TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Bringing Functional Foods to Market An innovation journey

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

The Innovation Journey

Innovation & Product Development

Identifying Market opportunities

Creating , Identifying and refining promising

Concept ideas

Final product distribution and

Launch Communication

Plan

Change text boxes to same format as Matrix

Creating Synergistic products to promising

Concept ideas

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Senior executives are unsatisfied with the financial returns on their investment in innovation

80% of new products fail and the cost of failure is high

Successful product launches don’t always result in top-line growth

It is getting increasingly hard to find and launch successful innovations

3

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Companies struggle along the continuum of innovation

24%

12%

14%

17%

18%

25%

44%

Other causes

Technical problems

Poor launch timing

Competitive strength or reaction

Higher costs than anticipated

In-effective marketing

Inadequate market analysis

SOURCE: Cooper and Kleinschmidt

24%

Main causes of new product failure

4

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Pinpointing opportunities for growth

5

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Identifying high potential product-led growth opportunities is essential for long-term success

6

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Underperformance is the norm Less than 1% of ideas succeed in-market

7

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

The cost of underperformance extends beyond financials

Credibility impact among external stakeholders

(shareholders / trade)

Impact on brand equity

Opportunity cost

KPI impact for the development team

8

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Causes of underperformance Too narrow a focus leading to a battle for share of aisle not consumer occasion

Healthy Nutrition

All foods

Healthy foods

Functional Foods

9

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Causes of underperformance Chasing empty spaces

Product

cluster

Empty space

Empty space

Product cluster

Product

cluster

Product

cluster

Product

cluster

Product

cluster

10

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Where opportunity hides Core needs

Passport expectations all products are expected to deliver – by all consumers in all occasions

Enjoyment

Tastes great

Satisfies a craving

Convenience

Convenient to use out of the home

Is not messy to use

Quality

Confident of food safety

Value

Is good value

GAP

GAP

11

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Where opportunity hides Occasion needs

Versatile Flavorful

Future orientated, ideal benefit bundles valued by a large number of consumers in a large number of occasions

27% Tasty balance ($178m) Mindless nibbles

($119m) 18%

20% Enhancers ($132m)

14% Home style sensory ($92m)

Ultra indulgence ($139m) 21%

a

I am looking for the best of both worlds – the perfect blend of taste and satisfaction without the guilt associated with unhealthy diet choices

Solutions to this need are expected to not only taste good, but also provide some added benefit such as energy, mood lift, or relaxation

I will not accept packaged, for the masses options and expect home-style products with unmatched freshness and wholesomeness

Ultra-convenient options optimised for multi-tasking so you can enjoy a treat without stopping what you are doing

The ultimate indulgence when only the best will do. All the senses are engaged with this rich taste and textural experience

12

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Opportunity identification The difference between ideal and best available is the opportunity

Tasty balance ($178m)

Consumer perceptions of best available

Client Product A

Competitor Product Y

Product category 1

Product category 2

Client Product C

% agree Improvement opportunity (less than 35% agree)

Secondary Secondary Primary Primary Primary

Sensible balance

Is low in cholesterol 25 20 10 8 10 Is low in fat 48 40 35 30 34 Easy to portion into small servings 28 50 45 40 38 Is low in calories 40 35 35 33 34

Satisfaction

Tastes great 38 41 42 45 46 Satisfies my cravings 40 30 28 35 29 Is rich and creamy 35 36 34 35 35

Natural goodness

Is all natural 38 34 33 31 30 Not overly processed 34 32 30 29 32 Not a lot of artificial ingredients 36 38 35 36 36 Is made with real milk 48 28 28 26 40

Experiential

Has a unique taste 50 45 50 44 35 Has a distinctive taste 42 38 48 35 30 Is a nice change from the usual 38 34 33 35 30

Ideal requirements

13

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Where opportunity hides What is a Convergence opportunity- what is a breakthrough opportunity

Tasty balance

Enhancers

Home-style sensory

Ultra indulgence

Home-style sensory

Versatile Flavorful

Convergence

Convergence

Unique expressions of different occasion need Combinations highlighting more niche opportunities

a

Mindless nibbles

Home-style sensory

Breakthrough-

Home baked delights ($80m)

Pick me up ($120m)

14

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

15

Being “healthy” used to be all that was required. Manufacturers could communicate around general long term health and that was enough. These health promises though really required “faith” as there were no tangible/visible proofs of efficacy

Consumers have become more demanding and the proof of efficacy timeline has shortened as is not more TODAY focused than FUTURE focused. Most of the functional health claims noted in the attached are health benefits I can experience today (digestive, joint, memory, energy, etc.). It is not that people no longer care about longer term health – they do. However, a long term health claim without TODAY functional claims will likely not be as successful.

The evolution continues still as there is evidence “Energy” has become table stakes in many markets and now functional and emotive REJUVENATION is the new territory.

What we have learnt about the evolution of health while identifying opportunities across the world

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Case study

16

The Danone brand strategy evolution is an example: In the 1970’s, Danone ran a very successful ad talking about long term health – it is known as the Russians commercial. They showed a handful of people from Russia who lived over 100 years and they all shared frequent consumption of yogurt. Inference-> a yogurt makes you live longer – a distant future promise. Today, Danone has gone almost 100% into functional health. Their main product Activia, makes digestive health claims. Benefits you can see today rather than 50-60 years from now. 70s

http://www.youtube.com/watch?v=HYng_oCaL3w

80s

http://www.youtube.com/watch?v=2Xf3bG4vMs8

Now

http://www.youtube.com/watch?v=rZGOixS5NHo

TNS April 11, 2014

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Creating Concepts and product ideas which will resonate with consumers

17

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

How you say it matters as much as what you say

18

Consumers need to be able to relate the technical innovation to solving the “tensions” in their everyday life.-

The ‘Aha’ factor makes the opportunity come to life

WITH Insight

WITHOUT Insight

‘Appeal’ 166 100

150 ‘Definitely Buy ’

100

Presence of an Insight impacts product acceptance

Scores expressed as indices Source : TNS R&D work

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

Opportunity Identification Its all about tensions (tradeoffs existing products force me to make)

19

Unless a new product or package resolves an existing market tension, consumers are not anxiously awaiting your new offer, decreasing odds of success. What are the tensions in your market

Spoil Child Child Health

Convenience Wholesome

Satiety Obesity

Child’s Needs My Needs

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

The structure of a compelling concept

Strapline

Reason to Believe

Benefit

Insight

Title/ Concept Name

20

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

Addressing Objective 1: Creating a Compelling Concept

Role of concept is to communicate product details to the consumer in an effective and realistic way. It should provide them with the type of information and level of detail that they would be likely to have in a real life purchase situation.

A good concept should:

Use language that works with the target audience – not marketing or technical jargon

Give as much information as a 30 second advert

Be written in the right tone for the brand

21

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

How to Create a Compelling Concept - Insight

All good concepts start with a brilliant insight

“Getting to the heart of why people do what they do, and using that knowledge to help us grow”

22

The insight is the reason why consumers keep reading – draws the consumer into the idea and shows you understand them An insight is the premise on which the idea is based and creates a situation or perspective for the benefit & Reason To Believe Needs to be based on true understanding of a consumer situation – they are the needs, wants or beliefs identified from the consumer portraits not just facts Thoughts that express a feeling and a need in a very subjective way

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

How to Create a Compelling Concept - Insight tips

23

All good concepts start with a brilliant insight “Getting to the heart of why people do what they do, and using that knowledge to help us grow” Insights should not be too extreme or worthy, patronizing or preachy Use toned down language like "sometimes", "often", "at times" and "now and then" avoids consumers rejecting the concept because it feels too extreme for them …but try not to fall back on expressions such as “wouldn’t it be great if…” Consumers need to relate to the insights so try to make them feel more personal “you” can feel accusing or intimidating whereas “I”, “I feel” and “some people feel” are often better received. An insight should be expressed as a “need”, “want” or “belief”. Avoid excessive negative phrasing – the insight should leave you feeling positive Should express the basic “tension” in consumers life – a common structure – I would like to … But ….

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

How to Create a Compelling Concept- Benefit

24

Should be something that perfectly answers the need identified in the insight, with a real, noticeable benefit in a compelling way. Give consumers what they want (benefit), not what you’ve got (feature) Does it pass the “so what” test? Consumers are very cynical about being told to buy a new product simply because it is new. The benefit is the reason consumers want to buy the product Ensure your benefit is distinct, compelling and original Benefits can be functional and/or emotional but must be different and better than competitors Functional - the tangible difference a product makes in the consumers life Emotional - the difference a product makes in how the consumer feels Often the benefit is emotional and the reason to believe is functional

The benefit that your product or innovation will give to people it’s the difference the product makes in a consumer life and answers “what’s in it for me”?

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

More detailed description that persuades people to buy it.

It should support the differentiated benefit in a compelling way

Avoid technical language that is not easily understood by normal people

Consumers are not often swayed by complicated technical words

Not always about “special ingredients”

Try to provide rational and emotional reasons to believe that will persuade consumers to try the product

RTB should be distinctive from other products in the category

25

How to Create a Compelling Concept - Reason to believe

The Reason to Believe supports the benefit It convinces consumers they will receive the benefits promised.

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

How to Create a Compelling Concept - Reason to believe can take many forms

4 Basic types of RTB • Logical Explanation

• Describe why or how the product will solve consumers’ problem

•Build from consumer insight about how things work

• Hard Evidence

• Show Results - graphs, pictures

• Identify the source - special ingredients (including explanation as appropriate)

• Give Data - % improvement, probability of success, etc.

• Outside Recommendations

• Professional Organizations e.g Doctors, Dental Associations, Nutritionists

• Independent research/study results

• Celebrity Spokespersons

• Brand Track Record

• Relies on strength of brand heritage

26

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

How to Create a Compelling Concept - Strapline

The Strapline

A short, snappy sentence that sums up and reinforces the benefit of the concept.

Leaves the consumer with a clear, last thought.

27

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

Without insight

28

The term probiotic literally means “for life”. Probiotics are beneficial live bacteria found in the intestinal tract. Given the fact that 70% of the body’s natural defenses are inside the digestive tract, probiotics, when consumed on a daily basis, may be beneficial in strengthening the body’s natural defenses.

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014 29

Example concept - Probiotic food Body

natural resistance

Stresses of

modern life

Strapline : protect your body the natural way

Consumer Insight : my body faces a lot of stress from my busy modern lifestyle

but I don’t want to be popping pills all the time

Consumer Benefit : Probiotic foods increase my body's natural resistance is can

face the stresses of modern life in a natural way

Reason to Believe : Independent research/study results , Healthier Choice labels ,

ingredients like Inulin

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

Exercise : Omega 3

30

Omega-3 refers to omega-3 fatty acids. Fatty

acids are the building blocks of fats, which,

despite their misunderstood reputation, are vital

nutrients. Omega-3 is used to regulate blood

clotting, build cell membranes and support cell

health. It's polyunsaturated, which is the

relatively heart-healthy kind of fats that help

reduce blood triglycerides (fats) and low-density

lipoprotein (LDL), the so-called bad cholesterol.

Omega-3 also curbs inflammation. Omega-3 is

called an essential fatty acid

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

A concept by Terence Chan

31

Description of the idea and benefits to Consumer:

Eating/drinking the “X” product which is high in Omega 3 conveniently reduces bad cholesterol.

Consumer Insights:

Busy life in modern society leads to people consuming a lot of processed food which are high in fats, bad cholesterol and salt. All of which leads to high blood pressure. Products that is convenient and tasty is needed to counter high blood pressure that is a result of eating a lot of food high in bad cholesterol.

Reason to believe – features (include things like pack sizes, flavours, price etc.) • The product contains “ingredients” that are proven to be high in Omega 3. For example,

each bottle of product “X” is made from 500 grams of flax seed. (Flax seed is high in Omega 3).

• Simple and uncluttered packaging design to differentiate the product from the “other highly processed” food products currently on the supermarket shelves.

• Celebrities and common people to endorse the product. Typically celebrities and common people who have a lot in common with the target market.

Tagline: Live life to the max with product ‘X’

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

A concept by AVA

32

Description of the idea and benefits to Consumer:

• Omega 3 can regulate blood fats (triglycerides) and low density lipoproteins which are the “bad cholesterol” .

• Omega 3 build cell membrane and support cell health

Consumer Insights:

I am afraid of contracting cardiovascular diseases due to high (blood triglyceride levels) and cholesterol because I eat a lot of processed foods (high in sodium & fats).

Reason to believe – features (include things like pack sizes, flavours, price etc.) • Omega 3 curbs inflammation (oxidative damage) • Research has demonstrated reduced incidence of cardiovascular diseases in populations with

high Omega 3 intake

• Ease of consumption due to availability of capsules.

Tagline: Omega 3 is good for your heart & brain.

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

A concept by Anonymous

33

Description of the idea and benefits to Consumer:

• Omega 3 fatty acids are polyunsaturated fats that used to regulate blood clotting, builds cell membrane and support cell health. It also helps to reduce blood triglycerides and low density lipoprotein (LDL) which can lower the risk of heart disease. Omega 3 is an essential fatty acid which can also curb inflammation.

Consumer Insights:

I like to consume meat but hardly exercise due to my hectic lifestyle

Reason to believe – features (include things like pack sizes, flavours, price etc.) • Based on research trials done on people who have higher risk of heart disease problems.

The results showed that these people have reduced blood triglycerides and low density lipoprotein after consuming Omega 3 products for 6 months.

Tagline: Protect your heart with natural source of Omega 3.

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

Developing winning products

34

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

Developing winning products – the key to success

35

Innovation is at the heart of most companies’ growth strategy. One of the most critical factors in the long-term success of new products is a strong repeat purchase rate. And to achieve that it is essential to create products that will meet consumer expectations.

The strongest indicator of optimal repeat potential is the extent to which the product’s actual performance meets consumer expectations. This is called synergy. A strong product can be undermined by a poor concept. A great concept can raise expectations that an average product cannot meet - so failing to deliver repeat purchasing.

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

It is important not to test products in a vacuum

Repeat

pote

ntial

Synergy

High

Low

Product weak vs. concept expectations

Product strong vs. concept

expectations

36

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

Concept A

11%

30%

300

29%

Concept B

8%

45%

380

9%

Same product, different concept

To get the concept-product fit right you need to test the product versus expectations

Trial rate year 1

Repeat rate

Volume year 1

Product worse than expected

37

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014

Bringing functional foods to market- a checklist

Identified a true whitespace opportunity

Created an insight driven compelling concept that tests well

Have you

Have a product that is synergistic with your concept

…then you are ready to go

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

TNS April 11 2014 39

Thank You