45


making them smaller and more potent. They formulated their “shot” concept with caffeine and B-vitamins, and artificial sweeteners, and targeted 5-Hour Energy at working adults rather than the teenagers who comprise the biggest market for energy.

Once 5-Hour Energy quickly reached the $200-million sales level a few years ago, it was clear to energy drink makers and other big beverage brands that this was a segment they couldn’t ignore. So Coca-Cola, PepsiCo and Hansen all fielded shots, most of them co-branded with their full-size energy drinks. And last year, Red Bull, the founder of the energy drink phenomenon, finally got into the market.

The results for these me-too brands have been disastrous – or at best weak – when contrasted with 5- Hour Energy’s breathtaking growth, as Chart 8 shows. This was a phenomenal 50% in 2010, following 64% growth in 2009. The me-toos in the market have been unable to come anywhere close to the pioneer:

• Monster Hitman, a brand introduced by energy drink giant Hansen in 2008, saw its sales actually fall 25% for the 52 weeks ended October 31, to about $16 million (€12 million).

• NOS, a Coca-Cola-owned brand, experienced a 56% drop in sales, to less than $6 million (€4.5 million).

• The Amp energy shot, from PepsiCo, disappeared several months ago.

• Red Bull’s entry into the shot format in 2009 “made us nervous”, Sperber admitted. Red Bull’s shot quickly rose to $33 million (€24.6 million) in sales and the No. 2 spot in the market – but it is still less than a 20th of the size of 5-Hour Energy.

Four tactics have been key to the continuing growth and dominance of 5-Hour Energy:

1. Focus: The company is not being tempted by other categories and formats. In fact, it’s a huge source of strength for the brand that it is seen only as an alternative to energy drinks and not a participant in that segment, said the industry consultant. 5-Hour Energy poses “an alternative to those drinks, so it has a special place” in consumers’ mindset, he said.

2. Positioning: The brand wisely positioned itself toward older consumers rather than the teenagers and 20-somethings who favour energy drinks. “They’ve cleverly pushed their category to the mainstream and away from where [energy drinks] got started,” the consultant explained. “If the energy-drink category was meant to be threatening and for pimply late adolescents, and people at bars mixing it with alcohol, 5-Hour Energy has gone away from that whole element of ‘danger’ with the shot category and tried to make it safe – for everyone, and without any danger.” As Sperber put it, “We make it clear that this is something to help working adults get through their daily life with zero sugar and four calories apiece.”


Chart 8: Energy shots – the creation of a new category

Total US sales in supermarkets, drugstores, gas stations and convenience stores (excluding Wal-Mart)

Source: Infoscan Reviews, SymphonyIRI Group

$US(millions)

02008 2009 Latest 52 Weeks

Ending Oct 31, 2010

$327.133

$530.307 $763.842

$97.863

$23

$32.786

$124.128

$95.278

100

200

300

400

500

600

700

800

900

$424.996

$677.435

$891.9065-Hour Energy

Red Bull

All other brands (total 18)


3. Serious marketing. The desire to occupy a credible place in target consumers’ perceptions drives 5- Hour Energy’s marketing, which is strong on measured tones and light on histrionics. “We’re of the belief that 5-Hour Energy still requires some explanation,” Sperber said. “You can’t go for jokes at this point. You can’t really even go for something aspirational. You have to be pretty plain about the product. And our hands are tied just a bit in how we market it because it’s a dietary supplement. We do the best we can. We’re out to inform, not entertain.”

4. Marketing investment. 5-Hour Energy is willing to invest money to support the brand, blanketing US airwaves with its TV commercials: “This huge amount of money is reflected in their market share,” said the industry consultant. “They keep adding fuel to the fire.”

SUPER-PREMIUM PRICING

5-Hour Energy has also held true to super-premium pricing strategy (see Key Trend 7), with a 2oz. (59 ml) bottle retailing for around $33 (€22) per 12-pack – equivalent to an impressive $41 (€32) per litre (see Chart 7). Impressively this massive growth of a super-premium category has been achieved against the backdrop of an American economy in recession, reflecting the value that consumers place on staying energetic and alert.

BEYOND THE CAFFEINATED BEVERAGE

There is a wealth of ingredients available that offer an energy benefit – well-known ones include guarana, ginseng, caffeine, taurine and B-vitamins. But thus far caffeine remains unchallenged as the ingredient that can best help people “feel the benefit” (Key Trend 3). The opportunity to create new markets is there for ingredient suppliers that can offer consumer goods companies as many as possible of the following:

• An ingredient that can be formulated in an effective dose into dairy or juice-based products without adversely affecting taste too much.

• An ingredient that offers a “natural source of energy” benefit.

• Ingredients that can be added in effective doses into small, low-calorie, daily-dose packages (such as 100ml/3.4oz. servings).

If advances in ingredient technologies enable companies to look beyond caffeinated drinks, the two areas which will have most appeal to consumers and the best chance of success (and where efforts so far have not met with success owing to a lack of effective products coupled with poor marketing strategies) are:

Fruit. With a healthy and natural image, fruit should be an ideal ingredient for energy products. As yet, though, no company has worked out a way to deliver energy from fruit. Ocean Spray, has tried with Cranergy, but with limited success.

Dairy. Like fruit, dairy has yet to work out how to take a slice of the energy market. One example of the effort so far made was Emminent, a brand marketed in Switzerland and Portugal by Swiss dairy group Emmi, one of the most innovative and successful dairy companies in Europe. It was withdrawn after a year.

RULES FOR SUCCESS IN ENERGY

There is much to learn from the way that Red Bull and 5-Hour Energy have gone about creating – and dominating – their respective segments of the energy drink market, and these lessons are relevant to anyone who is looking to create an energy brand:

1. Create a new category or segment, don’t be a me-too.2. Offer a benefit that the consumer can feel. 3. Focus on one benefit.4. Focus on one brand.5. Focus on lifestyle marketing, supported by heavy marketing investment.6. Innovate in packaging: this signals to consumers that “this is something very different”.7. Make your product premium-priced.8. Make it a beverage.



One of the biggest marketing advantages a product can have, and the surest way to create loyalty for a brand, is to deliver a benefit that the consumer can quickly see or feel.

As we first predicted back in 2008, offering a benefit the consumer can feel has become even more important – and effective – in an economic environment in which people are becoming more careful than ever about how they spend their hard-earned cash. When people can feel the benefit being offered to them, they see that they are getting value-for-money. When they quickly feel the benefit they immediately understand why they should buy the product again – and again and again.

A “feel the benefit” effect is the underpinning of the success of energy drinks, which deliver a benefit – a shot of stimulation – that is immediately effective and detectable. If the 24-year-olds who want to party all night long can feel that benefit they become – as they have done for Red Bull and other energy brands – loyal consumers.

Marketers of products with a digestive health platform have the same advantage. With digestive health you quickly know if a product works or not and if it gives you the benefit of better digestive health – and, therefore, an improvement in your quality of life.

The pioneers of the “feel-the benefit” strategy are:• Fonterra in dairy for bone health• Danone Activia in probiotic dairy for digestive

health• Red Bull for energy• Kellogg Special K for weight management

All of these brands continued to increase their sales during the recession, despite selling at premium or even super-premium prices.

In terms of formulating your own strategy, it’s worth looking carefully at Chart 1. All the consumers’ “most important” health concerns identified by Health Focus International relate to conditions where people are feeling an actual problem – sleeplessness, stress, overweight, intestinal disorder, etc.. These concerns are top-of-mind for consumers because they actually experience them.

The converse is that products targeting these health concerns must deliver a benefit that people can feel – or measure – in order to be credible.

It’s no accident that the two biggest functional food markets in the world are energy and digestive health. Nor is it an accident that Kellogg has made Special K the world’s biggest weight management brand by focusing on the tangible effect of “drop a jeans size”.

When technology can make it possible to provide products that have a tangible “feel the benefit” effect on sleep and stress (see Micro-Trend 7) then this market will grow. Until then, it will remain niche.

1. FEEL THE BENEFIT

Energy. As already explained above, the very tangible stimulating effect of a dose of caffeine is what has made the energy drink category, pioneered in the West by Red Bull, a continuing high-value, high-growth success story. The newest segment of the energy drink market, energy shots (see Key Trend 2), has also rapidly become

10 Key Trends 2011 Feel the benefi t

SUMMARY

• What consumers want most. Offering a benefit the consumer can feel has become even more important – and effective – in a tough economic environment. When people can feel the benefit being offered to them, they see that they are getting value-for-money.

• Key to building successful brands. A “feel the benefit” effect is the underpinning of the success of energy drinks and products for digestive health. These are among the top consumer health concerns – and all consumers’ top concerns relate to problems where delivering a tangible effect is critical for product credibility.

• Measure it and show it if they can’t feel it. If consumers can’t immediately feel the benefit of your product, then show them the benefit – as Kellogg has done with Special K’s “Drop a Jeans Size” challenge and Anlene has done with its Bone Health Check.

• Supporting science is increasingly important. Sales of Anlene have jumped 15% in the Asian markets where the message “Protect your bone strength within 4 weeks” – based on the results of a clinical study – has been introduced.

• Lack of a quick and easy-to-feel effect can inhibit success. This has been a particular problem for products fortified with

omega-3s, which provide no readily measurable effect, and brands that promise healthier skin have the same challenge.

Feel the benefit – the most powerful marketing message

Key Trend 3:


one of the biggest success stories in the global food and beverage industry as a result of offering a concentrated dose of stimulation, with the pioneering brand in US market, 5-Hour Energy, soaring from zero to a $1 billion (€770 million) in retail sales in the space of six years, even though it sells at a super-premium price.

Digestive health – money-back-if-not-satisfied challenges. Danone pioneered the idea of the “consumer challenge” back in 2002 by offering consumers a full refund if they didn’t “feel the difference” after consuming its Activia probiotic products every day for 14 days. Danone now uses this technique in every single market in which it operates (including the US). The fact that the product does enable consumers to “feel the difference” – with committed consumers such as men in their 50s eating

two pots a day to keep their digestive systems moving freely – is the essential underpinning of the promise and has helped make Activia the world’s biggest digestive health probiotic brand. Now widely copied, it is a highly effective communication and shows consumers – even those who don’t take up the challenge – that you have confidence in your product.

Joint health. If you have joint pain you know soon enough whether a product is helping to relieve that pain, and the reason that glucosamine supplements for joint health have become a $900 million (€692 million) business in the US is because people are powerfully motivated to end pain. The Elations juice brand, a juice beverage based on glucosamine, makes just that promise and provides an effective dose of the active ingredient in a convenient beverage format. This “feel the benefit” promise has propelled the brand from just $15 million (€11.5 million) in sales in 2008 to an expected $85-$100 million (€65-€77 million) in 2010 (Key Trend 10).

2. MEASURE THE BENEFIT AND SHOW IT TO THEM

Whether or not your brand delivers an easy-to-feel benefit, one of the most important lessons of the last decade is that you should try to demonstrate the benefit to make it easier for the consumer to understand. So if they can’t immediately feel the benefit, then show them the benefit.

The two companies who are arguably best in the world at this strategy are Kellogg and dairy giant Fonterra and both these examples illustrate how compelling this message is for consumer in every part of the globe:

Weight management, Kellogg’s Special K: the Special K Drop a Jeans Size and Drop a Bikini



Size promotions offer women a measurable benefit if they follow the Special K eating programme for 14 days, which involves substituting two meals a day with Special K. It has proven to be one of the most successful initiatives ever undertaken by a brand, as popular in France as in the US, leading to the successful re-positioning of the Special K brand, its expansion to over $1.5 billion (€1.1 billion) in sales worldwide, with 100% growth in the US alone.

Bone health, Fonterra Anlene: in Asia, in support of the Anlene brand – a high-calcium milk marketed throughout Asia which has been clinically proven to prevent bone loss (Key Trend 10) – consumers are provided with free bone scans supported by nutritional counseling called the Anlene Bone Health Check, to help them understand their bone health and how they can improve it. Anlene has provided over 4 million free bone scans in Asia since 2006 (and many millions more since this initiative began in the early 1990s). Fonterra says that this consumer engagement in understanding the benefit has proven to be five times more effective than advertising alone.

The brand has gone further in demonstrating the benefit by developing the “Anlene Movement’ – a series of exercise events which enable people to participate and “feel the benefit” of activity and movement. The reward for this initiative has been that Anlene has become the number one bone health brand in Asia with an unassailable 75% market share.

3. SUPPORT THE EFFECT WITH SCIENCE

Fonterra’s Anlene is also a good example of how important it is to invest in science to provide the effect – the brand is underpinned by several clinical studies which support the claimed effect of improving bone health and also have lead to approved health claims in several countries.

The company has not sat on its laurels however, but it has enhanced its brand over the years and in 2010 was able to demonstrate in a new clinical study, published in the journal Bone, that Anlene’s effect on bone strength could be measured as significant within four weeks of consuming Anlene. This new science has become the basis for a stronger consumer message:

Protect your bone strength within 4 weeks.

Sales of Anlene have jumped 15% in the Asian markets where this message has been introduced since March 2010 – the reward for investing in science and for focusing with laser-like precision on making the benefit tangible to consumers.

4. THE RISK OF AN INTANGIBLE BENEFIT

Conversely, the lack of a quick and easy-to-feel effect can be an inhibitor to a brand’s success. This has been a particular problem for products fortified with omega-3s – whose heart health benefit can’t be felt or even easily measured – unlike specific cholesterol-lowering products, where you can measure your cholesterol going down. This has contributed to the modest performance of omega-3 fortified brands – the few that have not been withdrawn – and kept omega-3 as a Micro-Trend (see Micro-Trend 8).

Brands that promise healthier skin have the same challenge. The buyers of Danone Essensis yoghurt – which made a “nourish your skin from the inside” claim – could not see or feel themselves becoming “more beautiful”, even though the benefit was, Danone said, clinically demonstrated. In fact Essensis communicated that it could take up to six weeks for visible results to show. No-one is willing to wait that long for results, so buying Essensis became a matter of faith and “belief ” rather than tangible, quick results. Essensis was later withdrawn and no beauty food or drink brand is doing well in the West.

Having a benefit that consumers can feel is already the underpinning of many successful brands and the categories that deliver a tangible benefit quickly, such as digestive health and energy drinks, are already the largest segments of the functional foods market, worldwide.

We are not suggesting that a quickly-felt benefit should be your only strategy – there are many, many benefits that are not immediate but which motivate consumers strongly and have growth potential, such as the perceived benefits of antioxidants, but a tangible benefit is a good insurance policy.

Products that offer tangible benefits are already able to earn premium prices and this will continue (see Key Trend 3). In fact, every example we give above is a product that earns a premium or super-premium price.

RULES FOR SUCCESS FOR FEEL THE BENEFIT

1. If your product has a fairly immediate effect (within two weeks, which is why so many products, such as Danone Activia, offer 14-day ‘feel the benefit’ challenges) and an easily-detected benefit to consumers, tell them about it.

2. If the benefit of your product can’t be quickly or easily felt, you must find a way to show consumers the benefit, as Anlene does with bone scans or as Kellogg does with its “Drop a Jeans Size” promotions for Special K.



The trend towards consumers wanting health benefits that are as natural as possible – and ideally intrinsic to the product or ingredient that is delivering them – has benefited fruit more than any other commodity. Fruit are all natural, offer intrinsic health benefits and connect perfectly with the worldwide consumer desire for products that give natural health.

Fruit has several advantages:• Fruit is seen by health-conscious consumers as one

of the few things they can eat as an indulgence without feeling any guilt.

• More than any other food type, fruit has a halo of health, one that’s being made brighter all the time as a steady stream of news about fruit’s benefits, such as fibre and antioxidants, makes its way into a media eager for simple and positive stories about healthy eating.

As a result fruit is the perfect health food and the perfect health ingredient. The addition of fruit ingredients to a packaged food – such as adding cranberries or blueberries to breakfast cereal – helps add a halo of health to a brand’s position and their presence is used to justify claims such as “high in antioxidants”.

Unsurprisingly, the use of fruit as an ingredient is escalating, sales of products positioned as “superfruit” are continuing to increase and sales of fruit-based snacks are increasing. For example, Ocean Spray’s Craisins sales grew 10% in 2010, following 13% growth in 2009 and 17% in 2008 – despite recession and despite a retail price equivalent to a hefty $17.60 (€13.50) per kilo, far above the pricing of potato chips and other mass-market snacks.

However, scientific research into the benefits of fruit

is at an early stage. The science of fruit is today where the science of dairy nutrition was 20 years ago.

Researchers are only just beginning to uncover a wealth of benefits in relation to digestive health and immunity, satiety, sports recovery, glucose uptake and insulin response, energy and mood. Ten years from now, fruit – like dairy – may be a vehicle for delivering a wide array of health benefits to consumers.

Companies that have invested heavily in the science of fruit have proven to be very successful. For example:

• It was investment in the science of the cranberry that enabled Ocean Spray to understand its benefits and turn it into the original superfruit.

10 Key Trends 2011 Fruit

SUMMARY

• A key driver: Alongside dairy, fruit will be a key driver of the food and health trend. Fruit is increasingly becoming one of the most important vehicles for delivering a wide array of health benefits to consumers. Sales of niche fruits and fruits with some novelty value will continue to grow strongly. Fruits with a health benefit that can be substantiated by science – those with the most scientific studies behind them – will be the most successful.

• Packaging adds convenience: Main growth will be in fruit in more convenient forms, such as packaged snacks, and beverages.Packaging innovation is key to differentiation and market success.

• Growth in drinks: The fruit drink market will not only grow but more sub-segments will appear, targeting more specific health conditions than the current “high in antioxidants” message that is used as the standard communication for superfruits. There is an unfulfilled opportunity to create a new category of juices with digestive health benefits, based on fibre or probiotics.

• Fruit in Europe: In Europe, despite the restrictions on health claims, fruit provides the opportunity to create health brands without claims by choosing fruit with a positive health image and ideally an association with specific benefits, and delivering them as a snack or beverage in strongly differentiated packaging.

Fruit – the future of food and healthKey Trend 4:



• It was investment of $25 million (€16.7 million) in the science of the pomegranate that enabled Paramount Farms to create the Pom Wonderful brand, which today earns the company super-premium prices, retailing at around $8 (€6.20) per litre – compared to around $2 (€1.55) per litre for a mass-market orange juice brand like Tropicana – and kicked off the fast-growing and profitable pomegranate juice and ingredients markets.

There is a demonstrable relationship between the number of scientific studies that have been published about a fruit’s health benefits and its superfruit status. Cranberry, blueberry and pomegranate all have a high number of studies, and relatively high numbers of human studies. These are probably the most widely recognised and successful superfruit.

So huge is the potential of fruit that new players with no previous experience of fruit products are muscling in. These are companies who have sufficient scientific know-how that they will likely invest more than the traditionally low-tech low-science fruit growing and processing industries, and they can be counted upon to remedy the deficiency of science in support of specific health benefits from fruit. If their strategies are successful they will transform the business of fruit; for example:

Danone and fruit giant Chiquita have formed a partnership to jointly build a new business in fruit drinks and fruit snacks.

Danone is acquiring fruit drink companies. Nestlé has a research programme that focuses on

fruit and has introduced fruit snacks in selected markets.

Danone has publicly identified fruit drinks as

potentially very credible carriers for other health benefits, securing a global license for the ProViva probiotic fruit juice brand, marketed with a digestive health benefit which is clinically proven and based on L. plantarum 299v, one of the world’s most-researched probiotics (see Key Trend 1). Launched in Sweden in 1994, in 2009 it had retail sales of around €50 million ($66 million). If Sweden’s per capita consumption of ProViva was translated into a larger country, such as the US, it would be a $2.1 billion (€1.5 billion) annual-sales brand – as big as Gatorade in other words.

ProViva’s success comes from the combination of excellent fruit flavours and a clinically-proven digestive health benefit that you can quickly feel (Key Trend 3).

AS A WAY OF DELIVERING THE BENEFITS OF FRUIT, BEVERAGES HAVE ALL THE ADVANTAGES:

• Convenience: beverages are fruit in their most convenient form and the form which most closely matches the needs of modern lifestyles.

• Added value: they deliver “more health” by blending in otherwise inedible parts of the fruit such as the skin and seed which may have healthy compounds.

• High quality naturalness and health benefits: consumers view high quality beverages as equiva-lent to fresh fruit in terms of both naturalness and health benefits.

• Multiple formulation possibilities: they can be formulated with a combination of juices to get reinforced benefits or to lower cost (superfruit juices can be blended with apple juice to enhance taste, sweetness and lower the cost of the finished product).

• Excellent taste potential: it is possible to make almost anything taste good as a beverage. Beverages can be formulated to make palatable fruit which are not palatable in their whole fresh form.

• Packaging innovation: it’s possible to use packaging design as a key part of your marketing mix to help maximise the differentiation of your fruit.

• Premium retail prices: most important of all, beverages are a way of achieving premium retail prices and high profit margins.

Fruit juice has proven itself to be a credible carrier for immune and digestive health benefits based on probiotic strains. These two brands are set for global roll-out.



RULES FOR SUCCESS IN FRUIT

1. Focus on delivering the benefits of fruit in the form of beverages or snacks, in as convenient a form as possible.

2. Use packaging innovation to differentiate the product as much as possible in a crowded supermarket.

3. Focus on high-value, low-volume niches targeting loyal consumers. This is the approach taken by all successful superfruit so far. If you can build a beachhead with such a niche you can later grow from it into the mass market.

4. Market a relevant health benefit – the message “high in antioxidants” is so common that it has already ceased to be a point of difference. It is, besides, an “ingredient content” statement not a health benefit and it is the latter which most motivates consumers.

5. Use technology that works – fruit or fruit ingredients based in science which, just like Ocean Spray’s promise that its cranberries “fight urinary tract infections”, is demonstrated by science and effectively delivered by the product. The promise of cranberry is a perfect example of the power of “feel the benefit” (see Key Trend 3).

FRUIT IS MORE CONVENIENT WHEN YOU DRINK IT…

Essencial has proven very successful in Portugal and launched elsewhere in Europe.Annual sales €10m ($13.4m) in a country of 10m people.

The challenge to fresh is from fruit in more convenient forms - to the consumer they are equivalent.

As the illustration shows, the message is simple – in this case, that drinking one of its kiwifruit drinks is the same as eating one whole kiwifruit (without the mess or inconvenience).

Fruit and digestive health is a particularly good fit, since many fruit – fig, prune, rhubarb, pear and many others – have a strong association in consumers’ minds with digestive health in many countries.

Another probiotic fruit juice which has become a significant success is the Gefilus juice brand, marketed in

Finland with an immune health benefit (see Key Trend 9). Gefilus – based on the clinically proven probiotic LGG – has taken an impressive 32% share of Finland’s chilled juice market since launching in 1997 and become the county’s biggest juice brand.


10 Key Trends 2011 Weight management

It’s been another lean year for the development of the weight management opportunity, despite the fact that:

• overweight is one of the leading issues identified by consumers that affect them personally, according to consumer researchers Heath Focus International, whose most recent survey found overweight increasing significantly as a consumer concern compared to previous years, with 24% identifying it as a personal issue (see Chart 1)

• multiple ingredient suppliers and some branded food and beverage companies have stepped up their efforts to create new products that address weight management.

Unlike digestive health (Key Trend 1) and energy (Key Trend 2), where some “expert brands” have defined the category and taken leadership, the whole area of weight management is still a wide open opportunity. Worldwide, just one brand has become a major success – Kellogg’s Special K breakfast cereal, which is today the world’s biggest and most successful weight management brand (see box). Ironically, it’s a brand that isn’t based on a new ingredient or a new technology; its success rests solely on a clever and different marketing strategy. Special K is just a “regular” breakfast cereal – but one that has been positioned and marketed for weight management better than any other food or beverage brand.

The good news is that weight management remains an embryonic market which is still new enough for companies to create opportunities and carve out new businesses in a way that is no longer possible in more mature sectors.

UNEXPECTED CHANGES AND CHALLENGES

The science of weight management is constantly evolving, which is an advantage to our industry, since as the science develops it throws up new opportunities to create effective products. This year three surprise developments which will challenge thinking and force reappraisals of nutritionists’ thinking as well as corporate strategy relate to high protein/low-GI diets, WeightWatcher’s points system overhaul, and konjac fibre.

Diogenes delivers

Protein’s image as a valuable part of a diet (see Micro-Trend 1) enjoyed its most recent boost in November 2010, following the publicity surrounding the publication in the New England Journal of Medicine of the results of the world’s largest diet study.

The large-scale randomised study, called Diogenes, investigated the optimum diet composition for preventing and treating obesity. The study was conducted by eight European research centres and headed by Thomas Meinert Larsen, PhD, and Professor Arne Astrup, Head of Department at the Faculty of Life Sciences (LIFE), University of Copenhagen, and it was funded by an EU grant of €14.5 million ($11 million).

The researchers found that high-protein, low-glycemic index (GI) diets were the most effective for weight management (see Chart 9). It’s a signifi cant study, not

SUMMARY

• Weight management is still a wide open opportunity: Worldwide, just one brand has become a major success – Kellogg’s Special K breakfast cereal. Weight management remains an embryonic market which is still new enough for companies to create opportunities and carve out new businesses.

• The science of weight management is constantly evolving: As the science develops it throws up new opportunities to cre-ate effective products, as evidenced this year by research around high protein/ low-GI diets, WeightWatchers’ points system over-haul, and a rare regulatory approval for a weight management claim (for konjac fibre).

• Satiety promise: Products that give a sense of satiety ought to become the largest area of weight management – consumers can easily “feel the benefit” of being fuller longer. However, satiety products have not performed well – most products so far on the market, it seems, are just not effective enough.

• Service please: Putting a weight-management product on the shelf is not enough – you have to actually provide a service. The success of concepts such as Weight Watchers and Jenny Craig – and Special K, with its eating programme – shows how much people value support and service in reaching their weight management goals. This will, of course, require a significant commitment in terms of investment and technology.

Weight managementKey Trend 5:



only because it challenges many strongly-held beliefs (including the widely held negative view of GI in the US) but because Professor Astrup was previously not a fan of high protein and low GI – but the results of good science have made him change his view.

The researchers favour diets with 25% of calories from high-quality, low-fat protein sources and comment that “current dietary recommendations are not optimal for preventing weight gain”. Their recommendation is a higher intake of (high quality) protein than current guidelines recommend; eating this way, they say, means you can also eat until you are full without counting calories and without gaining weight.

Because of the quality and scale of the study it is already having an impact on the world of nutrition. It’s good news for anyone making foods with a high content of wholegrain (such as dark breads, oats, breakfast cereals), producers of vegetables and some (but not all) fruits as well as protein companies.

The GI concept was popularized in Australia, where low-GI foods, tested as such at the University of Sydney, can carry a regulator-approved symbol, and a low-GI eating plan is used by the Australian Diabetic Association, However, the reality is that the concept is little understood by consumers at large, and the GI symbol, despite the backing of extensive TV advertising and PR, does little or nothing for the sales of products that carry it. It’s a unique-in-the-world experiment, and it has shown that low GI may be too diffi cult a concept for consumers to take on board in the midst of all the other health messages they are bombarded with.

So we are unlikely to see any enduring renaissance of “low GI” as a marketing message. However, “eat more protein” is easier for people to understand and that will benefit protein producers in the long run.

Weight Watchers overhauls points

In use in Europe for over a year and now being rolled out worldwide, Weight Watchers’ PointsPlus System replaces its long-established Points plan. The new system – which the company says has been clinically tested – is designed to reflect the current state of nutrition science. PointsPlus values are based on the amount of protein, fibre, carbohydrates and fat in foods – significantly, the formula takes into account that protein and fibre are important for fullness and warding off hunger. The programme is designed, the company says, to help people make food choices that will allow them to eat more food and help them “feel full longer”. In the PointsPlus system a breakfast of egg and ham will have a better score than a croissant while a 100-calorie apple is flagged as a better choice than a 100-calorie bag of chips. The company also has created “power food” choices so people can select the healthiest foods within food categories, such as soups or frozen dinners. Those power foods will be identified in the programme.

Unexpected boost for science-based weight management ingredient

Companies have become accustomed to the European Food Safety Authority (EFSA) almost routinely rejecting proposed health claims. In fact EFSA now has an average 98% rejection rate. But in 2010 EFSA surprised everyone by giving its first-ever approval of a weight-management claim for a specific food ingredient. They chose an ingredient that was not in any product developers’ plans – glucomannan, better known

Chart 9: Change in body weight during the Diogenes study

As the chart shows, the high protein–low GI diet produced the best weight-loss results.

Source: Diogenes study

Low-protein high GI

High-protein low GI



as konjac fibre. The EFSA review panel concluded that it agreed that a cause and effect relationship has been established between the consumption of glucomannan and the reduction of body weight and it authorised the proposed health claim:

Glucomannan contributes to the reduction of body weight in the context of an energy-restricted diet.

Many companies that have been experimenting with weight management products – such as those based on fi bre and proteins for satiety, which are now not approved by EFSA to make a satiety claim – suddenly are faced with a unique opportunity to do something in weight management with a claim that’s EFSA-approved.

Not only does konjac now have a unique claim, the clinical evidence is that it actually works, enabling consumers to “feel the benefi t”. Konjac fi bre is also FOSHU-approved for weight management in Japan, so taking the European and Japanese approvals together, there’s a strong body of science that should satisfy regulators everywhere. It is already used in many foods as a gel or thickener (it’s described as E425 on many product labels). It’s a soluble fi bre derived from the root of the konjac plant – enabling marketers to communicate a “natural plant extract” message of the kind that has already worked well for many ingredients.

Konjac is clinically proven – certainly to the satisfaction of EFSA’s near-pharmaceutical standards of clinical proof – to induce a sense of satiety leading to a decrease in subsequent energy intake. In order to obtain the claimed effect, 3g of glucomannan should be consumed daily.

SATIETY PROMISES A LOT

Because consumers are most motivated by benefits they can quickly see or feel, products that give a sense of satiety ought to become the largest area of weight management – as NNB has forecast in our trend surveys in previous years. If you have a snack in the morning and then find that you eat less for lunch, that’s effective. It also works as a consumer communication: it’s not a magic bullet promising to help them shed kilos overnight, but a positive promise to help them in the long run with a lifestyle change.

At the level of health claims satiety should also be a more straightforward concept. A claim such as Helps you eat less is more straightforward to demonstrate than one that a product “reduces body fat”.

There’s also a natural link between food and satiety – wanting to feel full is, after all, why people eat a lot of the time – and there are many categories in which the link could be developed. There’s potentially therefore scope for soup and other formats which consumers already associate with “filling you up”. Campbell’s Soups’ “Satisfied, naturally” message for its soups plays on this link between eating and satiety, using an “all-natural” message.

Consumers increasingly prefer to tackle their shape and weight management as one component of a broader healthy lifestyle and a “balanced diet” – as “normal food for normal people who just want to snack less”. It is in this context that soup or other meals can offer a satiety benefit.

These formats may also benefit from the clear decline in popularity of “dieting” as a regime and the decline of overtly diet products. Traditional dieting brands such as

There’s also a natural link between food and satiety – wanting to feel full is, after all, why people eat a lot of the time. Campbell’s Soups’ “Satisfied, naturally” message for its soups plays on this link between eating and satiety.

An American brand called NeuroTrim is one of the few brands in Europe already offering a weight management benefit based on the presence of konjac.


Unilever’s Slim-Fast have seen their sales slide in recent years – by 50% in the case of Slim-Fast.

However, there is a danger that this type of “naturally-satisfying” message could become an everyday message in many categories, and therefore cease to be a point of difference.

And while it’s tempting for marketers to bring this type of satiety communication to existing categories and brands, the reality is that such “soft claims” very often provide only a short-term lift to sales and no increase in prices.

And, while “satisfying” and “feel fuller for longer” have some appeal as “soft claims” they won’t help anyone create a brand with a distinct weight management position, such as Special K has, grow significant volumes (as Special K has) and earn premium prices (as Special K does in many markets, where its premium over regular cereals can be as high as 100%).

...but struggles to satisfy

Although, for all the reasons above, industry has long believed that satiety is the best direction to take, in fact satiety products have not performed well. To take just two significant examples:

Spain: In one of Europe’s most-active weight management markets, Danone Vitalinea Satisfacción 0% fat yoghurt achieved less than €7 million ($9.6 million) in retail sales despite a clear “helps to control the appetite for longer” message and a significant marketing spend. Satisfaccion provides a dose of 9.2g of protein and 2g of fibre per 100g and is claimed to reduce the desire to eat for two hours following consumption.

US: Kellogg’s Special K dairy satiety drink “providing protein and fiber to satisfy hunger for longer” achieved only $33 million (€25 million) in its first year on the market – approximately the same sales level as the company’s

KELLOGG SPECIAL K – THE GLOBAL LEADER IN WEIGHT MANAGEMENT

The successful re-positioning of Special K from being an out-of-date diet brand – it was fi rst launched in 1955 in the US – dates from 2001, when Kellogg and its advertising agency, Leo Burnett, devised the Special K “drop a jeans size” and “drop a bikini size” challenges. They designed a plan in which participants had to follow basically only one rule: for two weeks, they were required to substitute two meals a day with Kellogg’s cereal or meal bars; they could largely eat what they wanted the rest of the day, in two snacks and a normal lunch or dinner. Special K has no added functional ingredients; it is an example not of technical innovation but marketing innovation – using skilfull communications to help consumers alter their lifestyle and produce a measurable result.

Since 2001 sales of Special K have more than doubled in the US and in many markets it has performed even better. In the UK, for example, Special K has become the country’s second-biggest cereal brand, trebling sales between 2005 and 2009 to almost €120 million ($179 million). Worldwide – and Special K is marketed across Europe and throughout the Middle East and South America – Special K is a $1.5 billion (€1 billion) annual sales brand.

The “drop a jeans size” challenges are a perfect example of “feel the benefi t” marketing (see Key Trend 3). The key lesson from Special K is that the best way for a brand to be credible as a weight management brand is to deliver a tangible, measurable effect – indeed this is the only way to be successful.

One of the key underpinnings of the success of Special K is a supporting programme of motivational groups, nutrition counseling and much more – making it more likely that the Special K consumer will “feel the difference” in terms dropping a jeans size or dropping a bikini size.



RULES FOR SUCCESS IN WEIGHT MANAGEMENT

1. The ingredients of success for a weight management brand are clear:- a benefit that the consumer can quickly see or feel, and in this respect satiety seems to have the edge- an approach that can fit in with the do-it-yourself approach to weight management- a product that supports the consumer’s healthy diet and lifestyle, rather than forcing them to change their habits- delivered in an eye-catching and (if possible) unusual package format- a premium price- a heavy investment in brand support, in particular challenges to consumers to “feel the benefit”

2. For ingredient suppliers it will be key to success in a very competitive ingredient supply market to work in partnerships with branded goods owners to help them reduce their (very high) risk of failure and maximize their return on investment.

3. Given how risk-averse the marketing departments of many consumer goods companies are, partnership in this market might mean that an ingredient supplier not only supplies the technology, but perhaps invests in a joint venture company to take the technology to market in partnership with a branded foods company.

4. A significant, long-term investment in consumer communications is essential for any weight management brand to establish an “expert position” and earn the kinds of significant price premiums shown above.

5. Use ingredient technology that works and is clinically proven.

earlier brand stretch for Special K, an unsuccessful high-fibre and high-protein water, also marketed with a satiety message.

Most dairy satiety brands that have been launched in Europe and the US have been withdrawn or linger in niches – while the “feel fuller for longer” range of high fibre ready meals launched by UK retailer Marks & Spencer (which has always had a strong private label presence among the weight-conscious) is said to have performed only modestly.

Why has the satiety effect failed so far? Given the importance of consumers “feeling the benefit” to a weight management product’s credibility (see Key Trend 3) – “feel the benefit” has been the keystone of the success of Special K – the problem with most products on the market delivering a dose of fibre and protein is, it seems, that they are just not effective enough. They promise that people will feel fuller, but that feeling isn’t strong enough to deliver sufficient credibility to attract long-term repeat purchase. An improvement in the ingredient technology is needed.

A SERVICE, NOT JUST A PRODUCT

The other challenge for companies targeting weight management is that to succeed in this category it’s not just a question of putting a product on the shelf, you have to actually provide a service.

Weight management is a potential mass market concern – and the mass-market consumer group most engaged with weight management products are those whom Health Focus International calls “the strugglers”, a name which is fairly self-explanatory. This group, who comprise around 12% of the population, struggle with

maintaining their weight and with healthy eating. It’s hardly surprising that one of the biggest challenges with weight management is how quickly people can put the kilos back on after they have shed them.

The global success of concepts such as Weight Watchers and Jenny Craig illustrates how much people value support and service in reaching their weight management goals. Connecting to this reality is one of the key underpinnings of the success of Special K. The brand is not only a product, but an eating programme supported by motivational groups, nutrition counseling and much more – making it more likely that the Special K consumer will “feel the difference” in terms of dropping a jeans size or dropping a bikini size, as the brand promises they will.

In short, if you want to succeed in weight management you are facing a significant commitment in terms of investment and technology. The two critical success factors are that your consumers:

• Feel the benefit• Enjoy the product as part of a supportive

weight management service that assists them in meeting their goals.

We do not know, but we suspect, that as well as satiety, reduction of body fat is a piece of self-measurement that consumers can do and which enables them to “feel the benefit”, and this might go some way to explaining the continuing success of the Naturlinea dairy brand, still selling €50 million ($66 million) a year in Spain with little marketing support some six years after it was launched in an intensely competitive market. Naturlinea is based on the active ingredient Tonalin CLA – from Cognis – and carries the claim “helps reduce body fat”.



10 Key Trends 2011 Naturally healthy

SUMMARY

• “Natural” has strong appeal to consumers: Marketing the intrinsic health benefit of a food or food ingredient continues to be the most popular health marketing strategy in the industry since this message is one of the most appealing to consumers, who will accept it without hesitation.

• Convenience is key: The most successful products are those that offer their natural and intrinsic health benefits in a highly con-venient format – usually a beverage or snack.

• Natural snacks: Demand for snack products is increasing and can only grow more because of the gradual disappearance of tra-ditional meal occasions. A focus on building markets for new snack concepts rather than simply following on with predictable prod-ucts has already led to the creation of some innovative snacking concepts.

Naturally healthy and ultra-convenientKey Trend 6:

The message that a food or food ingredient has a natural and intrinsic health benefit is one of the most persuasive in food marketing. For many consumers a health benefit that is intrinsic to the product – such as oats and heart health, blueberries and antioxidants – is the only one they will accept without hesitation.

Natural health benefits are also an idea that’s easy for the media to understand and easier still for time-pressed journalists to explain. The media is always hungry for stories about foods with an intrinsic health benefit – oats, almonds, cranberries and blueberries have all benefited from media attention and the media’s labeling of them as “superfoods”.

But most often, consumers don’t want their superfoods in their “whole, fresh and unprocessed” state – that isn’t convenient enough. Supermarket sales data makes it clear that time-pressed consumers want their “all-natural” health benefit packaged, presented and if necessary processed into a format that makes their life easier.

To illustrate this, compare the fortunes of two “high antioxidant” superfoods – broccoli and a broccoli snack – and consider too how a convenient shot format has made beetroot appealing.

BroccoSprouts vs Booster Broccoli: As Table 3 shows, the former – Booster Broccoli – was simply sold as a head of broccoli. The latter – Broccosprouts – are sold in a convenient package, ready-to-eat. The company behind Broccosprouts went out of its way to use packaging to differentiate its product (see Key Trend 7 for detail), while Booster Broccoli kept its product looking like any other whole, fresh, natural broccoli in the supermarket.

The result? Booster Broccoli failed to appeal to consumers, while BroccoSprouts have become a super-premium success story.

Beet It: James White Drinks’ organic beetroot juice brand Beet It is a text-book example of how to market intrinsic health benefits. The benefits of Beet It are based on beetroot’s naturally high nitrate content – on the face of it, an unlikely starting point for a health brand, since from the 1950s nitrates were treated as a potential risk factor for colon cancer.

In fact epidemiological studies have never found any association between nitrate intake and disease in humans and researchers began to suspect that dietary nitrate might play a role in supporting human health. Researchers in Japan, the US and elsewhere found that nitrates lowered diastolic blood pressure, with no effects on systolic blood pressure.

However, whole beetroot do not score very highly on convenience – beetroot juice is much more convenient.

So Beet It set out to capitalize on the new scientifically-established health benefits of beetroot juice, which has been used extensively in clinical studies and has an even higher concentration of the actives than fresh beetroot.

Initially retailing in 250ml bottles and sold through health food stores, beetroot juice’s health halo was further burnished by published studies which found that drinking beetroot juice reduces the energy expended by muscle and can boost stamina, allowing an individual to exercise for up to 16% longer.

In the world of elite athletes there is a never-ending quest for products that will boost performance and word got around. Beet It juice was soon being bought by sports teams and professional athletes. However, beetroot juice has a polarising taste, so to get past this taste barrier the company decided to concentrate its product (see Key Trend 7), creating a 70ml shot version which contains the same quantity of nitrates as found in 250ml of beetroot juice and has a better taste – as well as being an easier “dose” to drink.



BroccoSprouts and Beet It illustrate the keys to successfully marketing products with natural health benefits. These are:

• It’s a health benefit from a natural food or ingredient.

• The benefit is intrinsic to the ingredient.• The benefit is easy to understand and relevant to

the lifestyle of the target consumer.• The product format is as convenient as possible.

People like to hear that something that’s natural and tastes good is also good for them – you can guarantee

health-conscious consumers will know all about the heart health benefits of red wine and the high antioxidant levels of dark chocolate.

Bear in mind that the wellness aura that surrounds antioxidants has come from messages about the “all natural” high antioxidant content of foods such as chocolate and blueberries; it is this “natural and intrinsic benefit” image that helps give antioxidants credibility.

BroccoSprouts and Beet It also illustrate a point made by Professor Brian Wansink – one of the world’s most respected food psychologists and professor of applied economics of marketing and nutritional science at Cornell University – who says that any vegetable

BroccoSprouts Booster Broccoli

Product BroccoSprouts – very young broccoli plants, just a few days old. Unusual appearance, not easily comparable to anything else in the produce area except alfalfa sprouts, which have a premium and health image.

Booster Broccoli – heads of mature broccoli. Comparable directly to commodity broccoli.

Active ingredient

Sulforaphane at 73mg per 28g serving. Sulforaphane at 84mcg per serve of 70g (at least 30% more than conventional broccoli).

Science base

Very strong – science dates back to work done at Johns Hopkins University School of Medicine in Baltimore, USA, in early 1990s.

Very strong – product is one outcome of a $2.8 million/€2.3 million research project involving Australia and New Zealand’s leading research organizations.

Benefit Labelled: “BroccoSprouts. Broccoli sprouts. A natural source of SGS – the long lasting antioxidant from broccoli. 73mg of SGS per serving. BroccoSprouts are the only broccoli sprout patented and licensed by Johns Hopkins University.”

On the reverse of the label: “BroccoSprouts. 100% natural. While studying broccoli and broccoli sprouts at the Johns Hopkins University School of Medicine, scientists identified a natural compound, sulforafane GS (SGS) which supports long-lasting antioxidant and essential cellular function. Only BroccoSprouts are grown from special seeds which are tested and certified by Brassica Protection Products, in order to provide a guaranteed level of SGS. A fat-free food, broccoli sprouts are a good source of Vitamin C. As part of a diet low in fat and rich in vegetables and fruit, broccoli sprouts may reduce the risk of cancer, a disease of many factors.”

“SGS is a long-lasting antioxidant which helps maintain the body’s immune function”.

Labelled: Naturally higher in essential antioxidants.

Packaging Sold in convenient 113g packs (in Japan in 50g snack packs) in containers which help differentiate the product and provide adequate space for label messages.

Booster Broccoli sold in heads and unattractively shrink-wrapped as conventional broccoli, failing to establish any visual point of difference.

Convenience factors

Product is hyper-convenient – instantly ready-to-eat, it can be consumed raw from the pack as a snack as well as being used in cooking without loss of the health benefit.

Zero convenience factors, zero snacking potential – product still needs to be washed and prepared by the consumer.

Pricing Super-premium – typically costing $3-$4 (€2.52 - €3.36) a pack, three times as expensive as a pack of alfalfa sprouts.

Initially aimed for 30% premium to regular broccoli, which widened to 150% as price of directly comparable undifferentiated commodity fell.

Consumer targeting

Premium health-conscious niche focus: “We have very broad distribution but our typical consumer is someone older, female, with a higher income, and who is educated about food. They’re conscious about what they’re buying – sometimes it’s organic, but certainly it’s high-end healthy products.”

Price-sensitive mass market.

TABLE 3: SUMMARY COMPARISON OF HOW TO – AND HOW NOT TO – COMMERCIALISE THE SCIENCE OF “NATURALLY HEALTHY FOODS”


with a health benefit that does not also deliver high convenience will experience modest sales. Eating vegetables, he points out, is perceived as involving more preparation than fruit or processed snacks – so people expect them to fail the convenience test.

COCONUT WATER

Another “natural health” success story is coconut water, extracted from young, green coconuts. It tastes like regular water that has been slightly sweetened and has more potassium than two bananas and 15 times the amount found in most sports and energy drinks. This makes it a natural electrolyte drink, three times more hydrating than water.

Coconut water drinks need no sweetening – they are often 100% all-natural coconut water, a benefit made possible by packaging and processing technology. Coconut water oxidizes quickly, but packaging innovation – specifically the development of aseptic TetraPaks – has made it feasible to package and distribute fresh coconut water.

Launched for the first time in Brazil in 1999, it is a $350 million (€235 million) market there. In the US, the coconut water category has grown to about $200 million (€153 million) a year in retail sales in just five years according to Nielsen data – about five times its estimated size just a year ago.

Tom Pirko, a leading beverage-industry consultant, said that coconut-water products “have succeeded on their own merits. There’s always an ongoing search by consumers for something new and different and exciting and well-packaged. Coconut water has an inherently good image, a bit like cranberries do.”

SNACKING AND MARKETING

Although beverages are the highest form of convenience, snack formats – and a significant marketing investment – can also create success.

Snacking is the over-arching trend in food and health, affecting every category, every type of food and creating a blurring of boundaries between categories as consumers evaluate multiple choices in the supermarket from a starting point of their suitability as a convenient snack. Snacks need to be portable and single-serve, since snacking is most often a solitary activity.

Just to make the challenge more complicated, consumer research is no longer able to tell companies in advance exactly what they should be delivering – the emphasis now is on creating innovations beyond consumers’ imaginations and then building consumer demand and creating new markets. Here are two examples:

Almonds. Over the last decade the American almond industry has invested heavily in establishing the

heart-health benefits of almonds – which, in common with many tree nuts, are allowed to make an FDA-approved heart-health claim – and followed this up with research into almonds’ effect on satiety and their use as a weight management food.

By itself, however, the heart health claim would be of no value. Almonds sold in the traditional whole form were just too inconvenient and uninteresting to attract consumers’ attention.

The almond industry’s strength has been its ability to make almonds available in as many convenient forms as possible – with a focus on snacking and their use as an ingredient by food processors – and to create strong snack brands.

Pistachios. The Wonderful Pistachios brand has become a $200 million (€153 million) healthy-eating success story within two years. Owner Paramount Farms – a company that is becoming to the marketing of “naturally healthy but convenient” foods what Danone has become to functional dairy – applied to this brand several lessons from its other major brand, Pom Wonderful pomegranates.

Both Wonderful Pistachios and Pom Wonderful juice rely on the intrinsic health benefits of their basic commodity rather than enhancement with other ingredients. In 2009, thanks to the brand’s fun, celebrity-laden marketing campaign, sales ended up about 65% higher than for 2008, which was Wonderful Pistachios’ first year in the market. In 2010 sales are on track for $200 million.

Paramount’s Los Angeles-based owners, Lynda and Stewart Resnick, pulled off the same thing with Pom Wonderful: identifying an under-appreciated but healthful commodity crop and then turning it into a marketing phenomenon.

Pistachios enjoy a number of advantages: they benefit greatly from Americans’ ever-rising appreciation of tree nuts as having “all-natural” nutritional benefits. “There’s an overarching kind of health awareness about nuts,” Marc Seguin, Paramount Farms’ brand



RULES FOR SUCCESS IN NATURALLY HEALTHY

1. Use ingredients with a natural health halo and intrinsic health benefit.

2. In snacks you are not just competing in your own category, but (in the mind of consumers) with every other category in the supermarket that they could use as a snack. Therefore innovating in packaging, merchandising, ingredients, formulation and delivery system are all essential to success.

3. As the examples of almonds and coconut water show, key to success in foods and beverages with natural and intrinsic health benefits is choosing a convenient product format – essentially, a beverage or a snack product.

4. For companies drawn to work with this trend – and most should be, we believe – success will still be driven by the way you translate your natural health benefit into a convenient format; how your product connects to other key trends; and the marketing skills you apply.

5. In choosing such an ingredient, or your all-natural health benefit, you need to work with ingredients that the media writes about, or ingredient suppliers who are educating the media about new ingredients with natural health benefits. By adopting this strategy you don’t need to be able to make a health claim (and in fact you may not be able to make a health claim, especially if you are operating in Europe).


manager, told NNB. “When you layer in the fact that we’re a good source of fibre, and pistachios especially have antioxidants and that sort of thing, we feel like in general – relative to snacks like chips and pretzels – we’re in a much better position.”

Paramount Farms (which also grows and sells almonds) watched closely what almond growers and brands did with their commodity. “They have a laser focus on getting people to understand how healthy almonds are,” Seguin said. “We saw that as a model for replicating a consistent health message over a long period of time and getting it ingrained in people’s minds.”

The fact that Wonderful Pistachios were launched just as America was entering recession could have been a problem for a premium-priced nut that retails in an 8oz bag for a suggested $3.99 (€3.04) – in the realm of cashews, macadamias and almonds rather than, say, cheaper peanuts and sunflower seeds.

But Wonderful Pistachios began proving last year that control of the majority of the crop, along with clever marketing (you can see examples at http://getcrackin.com/#sidebar_video_thumb_1534), can elevate savvy brands above concerns about price elasticity. Overall advertising spending was expected to be $20 million (€15 million) in 2010.

The most marked trend is for snacks marketed for their intrinsic healthfulness and perceived naturalness, even if the snack is a processed product and the natural “wellness” appeal comes from added ingredients with a health halo – and even if they’re not present at sufficient levels to have any measurable effect.

Perceived health benefits from “naturally healthy” ingredients is an easy concept for both consumers and the media to understand. Hence oats, almonds, cranberries, blueberries and many other foods are seeing increasing use in snacks and this trend can only strengthen.

http://getcrackin.com/#sidebar_video_thumb_1534)


When people in our industry ask us about trends, very often – too often in fact – they ask “What are the “hit ingredients?”. This is the wrong question, because they should be asking “What are the trends that will deliver increased sales and profits?” When you look at trends from that perspective it soon becomes apparent that selection of packaging formats, packaging innovations – and the rise of consumers willing to pay premiums for health – are bigger trend drivers than most individual ingredients will ever be.

DIFFERENTIATION THROUGH PACKAGING

Good packaging, particularly innovative packaging, is crucial to creating successful health propositions in increasingly over-crowded markets. At its best, packaging supports the brand in asserting its difference from the competition. It’s the best way to catch the consumer’s eye and earn premium prices and better-than-average profit margins.

Innovative packaging performs several important functions:

• It signals to consumers that “this is something very different”.

• Innovative packaging conceals a price premium (see below). Using packaging, companies can create new price points and achieve much higher selling prices for their products. In particular, selling in single-serve packages makes it very difficult for consumers to easily compare prices. Putting your new product in a standard 1-litre gable-top carton, on the other hand, makes your product look like every other brand on the shelf and enables consumers to easily compare prices between your product and regular products.

• If you use packaging innovation to create a new category then you are defining the direction in which many of your competitors must go and you are defining the packaging format they must adopt. You are in effect establishing your credentials as a market leader and innovator.

The beverage category is strongest in eye-catching packaging, but it’s an opportunity that does not need to be exclusive to beverages – even vegetables can exploit good packaging, if the minds behind them are creative enough. When Tony Talalay of Brassica Protection Products (BPP) brought his product to market he “deliberately sought to distinguish BroccoSprouts from other sprout offerings on the market”. Sold in high-quality lidded plastic trays, BroccoSprouts are very young broccoli plants which provide a “concentrated dose” of 73mg of the antioxidant sulforaphane per 28g serving – twice as much as mature broccoli. As well as carrying a prominent claim on its label, the product provides a small and convenient serving size, perfectly in line with the preferences of today’s health-conscious consumers.

“We’ve changed the face of the sprout industry with our high quality packaging and graphics,” says Talalay.

BroccoSprouts also recognized that it was an advantage in terms of creating credibility with the most-informed and most health-conscious consumers – as well as creating much higher profit margins – to market their brand at a super-premium price – typically $3-$4 (€2.52 - €3.36) a pack. This, says Talalay, is roughly three times as expensive as a pack of alfalfa sprouts, but he insists it is a price some consumers are willing to pay, adding that: “We have very broad distribution and we go in every kind of major supermarket, but our typical consumer is someone older, female, with a higher income, and who is educated about food. They’re

10 Key Trends 2011 Packaging and premiumisation

SUMMARY• Packaging lessons learned: More and more companies are learning to apply some of the key lessons of the last 15 years, which

are that:a) packaging innovation is key to success in the business of food and healthb ) the biggest successes in the business of food and health are in single-serve productsc) concentrated dose of the effective ingredient – 100% of what you need in a single-serve – has extraordinary resonance with

the most health-conscious consumers d) focus on lower-volume, higher-margin niches of loyal consumers rather than targeting the price-sensitive mass market – these

niche consumers are the same ones for whom packaging innovations have most value.

• Better prices, higher margins: After all, there isn’t much point in putting in a major effort to create a health brand, with all the development costs and higher ingredient costs that often entails, unless you’re going to be able to earn superior retail prices and therefore higher profit margins.

Packaging and premiumisationKey Trend 7:



conscious about what they’re buying – sometimes it’s organic, but certainly it’s high-end healthy products.” The brand is marketed in the US and Japan and has sales of over $25 million (€19 million) a year and rising.

CONCENTRATED DOSE

The “daily dose” or “concentrated dose” format has become one of the defining product formats of the global nutrition business. The concept of a “concentrated dose” – meaning a high, and effective, dose of an active ingredient in as small a package as possible (for example a beverage in a 1.7oz-6oz/50ml-180ml package) – has been growing in popularity in Europe over the last decade, and the idea is now, at last, taking off in America, after years of resistance to the concept from marketers.

It’s a format that achieves differentiation and premium pricing, and reassures consumers that they are getting a guaranteed “concentrated dose” of the effective ingredient that provides the benefit they are looking for.

It’s a compelling idea and one with a proven track record – “concentrated doses” have long been established as one of the most powerful concepts in consumer marketing. In laundry powders and liquids for example, products that offer a “concentrated dose” have been redefining the market for a decade. The reason for this development is very simple, as a senior Unilever executive was quoted as saying:

“Consumers are looking for convenience and ease of use. Convenience is the big trend as consumers’ lives get

more hectic.”As a result of the willingness of companies such

as Unilever and Proctor & Gamble to respond to consumers’ needs for ultra-convenient products, in the $34 billion (€27 billion) global laundry powders and liquids market “concentrated dose” powders and liquids have grown to a 35% market share, a retail sales value of $9.5 billion (€7.6 billion).

“Concentrated dose” is an opportunity that has been neglected by all but a few food and beverage companies. However, that is slowly beginning to change. On a conservative estimate, global sales of concentrated dose beverages are, at retail prices, already $8.5 billion (€6.9 billion), of which probiotic dairy and energy shots are the single largest segments.

PREMIUM IS THE GOAL

As the above examples show, smart brands begin by targeting the most health-conscious, least price-sensitive consumer. Yet in many companies, executives convince themselves that they must – to satisfy their need for volume, to meet the expectations of senior management or shareholders or to meet their own preconceptions about how the market should work – target the mass market.

As we have said before, this point of view is mistaken more often than it is right. One of the key lessons of the last 15 years is that companies who try to jump straight into the mass market usually wind up with an expensive failure, or at best a brand that performs short of expectations.

Chart 10: Energy drinks are premium-priced but daily dose energy shots are super-premium

US energy drink prices compared with one-another and with a “standard” mass-market non-energy product such as Coca-Cola Classic

Source: Wal-Mart, Albertsons, Walgreens

Price per 32 fl.oz. (approximately

1 litre)

0CocaCola Classic

1 litre $2.19

$2.195

10

15

20

25

30

35

40

Monster Energy Drink

16 fl.oz. $2.29

$4.58

Red BullEnergy Drink

8.3 fl.oz. $2.09

$8.06

Cranergy12 fl.oz. $3.99

$10.64

Living Essentials 5-Hour Energy Shot

12 pack $332 fl.oz. bottles

$41.2545



The mass market was reluctant to pay high price premiums for health, even in economic good times, and is more price-sensitive than ever now, while the cost of effective health ingredients means that it is difficult to deliver an effective product at low prices.

Better than aiming a less-than-precise “wellness” message at the mass market, look instead for people for whom health is part of their lifestyle. These people are, at best, only 20%-25% of the population in most countries and tend to be older, 40- or 50-plus – the age when people start to notice the changes that life brings to how they look or feel and also the age when people have not only the motivation but sufficient disposable income to spend on maintaining their health.

Health-conscious niches are the key driver of health brands – in almost every case in every country. Take Danone Activia probiotic yoghurt, the biggest brand of its kind in the world – although it has evolved to be mass market in Europe it is still something of a niche brand in many markets. Activia has rocketed to over $438 million (€333 million) in retail sales in the US since 2006, but, as a Danone spokesperson told New Nutrition Business, the crucial point is that: “It doesn’t have broad penetration among consumers but rather dedicated usage among a narrow slice of consumers – sales are driven by about 5% of consumers.”

Here are some examples of successful convergence of packaging innovation, concentrated dose and premiumisation:

Beet It is a brand of beetroot juice, marketed for its clinically-established benefits as a sports drink. Supplied to elite athletes and sports teams, the problem was that beetroot juice has a polarising taste, according to founder Lawrence Mallinson: “About a third of people love it and two thirds find it difficult. To try and get past the taste barrier we said to the sports people that we were thinking about concentrating it, to enable people to down a dose without having to drink a full 250ml bottle.” The response was

positive, so the company launched a 70ml shot version which contains 5mmol of nitrates, the active ingredient, and the same amount found in 250ml of beetroot juice.

Explains Mallinson: “It’s a more intense, slightly thicker drink. The 250ml juice smells and tastes exactly like beetroot, but the shot doesn’t have the smell of beetroot or the taste. When you concentrate it, it becomes very sweet. But people drink it not as a drink but for its functional properties.”

The price is, typically for shots, super-premium at $2.85 (€2.05) for a 70ml bottle, equivalent to around $40.60 (€29.25) per litre. By comparison the 250ml Beet It sells for around $2.38 (€1.70), equivalent to many smoothie brands.

Anlene Concentrate: The “daily dose” version of Fonterra’s successful Anlene bone health brand (see Key Trend 10), each 110ml pack of UHT milk provides a concentrated dose of calcium and other nutrients for bone health. With a message of “four times as much calcium as regular fresh milk”, each 110ml pack delivers 500mg of calcium. It has since been rolled out in five Asian markets, where it has driven sales increases despite retailing at a super-premium price.

Energy shots: Offering a concentrated dose of energy – usually from caffeine and B-vitamins – energy shots have rocketed from nothing to over $1 billion (€760 million) in retail sales in six years. They have achieved this against a backdrop of economic recession and despite retailing, as Chart 7 shows, at a super-premium price. This success reflects the winning combination of a benefit you can feel (Key Trend 3), a benefit that is one of the most-needed by consumers (Key Trend 2) delivered in a highly convenient, innovative dose format that conceals the price premium.

RULES FOR SUCCESS IN PACKAGING AND PREMIUMISATION

1. Reconsider the urge to take your product to the mass-market. The business of food and health is about value, not volume. Consumers’ interest in health is highly personalized and so health markets are highly fragmented. Target niches of motivated consumers with an effective product, innovative packaging and a premium price.

2. To have a good chance of commanding and keeping a higher price point and higher profit margins, offer a relevant benefit in a product that consumers believe to be effective, and use packaging innovation to add to your point of difference (to cater to the increasing need for single-serve products and to conceal your price premium).

3. Exploit the concept of “concentrated doses”.

4. Lead the way in your category with a new packaging idea that defines the format for that category.


Many marketers love the term “antioxidants” – and many consumers do too, though not as many as some marketers like to believe. Recent years have seen a frenzy of interest in using terms such as “high in antioxidants” on product labels and in advertising, as Charts 11 and 12 show. However, the antioxidant frenzy seems to have passed its peak – and with marketing, regulatory and scientific challenges mounting, the use of the marketing term “antioxidants” will only be effective only in niches where it is delivered by innovative products (see box on Nestlé green coffee), supported by excellent marketing execution and by strong science.

Two years ago, we downgraded “antioxidants” from Key Trend to a Micro-Trend. Our reasoning was simply that antioxidants, although a widely-used marketing message, face some significant challenges – besides having become a “me-too” message and one of the most common in the supermarket. The response we got

was a barrage of e-mails from people in industry asking us how we could have made such a mistake and insisting that antioxidants were one of the most powerful trends.

In 2010 we reluctantly elevated antioxidants back to being a Key Trend, recognising that as a message it is hugely popular with marketers. This year, forecasting for 2011, antioxidants remain a key trend but move down the ranking. Our trend analysis has the objective of identifying opportunities for growth – and in this respect antioxidants are currently faced with problems as sceptical regulators move to curb use of the term in marketing, and challenge the underlying science.

Marketing messages about antioxidants have become possibly the most commonly-found message on food and beverages. As Charts 11 and 12 show, there has been a massive growth in the number of new product launches communicating the perceived benefit of being “high in antioxidants”.

10 Key Trends 2011 Antioxidants

SUMMARY• Regulation threat: Fuelled by the often questionable science, regulators in Europe and the US are training their guns on

antioxidants – and their lead may provide a cue to regulators elsewhere. Europe’s rigorous new health claims system has rejected every antioxidant-based claim that has come before it.

• Suffering from overuse: So common has the message “high in antioxidants” become that using it will not result in higher sales or higher selling prices. Marketers of new products will have to move beyond the high-in-antioxidant message and invest in science so that – like other functional foods – they can be more specific in their benefit statements.

Antioxidants: popular but future uncertain?Key Trend 8:

Pom Wonderful pomegranate juice’s success rested on: leveraging the benefits and healthy image of fruit (Key Trend 4); offering a previously inconvenient fruit in a convenient-and-natural form (Key Trend 6); delivering a premium product in innovative packaging (Key Trend 7). Pom’s appeal, like that of many “high antioxidant” products, has been niche not mass.



A halo of wellness

The high antioxidant content marketing message is not a direct benefit message but an ingredient statement, with the benefits implied. Consumers are free to interpret this as meaning what they want it to mean to them, individually. It has worked because consumers perceive antioxidants as something healthy to include in the diet and the many possible benefits of antioxidants are being actively communicated by the media.

Brands carrying the antioxidant message that have succeeded have usually done so because:

• They were often first to market with the message.• They have linked it to specific benefits that resonate

with the consumer.• Their products have been packaged and presented

in a way that strongly differentiates them.• Their products have been supported by significant

marketing communications efforts.• The products taste good. • “Antioxidants” is a term whose “wellness” halo gives

consumers permission to enjoy something indulgent that they wanted to consume anyway – red wine and dark chocolate are good examples. It’s an easy sell when you give people permission to eat more chocolate because of a supposed health benefit – no matter how imprecise.

Another perspective on the perceived success of the “high in antioxidant” marketing gambit is that, studied closely, it’s clearly most successful when the products using it connect to other, arguably more important, trends. Take Pom Wonderful pomegranate juice – its success arose from leveraging the benefits and healthy image of fruit (Key Trend 4); offering a previously inconvenient fruit in a convenient-and-natural form (Key Trend 6) and delivering a premium product in innovative packaging (Key Trend 7). The heart health benefit was also important, and the fact that it came from antioxidants was a reason to believe, but only one small part of a bigger picture. And in case we forget, Pom Wonderful’s appeal, like that of many “high antioxidant” products, has been niche not mass.

EVERYDAY MESSAGE NO LONGER OFFERS A POINT OF DIFFERENCE

The presence of antioxidants is being used as a generalized wellness message across multiple categories. But it’s the increasingly everyday nature of the antioxidant message that poses the problem. The term antioxidant has became so common it has ceased to be a point of difference, communicated by tea, chocolate, Nescafé, spices, vegetables, juices, berries and a host of other product types.

The antioxidant message helped create sales for the first products to use it, but new entrants with a high antioxidant message have no point of difference – and in fact recent would-be superfruits have mostly performed poorly. And while it’s true that adding the “antioxidant” message to an existing brand is an appealing “secondary” marketing message that can raise a product’s health profile with consumers, very, very few brands gain any significant and lasting sales increases as a result of using it.

So common is the term that it’s a mistake to think that simply adding the message “high in antioxidants” to a product will result in higher sales or higher selling prices. The benefit – and whether it is relevant and credible – is what matters most to the consumer. Marketers of new products will have to move beyond the high-in-antioxidant message and invest in science so that – like other functional foods – they can be more specific in their benefit statements. In Europe this will be the only strategy available.

REGULATORS’ SIGHTS SET ON ANTIOXIDANTS

The biggest threat to the use of antioxidant marketing comes from regulators and the scientific community. The latter is increasingly sceptical of the antioxidant marketing concept, and with good reason (see box).

Fuelled by the often questionable science, regulators in Europe and the US are training their guns on antioxidants – and their lead may provide a cue to regulators elsewhere.

Nestlé’s high antioxidant green coffee is a perfect example of successful brand creation in the antioxidant space. It provides a health benefit in a natural and convenient form (Key Trend 6) – in some countries advertising emphasizes that “we’ve returned to nature”; provides a first-in-its-category product that offers a healthy alternative to green tea; it’s delivered in an eye-catching package that’s unlike anything else on the coffee shelf, and it retails at a premium price (Key Trend 7).


SCIENCE GIVES LITTLE SUPPORT FOR “ANTIOXIDANT” MESSAGE

Most consumers will tell you that antioxidants are good – although most won’t know exactly why. More informed consumers may paint a picture of molecules racing around the body neutralising “bad” free radicals.

Emerging science is now suggesting that even the word antioxidants is a misnomer and really obscures how these compounds provide a health benefit.

Neutralisation of free radicals is not primarily how they work, and may only be a minor part of the health benefits of “antioxidants”. Consider this. The total antioxidant capacity (TAC) of plasma in a normal individual has been estimated at 500 μM. Even the maximum estimated concentration of polyphenols of 10-20 μM represents a transient 2%-4% increase.

Just to underscore this point, although a recent study on apple consumption outlined that the increase in TAC from apple consumption was approximately 37%, this increase came entirely from sugar metabolites and there was no detectable increase associated with the polyphenols. The authors suggest that this applies more generally to other plant-derived high antioxidant foods1.

In addition, it is now well established that antioxidant polyphenols are almost completely metabolised and that the compounds that your cells see are not the same ones that are measured in a chemical antioxidant assay. In very simple terms, what ORAC measures is not what your body actually gets.

So what is happening? How do these compounds work? There are a number of suggested mechanisms:• induction of endogenous antioxidants – up regulating the enzymes that produce the body’s own

antioxidants• regulation of inflammation – influencing the body’s complex inflammation pathway• regulation of cell proliferation – important in cancer prevention• regulation of gene transcription – multiple effects in many important body pathways• direct antioxidants, the “free radical neutralising” theory – it is possible that there are some direct

antioxidant effects, perhaps on the gut lining and intestinal microflora

1. Stevenson, D.E.,& Hurst, R.D. (2007) Polyphenolic phytochemicals – just antioxidants or much more?Cellular and Molecular Life Sciences, 64, 22, 2900-2916.

Source: Crawford K., Mellentin J., Successful Superfruit Strategy


In Europe, for example, the antioxidant trend will soon be dead, killed off by the new health claims system which requires rigorous scientific substantiation, using human clinical studies, of claimed health benefits. With very few exceptions, human studies on antioxidants are simply not available that would satisfy the European regulator (EFSA). Moreover, EFSA requires ingredients that are the basis of health claims to be properly characterised – something which cannot yet be done for most antioxidants to the level that would satisfy EFSA.

And hence EFSA has rejected every antioxidant-based claim that has come before it. In February 2010 EFSA published opinions on 169 antioxidant-related claims. These covered a range of food and drink products, such as blackcurrant juice, banana, guava and prunes, as well as food components and ingredients such as flavonoids from green tea, grape seed extract and olive biophenols. All were negative. Essentially, EFSA’s problem with the applications was twofold: first, tests showing the oxidant power of a product (such as the widely used ORAC test) were not proof that a product had an antioxidant effect; and second, the evidence presented that products did have an antioxidant effect in the body was not sufficiently persuasive.

As a result, regulatory experts in Europe are advising

companies to remove all references to antioxidants from labels, advertising and websites.

Liz Read, company nutritionist at Nestlé, which markets the Nescafé Green Blend antioxidant-rich coffee brand, told New Nutrition Business that she was not surprised by the raft of negative opinions issued. “It was likely to happen because of the state that general antioxidant research is in at the moment,” she says. “The research we’ve got for the epidemiological effects of foods that contain antioxidants is really good, but we probably need another 10 years to get it into the state of, say, polyunsaturates and fibre.”

Proving the benefits of antioxidants in the body will be a challenge, Read adds: “You have to show first of all that it is absorbed by the body so it’s bio-available, secondly that it is then having an effect on the cells in the body, and thirdly that these are definitely antioxidant effects. It’s a case of joining the dots.”

Read says one way to avoid the ‘antioxidants’ conundrum would be to use the term ‘polyphenols’ instead – and indeed Nestlé does do so in advertising and labelling for Nescafé Green Blend. But she admits: “We could say polyphenols but consumers don’t yet understand what polyphenols are. The word antioxidants is well understood by consumers.”



RULES FOR SUCCESS IN ANTIOXIDANTS

1. Link your product to specific benefits that resonate with the consumer – “contains antioxidants” is a message that is rapidly ceasing to provide a point of difference.

2. Invest in science to establish the credibility of the specific benefit of your product’s antioxidant contents

3. Package and present your products in a way that strongly differentiates them.

Source: Mintel GNPD new product database

Chart 11: US – number of new food and beverage product launches each year which mention antioxidants

As these two charts show, the antioxidant marketing craze may have passed its peak, and in Europe regulation will bar the use of the term “antioxidants”.

Number

02003

34100

200

300

400

500

600

700

2004

147

2005

156

2006

356

2007

399

2008

663

2009 2010 YTD

521

452

Chart 12: Europe – number of new food and beverage product launches each year which mention antioxidants

European data from France, Germany, UK, Italy, Spain, Netherlands, Belgium

Number

02003

3250

100

150

200

250

300

350

Source: Mintel GNPD new product database

2004

53

2005

109

2006

115

2007

273

2008

304

2009 2010 YTD

309

231

Nestlé, as one of the world’s biggest food companies, has deep pockets and can well afford to conduct the necessary proprietary research to meet the extraordinary standards demanded by EFSA. Smaller companies may

not be in such a fortunate position and it is possible that the term “antioxidant” might become one that only the largest companies can afford to use.


There’s little doubt that better immune function – in the sense of better defences against colds and flu – is high on consumers’ wish list. According to research by Health Focus International in 32 countries, “frequent colds/flu” has evolved into one of the top- four health issues for consumers, with the percentage saying it is an issue that affects them personally rising to 28% in the company’s 2010 survey, from 22% in 2008 (see Chart 1).

Hence it isn’t surprising to find sales of dietary supplements claiming an immune benefit on the increase, according to Nutrition Business Journal. It reports rising US sales of vitamin C (up 8% to $970 million/€727 million), echinacea (up 7% to $130 million/€97.5 million) and other ingredients associated with immunity.

Worldwide, better immunity for their children is the top health concern of mothers – which is why better immunity is the benefit offered by most brands of infant formula as well as many dairy products aimed at the three-to-nine age group.

David Walsh, VP communications at Biothera, a biotechnology company founded to commercialise Wellmune WGP, a beta glucan carbohydrate with immune-boosting properties, says food and beverage companies are fast waking up to consumer interest in products with immune benefits: “We’ve been selling immunity products for several years. Four or five years ago we’d go into a company and talk to the food scientist there, and they’d say: this technology is great. But then the marketers would say: how do you sell immunity? It doesn’t make you feel different – it’s like selling insurance.

“Consumers have either become more educated or more aware that the immune

system is important to their overall health. So there’s been more of a demand for immune products and consequently the food and beverage manufacturers are responding and looking at those foods.”

A wealth of ingredients – from colostrum to probiotics to beta glucans and many others – are targeting this benefit and some are getting traction. Some even have some strong evidence to back up their claims, such as Vitamin D (Micro Trend 3) which is in the unusual position of having obtained an approval for an immune health claim in Europe – a place where, it should be remembered, the regulator (EFSA) has a track record of rejecting 98% of all health claim petitions. Based on clinical evidence – and EFSA’s requirements for clinical evidence are at pharmaceutical-type levels – EFSA approved a health claim as follows:

Vitamin D contributes to the normal function of the immune system and healthy inflammatory response.

So why have we defined immunity as a Micro Trend rather than a Key Trend? There are two reasons:

1. Better technology needed to “feel the benefit”. Although many products (especially probiotic dairy) offer an immune benefit, in reality few have yet established any significant success. Those few include Danone Actimel, arguably the world’s biggest brand of its kind, with its “supports your natural defences” messages, and dairy and fruit juice products based on LGG (see box). Although immunity ought logically to have a “feel the benefit” (Key Trend 3) advantage, in practice that benefit has been difficult to demonstrate, with only Danone among immunity brands using “feel the difference or get your money back” promotions. Although consumer demand for immunity products is growing, it’s because consumers are looking for

SUMMARY

• Consumers’ interest in immunity is high. Worldwide, immunity ranks among consumers’ top-4 health concerns that affect them personally and boosting childrens’ immunity is a particular concern for parents.

• Scientific substantiation. Scientifically the immune-boosting effect has been hard to demonstrate to the satisfaction of regulators.

• Feel the benefit. Moreover, many products do not enable consumers to quickly and easily “feel the benefit” (Key Trend 3) and only one brand has made “feel the difference” a key part of its marketing – Danone Actimel, now the world’s biggest immunity brand. Marketers have yet to work out an effective execution strategy for immunity and hence shy away from it other than as a very broad “wellness” message – an approach which regulators are now targeting.

• Claims under attack. Regulators have come down hard on immunity claims and show every sign that they will continue to take a strong line against them. All of the above factors have together held immunity back from becoming a Key Trend, which is what consumer interest suggests it should be and could become in time.

Immunity’s regulatory and marketing speed-bumps Key Trend 9:

10 Key Trends 2011 Immunity


products that will genuinely enable them to feel better – something that people will measure though their personal experience of fewer episodes of cold and flu and episodes of shorter duration. Technology that can clearly give people this effect – coupled with savvy marketing such as that used for Actimel – will be the key to achieving significant success and growing brands in this sector. Using immunity as a “wellness” message without being able to prove better health will not do much for any brand – as we have seen over and again for the last 15 years.

2. Regulation – immunity under attack. Substantiating immune health claims may be one of the most difficult benefits to substantiate for any food component. Substantiation of an immune benefit is complicated and it is often difficult to demonstrate an immune effect. Since many brands have been marketed in recent years which neither enable consumers to “feel the benefit” nor clinically demonstrate an effect, marketers preferring to use “immunity” as a shorthand for a soft “wellness” claim, there is understandably scepticism about immune products among regulators.

As a result, for regulators and mischievous lawyers immune health has become a low-hanging fruit:

America. Regulators have made their intentions clear. The Federal Trade Commission (FTC) has said it will be paying particular attention to immunity claims, particularly those made by probiotics, and has expressed a dislike of claims to “boost” or “strengthen” immunity. The FTC has also indicated that it is looking not only at brand owners but ingredient suppliers who should have a robust science base if they are encouraging their customers to make immunity claims on finished products.

Nestlé is the most recent victim of the assault on immunity. The company must have thought that it would settle a complaint by the FTC against its Boost Kid Essentials in a way that left it with no egg on its face. As the FTC’s legal document states, the settlement with Nestlé “does not constitute an admission…that the law has been violated as alleged…or that the facts as alleged in the draft complaint…are true.”

But the company cannot have imagined that David Vladeck, director of the FTC’s Bureau of Consumer Protection, would use the settlement to tell the press that: “Nestlé’s claims that its probiotic product would prevent kids from getting sick or missing school just didn’t stand up to scrutiny.”

Boost Kid Essentials is a probiotic drink intended for children aged 1-13. It made two claims:

Reduces the duration of acute diarrhea in children up to the age of thirteen

Reduces absences from daycare or school due to illnessThe FTC charged that the claims were “deceptive”

and that the company made deceptive claims in television, magazine, and print ads that the product prevents upper respiratory tract infections in children

and protects against colds and fl u by strengthening the immune system.

Under the settlement with the FTC, Nestlé has agreed to stop claiming that Boost will reduce the risk of colds, fl u, and other upper respiratory tract infections unless the claim is approved by the FDA and has agreed to stop claiming that Boost will reduce children’s sick-day absences and the duration of acute diarrhea in children up to age 13.

So does this mean Nestlé was using probiotic strains that could not be shown to have the claimed effect? In fact the strain used in Boost is a well-researched strain, as you would expect from a company that claims that all its products are based strongly in science. It seems that Nestlé, which boasts of its industry-leading R&D into health, its unrivalled investment in science and the biggest R&D department in the global food industry, chose not to defend the science supporting its Boost Kid Essentials immune health claims.

In fact, lately major companies seem to be rolling over and surrendering to any challenges to their science. Inevitably, this gives rise to suspicion among the public that they may not be able to provide a defense – and it encourages regulators to go after any and all immunity claims, while giving hope to lawyers who are pursuing class actions in the hope of large financial pay-outs.

Europe: Like US regulators, those in Europe seem to have set their faces against immunity. EFSA has rejected every immune health claim put before it, sometimes legitimately. But EFSA has even rejected immune claims that were well-supported. Witness its rejection of an immune health claim for Danone Baby Nutrition’s infant formula. Although backed by 25 peer-reviewed studies published in learned journals and conforming with the requirements for immune heath claims specified several years before in an EU-funded project called PASSCLAIM, which followed the guidance of immunologists and paediatricians, EFSA still rejected the claim, even going so far as to question the criteria

The fi rst-ever Actimal “Feel the Difference Challenge” was pioneered in the UK in 2003. It had a dramatic impact on the popularity of the brand: by the end of 2005, Actimal had become a top-ten UK take-home soft drink alongside Coca-Cola, Sprite and Red Bull.



used by paediatricians – prompting one European professor of paediatrics to write to the European Commission asking ironically if EFSA would care to tell him and his fellow scientists what criteria they should be using in their research. Against that background of eccentric decision-making it is hardly surprising that Danone decided to withdraw its immune health claim petition for Actimel in 2010 rather than face the risk of rejection.

What all this means is that if your science is not already well-advanced in immunity and you cannot deliver a “feel the benefit” advantage supported by data that will satisfy vigilant regulators, you must:

a) accept that you are making a long-term, multi-million dollar investment in establishing the science, or

b) stop and do something else, orc) partner with other companies if you are

looking at a widely available material, to share the investment and risk.

Regulatory uncertainty remains a big headache for advancing the immune health benefit, but so too does the fact that, with the exception of Actimel and Gefilus, marketers have yet to work out an effective brand and communication strategy for immunity.

CLINICALLY-PROVEN IMMUNITY FROM JUICE & DAIRY

Gefilus and LGG: One of the pioneers in immune health is innovative Finnish dairy company Valio, which has spent the past 20 years turning its probiotic strain LGG into a major worldwide success. Since 1987 Valio has held worldwide commercial rights for strain Lactobacillus rhamnosus GG ATCC 53103, better known as Lactobacillus GG or LGG.

Valio launched the first LGG-based dairy product in its domestic market in 1990, called Gefilus. Since then the Gefilus brand has grown and grown and has been extended to a wide range of products for almost every dairy consumption occasion, such that per capita consumption of Gefilus in Finland is over 6kg – arguably the highest per capita consumption of probiotic products in the world.

Gefilus products carry an immune health claim, which translates as a “strong dose of immunity”. LGG’s claim will be reviewed by the European health claim regulator in 2011, but with 518 clinical studies, it would be surprising if even European regulators can find fault.

Valio has successfully commercialised LGG globally – it can be found in dairy products in 35 countries, including some of the most successful probiotic brands, such as Emmi Aktifit in Switzerland and Campina’s Vifit in the Netherlands, the Unimilk brand in Russia, the Parmalat Vaalis brand in Australia (that country’s biggest probiotic brand), as well as in supplements in 15 countries.

Valio launched Gefilus probiotic juice in Finland in 1997. Delivering an effective immune benefit, by 2010 Gefilus juice had taken an impressive 32% share of Finland’s chilled juice market, becoming the country’s biggest chilled juice brand. When you consider that Finland has a population of just 5 million, you can see that if Finnish per capita consumption of Gefilus Juice was translated pro rata into a larger country, such as the US, it would be a $800 million (€600 million) annual-sales brand.

Gefilus juice, which is also now set for a global roll-out, also illustrates the extent to which fruit is becoming a key carrier for health benefits (see Key Trend 4).


Launched in mid-2009, each 250ml glass of Oasis Health Break provides two servings of fruit and 100 mg of Wellmune WGP, from Biothera. Fruit juice is a logical format for delivering an immume health benefi t.


Bones and movement may seem a strange team, but they’re a pairing already made by the world’s most successful bone health brand, the Asian-based dairy brand Anlene, in response to consumer insight. It’s a more relevant description than either “bone health” or “joint health”, neither of which by itself captures the niche opportunity that is emerging.

For science-based companies bones and movement has many attractions:

• It’s an area where it is possible to deliver a “feel the benefit” promise, one of the most compelling marketing messages (see Key Trend 3).

• It is also an opportunity for anyone whose technology enables them to deliver a concentrated dose – as Anlene already does very effectively in bone health and Elations does in joint health.

• It’s an area where beverages can hope to provide the same benefits as pills but in a more convenient and palatable form.

• And it’s set for growth as populations around the world age – even in Asia, 25% of the population is over the age of 50. The market for products that enable people to maintain movement and independence – by protecting their bones and joints – is growing. Worldwide sales of pills for joint health alone – usually based on a combination of glucosamine and chondroitin – are more than $2 billion (€1.5 billion) already, with $800 million (€611 million) of that in the US alone.

Although joint health is a market dominated by pills, in America beverage brands are challenging that dominance by providing scientifically-proven joint health ingredients in a more convenient and better-tasting form. Joint Juice and Elations were the pioneers in this new segment that’s growing in double digits and moving beyond the embryonic phase.

Joint Juice was developed in 2001 by an orthopedic surgeon, as a vehicle for glucosamine. The conviction of the company’s founders was that consumers would rather drink such supplements than take them in pill form. Many people don’t like to swallow pills, or find it difficult, and many joint health pills need to be taken several times a day to provide an effective dose – defined by the US government’s National Institutes of Health, whose research found that dosages of 1500mg of glucosamine and 1200mg of chondroitin significantly relieved joint pain in those who suffered at least moderate levels of it.

To an extent the founders of Joint Juice were right – the beverage format accounts for more than 15% of the American joint health supplement business overall,

10 Key Trends 2011 Bones and movement

SUMMARY

• Scope for niche brands: For companies willing to provide the right marketing support for a product that can deliver an effective dose in a clinically-proven, ultra-convenient, premium-priced, niche, delicious-tasting form, and willing to grow the brand slowly, there is scope for niche brands with a bone-joint-movement health benefit platform.

• Beverages growing: Although joint health is a market dominated by pills, in America beverage brands are challenging that dominance with convenience and better taste. Beverages are enjoying double digit growth.

• Glucosamine – opportunities beyond Europe: Beverages based on glucosamine cannot now be marketed in Europe because of health claims regulations but the idea has potential in the rest of the world.

• Anlene leads the way: Fonterra’s Anlene remains the pioneer in the area of differentiated, premium bone health dairy brands.

• Concentrated dose: the pioneering products both for bone and joint health show the power of providing a concentrated and effective dose of the active ingredient.

• New niche in kids’ nutrition: the increasingly compelling evidence about bone formation in the years 9-13 opens a new niche for concentrated dose products for the most health-conscious mothers (see Micro-Trend 2).

Bones and movementKey Trend 10:


a steadily-growing market in which retail sales of pills are valued at $900 million (€687 million) in 2010. In fact sales of pills actually declined slightly in 2010 – all of the joint health market’s growth was in beverages.

Elations, the rival brand in the US market, expected to reach an annualized sales rate of about $55 million (€37 million) by the end of 2009 and is on a path to reach $85 million to $100 million (€57 million - €67 million) in 2010. In 2008, Elations’ sales were just $15 million (€10 million). Elations’ advantage, according to VP of marketing Mike Burton, is that: “Boomers don’t like to take pills – that’s something that always has been associated with getting old and sick, and they don’t want to feel old or sick, especially when they’re only in their 40s and 50s. They view themselves as much more active and able to continue with their lives than people of their age a few generations ago, and a beverage fits better into their overall lifestyle.”

While beverages based on glucosamine cannot now be marketed in Europe – where the health claim regulator (EFSA) in 2009 rejected claims that consuming glucosamine can help maintain your joint health – it is an idea with potential in the rest of the world, as the developing success in the US is showing.

Even European regulators, however, cannot object to a dairy product that is clinically proven to maintain bone health.

Marketing a high-calcium milk is one of the most difficult things a marketer can try to do. There’s no technical advantage – any competitor can launch an identical product – and many consumers believe that regular milk is already high in calcium. Moreover, the benefit – improved bone health – is not one that the customer can see or feel (see Key Trend 3). That one brand can overcome all these obstacles so successfully – and all at a premium price – is the result not only of having a clinically-proven product that actually works, but more importantly a sophisticated, focused, long-term consumer communication effort backed by significant marketing funds.

The brand is Fonterra Brands’ Anlene, the world’s biggest clinically proven bone-health dairy brand, with annual retail sales in Asia in excess of $300 million (€200 million) and an average 75% share of the high-calcium milk market – despite

selling at a 100% price premium to regular milk. Anlene is a low/no-fat calcium-fortified milk sold

primarily as a powder but also as a yoghurt and in ready-to-drink formats. Two 250ml servings provide 100% of the RDI of calcium and the product is also fortified with vitamin D3, magnesium and zinc, which are important in bone formation.

One aspect that has made Anlene stand out is the way the brand has always worked to establish the benefit in the mind of the consumer. Since the 1990s the brand has provided millions of people with bone health scans through the Anlene Bone Health Check – consumer education teams who visit clinics, supermarkets and shopping malls where they set up bone scanning machines and offer free bone scans to passers-by.

The Anlene Bone Health Check, already a massive commitment to consumer communication, has been supplemented by The Anlene Movement, which built on the insights from consumer research that for consumers the benefit of bone health is mobility.

The brand is focused on a core target of women aged over 40, to whom bone health is very relevant.

Anlene has been successfully extended to a concentrated “daily dose” format (Key Trend 7) that provides a dose of 500mg of calcium per 110ml pack. A super-premium product, it has nevertheless been successful across Asia.

Interestingly, despite the huge belief in the dairy industry in the importance of marketing the bone health benefits of milk, no-one has yet succeeded in creating differentiated, premium bone health dairy brands. Anlene remains the pioneer in this area, in a unique position, just as Kellogg Special K is in weight management, and look closely at its strategy and you will see that although it stands on a very different benefit platform its strategy has much in common with that of Special K.

In the area of movement and bone health there are also many common elements of strategy between the two pioneering brands, Anlene and Elations. These include:

• A benefit you can feel or measure: randomized, double-blind clinical trials that enable the brand to claim a tangible benefit.

• Focused consumer target: Elations began as a brand meant broadly for those with osteoarthritis pain, but nowadays targets older women – in America, at least, the condition is split about two-thirds to one-third between women and men. In Asia Anlene targets women over the age of 40.

• Guaranteed dose of the effective ingredient.• Convenience and taste.

Finally, it’s worth highlighting that bone health provides the opportunity for a new niche in kids’ nutrition.



The increasingly compelling evidence about the extent to which the years 9-13 are the most important for bone formation among girls (see Micro-Trend 2) is leading public health experts to propose a significant increase in the RDI for calcium for this age-group. However, not all girls of that age will be willing to consume enough dairy to meet their requirements (and in fact teenage girls are a group well-known for not meeting their calcium RDIs) so an opportunity is presenting itself for a concentrated dose product, rather like Anlene Concentrate, which health-conscious mothers can give to daughters who aren’t willing to consume large quantities of dairy. It’s a concept that would be particularly relevant in Asian markets, where dairy consumption is a taste challenge for many consumers.

RULES FOR SUCCESS IN BONES AND MOVEMENT

1. Technology that works. Your product must be clinically proven.

2. If the product doesn’t enable the consumer to “feel the difference” quickly, as Elations does, then you must “show them the dif-ferences”, as Anlene does.

3. You are not marketing bone health, you are marketing a healthy lifestyle, ease of movement and activity.

4. No brand can succeed without a significant and long-term commitment (see Anlene and Elations) to investment in marketing and consumer education.

5. Packaging innovation creates convenience and a point of difference and helps secure premium pricing.

Spain: Danone’s Densia is one of the few brand to have taken followed the lead of Anlene and offer a bone health benefi t. It achieved €16 million ($20 million) in retail sales in its fi rst year on the market in Spain. The Densia package carries a graphic showing a spine, the brand, and prominently carries the claim: Helps you to maintain your bone density (In Spanish: Ayuda a mantener tu densidad Osea).


Anlene Concentrate – an extension of the Anlene brand, Asia’s most-successful high-calcium milk, Anlene provides a concentrated dose of 500mg of calcium per 110ml pack.

Anlene focuses on demonstrating a tangible, clinically-proven bone health benefi t.


Demand for high-quality sources of protein is set to grow significantly in the years ahead. The most health-conscious consumers are becoming more aware of the benefits of protein in the diet, while producers of protein, and in particular the dairy industry with its huge annual output of whey proteins, are working hard to find ways to take protein out of the body-builder and elite athlete niche and into wider markets.

At the moment the two most significant market opportunities are:

Weight management. Protein’s image as a valuable part of a diet that helps people manage their weight has received several boosts in recent years, most recently in November 2010 following the publication in the New England Journal of Medicine of the results of the world’s largest diet study (see Key Trend 6).

The large-scale randomised study, called Diogenes, investigated the optimum diet composition for preventing and treating obesity.

The researchers found that high-protein, low-glycemic index (GI) diets were the most effective for weight management.

The researchers favour diets with 25% of calories from high-quality, low-fat protein sources – a result which perfectly favours quality proteins, such as whey.

Boomers’ muscle strength and independence. Maintaining muscle strength and independence is a marketer’s way of saying “fi ghting sarcopenia”. Sarcopenia – or muscle wastage – is a condition that affects everybody to a greater or lesser extent as they age. It’s a worry because it impacts on a person’s strength, which can put someone at a greater risk of having a fall and breaking a bone. With people increasingly living for longer it is a health problem that threatens to reach epidemic proportions. The ageing of the boomers, the oldest of whom are now in their sixties, and their desire

to maintain their independence and well-being will likely see them in old age, as at other stages of their lives, become a signifi cant and high-value niche market for high quality protein products.

Sarcopenia affects everyone. Although it is a condition caused by several factors, including a lack of exercise, there is general agreement among experts that sarcopenia can be aggravated by a low intake of dietary protein. Elderly people have a much higher need for protein because they’re getting increased muscle

SUMMARY• Opportunities in weight management and muscle wasting: Demand for high-quality sources of protein is set to grow

significantly in the years ahead; the biggest opportunities lie in protein products targeting weight management and sarcopenia (muscle wasting). The latter is an issue which affects everyone past the age of 60 and boomers can be expected to create new niches for products that help maintain their muscle strength and therefore their activity levels and independence.

• Still to find the right strategy: The industry has not yet found an executable and successful product and marketing strategy – a key factor in keeping protein (for now) as a Micro-Trend.

• Format key to success: Protein needs to be delivered in formats that are credible to consumers. It makes sense as a meal centre, as the success of Quorn mycoprotein shows. Cookies is a format that’s been a hit with elderly consumers. In beverages, protein’s natural partner is a dairy drink, particularly one offering a “concentrated dose”. However, products that combine protein with water have not worked and other combinations might also be challenging.

ProteinMicro-Trend 1:

Micro-Trends 2011 Protein

The efforts of breakfast cereal brands such as Kellogg-owned Kashi are raising consumer awareness that protein can come in many forms – although few are motivated by its presence in cereal.


wastage, so it’s important for them to eat more protein as a result. But your ability to assimilate protein shrinks markedly after the age of 50. Someone in their 20s, if they eat whey protein or beef protein, will get as much benefi t from either. Someone in their 60s will get almost 100% of the protein from whey protein, because it’s easily absorbed. But they’ll probably get only about 60% of the benefi t of eating the protein from beef.

FOOD MATRIX AND PRODUCT FORMAT KEY FOR CREDIBILITYThe challenge to industry is to figure out in what categories and in what product formats protein can be successful and credible, and how its benefits can be marketed. At the moment the industry is struggling with this challenge and has not yet found an executable and successful product and marketing strategy – a key factor in keeping protein (for now) as a Micro-Trend.

Protein needs to be delivered in formats that are credible to consumers – and if your product format is a new and unfamiliar source of protein, then you need to be willing to invest significant sums in slowly and patiently building that credibility.

Meal centres and soups. Protein is one of the few ingredients which makes sense to consumers in meals, as a significant part of a meal. This focus on meal-centres is one of the key reasons for the success of one of the industry’s greatest innovations of the last 50 years, the “fifth protein”, marketed to consumers under the brand name Quorn.

Quorn was created back in the late 1960s when it was widely believed that the 21st century would witness a protein shortage. UK-based RHM food group successfully isolated an organism from soil – Fusarium sp. A3/5 – which could be processed into an edible protein, called mycoprotein. At the same time chemical giant ICI (today known as AstraZeneca) developed a

fermentation technology to produce protein. The two companies joined forces to create Quorn – a totally new type of protein, not taken from an animal, but fermented in a factory. Although mycoprotein is from a natural source, the fact that it had no history of human consumption meant that it had to go through a rigorous process of safety evaluation before regulators finally granted permission for its use in foods – in 1985, some 18 years after development began.

But only now is that protein shortage forecast almost 50 years ago becoming a reality and its effect has been to push up the prices of traditional proteins, such as beef, lamb, pork, chicken and fish. The growing middle class in emerging countries from China to Brazil is demanding a richer protein diet (see Chart 13), straining the industry’s supply.

In 2010 global meat prices hit a 20-year high as robust demand from emerging countries has coincided with a drop in production by exporters such as the US and Australia. The UN Food and Agriculture Organisation’s index of meat prices in 2010 hit its highest level since 1990, up 16% over the past year, after beef prices climbed to a two-year high and the cost of pork and poultry prices rose.

Quorn has meanwhile grown since the early 1990s to become a profitable brand on sale in 10 countries with retail sales in excess of $269 million (€194 million). It’s a perfect example of the innovation that’s possible with

high quality proteins. Quorn boasts the perfect nutritional

profi le for today’s consumer – it contains no allergens, it’s low in fat and high in fi bre, is an easily digestible protein that’s on a par with meat in terms of essential amino acid content – and it’s supported by a growing body of evidence that regular consumption can lower LDL cholesterol and promote a sense of satiety.

A signifi cant part of Quorn’s success stems from NPD efforts that have increasingly presented Quorn in forms, such as ready meals, which are familiar and acceptable to consumers. Today the range encompasses over 32 items, both chilled and frozen, such as deli meats in a range of meat fl avours and ready meals ranging

The Quorn range extends to over 35 convenient products, marketed in 10 countries.


Chart 13: Global meat demand on the increaseBy region (Million tonnes)


from spaghetti bolognese to red Thai curry – as well as the more traditional meat-free options of sausages, burgers, mince and nuggets.

Cookies. It may seem unlikely, but when serial food entrepreneur Mathew Richardson of UK-based Applied Nutritional Research turned his attention to the growing problem of sarcopenia in the elderly, he found that soft cookies were one of the formats most suited to the elderly market. The kinds of products currently on the market don’t appeal to older consumers, says Richardson. “Elderly people don’t like drinking milkshakes or eating chewy bar-type things,” says Richardson. “They just don’t eat them. But they’ll always have a biscuit with a cup of tea.” Data from market analyst Kantar Worldpanel supports Richardson’s assertion that the elderly are heavy consumers of biscuits. Its research shows that women aged over 65 buy biscuits an average of 48 times a year; for women aged 28-35 the frequency of purchase is 34 times a year.

Applied Nutritional Research’s first product is a 50% protein soft cookie called Probake50, currently undergoing trials at the world-leading Institute of Ageing at the University of Newcastle.

Beverages. Selecting the right beverage format for protein is not proving easy. Taste – protein adds a certain astringency in beverages – is one of the biggest challenges. Dairy protein in a dairy drink is a logical connection, and while such a product might not have much appeal to the elderly market, it is the kind of product that would hold appeal for health-

conscious but not necessarily body-building males aged 18-25 with a message about muscle strength. One innovative approach which might get some traction is to focus on the most knowledgeable consumers with a “concentrated dose” (see Key Trend 7) product. This is the approach being taken by start-up Provita, whose 3oz (90ml) drink delivers 42g of medical-grade protein.

What is clear is that there are many beverage formats that don’t represent a happy marriage with protein. Water is one of the best examples of why it’s important that the ingredient and the format have some logical fit in the mind of the consumer. Kellogg’s launched a protein-fortified water as an extension of its very successful Special K weight management brand, while Fonterra, the dairy giant, launched a protein and fibre water as a way of creating a new market for its whey proteins. Both products bombed. The benefit of protein is a new one for water and one of the key lessons of the last 15 years is that consumers are slow to accept new benefits from established categories. Moreover protein in water runs against consumer logic about the purity of water.

Bars and breakfast cereals. Taste and texture – high-protein bars have a well-deserved reputation for being dry and unappealing – is a restraint in these categories too. Kellogg with its Special K weight management brand (see Key Trend 5) has made the most conspicuous efforts in high-protein cereals, Special K Protein Plus delivering 10g per 30g serve. But the cereal has stagnated and sales today account for only 5% of total Special K cereal sales in the US. Special K high protein bars – whose portability makes them more appealing to the gym-goers – have performed better, US sales rising 27% in 2010. Overall, however, protein has yet to become acceptable in cereals to all but a niche of consumers.

To address the sarcopenia opportunity, product formats need to be acceptable to the target consumer. Older consumers are cookie consumers, not smoothie consumers.



At first glance it hardly seems necessary to “reinvent dairy”. Dairy products are the largest part of the functional foods market and have seized the high ground as the most credible carrier for delivering added health benefits.

Dairy also benefits from a positive, “naturally healthy” halo in the minds of most people in most dairy-consuming countries. And its health halo is helping demand grow in countries with traditionally low per capita dairy consumption, thanks to the rising middle classes of Asia and South America.

Now a number of factors are converging – ranging from dairy’s possible role in weight management, sports recovery, and as a contributor of a range of increasingly well-understood key nutrients intrinsically present in dairy – that together are adding to dairy’s already positive image.

The most controversial and possibly far-reaching factor in the reinvention is the dairy industry’s new-found willingness – thanks to developments in nutrition science – to challenge the long-held belief that saturated dairy fats are one of the worst things a human can consume.

SAT FAT FIGHT

“A lot of positive research has emerged recently that is beginning to change perceptions in the health and science community about dairy foods and saturated fats,” said Gregory Miller, executive vice president of research, regulatory and scientific affairs for

Dairy Management, a not-for-profit marketing arm of the US dairy industry.

And a growing number of independent experts agree that dairy – particularly saturated fats – has been over-vilified.

Dairy is “much better perceived as being positive in health benefits than 10 or 20 years ago,” said Michael Zemel, a University of Kentucky professor

SUMMARY• Dairy demonization unfounded? New science suggests that dairy – particularly saturated fat in dairy – has been over-vilified

and it is now set to develop an (even) more favourable “health halo”. Evidence is emerging that it may even benefit heart health. This changing perception will gradually lead to more marketing and product development opportunities.

• Opportunities in sports recovery drinks: Dairies in the US are making the most of scientific research that suggests chocolate milk is an ideal sports recovery drink – better even than isotonic drinks like Gatorade.

• Teen girls’ bone health. There is increasing evidence about the extent to which the years 9-13 are the most important for bone formation among girls, creating an opportunity for products which health-conscious mothers can give to their daughters.

The reinvention of dairyMicro-Trend 2:

Micro-Trends 2011 Dairy


Micro-Trends 2011 Dairy

who is unaffiliated with any dairy interests and who leads research into the nutritional properties of dairy components. Professor Zemel’s research aims, in part, to understand what has made milk such a nutritional staple over the centuries.

“When the low-fat era hit us, dairy became an easy target,” he explains, “because many dairy foods have higher-than-recommended levels of fat. So, well, ‘Dairy must make you fat.’ That’s where the counterintuitive argument comes in.”

The swing back toward a more balanced view of dairy’s saturated fats has been a long time in the making and has reached a new pitch in 2010 as author Gary Taubes’ book Good Calories, Bad Calories – controversial, well-researched and well-argued – has brought to wider attention the science that challenges the demonisation of dairy fat. Unsurprisingly, given his message, he was a keynote speaker at the International Dairy Federation’s 2010 annual conference.

At the centre of a complex picture is the premise that dairy fats’ role in cardiovascular disease is not what many have assumed it to be. A recent review of research published in the American Journal of Clinical Nutrition1 looked at 17 studies and found no association between high intakes of either regular-fat or low-fat dairy products and increased risk of death from cardiovascular disease. There are even suggestions of a protective effect because certain nutrients in dairy have a beneficial impact on blood pressure.

Similar conclusions were drawn in another scientific review2 which concluded people who consumed milk had a low risk of cardiovascular disease compared to those who drank little or no milk.

Dairy Australia, the trade body for the Australian dairy industry, is one of the many national dairy organisations that has picked up this science and begun to communicate it to cardiologists and other health professionals with literature (see illustration).

It’s a development that will not be of immediate value to the producers of dairy products – there will continue to be strong resistance from many doctors, researchers and the media to the idea that dairy fats could be anything other than bad – but if the evidence continues to build, it represents a chance for dairy to further enhance its health halo, which in turn may lead to both more marketing and product development opportunities.

SPORTS RECOVERY REVIVAL

Another area which is developing is in relation to sports recovery. Once demonised by dietitians, chocolate milk drinks are fighting back. In the US, dairies are returning to marketing messages about the natural nutrient richness of milk, reformulating their chocolate milk drinks to be lower in fat and sugar and making the most of scientific research that suggests chocolate milk is an ideal sports recovery drink – better even than isotonic drinks like Gatorade.

The evidence is still early stage, but it includes (for example) a study published in Medicine and Science in Sports and Exercise which investigated the impact on lean muscle mass gain and fat loss among female resistance athletes of drinking a sports beverage and a skimmed milk drink. Women drinking milk gained more muscle mass and milk drinkers were the only ones to experience a reduction in fat mass after training.

Explaining the results, the authors said that the constituents responsible for the benefi cial effects on muscle gain and fat loss are protein, calcium and vitamin D, which is added to milk in the US. One possible explanation is that milk contains amino acids that help trigger muscle growth, but which are absent from carbohydrate drinks. One is leucine, found in signifi cant quantities in dairy protein, that has been shown to trigger protein synthesis at a molecular level. Similar results were found in a study of men published in the American Journal of Clinical Nutrition in 2007.

It hasn’t taken the dairy industry long to latch onto researchers’ findings that chocolate milk may make an ideal recovery drink. Shamrock Farms, for example, one of the largest family-owned dairies in the US, has responded by launching a product called Rockin’ Refuel, a protein-fortified, flavoured “recovery” milk and one of several new milk drinks for sports recovery.

In Europe, Swedish dairy Norrmejerier has already demonstrated the potential of milk as a sports recovery beverage. Its Gainomax Recovery brand is a high protein and high carb milk-based beverage intended as a recovery drink after training. Originally targeted only at elite sportspeople, Norrmejerier, a traditional dairy company, successfully widened the consumer target market and took it into supermarkets. Today Gainomax Recovery is the market leader in recovery drinks in Sweden.

BONE HEALTH AND VITAMIN D

The increasingly compelling evidence about the extent to which the years 9-13 are the most important for bone formation among girls is also leading public health experts to propose a significant increase in the RDI for calcium for this age-group, creating an opportunity for products which health-conscious mothers can give to their daughters (see Key Trend 10). Dairy is also seen as having potential as a carrier for vitamin D (see Micro-Trend 3).

REFERENCES1 Soedamah-Muthu et, al. (2010) ‘Milk and dairy consumption and incidence of cardiovascular diseases and all-cause mortality: dose-response meta-analysis of prospective cohort studies’, AJCN doi: 10.3945/ajcn.2010.29866 .

2 Elwood et al (2010) “The Consumption of Milk and Dairy Foods and the Incidence of Vascular Disease and Diabetes: An Overview of the Evidence” Lipids. Apr 16.


There’s a rising tide of appreciation globally for the apparently multiple beneficial effects of vitamin D and a growing body of good evidence in support of many of those effects – as exemplified by the fact that the European Food Safety Authority (EFSA) has made vitamin D the subject of one of its all-too-rare health claim approvals. The suggested wording is:

Vitamin D contributes to the normal function of the immune system and healthy inflammatory response.

From a regulator which has rejected 98% of health claim petitions put before it and which requires pharmaceutical standards of evidence, that’s praise indeed. As we explain in Key Trend 9, with regulatory scrutiny of immune health claims now at a high level, there are very few ingredients that can talk about immune health benefi ts with security. EFSA has suddenly propelled vitamin D into that class of ingredients. Although EFSA’s approval is for a dose as low as 50mg, which should be commonly available from the diet, it opens the door to new opportunities.

One of the leading American experts on vitamin D deficiency doesn’t foresee US regulators following the lead of EFSA and approving health claim language for vitamin D.

“I don’t see that on the horizon soon, even though the evidence is strong,” Professor Walter Willett, a renowned nutritionist at the Harvard School of Public

Health, who has spent several years crusading for ways to increase vitamin D consumption in most diets, told New Nutrition Business.

Some analysts held out hope that the FDA might soon consider calling for increased dosages of vitamin D because of the growing evidence of its benefits. “It will be a test case” for the agency in coming months, said Jack Calfee, resident scholar of the American Enterprise Institute, in Washington, D.C., and an observer of federal regulation.

Researchers have posited benefits from vitamin D in a long list of other areas, including prevention of cancer, heart disease, seasonal flu, depression, diabetes, neuromuscular function and osteoarthritis – not to mention its well-established benefits in conjunction with calcium in supporting bone density. Some researchers have even suggested a systematic lack of vitamin D in the modern diet.

Willett long has advocated an “urgent need” to increase the so-called Adequate Intake level of vitamin D to 1,000 international units a day for adults from the current standard, set by the U.S. government’s Institute of Medicine, of just 200 to 600 IU daily, a figure that rises with the age of the consumer.

Sunlight helps the body produce vitamin D at the rate of 15,000 IU or more in as little as 30 minutes of optimal sun exposure and it was formerly thought that in most parts of the world (with the exception of the

SUMMARY• Growing scientific support, more evidence of deficiency: Vitamin D is coming into an ever-stronger position – in short

supply in the diet and (in the winter months in particular) not available to many people from sunlight. At the same time science is growing in support of its benefits. Researchers have posited benefits from vitamin D in many areas, including heart disease, immune function, depression, diabetes, neuromuscular function and osteoarthritis – not to mention its well-established benefits in conjunction with calcium in supporting bone density.

• Health claim potential: The European Food Safety Authority (EFSA) has made vitamin D the subject of one of its all-too-rare health claim approvals, in relation to immune function – one of the areas where regulators’ demand for substantiation is becoming more exacting.

• Supplement sales soaring: Supplements have become a reliable and safe source of vitamin D augmentation and US sales of vitamin D supplements rocketed in 2009, rising 82%.

• Opportunity in Asia, Middle East, Europe: In particular, there’s an opportunity in Europe, the Middle East and Asia to create products which specifically offer benefits from vitamin D, as evidenced both by insufficiencies and by regulatory approval.

• Opportunity in “concentrated dose”: Innovation in packaging and marketing will be essential to make the most of the embryonic vitamin D opportunity. A Yakult or Actimel-type daily dose drink product, based on a signifi cant dose of vitamin D (perhaps 100% the RDV) as its active ingredient, will be the best route to effective differentiation and better margins. With vitamin D’s image as “the sunshine vitamin” it is easier for consumers to accept and relate to its benefi ts giving marketers a head-start. Vitamin D may yet become a much bigger opportunity than anyone has yet imagined they could be.

The rise of vitamin DMicro-Trend 3:

Micro-Trends 2011 Vitamin D


northernmost latitudes) people got adequate vitamin D from exposure to the sun. However, the reality now seems to be that vitamin D status is infl uenced by ethnicity and lifestyle. Researchers have found signifi cant defi ciencies among women who are darker-skinned, or veiled. And given that today most people work indoors on computers it isn’t surprising that inadequate vitamin D intake is more widespread than was once thought – even in the south of France, 35% of women have been found to have lower than adequate vitamin D status.

Supplements have become a reliable and safe source of vitamin D augmentation, most of them at the level of 400 IU. “We are making some progress” in boosting Vitamin D consumption in the US, Willett said, in part because “many multi-vitamin producers have increased the amounts [of Vitamin D] in their products.”

In fact, Vitamin D in supplements have become one of the fastest-growing nutrients on the market in America. Their popularity was helped along by the fact that famed TV talk-show host Oprah Winfrey recently told her viewers that adequate intake of vitamin D could be as much as five times current recommended levels.

Also catching the attention of many Americans was Dr. Timothy Johnson, the ABC TV network’s on-air physician, who mentioned research showing that diet-induced weight loss increases with higher intake of calcium and vitamin D.

As a result, US sales of vitamin D supplements rocketed in 2009, rising 82% to $430 million (€324.5 million), according to Nutrition Business Journal, making them the fastest-growing category in the entire US dietary supplement market. The segment contributed $190 million (€143 million) in new sales dollars and is expected to maintain its robust growth, as more healthcare practitioners and consumers understand the need for vitamin D supplementation and the science supporting its health benefits grows.

Foods naturally rich in vitamin D are scarce. Oily fish such as mackerel, salmon and sardines top the list and hence mandatory supplementation of some foods with vitamin D is common in some countries. In Canada, Finland and America, for example, all milk has long been fortified by government mandate, typically with 100 IU per 8oz (250ml) serving.

Lately in the US, there has been a surge of activity in foods and beverages that have added vitamin D, however. A recent example is Stur-D, an extension of the Vitaminwater brand, now owned by Coca-Cola. Introduced in October 2010, Stur-D is called “the very first enhanced water and juice beverage to include vitamin D and calcium.” Stur-D is flavoured with passion fruit, citrus and blue agave. Each 250ml serving contains 10% of the DRV for vitamin D and calcium.

At NNB we don’t believe that such products can make much of a difference to health and such a low dose of vitamin D is insufficient either to differentiate a product or substantiate a clear health benefit claim.

For the food industry the door is now open to two opportunities:

1. Investment behind the growing body of research that shows enhanced benefi ts from vitamin D at much higher levels, to enable a better understanding of what could be claimed and to generate better substantiation of claims.

2. The creation of branded foods that can make a claim in relation to calcium and bone health (see Key Trend 10) or immune function (and later perhaps other claims that science could substantiate).

In particular, there’s an opportunity in Europe, the Middle East and Asia to create products which specifi cally offer benefi ts from vitamin D. Across Asia and the Middle East, insuffi ciency of vitamin D is a real issue – in China, for example, 80% of teenage girls have been found to have insuffi cient vitamin D (Foo et al. Osteoporos Int 2009;20:417-25).

What’s more, as with many aspects of food and health, the need for this nutrient increases with age, presenting opportunities in relation to both women and the most health-motivated segment of the population, the over 50s, who are becoming a larger part of the population everywhere (see Chart 3).

Vitamin D is coming into an ever-stronger position – in short supply in the diet and (in the winter months in particular) not available to many people from sunlight. At the same time science is growing in support of its benefi ts.

The temptation, of course, is for dairy companies (for example) to fortify their standard milk lines with a little more vitamin D. The evidence of the last 15 years, however, is that such an approach will yield no additional volume and the consumer won’t pay any extra, so there will be no benefi t to the bottom line.

Innovation in packaging and marketing will be essential to make the most of the embryonic vitamin D opportunity. Better by far than a “regular” product with vitamin D would be a Yakult or Actimel-type daily dose drink product, based on a signifi cant dose of vitamin D (perhaps 100% of the RDV) as its active ingredient – research puts 10,000 IU a day as the safe upper limit, with new research indicating it may be even higher.

With vitamin D’s image as “the sunshine vitamin” it is easier for consumers to accept and relate to its benefi ts than many other food ingredients, giving marketers a head-start as well as a basis for communication around the “natural benefi ts” of the sunshine vitamin.

With differentiated packaging, a high and effective dose and good marketing execution, products high in vitamin D may yet become a much bigger opportunity than anyone has yet imagined they could be.

Micro-Trends 2011 Vitamin D


It might seem hard to believe that we can describe a market with total retail sales of over €1 billion ($1.3 billion) as a Micro-Trend – but it’s important never to be dazzled by flashy numbers. Data is, after all, useless without interpretation. That €1 billion is split between three brands – Unilever’s Pro.activ, Danone’s Danacol and Benecol – and across more than 30 countries. Compared to the market for digestive health, cholesterol-lowering is only one twentieth the size.

Moreover, even at €1 billion and with its recent rapid growth rates, the sterol-based cholesterol-lowering foods market is less than 10% the size of what was forecast 10 years ago.

The total is high but the individual brands are all niche. It’s a high-value, low-volume business, with a product such as Danacol retailing for around €3.50 ($4.70) per 4-pack in the leading market, Italy. That’s equivalent to €9.50 ($12.75) per litre – or a 300% premium over regular yoghurt. Typically for high-value markets it’s also a high profit margin business, and that’s what makes it attractive for the three main players.

It’s also a Euro-centric market. Cholesterol-lowering has made little headway in the US – which remains a fraction of the size of Europe, largely because of the failure of US dairy companies to deliver innovative products or effective marketing.

Even the broader heart health market merits only Micro-Trend status. It’s often cited as the second-largest part of the functional foods market after digestive health, but drill down into the sales of heart-health products and you’ll find that the largest percentage is made up of long-established products that later added heart health as an “all natural and intrinsic” benefit. Although the addition of the heart health message brings an increase in sales, it may not be very much or very long-lasting unless the brand scores highly on convenience and other factors.

Bearing in mind that the potential for growth is the measure of how we select our trends, growth opportunities are limited in heart health – it is now one of most common messages in the supermarket.

CEILING IN EUROPE

In Europe the cholesterol-lowering market has been driven by packaging innovation, specifically the daily dose format (see Key Trend 7); a heavy marketing

investment and the ageing of Europe’s population. All of these factors can be seen at work in Italy, where 20% of the population is already over the age of 65.

Unsurprisingly, Italy is one of Europe’s biggest and most dynamic cholesterol-lowering markets and Danacol has – we estimate – almost a third of its sales in Italy alone, earning Danone more than €80 million ($106 million).

Consumption of cholesterol-lowering products skews to people aged 55-74 – the age at which elevated cholesterol becomes an issue. Respected consumer research group Health Focus International describes people motivated by cholesterol-lowering as among its “healers” segment, accounting for at best 9%-12% of the population, depending on the country.

The cholesterol-lowering market will never attract truly ‘young’ consumers. Even reaching down to the 40-45 demographic has proven to be tough. This limits the scope for further growth in Europe, where we think the market is reaching the ceiling of its healthy niche.

Growth will be in Asia and South America. Dairy will remain the dominant format – it’s difficult to formulate sterols into products such as juice without taste issues so dairy fat remains the ideal carrier. Non-dairy offerings will also exist as a niche within a niche – Benecol is one of a number of brands to have tried a soy-based variant, without much success.

NEW NICHES

Looking beyond sterols and cholesterol-lowering, other areas of cardiovascular health are the focus for the creation of new niches. One example is Sirco juice (based not on sterols but on a tomato extract), another brand hoping to gain in Europe from the confluence of regulatory approval – its claim is, like those for sterol/stanol-based products, one of the few signed off by regulators – and an ageing population. Marketed with a claim that it helps “maintain a healthy blood flow and benefits circulation”, Sirco has also found that its customers are overwhelmingly in their 60s and 70s and form a loyal hardcore with a high repeat purchase pattern. Markets like these are potentially high value niches for companies whose strategies enable them to play in niches.

SUMMARY

• Demographics favourable: Markets for cholesterol lowering foods are much smaller than forecast 10 years ago, but the rapid ageing of the population (see Chart 3) is now causing increases in sales.

• Boost in Europe: In Europe in particular, approval for a cholesterol-lowering health claim, together with an ageing population, has boosted sales of these foods – in Italy, for example, Danone’s Danacol cholesterol-lowering brand enjoyed a 28.8% increase in value to August 2009, even while the Italian economy contracted by 6%.

Ageing population, good science lift cholesterol-lowering Micro-Trend 4:

Micro-Trends 2011 Cholesterol-lowering


Comparing the strategies of two very different companies (on the surface, at least) offers a shorthand way of understanding all the key trends that drive the children’s nutrition market. One is global dairy giant Danone, the other entrepreneurial kids’ food start-up Ella’s Kitchen. Although different in size and focus, they are both pursuing very similar strategies, based on similar insights about what motivates mothers and children under the age of 10.

Danone: in 2010 it dropped omega-3 from its kids’ yoghurt brand in Canada, after four years of trying to make the concept work beyond an ultra-niche. It is instead focusing on a “natural” and free-from-what’s-bad message, emphasizing that its Danimals and Dan-o-nino brands contain no artificial colours, flavours or high-fructose corn syrup.

“We talked to moms about why they had been turning away from kids’ yoghurt products and what they were looking for, and we found that they wanted healthier products that didn’t have what they called ‘negative’ or ‘bad’ ingredients,” said a Danone spokesperson.

Danone also dropped an immune-boosting probiotic from one of its product to focus instead on making “something kids want to eat” – meaning products that perform on taste and kid-appeal – adding that mothers believed that no matter what health benefits you might add they “know that, overall, a product can’t be healthy for their kids unless they’re willing to eat it”.

The company is also focused on packaging innovation, with the introduction of squeezable tubes of yoghurt so children can enjoy yoghurt without a spoon. These followed the successful launch in 2009 of a crushable cup – a yoghurt pot which gradually collapses, allowing kids to eat yoghurt like ice-cream from a cone. The crush-cup already accounts for 20% of Danone’s US kids’ product sales.

Ella’s Kitchen. UK-based startup company Ella’s Kitchen is the fastest-growing food brand in the UK. With its products in mainstream supermarkets in Scandinavia, too, the company hit total retail sales of around £25 million ($37.6 million/€27.8 million) in 2009, its third year in business, and is thought to have passed £50 million ($79 million/€59 million) in 2010.

The company’s approach is simple: all products

SUMMARY

The trends in the kids market are now firmly established and show little sign of change anytime soon:

1. Natural and free-from “bad ingredients”. “Natural” is nothing to do with science and everything to do with consumer beliefs.

2. Convenient – minimum preparation required by the parent.

3. My child will eat it – beat the picky eater

4. Tastes so good the child will ask for it again and again. Make parents’ lives easier – design your product so that children want to eat it and will ask for it. Pay attention to taste first so healthy is not a chore.

5. Innovative packaging

The kids market – where natural and convenient beat fortification

Micro-Trend 5:

Micro-Trends 2011 The kids market

“No artifi cial colours or fl avours…covers what mom wants and what she wants to give her child. As a minimum you have to deliver that.” Free-from what’s bad is the basic standard for any kids’ food to be credible.


Micro-Trends 2011 The kids market

are organic and 100% natural without any artificial additives or preservatives.

At the core of Ella’s success is a range of flexible pouch-packed products designed for children aged three to 10. Suitable for ambient storage, they are designed for consumption on-the-go as well as in the home; no spoon is needed because they can be squeezed straight into the child’s mouth, and a resealable screw-on lid means they can be re-used later.

From concept to launch, product development involves consulting with children, to be sure that kids find them fun and tasty. According to founder Paul Lindley: “A core part of our brand and business is involving children in our product development and marketing, in a way that extends all the way down to babies. It might be as simple as reaching out and grabbing a colourful pack, or playing with the tactile nature of our pouches. For the slightly older babies it might be getting involved in the food process – squeezing a sauce onto pasta or feeding themselves with pouches. We see children as decision makers in terms of purchasing and consumption and we’ve built our brand around that.”

Ella’s Kitchen bucked the recent trend of sales of organic products suffering in the recession. Lindley says this is because people feel differently about children’s food than they do about their own.

Making it more likely that a child will choose to consume their products is key to Danone and Ella’s strategies, for the simple reason that no matter how healthy, convenient, or low-priced your product is, no matter how high-quality the ingredients or how “free-from” and “no added bad things” its credentials are, if a mother has to force her children to eat it, it’s just not worth the effort. Making a health-conscious mother’s life easier is one of the most persuasive ways of earning her loyalty and repeat purchase – according to an ACNielsen study, approximately 34% of mothers think that their children are “picky about food”.

Five years ago, there were a host of companies hoping that adding ingredients with health benefits would enable them to conquer the kids’ food category.

The brain health benefits of omega-3, for example, were held up by ingredient suppliers as an opportunity to create a point of difference that “every mother” would respond to. But now we know that natural beats omega-3 every time.

US branding agency Just Kids, which specializes in products for children, describes a fortification-focused strategy as “Sin number six” of the many things that companies can do wrong in trying to develop a kid-specific food: “All too often, added ingredients only add clutter and confusion to natural products—and seldom add sales revenues. Be careful and thoughtful, always looking through to the consumer benefit, before fooling with Mother Nature.”

DAIRY’S ADVANTAGES

One of the few categories that can fortify and still be “natural” is dairy. One of dairy’s big advantages is the benefit of calcium, and mothers accept added calcium in dairy foods because it’s perceived as a “concentrated dose” of something they expect to be naturally present anyway. Hence Danone is strongly promoting the high calcium content (as well as the convenience advantages) of its Dan-o-nino brands in its current US market strategy: “Mothers are very interested because they’re focused on the calcium content of the product – two times that of milk – and their children’s need for calcium during this time frame….They also like the protein [three grams of protein – 19% of the recommended daily value] and Vitamin D content. There’s no other snack out there that fulfills this need.”

Even in Canada, where omega-3 products are allowed to carry a health claim, omega-3 fortifi ed dairy products have failed to make any headway. Danone recently dropped omega-3 from the formulation of its leading kids dairy brand.

Innovative packaging and good fl avours, coupled with a message that its products are organic and 100% natural, without any artifi cal additives, has propelled Ella’s Kitchen to $79 million in sales, just fi ve years after the brand was fi rst launched.


The story of probiotics has been dominated by dairy and digestive health (Key Trend 1) – and dairy-probiotic-digestive health has become a big success story. However, as Key Trend 1 shows, there’s usually only room in each market for one or two significant probiotic dairy brands; meaningful growth is only possible for brands that are already established, with little room for new entrants. This market is in most countries a “done deal” and so anyone looking to do something with probiotics needs to be looking at entirely new areas.

Smaller but still important is the dairy-probiotic-immunity combination (see Key Trend 9), where Danone’s Actimel brand has carved a position as the world’s biggest immunity brand and Valio’s LGG strain of immune-boosting bacteria has created a global position and is used in 32 brands around the world for its immunity benefits.

The biggest growth opportunity for probiotics for digestion and immunity lies in juice drinks, where there are already very successful brands for digestion (ProViva, see Key Trend 1) and for immunity (Gefilus, see Key Trend 9), both of which have achieved significant sales over the last 15 years and both of which are beginning their global roll-out. Nevertheless, based on the evidence, we believe that probiotic juice will never be as big as probiotic dairy – perhaps only a tenth of the size.

When you step beyond the “big niche” of probiotic juice, the opportunities for probiotics in foods and beverages becomes a series of ever-smaller niches and many might be better-served by probiotics supplements.

One example of the difficulty – perhaps impossibility – of taking probiotics beyond dairy and juice is the recent craze for adding probiotics to solid food forms, such as bars, breakfast cereals, pizza and other formats. Particularly prevalent in the US, it is one of the biggest strategy mis-steps of recent times and, as we have said before, was never more than a small niche opportunity.

The idea of probiotic breakfast cereals or bread runs counter to consumer logic, and probiotic chocolate runs even more strongly against the indulgent, health-from-natural-antioxidants positioning that chocolate enjoys in the mind of the consumer.

Probiotic food forms have been attempted time and again – mostly in Europe and almost all have

disappeared. The development of the US market has followed the same arc.

Dry-form probiotic foods will, of course, find some devoted fans – in today’s increasingly fragmented market for health, everything does – but they will be marginal brands.

GUM HOLDS PROMISE

After juice, the next biggest format for probiotics will be gum, for oral health. The gum category “owns” the benefit of oral health – stronger teeth, whiter teeth, breath-freshening, caries-fighting are all messages that consumers associate with gum. Probiotics have been developed which have benefits in areas such as throat protection and fighting oral bacteria and for these gum is a logical carrier.

One example is from a company called BLIS Technologies, which markets an anti-sore throat probiotic called Throat Guard, based on its K12 Streptococcus salivarius probiotic, as well as a strain called M18, which is said to help prevent tooth decay. M18 can be found in children’s chewable dental supplements, such as Animal Parade Tooth Fairy from Nature’s Plus.

Gum also has the advantage of being able to deliver a “concentrated dose” (see Key Trend 7) of the active probiotic without taste issues. This may also make gum a credible carrier for probiotics with immune benefi ts (Key Trend 9). Gum with probiotics could reach $100 million (€75 million) in retail sales (in the US and Europe together) within the next fi ve years – but not more than that.

A FUTURE OF SMALL NICHES

The future of probiotics is as a series of condition-specific niches, some served better by supplements than foods. A few ultra-niche dairy or juice drinks will be the delivery mechanisms for medicinal benefits such as fighting childhood eczema, marketed to very targeted and specific groups.

SUMMARY• New formats: Besides their obvious application in products for digestive health and immunity, which we have covered elsewhere

in this report, probiotics have promise in a number of embryonic new formats, targeting new consumer groups and new conditions, such as dental health. However, many of these areas will be small, condition-specifi c niches.

• Gum a credible carrier: probiotic gums for oral health have promise and could reach $100 million in the next fi ve years.

Probiotics’ new niches Micro-Trend 6:

Micro-Trends 2011 Probiotics’ new niches


According to Health Focus International research in 32 countries, stress has become the number one health concern which people say affects them personally – with sleep problems a close second (see Chart 1). If sleeplessness and stress are such big consumer concerns, why then isn’t there a huge market established for products that address them, as there is for the other top consumer concerns, digestive health and energy?

The reason is that ingredient technology is not yet at the point where ingredients can be formulated into products which are effective (“feel the benefit” – Key Trend 3 – is an essential element of strategy in this market), safe, produce good-tasting products and deliver claims that will pass regulatory scrutiny. Nor has anyone yet figured out a winning strategy and winning product format. Solving these two challenges is key to creating new categories – as Red Bull did for energy drinks, 5-Hour Energy did for energy shots (see Key Trend 2), Danone Activia and Fiber One have done for digestive health (see Key Trend 1), and Special K has done in weight management (see Key Trend 5).

Many companies are developing toeholds in the area:

Nestlé in 2006 announced a $4 million (€2.7 million) a year, five-year investment into researching the relationship between nutrition and the brain.Unilever’s Lipton tea brand was the first, and so far the only, brand to communicate to consumers

that tea has an intrinsic effect that helps you feel relaxed but alert. Japanese consumers were first to learn about Lipton’s benefits in 2005 when Unilever began using a slogan that translates as Activates your brain & turns on the light bulb in your head. Since then the company has rolled out communications about the mental benefits of its tea to Australia and elsewhere. Communications concentrate on one intrinsic component of tea, an amino acid called L-theanine, found naturally only in green, black and oolong teas. Clinical studies have established that 50mg of L-theanine (found in two to three cups of tea) causes alpha brain waves – associated with relaxation – to increase in frequency and beta brain waves – associated with tension, anxiety, and irritation – to decrease.

Confectionery giant Ezaki Glico, in Japan, has had perhaps the single biggest success with its stress-reducing “Mental Balance Chocolate GABA”, a chocolate product

which delivers a much larger dose of gamma-aminobutyric acid (GABA) – the chief inhibitory neurotransmitter in the central nervous system – than most chocolate (chocolate naturally has a GABA content). First-year sales (in 2005) reached $50 million (€34 million), exceeding expectations, but the brand has since plateaued.

These companies aside, at the moment the area is largely the

SUMMARY

• Sleeplessness and stress are major problems for consumers. There’s a consumer need for products that help with stress and sleeplessness. However, the market for such products remains a Micro-Trend, its development hampered by the perceived lack of ingredients that can deliver an effective benefit and also meet the normal criteria for inclusion in a food or beverage, coupled with uncertainty about how to communicate a sleep or stress benefit and not fall foul of health claim regulators.

• The realm of start-ups: In the US, relaxation drinks offering either stress or sleep benefits have become a legitimate niche of some 350 start-up brands, worth about $10 million (€7.9 million).

• A beverage opportunity: The category is currently dominated by beverages, since they offer more scope in terms of ingredients formulation, flavour and convenience. Given how beverages also dominate energy it’s likely that they will also be the major part of any future stress/relaxation market.

• A dairy opportunity: In many countries a “milky drink” at bedtime is believed to aid sleep, and already a few dairy companies have tried to capitalize on this, marketing milks naturally high in melatonin (a natural aid to sleep that is widely used in OTC and supplements). Consumer reception has been good but most have disappeared as the result of regulatory challenges.

• Sleep or just relaxation? No company has yet established a winning strategy for relaxation beverages for formulation, positioning, packaging, distribution or marketing. Opinion is divided over whether these products should promote sleep or just relaxation, a decision that would determine much about brand strategy.

Stress, relaxation and sleep Micro-Trend 7:

Micro-Trends 2011 Stress, relaxation and sleep


preserve of entrepreneurial start-ups, most of which are solely focused on marketing foods with either stress or sleep benefits. In the US, relaxation drinks have become a legitimate niche with some 350 start-up brands contending for space.

“America is becoming more stressed, so everyone is trying to relax with prescription drugs and other things,” said Peter Bianchi, CEO of Innovative Beverage Group Holdings, whose Drank brand posted $6.5 million (€5 million) in sales last year and, he said, holds the largest share of the US market for relaxation drinks. That suggests relaxation drinks already were at least a $10 million (€7.9 million) segment in the American market in 2009, after just a few years.

Fortitech, which develops custom nutrient premixes for foods and beverages, is seeing “strong interest from our clients” for blends targeting the relaxation segment, said Richard Schleif, director of marketing, “which is typically an indication that we will see a spike in commercial products in the near future”.

But relaxation drinks have attracted skeptics: “The problem with these drinks at this early point in their evolution is that the consumer hasn’t yet taken to the concept – and that’s much more important than what these things taste like, how they’re packaged or what they’re named,” argued Tom Pirko, president of Bevmark, a California-based beverage-industry consulting firm. “Consumers know and understand that they want to be able to ‘lift off ’ with energy drinks, but they haven’t yet moved over to figure out if relaxation drinks are the yin to that yang, if the other side of that coin is calming down.”

No company has yet established a winning template for cracking relaxation drinks. Unlike energy shots, there’s no unassailable strategy yet in relaxation beverages for formulation, positioning, packaging, distribution or marketing.

And Pirko said the giants “won’t go into a category until they really see sales and space being taken that they believe they should rightfully own. This category hasn’t

proven itself yet. Not yet and maybe never.”Here’s how some of the players are approaching these

crucial criteria:

Exactly how relaxed do people want to be? So far, the biggest divide in this segment is over whether to promote sleep or just relaxation. A relaxation drink might include kava, valerian root and other herbal ingredients, while melatonin, a hormone that induces sleep, is found in both kinds of drinks. This decision determines much about the brand’s formulation, positioning and other factors.

Mary Jane’s Relaxing Soda chose to focus on reducing anxieties and general stress levels in part because, as founder Matt Moody explained, of the emergence of strong demand for “natural” stress remedies including kava and passionflower. “I didn’t want to produce a sleep aid; there are plenty of things people can take for that,” said the CEO of The Relaxing Co. “I wanted something that would be a quick fix for someone during the day who faces a speech or some other anxious situation, but yet wouldn’t be a shot of whisky or a beer.”

Mini Chill relaxation shots focus on promoting stress reduction, not sleep. The active ingredient is 500mg of valerian root per 2oz (59ml) shot. Competing beverages that include melatonin just leave consumers “feeling disoriented and tipsy; that’s a fundamental error,” said Steve Panzella, founder and president of Stevenson Products, producer of Mini Chill.

Dream Water is aimed directly at sleep. In blueberry and pomegranate flavour, it contains melatonin, GABA and 5TH and promises sleep “usually” within 40 minutes. “At least 25% of Americans have some kind of sleep problem, not a relaxation problem,” said David Lekach, CEO of Dream Products.

Vacation in a Bottle, with its beach-holiday imagery, encourages users to “Take time to unwind from the daily grind and pour yourself a vacation that never has to end”.

Micro-Trends 2011 Stress, relaxation and sleep

Danone has already tried a stress-relieving dairy drink in selected European markets; called Zen, its benefits were said to be based on its added magnesium. Though Zen failed to meet sales expectations and was withdrawn, it signals that the mood food area is being looked at seriously – and that figuring out how to succeed will not be easy.


Every year producers of omega-3 oils – from marine and from algal sources – hope for their big break-through. And every year produces another disappointment; 2010 was no exception, and until there’s a major re-think among ingredient suppliers about their technology and strategy, nor will 2011 be any better, nor any following year.

Omega-3 has become a major success in some areas: around the world the omega-3 dietary supplement business (pills and capsules) is thriving, with supplement sales up 10% in the US in 2010, to over $1 billion (€750 million), making omega-3 the biggest dietary supplement category. Omega-3 has also become a standard ingredient in infant formula.

But in the food and beverage market, in Europe, the US, Japan and most of Asia, sales of omega-3 fortified products continue to underperform with all bar a couple of brands selling in niche quantities. To take two examples from 2010:

Bread. In January 2010 Sara Lee, one of America’s best-known fresh bread brands, with a 9% market share, introduced a new variant of its Soft & Smooth bread line called Soft & Smooth Plus; bread made with DHA omega-3 and billed as “the first nationally distributed bread” of its type.

The aim was to provide mothers with a simple means to ensure their children, “especially picky eaters who turn up their nose at one of the most common sources [of DHA] – fish”, get the benefits of DHA.

Soft & Smooth Plus is available in three varieties:• 100% Whole Wheat • Made with Whole Grain White • Mini-buns

Plus contains 12mg of DHA per two-slice serving, which is 10% percent of the Institute of Medicine’s suggested daily amount for kids aged 1-13. The DHA is from Martek, which extracts it from algae.

Hailed as a major development, Plus has disappointed, producing, according to IRI supermarket scanning data, total sales of just $7.5 million (€5.6 million) in 2010 – and doing nothing to arrest the 16% decline in sales that Soft & Smooth experienced in the year to October 3rd 2010, to a total of $110 million (€82 million), following a 15% decline the previous year. Sara Lee seems to have used omega-3 as many companies do, as part of a last-ditch functional food make-over intended to rescue a struggling brand.

SUMMARY• Trapped in an ultra-niche: Until recently hyped as having mass-market potential, in reality omega-3 remains in its infancy.

• Low dosage, poor taste: omega-3 products’ failure to deliver more than small doses in foods and beverages – and its often poor taste in many foods – means that foods and beverages are a poor second choice to supplements and to fish for consumers.

• No point of difference: the brain and eye development benefits for children are now well-proven to be a motivation to only an ultra-niche of the most health-conscious mothers, while the heart health benefits give it no point of difference – tens of products from oats to pomegranate juice today offer heart health.

• Technological change needed to realize food and beverage potential: The acceleration of the omega-3 trend will come only when companies work out how to deliver an effective “daily dose” of omega-3s in a convenient, single-serve drink (Key Trend 7) with a good taste.

• Health claims no help: Getting health claims approvals for omega-3 will make no difference to this ingredient’s fortunes until this technical challenge is overcome. The limited value of health claims, given the disadvantages listed above, has already been demonstrated in Canada and elsewhere.

• RDI blind alley: Nor will getting an RDI boost consumers’ consumption of omega-3 (it certainly hasn’t helped in Japan). Looking at the lessons from nutrition history, it’s clear that 60 years of an RDI for calcium hasn’t overcome the problem of inadequate calcium intakes in many countries, particularly among young women.

• Realistic strategy needed: The omega-3 industry needs to either a) focus on what it does well (supplements and formula) and forget food and beverage or b) accept the realities of the food and beverage market and overhaul its technology and strategy.

Omega-3 needs better technology to achieve break out Micro-Trend 8:

Micro-Trends 2011 Omega-3


Dairy. Suppliers of omega-3 hoped the initial success of an omega-3 fortified product in Canada, Danone’s Danino, would lead to a worldwide adoption of the nutrient in Danone’s kids’ brands. But it was not to be. Even with the benefit of a specific health claim, omega-3 turned out to have only niche appeal.

Danone introduced Danino, a spoonable yogurt, in 2006 with a health benefit based on assisting brain development of young children. Danino contained 20mg of DHA omega-3s from fish oil and 35mg of total omega-3s. Danone made much of the fact that HealthCanada, allowed the brand to carry a specific health claim for DHA and brain development.

But, said a Danone Canada spokesperson, in 2010 the company still had a challenge in Canada in getting parents to purchase Danino for their kids. Among parents of three to six-year-olds, only 20% actually buy children’s yogurt for their kids.

Unsurprisingly, when Danone overhauled its kids dairy strategy in the US and Canada in 2010, it focused on packaging innovations and on mothers’ most-wanted benefits – products that are about bone health and are “free from HFCS” and artificial colours and flavours. Omega-3 formed no part of the strategy overhaul and has now been dropped from Danino’s recipe in Canada. A spokesperson explained: “If you have a benefit that’s not motivating [consumers], then there’s no added value to including it.”

STRATEGY RE-THINK

The signs are that, with one or two exceptions, if we take Einstein’s definition of madness as doing the same thing over and over again and expecting to get a different result, then many omega-3 oil suppliers are locked into a mad repetitive pattern that goes something like this:

1. Try to get omega-3 into as many products in as many different product formats as possible.

2. Hope that the next launch will lead to the long-awaited big breakthrough for omega-3 in food.

3. When the newest omega-3 product sells at niche levels – or is withdrawn after marketers find that omega-3 “makes no difference to consumers” (as the marketers of Europe’s biggest omega-3 dairy brand said as they dropped omega-3 from their product formulation), go back to step 1 above and repeat the process.

BETTER TASTE AND DOSE THE WAY AHEAD

One of the key lessons of the last 15 years is that there’s a significant niche of health-conscious consumers who want an effective dose of whatever nutrient it is they need, delivered in a convenient and good-tasting beverage form. This can be seen in calcium and vitamin D for bone health (Key Trend 10), glucosamine for joint health (Key Trend 10), fibre or probiotics for digestive health (Key Trend 1) and many, many others.

As yet, no omega-3 product can give you such a quick fix of an effective daily dose. In fact omega-3 fortified foods deliver only modest dosages per serve. More than 100mg and many products start to have an “off-taste” – yet the effective daily dose according to international guidelines is around 500mg. To build their market, the omega-3 companies will need to crack this problem and find a way to create (good-tasting) Yakult-type products that give you your effective daily dose in one convenient, single-serve beverage.

Until then, omega-3s are disadvantaged compared to the increasing number of products, from oats to pomegranate juice, that communicate heart health benefits and are available in supermarkets in good-tasting and convenient formats.

RDIs NOT THE ANSWER

Even securing national RDAs for omega-3 will not change the situation. Note that:

• There is an RDI for calcium and has been for decades, but in most countries most people – particularly women and young girls – still don’t meet their RDIs, 70 years after calcium was recognised as an essential nutrient.

• Japan has an RDA for omega-3 fatty acids – it is recommended that 2,600mg of DHA be consumed daily – but even so it’s had limited effect on the omega-3 market. Japanese people prefer to get their omega-3 from fish or from supplements – and Westerners are showing every sign of going the same way.

As we point out in Key Trend 6, consumers’ desire for health benefits that are intrinsic and natural to a food is one of the most powerful trends. Omega-3 – fish oil – has its natural home in fish-based products. Why then would anyone want to add fish oil to yoghurt? In fact, as Key Trend 6 shows, the fish processing industry is starting to do an ever-better job of positioning fish as the best and most natural source of omega-3.

Until technological and marketing breakthroughs can be made, omega-3 will stay

firmly locked into its current niche.

Micro-Trends 2011 Omega-3


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