N EW N UTRITION BUSINESS · 2014-03-25 · N EW N UTRITION BUSINESS VOLUME 14 NUMBER 1 –nutrition.com OCTOBER 2008 ISSN 1464-3308 THE JOURNAL FOR HEALTHY EATING, FUNCTIONAL FOODS

N E W N U T R I T I O N

B U S I N E S Swww.new–nutrition.com OCTOBER 2008 ISSN 1464-3308VOLUME 14 NUMBER 1

T H E J O U R N A L F O R H E A L T H Y E A T I N G , F U N C T I O N A L F O O D S & N U T R A C E U T I C A L S

Pages 15-18

Continued on page 9

Pages 3-4 Pages 7-8

Double effect focus for reborn heart

health brand

Probiotics: future stars of skeptical,

price-sensitive markets

Portuguese hit destined for new market

It began largely as the idea behind some exotic products in Japan. Slowly over the last few years it crept into niche offerings in other markets including Europe and North America. And now, the concept of “inner beauty” finally is reaching the mainstream in America – at least its wealthy members – in a new product by Nestlé called Glowelle.

The daily “beauty-drink dietary supplement” debuted in early September, at the hefty price of $7 (€4.90) for each a 8.8 fl. oz. (260ml) bottle or $3.70 (€2.58) for each mix stick, at the cosmetics counters of Neiman Marcus’s 40 upscale department stores scattered in major urban markets around the United States and at its sibling Bergdorf-Goodman stores in and around New York City.

And that’s where the drinks will be peddled exclusively for the time being, while Nestlé’s marketers create a narrative around Glowelle attempting to persuade well-off women to invest as much as $112 (€78) a month in the brand’s beauty-enhancement “system”.

Glowelle is a bold bet from a rather unlikely source, but Nestlé executives are backing it. “We hear people saying, ‘It’s about time,’” Kimberly Cooper, the brand’s “chief beauty officer”, told New Nutrition Business. “They feel the product delivers on something that they can take every day.”

Glowelle, she explained, “was designed to make women feel good and designed to make sure they knew they were doing something good for themselves. And it has a holistic feel. A lot of products just treat the problem, but we’re saying that we’re about lifestyle change.

And every day, Glowelle is one little step to living a more holistic lifestyle”.

Her task, Cooper said, was “to educate consumers not only on Glowelle but also on the category as a whole”. Two years ago, she estimated, the entire inner-beauty segment probably was less than a $1 million (€700,000) business in the US. But, noted Cooper, it is predicted to reach $1.3 billion (€900,000) annually by 2011.

A TURNING POINT FOR INNER BEAUTY?

To outside experts, it’s far from clear that Glowelle will catch on or ever comprise a significant piece of business for Nestlé. “The product will receive a small place in the luxury, top-end retail segment for women who ‘don’t care’, the same ones who bought Evian water with atomizers at ridiculous

prices just to spray on their faces,” cracked Tom Pirko, president of Bevmark, a leading beverage-industry consulting firm that has worked with Nestlé management.

But Pirko definitely believes that, whatever the product’s fate in the marketplace, the introduction of Glowelle represents a significant turning point in the slowly expanding world of inner-beauty products.

Moreover, said the Santa Inez, Calif.-based beverage guru, the fact that Nestlé, and not some other company, made this play lends unprecedented credibility to the possibility of a mainstream inner-beauty product.

“Nestlé probably is the only company that has the resources and smarts to do this,” Pirko said. “So they’re testing it. What I think they’re really trying to figure out is how much further they can go”.

WHAT WOMEN WANT

Cooper is Nestlé’s point person for the Glowelle venture. She earned her marketing spurs at Kraft and Walt Disney, then skipped to Nestlé USA five years ago, where she started developing products and marketing ventures for Coffeemate and Nescafé brands.

A couple of years ago, she was tasked with launching what became Glowelle, as an “intrapreneurial” venture apart from Nestlé’s other brands. Her first conclusion was that the notion of a product that specifically benefited women’s skin tone and overall appearance via proper nutrition and diet was a natural one that intrinsically makes sense to most people.

Nestlé targets “inner glow” with beauty beverage

By Dale Buss

OCTOBER 20082

N E W N U T R I T I O N B U S I N E S Sw w w. n e w - n u t r i t i o n . c o m

C O N T E N T S & C O N TA C T S

LEAD STORY

1,9-10 Nestlé targets “inner glow” with beauty beverage

NEWS ANALYSIS

3-4 Double effect focus for reborn heart health brand

5 Asia, oats and dairy-free: new direction for Benecol

6 Kellogg has Bright plans for DHA

7-8 Portuguese hit destined for new market

EDITORIAL

11 A true innovation tests the beauty hypothesis

CASE STUDIES

13-14 REGULATION: Europe’s health claim ‘black box’

15-18 STRATEGY: Probiotics: future stars of skeptical, price-sensitive markets

19-20 COMMERCIALISATION: Strategy turnaround pays off for NutriTech

21-22 START-UP: “System” takes on natrual heart health niche

23 COMMERCIALISATION: Probiotic profitability

24 COMMERCIALISATION: Probiotics: getting them to the gut

NEW PRODUCTS

25-27 Functional & healthy-eating new product launches

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29 A polite reminder to our subscribers

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U.S. EDITORIAL OFFICEDale Buss, New Nutrition Business, 6390 Cherry Tree Ct, Rochester Hills, MI 48306, USA.Tel: 248/651-9648 Fax: 248/[email protected]

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Actimel ...................8,15,16,17,18Activia .......................16,17,18,24Aktiv ....................................19,20Albert Heijn ........................15,18Aldi ...........................................18Alpro ..........................................5Benecol .......................3,4,5,15,21Bergdorf-Goodman ...............1,10BioGaia ....................................23Blue Band Halvarine................13Borba Skin Balance Water .........9Campina.........................16,17,18Clinique ....................................11Coca-Cola ................................11Coffeemate .................................1Cognis ......................................11Compal....................................7,8Danino .......................................6Dannon/Danone .........................

........................6,8,12,16,17,18,24DSM .........................................11Elancyl Global Silhouette ........13Elovena .......................................5Essencial/Essential ..................7,8Essensis .....................................12Evian ..........................................1Evolus ......................................3,4Fayrefield Foods ......................7,8Femarelle ..................................13Fruit2Day ................................7,8Gefilus ........................................3General Mills ...........................22 Glowelle ...................1,9,10,11,12Hero .......................................7,8Hyla ............................................3ICA...........................................19Innéov ......................................12Kalbe Nutritionals .....................5

Kardea ................................21,22Kellogg ....................................6,8Knorr Vie ................................7,8Kraft ...........................................1L’Oréal ................................11,12Live Bright ..............................6,8Martek .....................................6,8McDonald’s ................................8McNeil ................................21,22Minute Maid .........................6,12Müller .........................................8Neiman Marcus ...............1,10,12NeOpuntia ...............................13Nescafé .......................................1Nestlé ...................1,9,10,11,12,23Nutraceutix ..............................24NutriSystem ...............................9NutriTech ......................19,20,23Paulún’s ...............................19,20

PerriconeMD .............................9Pom Wonderful ........................12Pro.activ ...................................15Quaker Oats.............................22Raisio ......................................3,5Red Bull ...................................11Special K ..................................22Super de Boer ..........................18Take Control ............................21Thompson Brands ...................21Tropicana .................................22Unilever ...............7,8,13,14,15,22Valio Dairy .........................3,4,16Vifit.................................16,17,18Waitrose.................................7,20Wal-Mart ..................................10Walt Disney ................................1Whole Foods Market ...........21,22Yakult ........................11,15,16,17

COMPANIES AND BRANDS IN THIS ISSUE

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OCTOBER 2008 3


Valio Dairy is maintaining its reputation as one of the world’s most innovative companies in functional foods with the launch of Evolus 2-Effect, the first brand in the world to offer a clinically-proven benefit of both reducing cholesterol and also blood pressure. Debuting initially in Finland, Valio’s home market, the technology of Evolus 2-Effect will be taken to other markets as part of Valio’s long-established licensing strategy, a strategy which has already made the company one of the most important players, worldwide, in probiotics.

The Evolus 2-Effect range includes spoonable yoghurts, yoghurt-based daily dose drinks and a buttermilk (buttermilk is a very popular dairy drink in Finland). Each 100ml bottle of the daily dose drink delivers 2g of plant sterols and 4.2mg of peptides – the same as two glasses of the buttermilk or two servings of the yoghurt.

The products carry the following claim:2 effects that promote the well-being of the heart:1. Lowers cholesterol2. Helps to control blood pressure

“This launch is one of Valio’s biggest in recent years,” Elli Siltala, Marketing Manager & Team Leader, Innovative Concepts & Technologies, told New Nutrition Business. The launch is being supported by a TV and print advertising campaign, a website (www.evolus.fi) and in-store sampling. “We also invest a lot in health care specialist marketing,” adds Siltala. “It is crucial to get their awareness and recommendations. For them we have seminars, target mailings, print and internet ads.”

The new brand is aimed at people aged 35-65+ and its relevance is likely to be understood by consumers in Finland – Finland’s well-funded government-run healthcare system means that most people have had their cholesterol levels and blood pressure checked at least a couple of times in their thirties, and in their forties and fifties almost everyone gets a letter every year inviting them for a further check-up.

“Our message is focused first on those most concerned, the people who have been diagnosed,” says Siltala. “In Finland if your

cholesterol and blood pressure are found to be a bit high then you have about 6-12 months to do something about it before it’s recommended that you go on medication.”

Evolus 2-Effect replaces two separate products – Valio Evolus, a peptide-based blood-pressure lowering dairy drink and Valio Benecol, a cholesterol-lowering line based on Benecol plant stanol esters.

“We did extensive marketing research both among consumer and health care specialists on how people perceive heart health and how they want to promote it,” explains Siltala. “The best way to promote heart health is to have an effect both on cholesterol and on blood pressure, and that is most interesting to consumers as well.”

Valio is no longer marketing Benecol-branded cholesterol-lowering dairy products

– which include a yoghurt, a milk and a daily dose drink. The brand has returned to Raisio Benecol, the supplier of Benecol plant stanol esters, and will continue on the market as a cholesterol-lowering-focused brand. The Benecol range is being revived by Raisio with new products and new marketing (see page 5) and now it is, in effect, in competition with Valio Evolus 2-Effect.

PATENTED TECHNOLOGY & LACTOSE-FREE

The peptide technology used in Evolus 2-Effect is the same as that used in the pre-existing Evolus products and is based on fermenting peptide s with probiotic bacteria. It was developed and is patented by Valio and can also be found in Evolus-branded blood-pressure lowering products marketed in Switzerland, Spain and Portugal (see Box).

In addition, all of the Evolus 2-Effect products are either low-lactose or lactose-free.

“We have to consider all elements in product development,” explains Siltala. “In Finland 17% of people are lactose-intolerant – and they all know it.”

As Finland’s biggest dairy company Valio has long been a pioneer in low-lactose products, marketing a complete range of low-lactose products under the Hyla brand – the biggest low-lactose brand in Europe. In some categories Hyla has been particularly successful – almost all cream sold in Finland, for example, is low-lactose.

Many Valio health-enhancing products, such as its very successful Gefi lus range of probiotics, use Hyla milk and such products carry the Hyla logo as a sub-brand on their packaging.

Valio went on to develop a lactose-free process, using a chromatographic separation process which the company had patented in the late 1980s and which was already in use to manufacture other products. Valio s lactose-free milk contains just 0.01% lactose, far less than many lactose-free products on the market elsewhere.

“It was easy to make the new Evolus drinks lactose-free at no extra cost,” explains Siltala. “But to achieve that in the yoghurt and sour milk it would be an added cost for

N E W S A N A L Y S I S

Double effect focus for reborn heart health brand

OCTOBER 20084



PATENTED PEPTIDE TECHNOLOGY

Valio Evolus, launched in Finland in 2002, was the first product sold in Europe with a scientifically-established claim that it can lower blood pressure.

Evolus contains bioactive tripeptides isoleucine-proline-proline and valine-proline- proline which act as ACE (angiotensin- converting enzyme) inhibitors, similar to blood pressure-lowering drugs.

Evolus milk is fermented with the lactic acid bacteria L. helveticus K16, a strain already used in dairy products. The fermentation process produces bio-active peptides. The end result is a product that has enough peptides to have the claimed effect and a good taste.

Five published clinical studies have established that an intake of 150ml a day of Evolus can significantly lower both systolic and diastolic blood pressure. Subjects systolic pressure fell on average by 4mmHg and diastolic by 2mmHg, compared to the control group.

Patents protect the Evolus technology, covering the starter culture, the tri-peptide concentrate and the process know-how and technology, making Evolus an ideal candidate for Valio s global technology licensing business.

Ainutlaatuisen hyvää sydämelle

Uusi Valio Evolus® 2-teho on ensimmäinen maitovalmiste joka sekä alentaa kolesterolia että auttaa hallitsemaan verenpainetta. Tämä ainutlaatuinen kaksoisvaikutus auttaa myös verisuonia pysymään kimmoisampina. Ota Valio Evolus® 2-teho maistuvaksi osaksi terveellistä ruokavaliota ja elinvoimaista elämäntapaa, joka päivä. www.evolus.fi

2 sydänterveyttä

edistävää vaikutusta:

1. Alentaa kolesterolia

2. Auttaa hallitsemaan

verenpainetta

Valio_Evolus_210x273.indd 1 1.9.2008 8:39:4

what is already a highly-priced, added-value product.” Hence these products are low-lactose rather than lactose-free.

Siltala emphasizes that achieving a good taste was a key goal in the product development process: “Sterols and peptides are not the most delicious of ingredients so we did extensive R&D to get the new products really tasty – we are not selling medical products, we are selling foods that people should want to eat every day.”

Valio says that it launched Evolus 2-Effect as a complete family of products to enable consumers to use the products every day – as they need to if they are to get the claimed effect.

“There’s enough variety to enable people to enjoy it every day and replace their normal product without compromising on taste,” adds Siltala.

PREMIUM-PRICED

The new Valio Evolus Double Effect is only slightly more expensive than the old Evolus brand or the competing Benecol products. In a Helsinki supermarket NNB found Benecol branded cholesterol-lowering products on sales at €3.05 ($4.40) for a pack of four 100g bottles, with Evolus 2-Effect priced at €3.45 ($4.98) for the same pack size.

Compared to “regular” products, however, Evolus 2-Effect is, as might be expected, a super-premium product, with the Evolus Sourmilk retailing for €3.05 ($4.40) a litre and regular sourmilk €0.99 ($1.43) in the same store – a straight 200% premium.

The laws of marketing suggest that Evolus 2-Effect will retain the niche status of the two products that it has replaced. Valio doesn’t disclose sales figures very often, but in 2003, a year after the launch of Evolus, the company said it was selling 1.5 million litres a year of the old Evolus, suggesting that the brand was worth around €6 million ($8.6 million) at retail – a respectable level in a country of just 5 million people. Industry sources speculate that sales may have advanced only a small way since then.

But for consumers who are concerned about heart health, Evolus 2-Effect gives greater convenience by addressing two health benefits, thus removing the need to buy two separate products – and reducing their shopping bill.

“We are trying to combine the mega-trends: tasty, healthy, convenient, clinically proven,” says Siltala.

Example of print advertising for Valio Dairy’s new Evolus 2-Effect range.

OCTOBER 2008 5



New product launches in September show how the Benecol cholesterol-lowering ingredient brand is moving beyond the dairy and spreads area which has dominated cholesterol-lowering products for the past thirteen years.

Raisio, the Finnish company which owns Benecol and which launched the first-ever cholesterol-lowering plant stanol ester-based products back in 1995, has recently taken back from Valio Dairy the Benecol dairy brands sold in Finland (see page 3). The company relaunched these in September, adding a number of new products which widen the scope for consumers to include Benecol products in their daily diet – as well as creating new concepts for Benecol licensees around the world.

The new launches include:• A soy-based daily-dose drink, similar to

that already marketed under the Benecol brand in Belgium and the UK

• A “soyghurt”• An oat drink• An oatmeal with Benecol• A new version of Benecol spread

with enhanced taste

Finland has the highest rate of lactose intolerance in Europe – it’s medically diagnosed in 17% of the population – and while soy products haven’t achieved the penetration in Europe that they have in the US, Finland is one of the more successful countries for dairy alternatives.

Benecol Soyghurt is a lactose-free, soy-based spoonable product that comes in two flavours. It is priced at €0.75 ($1) per 150g pot, compared to €0.50 ($0.70) per 125g pot of the competing Alpro soy yoghurt, the leading soy yoghurt brand in Finland and in Europe.

Raisio’s Elovena brand is the biggest oat porridge brand in Finland. The brand was extended into a “liquid breakfast” format in January 2008 with the launch of Elovena oat drink, which rapidly became a success. Now the oat drink brand is being extended further with the launch of Elovena Plus Benecol Oat Drink. Retailed in a 250ml package

which provides 2g of plant stanol esters, the brand also connects to the high level of consumer association between oats and cholesterol-lowering. Elovena’s flavour is lingonberry, which is a traditional Finnish high-antioxidant “superfruit”.

Elovena Plus Benecol retails for around €1.69 ($2.42) per pack, about 50% above a competing “regular” oat drink such as Yosa.

INDONESIAN DEBUT

Raisio’s increasing experience in formulating its ingredient into dairy-free formats will help the company’s ambitions in Asia, which is a key target growth market for Benecol.

September saw the launch of the first Benecol branded cholesterol-lowering products in Indonesian, by Kalbe Nutritionals, which is launching smoothies under the Nutrive Benecol brand on the Indonesian market. In Asia, Benecol products are already sold, as supplements, in India.

Matti Rihko, Raisio’s CEO, said that the launch of Benecol products in Indonesia was an important step and an indication of the company’s ability to enter new markets with strong local partners: “As has been seen in many countries, the sales of Benecol products increase when the partner focuses on developing the entire market for cholesterol-lowering functional foods and introduces new, interesting products and applications to the market.”

Raisio’s Indonesian partner, Kalbe Nutritionals, is a part of the PT Kalbe Farma Tbk group, a leading nutrition and pharmaceutical company in Indonesia. The group is also the biggest listed company in the sector in south-east Asia, with annual sales in 2007 of €560 million ($800 million).

In the first six months of 2008 Raisio’s Benecol division had sales of €22.8 million ($32.8 million) and produced an impressive 22% operating profit, worth €5 million ($7.2 million).

Asia, oats and dairy-free: new direction for Benecol

OCTOBER 20086


N E W S A N A LY S I S

Kellogg is trying to extend its innovative approach to the better-for-you market with a nutrition bar that represents the most serious mainstream attempt yet to leverage an adult brain-health message with American consumers.

In doing so, the Battle Creek, Mich.-based giant is taking on at least two risks: trying to move beyond the children’s brain-health positioning that has been the focus of DHA-enriched products so far in the U.S. market, and counting on creating a presence for its new entry in a general segment of omega-3 products that seems to be getting overpopulated.

Kellogg’s Live Bright “brain-health” bars, each with 100mg of DHA omega-3s, were rolled out on a limited basis in September to mainstream grocery stores in four U.S. markets with the explicit aim of persuading food shoppers that they should be as concerned about maintaining their own cranial health as they are with developing their kids’ brains.

Available in Dark Chocolate Vanilla and Double Chocolate flavors, the 1.23-ounce bars are packaged four to a box and retail for a suggested price of $3.99 a box, putting them squarely in line with the primary price point for nutrition bars. The packaging bears the co-brand of Life’s DHA, owned by Martek Biosciences, the company that is supplying Kellogg with the DHA for Live Bright.

So far, Live Bright has been available only in the health or supplement aisles of supermarkets in metro Atlanta, Cincinnati, Detroit and Houston, or via Amazon.com.

“They’re designed to make it easier for consumers to take a more proactive approach to their brain health, and few bars today contain DHA,” Jennifer Garrett, Kellogg’s director of nutrition marketing, told New Nutrition Business. “Many Americans don’t consume enough DHA in their diets.”

Kellogg is counting on its heavy dosage of 100mg of DHAs – five times more than most Americans

eat each day – to differentiate the bars from other omega-3-bearing products as well as, of course, nearly all other nutrition bars.

The federal government’s Institute of Medicine has recommended that adults consume an average of 160mg of omega-3s a day as a matter of general health (albeit its recommendations also include differentiation among various forms of omega-3s.) Minute Maids’ Heart Healthy with Omega-3s orange juice provides 50mg a serving of omega-3s. And most DHA-bearing products contain only 32mg of DHA per serving “because that is roughly 20% of what the Institute of Medicine recommends daily,” said Jeff Bernfeld, Martek’s executive director of marketing.

But while Kellogg can boast that Live Bright contains clearly superior quantities of DHA, its executives can’t yet be too sure that consumers will care enough to purchase them – or that it wouldn’t have been better to come

out with an omega-3 bar that appealed to cardiac-health concerns instead.

Initially, mainstream companies have tended to favour DHA-enhanced products that they can aim at children but market to mothers for the boost they can provide to brain “development”, such as nutrition bars aimed at pregnant mothers, infant formulas and Danino, the Dannon yogurt product that was introduced in Canada.

“What Kellogg is doing,” said Martek’s Bernfeld, “is taking this one step further by marketing it to adults, taking a leadership role in that, and filling what it sees as a gap in the market. They’ve seen data that suggests adults actually do care about their brain health and feel that there aren’t many ways to do anything about it, outside of exercise and maybe solving sudoku puzzles, or eating lots of fruits and vegetables.”

That still leaves what is perhaps an even deeper question: Do American adults

really perceive that they need to reinvigorate or maintain their brains in the same way that they clearly do with their hearts, joints and other body parts and functions?

Kellogg’s Garrett won’t elaborate about Live Bright’s positioning, but the company makes its strategy clear by, among other ways, how it has been promoting the product launch. In its introductory news release, for example, Kellogg portrayed brain health as a concern that should be obvious to consumers, given other health issues they worry about:

“We drink milk to promote strong bones. We eat more fiber to promote digestive health. We eat more whole grains, fiber and antioxidants for heart health. We exercise daily to stay active and increase agility. Americans are redefining the way we age by proactively taking charge of all aspects of our health and nutrition. Why should our approach to brain health be any different?”

Later in the release, the company also asserted: “Brain health is an increasing concern for consumers today,” without citing evidence. The release also quoted a physician’s “tips for keeping brain health top

Kellogg has Bright plans for DHABy Dale Buss

Continued on page 8

OCTOBER 2008 7



Fayrefield Foods has given a UK launch to Portuguese fruit-shot range Essencial in the belief it can overcome tough rules on marketing – and buck the challenges other brands have faced – to turn the brand into a hit.

The range of 110ml fruit purees has been purchased by more than a quarter of all households in Portugal since it was launched there 18 months ago by fruit drinks supplier Compal. The brand was also launched in Spain a year ago.

Now Fayrefield Foods, a north-west of England-based sales and marketing company, is hoping to turn Essencial – or Essential to give it its Anglophone name – into a brand worth £5 million ($8.9 million/€6.3 million) on the UK market by the end of next year. It’s a target that would put the brand on a par with Campbell’s V8 – and would be better than many juice drinks have achieved.

The range has just gone into supermarket chain Waitrose, with a roll-out into other major grocery chains scheduled for the New Year, when consumers’ minds turn to improving their diets and lifestyles.

The product comes in six variants – apple, pear, strawberry, pineapple, mango and peach. It will retail for £1.89 ($3.38/€2.34) for a pack of three 110ml bottles. The product is chilled with a shelf life of up to two months. By comparison, Unilever’s competing Knorr Vie daily dose fruit drink (currently the only such product on the UK market) retails for £1.68 ($3/€2.12) for a pack of three 100ml bottles.

UK REGULATIONS A HURDLE

Fayrefield’s confidence in Essential is fuelled by its success in Portugal. Here it has achieved penetration of 28% since launch, says product manager Patrick Brunt. “Portugal is obviously a different country to the UK and consumer patterns are a bit different,”

he says. “But it’s such a phenomenal success there.”

Nevertheless, Fayrefield faces challenges to replicate this success in the UK. For one thing, the company will not be able to claim that a bottle of Essential equates to one of a person’s recommended five portions of fruit and vegetables a day.

This is because it is considered by the Department of Health, which runs the UK government’s Five-A-Day campaign, to be a fruit juice, and fruit juice must be drunk in a quantity of at least 150ml to qualify as a portion. Essential is only 110ml per bottle and therefore cannot carry the official Five-A-Day logo, which is widely used in the UK.

This, Brunt concedes, is “annoying”, on two grounds. First, Fayrefield does not

consider Essential a fruit juice because it contains the entirety of the fruit in question, except for any pips. As such, the 150ml measurement is irrelevant in this case, the company contests.

Second, notwithstanding any disagreement about the categorisation of the product, each variant contains at least 80g of fruit. This is relevant because 80g is considered by the UK Department of Health to be one portion.

“The raison d’être of the product is that it is the nutritional equivalent of one piece of fruit,” says Brunt. “We can prove it is nutritionally equivalent to one portion because they have done all the scientific tests in Portugal to check. We’d assumed we’d be fully supported in using the Five-A-Day logo because it’s a nutritionally beneficial product. But because of the way the legislation is set up in the UK we can’t use the Five-A-Day logo and market it exactly as we’d like to.”

Another problem for Fayrefield is that it cannot even claim Essential is equivalent to eating fruit because it contains vitamin C, in the form of ascorbic acid, to prevent discoloration.

In Portugal, Compal is able to claim on-pack that Essencial “is fruit”. But in the

UK, where trading standards are tougher, the inclusion of even a small amount of natural

preservative prevents this.Instead, Fayrefield is describing

Essential on-pack as a “Fruit Shot”, with the strapline “Eat fruit today the Essential way”. Bottles also carry the Essential “promise” highlighting the amount of fruit contained within.

CAN ESSENTIAL DO BETTER?

Besides regulatory hurdles, Fayrefield will also have to buck past market trends if it is to make

Essential a success in the UK.Past efforts in this market have not

fared well. Switzerland’s Hero Foods came unstuck with its Fruit2Day range of

Portuguese hit destined for new market

Portugal-based juice marketer Compal is taking aim at the daily dose category in the UK with an innovatively packaged product that’s already proven successful in its home market. By RICHARD CLARKE.

Continued on page 8

OCTOBER 20088



drinks, which were prevented by the UK’s advertising regulator from claiming in adverts that they provided two portions of fruit.

Like Essential, Fruit2day drinks were considered juices, and juice can form only one of the five portions a day. Hero withdrew Fruit2Day in October 2006 because, it said, the ruling effectively meant it could not advertise its product.

Encouragingly for Compal and Fayrefield, despite the regulatory hurdle, sales of Hero Fruit2Day had hit over £2.3 million ($4.1 million/€2.9 million) in the few months it was on the market, demonstrating the potential of the concept.

Food giant Unilever, meanwhile, saw sales of its Knorr Vie fruit and vegetable shots halve last year in the UK, according to Nielsen data, which suggests annual sales may have fallen as low as £0.5 million ($0.9 million/€0.6 million). The product is still on the market, but for how much longer is unclear.

Meanwhile, German dairy Müller pulled its One-A-Day spoonable and drinking yoghurts – sold on the basis that a single pot or bottle represented a portion of fruit – after sales disappointed.

Brunt thinks Fruit2Day failed because it contained lumps of fruit. Essential is smoother, he says, and more suited to UK consumers’ tastes.

Of Knorr Vie, he says: “I think it’s probably down to the quirky flavours that they chose. You’ve got things like sweetcorn in there. Maybe, because it was vegetable-

based, it wouldn’t necessarily appeal to the mainstream.” In Portugal, he adds, Essencial outsells Knorr Vie 25 to one, giving Fayrefield yet more confidence it can succeed in the UK.

The Müller One-A-Day failure he finds harder to understand. “It’s obviously a concern. You can’t pretend it’s not. You’d have thought that did tick most of the boxes in terms of current consumer trends. You have got to hope, given all your best research, that you hit the spot.”

In its bid to hit the spot, Fayrefield has earmarked £200,000 ($357,000/€252,000) for marketing Essential in the UK. This will be spent primarily on press advertising in food and women’s magazines.

Brunt believes the product will prove particularly popular with children because “the bottle is a little bit funky”. He adds: “It will find its way into lunchboxes. I think you’ll be able to get kids hooked on it.” Interestingly, in Portugal, Essencial is sold as a component of Happy Meals in McDonald’s, a supply channel Brunt will seek to replicate in the UK.

In spite of the hurdles in its path, Essencial’s success in Portugal gives Brunt the belief Essential will prove a winner in the UK.

He compares Essencial’s 28% penetration favourably with that of Danone’s Actimel probiotic active health drink, which is bought by 36% of Portuguese households. “Actimel has been out for years and has a huge trade spend behind,” he says. “So for Essencial to achieve that level of penetration is quite a remarkable achievement.”

of mind” including getting sufficient sleep and, of course, adding DHA omega-3s to the diet. But the other two bits of advice have arguably only a tenuous connection to brain health: “have some fun”, and get annual check-ups for the body’s level of homocysteine, which is an amino acid that may promote inflammation and is associated with an increased risk of cardiovascular disease.

Martek’s Bernfeld defended Kellogg’s stance and its logic, asserting that “brain health … is a top concern globally”. He said that Kellogg’s positioning of Live Bright could succeed, as far as the product per se is concerned, simply because it is trailblazing. “Unlike something for, say, heart health, where there are so many products, for brain health, not only are there not many products that can really help, but not many nutrients,”

he said.Garrett also professed no concern about

the other challenge for Live Bright: the proliferation of DHA-containing products that could tend to clutter prospects for Live Bright. “Kellogg is working to ensure that consumers know the benefits of DHA by posting this information on the back of the Live Bright box,” she noted, adding that it also appears on a microsite online.

Bernfeld maintained that the overall level of consumer interest in omega-3s in the US is much greater than in Europe – where a number of omega-3-based products, such as Müller’s Vitality pasta, have struggled – but that it remained “two or three years behind” the omega-3 interest demonstrated by many Asian consumers.

“Over three-quarters of the products we have launched [with Life’sDHA] have met or

exceeded company expectations in the US,” Bernfeld said. “And the number of active projects and companies and new products that we’re working with companies on, both in the US as well as around the world, is the highest it’s ever been – and increasing at a rapid rate.”

As for Martek, Kellogg apparently was happy to allow co-branding of Life’sDHA on the packaging. “They want to add that small token of recognition of the fact that this is a credible source of DHA,” Bernfeld said.

So the Life’sDHA logo appears in two places on Live Bright packaging: on the outside of the main package and on the wrapping of each individual bar. On the main package’s side panel, the logo appears near the headline, “Tasty way to get DHA Omega-3 from Natural Plant-Based Source”.

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OCTOBER 2008 9



“Women, especially, understand that when you’re not doing the right things for your body, or eating the right things, or living the right lifestyle, it’s definitely reflected in how they look and feel,” Cooper said.

Consumer panels told Nestlé that “looking and feeling good are one and the same: If women didn’t think they looked good, they didn’t think the outer world would think they were healthy – and, therefore, they wouldn’t feel good,” Cooper explained.

Nestlé also learned from the early niche success of existing inner-beauty products such as PerriconeMD Cosmaceuticals and Borba Skin Balance Water, the latter a line developed by a California-based “esthetician”.

Like the topical skin-care industry, Cooper found, these existing inner-beauty lines typically were divided according to skin type. Borba, for example, offers separate waters for Age Defying, Firming, Clarifying and Replenishing applications.

“We concluded that women actually wanted something different,” Cooper said. “They said, ‘I’m already taking my calcium and doing various things for internal health; for this kind of product, I just want something simple.’ They wanted the key benefits, but they just wanted one product a day.”

So, Nestlé had its researchers come up with formulae that, rather than segregating benefits according to skin type, promised generally to “protect and hydrate the inner and outer layers of the skin” and guard against “the damage caused by free radicals. The list of

natural ingredients includes high-antioxidant vitamins, phyto-nutrients, and botanical and fruit extracts – including quercetin, lycopene, lutein, pine bark, goji berry, white tea, green tea and white-chocolate extract. “They’re in a unique and proprietary blend in efficacious amounts,” Cooper said.

“All of Glowelle’s active ingredients have been specifically researched for the skin,” she added. “Our scientists looked at hundreds of secondary studies to come up with the original formula, which includes things such as antioxidants that specifically benefit the skin.

“And there’s one product, requiring one serving, a day. Consumers don’t have to try to pick and choose whether they’re going to try to fight free radicals or ‘do moisture’ today.”

Nestlé also decided to use Glowelle’s flavors to evoke directly the world of day spas frequented by its target consumers. Glowelle’s Natural Raspberry Jasmine flavor and Natural Pomegranate Lychee flavor are “spa-inspired as well as food-inspired,” Cooper said.

“In top spas you’re seeing more lychee and pomegranate and dark berries, and you’re even seeing more florals, such as lavender and jasmine,” Cooper explained.

The idea of jasmine “flavor” also subtly reminds consumers that Glowelle is not a typical beverage. “We wanted it to be a little different, not something regular like ‘orange’ flavor,” she said. “We traveled to spas in Europe and China and Japan and found jasmine waters and teas and food infused with florals, and it’s just starting to become more

popular.”Glowelle is also low in calories – with 100

calories in each 260ml bottle and 50 calories in each stick of drink mix.

SELLING A SYSTEM

Another crucial component of the Glowelle proposition is shared with more and more better-for-you products that want to sell consumers on a “systematic” approach, and “teach” them how to adopt it, rather than simply sell them an isolated product and leave consumption and frequency up to consumers’ own devices.

The key to promoting a systematic strategy, however, is the forms in which Nestlé is offering Glowelle. Similar in approach to Borba Skin Balance products, Glowelle is available in both single-serve, ready-to-drink packaging and powder sticks for mixing – the latter, in both seven-day and 30-day quantities.

“Some consumers like ready-to-drink because it’s convenient,” Cooper explained. “But others like the portability of powder, and its versatility, because you can mix it with either juice or water. If you’re drinking something for 30 days, powder is easier. So as people try the product and become regular users, we think powder will sell a little bit more than ready-to-drink.”

Pirko endorsed Nestlé’s attempt to get Glowelle customers to buy into a system. “NutriSystem and other successful brands are always trying to get you to buy into a system,” he said. “It gets consumers committed to something, and it increases revenues. You build brand loyalty by getting them hooked on a long-range program. If you do a one-off, it’s like a one-night stand; you want to get them involved in a pattern or habit of behavior.”

PREMIUM PRICING: BARRIER – OR SYMBOL OF EXCLUSIVITY?

Perhaps the most challenging aspect of the Glowelle proposition is its pricing. Whereas Borba charges $3 (€2.09) a bottle for its Skin Balance Water via the internet, and $14 (€9.80) for each seven packets of mix, and $50 (€35) for each 30 packets, Glowelle’s price points are $7(€4.90), $20(€14), and $112(€78).

On one level, Cooper said that the pricing reflects the high cost of “quality” and “pure” ingredients that are included in Glowelle in “efficacious” amounts, and akin to supplement pricing.

Glowelle contains a wide range of antioxidants that have been shown to benefi t the skin - and if the consumer isn’t sure what some of the ingredients are, such as quercetin, then Glowelle’s communications make it clear that it’s something found naturally in apples – each 260ml bottle providing as much quercetin as half a kilo of apples.

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OCTOBER 200810



But Glowelle’s lofty prices are also an important part of creating a mystique around the product that ensures it will be exclusive.

“They didn’t go for the mass market; they’re not advertising in Seventeen and Cosmo magazines; they’re not pushing it to every young girl who wants to get a new boyfriend,” Pirko said. “They’re really looking at the very top-end carriage trade: women who can afford to spend any amount they want to.

“If they can afford to spend large amounts of money that cost many multiples of what it would cost to buy them at Wal-Mart, would they lay down $7 a bottle [for Glowelle]? Yes. They’ll go out to lunch and spend $15 on a bottle of Perrier, so they really don’t care.”

DIETARY SUPPLEMENTS AT THE BEAUTY COUNTER

And upper-crust retailers like Neiman Marcus, of course, are precisely where this target market prefers to hang out. Specifically, Glowelle is proffered at the cosmetics counters that comprise the heart not only of Neiman Marcus and Bergdorf Goodman stores but of practically every worthy department-store chain around the world.

“We really wanted to be in the prestige beauty industry with Glowelle and partner with a retailer that was really going to be able to dedicate resources to this product, just as we are,” Cooper said.

But turning a beauty counter into an area where typical customers would welcome, much less object to, hawking of a dietary supplement posed a delicate task to Nestlé – particularly because it has burgeoned worldwide by understanding mainstream, not upscale, tastes.

Counter clerks in cosmetics departments emerged as a key to the Glowelle proposition. They tend to be accustomed to learning intently about the expensive topical

products they offer, and many women listen just as intently to their advice.

“So we’ve trained 1,000 of them on Glowelle, and have set up an 800 number so that any beauty associate can call it, where we’ve got doctors and nurses available to answer questions,” Cooper explained. The clerks “are having to answer questions that are new to them, about putting products inside their bodies, but they’re comfortable with communicating with consumers”. Nestlé also has been providing free Glowelle to cosmetics clerks since July.

Another important aspect of launching Glowelle is a sampling program. Again, the idea of sampling – by rubbing some foundation on a cheek or spritzing some perfume on a wrist – is hardly foreign to cosmetics counters. At the same time, Cooper wanted women to be able to mix Glowelle right on the sales floor. But Nestlé quickly determined that the typical paper cup of beverage that one might find in a supermarket sampling program wasn’t going to create the proper aura, or moment of delivery, for Glowelle.

So, in the majority of Neiman Marcus stores that include a restaurant called Mariposa, Glowelle hires waiters and waitresses to come to the cosmetics department and circulate among the clientele with champagne glasses full of Glowelle, while sales associates are chatting customers’ ears off about its benefits.

“It helps that the product is either dark purple or dark reddish, so it’s very beautiful as servers walk it around the store,” Cooper said. “It’s an experience we’re trying to create: a luxurious experience, versus someone just trying to get the sample into your mouth. Our purpose is to make you feel connected to the brand.”

Nestlé launched Glowelle in September with events such as personal

appearances by its consulting physician, as well as sampling in Neiman Marcus and Bergdorf Goodman stores. Glowelle also is available exclusively online at the Neiman Marcus web site.

Cooper said that, initially, Nestlé is hearing “good buzz” about Glowelle. Among consumer feedback is the idea that “our label pulls everything together for people who might be hearing about lycopene and green tea, for example – but they’re not sure why.”

Nestlé will be seeking at some point both to extend the Glowelle brand into other inner-beauty products and to expand distribution outside of Neiman Marcus, Cooper said. “We see this as a platform for women that we can continue to build on,” she said.

Maybe, countered Pirko. “If they move toward the mainstream, we’ll see how many teenage girls they can get who would pay even $3.50 a bottle” for Glowelle, he said. “Right now, they’re in safe territory.”

But regardless of how Glowelle fares in the coming months, Nestlé importantly has broken a mold with the product, Pirko said.

In any event, the consultant said, with Glowelle, “what we’re really looking at is a changing paradigm when you look at beautification. It’s moving forward with something much more interesting and larger than before in its repercussions – beauty products tending to get into the same plane with health-and-wellness products.

“If they do get in the same plane in the American market,” Pirko concluded, “they probably have 140 million customers.”

NUTRITION FACTS PANEL

Glowelle communicates that it is available in powder form in convenient 7-day or 30-day packs.

OCTOBER 2008 11


E D I T O R I A L

Combining innovation in ingredients, technology, packaging, positioning, marketing and distribution, Nestlé’s Glowelle beauty drink is a rare example of a new launch that innovates from every angle. It even acknowledges the reality that functional foods are a high-value, low-volume niche. If it doesn’t work, the most likely reason will be that women may not yet be ready for beauty drinks.

1. Innovation in ingredientsAlthough it’s a product which represents the excellence of food technology skills, Glowelle in fact conveys a strong message about the “naturalness” of its ingredients, using imagery to reinforce messages such as that it contains, “the same amount of vitamin E found in 108 almonds”. The ingredient list also features cocoa extract, apple extract, pomegranate extract, green tea extract and others, while the flavours of the products are derived from fashionable fruit, such as pomegranate, raspberry and lychee.

And if the consumer isn’t sure what some of the ingredients are, such as quercetin, then Glowelle’s communications make it clear that it’s something found naturally in apples – each 260ml bottle providing as much quercetin as half a kilo of apples.

Moreover, women – the target market – are used to “natural extracts” being the basis of many personal care products and are seemingly willing to accept the ingredient list of these products also containing (in apparent contradiction of the “natural” message) other things that sound like the contents of a chemistry set. But when people are buying “hope” they are often willing to make compromises. A blend of naturalness with science seems to work best in topical skincare products, so why not skincare drinks too?

Thanks to the marketing of the cosmetics industry over the last five or more years, women are also well-aware of antioxidants in connection with skin health, and Glowelle connects to beliefs about antioxidants’ skin benefits with its message about being “the highest antioxidant beauty drink”.

The types of ingredients used in Glowelle figure in the strategies of an increasing

number of ingredient companies, such as Cognis, which has created formulations with vitamin E, plant extracts, carotenoids and others for use in nutricosmetics. So too has DSM Nutritional Products, which has formulated vitamins, antioxidants, carotenoids and polyphenols for use in beauty beverages that claim to protect skin against UV rays and dryness. The success or failure of Glowelle will have an impact on their destinies.

2. Innovation in packagingBoth the 260ml bottle and the stick of powder, for adding to other drinks, recognize the reality that most foods and beverages for health are for individual consumption – not family consumption. The 1-litre gable-top carton is completely wrong for products like this. In our industry, however, an inability to innovate in packaging (or even achieve a point of difference) is one of the most common causes of failure.

The package design itself also looks right for a product that is in essence a cosmetic (or a “nutricosmetic” as L’Oréal refers to such products) with a slightly clinical look.

3. Innovation in distributionConnected to the innovation in packaging, Nestlé is showing an admirable approach to innovation in distribution.

Supermarkets are often the worst place to sell a product. They expect brands to bring quick results while in fact doing little or nothing to help the brands they sell succeed. Your package can all-too-easily become invisible among the thousands of other products cluttering the shelves – and finding the right aisle to put your product in can be a nightmare.

Merchandising a beauty drink such as Glowelle in the beverage aisle alongside the Coca-Cola or in the chiller cabinet with the yoghurts priced at two-for-one would kill the upscale beauty image that Nestlé is trying to create. And neither aisle is a place that women go to with beauty on their mind (nowhere in the supermarket is). Many successful brands have been built without supermarket distribution – Red Bull and Yakult being two examples.

Where better to sell your beauty product than in the beauty and cosmetics section of a very upscale department store such as Neiman Marcus – a place where women do go with beauty on their mind and where they are used to taking the time to browse and sample?

As everyone knows, functional food brands are brands with a high content of information – there’s a lot to explain about what they are and how they work. That requirement to communicate and educate is particularly acute when the product and the benefit being offered are completely new and unfamiliar to consumers.

Hence Glowelle is being heavily sampled in the beauty area, where there will be knowledgeable staff on hand to explain the product – which is what consumers expect beauty brands to do. If you haven’t done this before, go to a department store and look for a range called Clinique (there’s a men’s range as well as a women’s, so male readers can go too) and experience how the sales assistants for this brand, forty years old this year, communicate the benefits. That’s the model for Glowelle – and it’s the best approach yet

A true innovation tests the beauty hypothesis

OCTOBER 200812


E D I T O R I A L

attempted in the embryonic beauty foods business.

SUPER-PREMIUM

The Glowelle strategy recognizes from the outset that “beauty” is a niche – perhaps an utra-niche – opportunity and the brand is priced accordingly. Priced at $7 (€4.90) for each 260ml bottle, that’s equivalent to an impressive $27 (€18) per litre.

Put another way, on a price per litre basis Glowelle retails at:

• A 270% premium to a premium brand such as Pom Wonderful pomegranate juice

• A 1,045% premium to a mass-market superfruit brand such as Minute Maid’s Pomegranate-Blueberry juice

Given the very expensive array of ingredients and the marketing costs involved, that premium price is necessary.

While wobbles in America’s financial world and the mortgage woes of ordinary people might bite into the sales of mass-market products, in a country such as America there’s still a large niche of people whose wealth is at a level far, far removed from ordinary mortals. Let’s not forget that even in the Great Depression of the 1930s, alongside soup kitchens there was an echelon of society who dined at the Ritz and shopped at Cartier (see the glamorous movie “The Rich are Always with Us”, made in 1932, to learn about a lifestyle untouched by hard times). These people shop at Neiman Marcus.

The worst thing anyone could do now would be to aim such a product at the average person. Better by far to build up an elite following and leave moving into the mass market to some future date when conditions allow it.

THE BEAUTY EXPERTS?

Nestlé has the advantage of having already acquired experience in the beauty business through its part ownership of cosmetics giant L’Oréal, with which it has a small but successful “beauty supplements” business operating in nine European countries, as well as Brazil, trading under the Innéov brand.

The Innéov range, which are dietary supplements, has been

around since 2003. Neither L’Oréal nor Nestlé will disclose Innéov’s sales, but industry sources estimate the brand to be worth over €70 million ($100 million) and growing and there’s no-one who disputes Nestlé’s claim that Innéov is Europe’s largest “nutricosmetics” brand.

SUPERMARKET STRUGGLES FOR ESSENSIS?

Danone’s Essensis is possibly Europe’s second-biggest beauty food brand. Like Nestlé, Danone does not disclose sales, but industry sources estimate that the range of spoonable yoghurts – launched in Italy, Spain, Portugal, France, Belgium and Ireland – peaked at no more than €50 million ($72 million) in retail sales in 2007, the brand’s first year on the market. If true (and some sources say the sales number is lower) that’s well short of the €100 million ($144 million) target which Danone said it was aiming for in January 2007. Industry executives say that in France the brand’s sales fell in early 2008, prompting a relaunch in mid-year. Overall, Essensis appears to have stalled.

Among the reasons may be that it is merchandised in the supermarket – alongside the regular yoghurt. That’s not a place where a brand can acquire any cachet or mystique. Moreover, it’s easy for consumers to see that it’s a brand that’s at quite a premium to regular yoghurts. French consumers have been tightening their belts in 2007 and 2008 – and Essensis, especially when compared to the Glowelle strategy,

just isn’t differentiated enough to justify a price premium. Its only point of difference from other yoghurts is the beauty benefit – that aside there’s no innovation in packaging, distribution or merchandising.

Essensis is in fact showing signs of being a brand whose benefit has only ultra-niche appeal – as Glowelle is planned to be – but without earning Glowelle’s super-premium price.

When compared to Glowelle, Essensis looks like an opportunity that was missed.

If Glowelle succeeds as a super-premium, ultra-niche product, as we suspect it might, then the beauty foods market will be confirmed as a profitable niche opportunity for brands that are willing to

innovate and obey the marketing rules of the cosmetics market.

If Glowelle fails, despite such an innovative approach, then it will present the question of whether beauty foods really have any future at all.

OCTOBER 2008 13


R E G U L AT I O N C A S E S T U D Y

In August the European Food Safety Authority (EFSA) provided the first indication of how so-called “Article 13” health claims will be treated when it published its first eight opinions on disease risk reduction claims and on claims referring to children’s development and health, submitted by food and ingredient companies.

Under Europe’s new health claim regulations health claims fall into two categories:

• the so-called structure-function claims (Article 13 claims), such as calcium builds strong bones. Claims from this category will be put on a ‘positive list’, if they are based on generally accepted scientific evidence and are understandable by consumers. New health claims based on new science can be authorized later and added to this list. After consulting EFSA, the final Community list of permitted claims will be adopted by January 31st 2010.

• disease risk reduction claims (Article 14 claims), such as decreases the risk of heart diseases. For these submitting an individual scientific dossier to EFSA is obligatory.

In July this year – after an intensive 18 months of hard work by regulators and companies across Europe – EFSA had received the draft consolidated positive list of health claims (Article 13), a compilation of all claims that are now in use in the member states.

EFSA is now supposed to evaluate all the claims on this list to allow the European Commission to adopt a final list with all the approved Article 13 health claims by 2010.

That will be a turning point in for marketers in Europe; once approved, the list will become a ‘positive list of authorized health claims’ and all other health claims – except for individual and EFSA authorized

claims regarding reduction of disease or claims relating to children’s health – will be prohibited.

There’s just one complication, which is that the list submitted in July is not yet a final version – so EFSA can not start its evaluation.

“Part of the information is still missing, as some member states were not able to send all their comments and additions before the deadline requested by the European Commission,” says Miguel Silva, consultant with EAS, the leading regulatory advisory agency and a company that has been closer than most to the health claims process.

Moreover, the draft list also includes “wannabes” – claims that are not yet being used in the member states, but that the industry would like to use in the nearby future.

Lucia de Luca, an EFSA spokesperson, told New Nutrition Business that: “The draft consolidated list that we have received is based on 44,000 health claims in total. We are now discussing with the European Commission how to tackle this work. At this moment I am not in a position to anticipate the outcome of talks or provide you with a precise publication date of the final list”.

EAS’s Silva expects the list to be cleaned up before EFSA starts the assessment. “Duplicates will be removed, just like claims that are considered to fall under article 14,” he explains. But with so many claims to be deleted from the list, it will be huge cleaning operation and it may take some time before the result becomes public.

FIRST OPINION: AN HISTORIC MOMENT IN THE EUROPEAN CLAIMS SAGA

Nevertheless, EFSA is not sitting on its hands and in August the agency provided the first indication of the final outcome of the Article 13 story, publishing its first eight opinions (of which seven were Article 14 and one was

Article 13).The claims concerned are diverse in

nature:1. Top of the list is a claim relating to the

use of cholesterol-lowering plant sterols in products such as spreads, milk and yoghurt, applied for by Unilever. It says: “Plant sterols have been proven to lower/reduce blood cholesterol signifi cantly. Blood cholesterol lowering has been proven to reduce the risk of coronary heart disease”.

2. Also submitted by Unilever was the claim ‘alpha-linolenic acid and linoleic acid are essential for the proper growth and development of children’, to be used for its spread brand Blue Band Halvarine.

3. A claim for a relationship between dairy consumption and healthy body weight, applied for by the National Dairy Council of Ireland, under which three portions of dairy foods per day are claimed to promote a healthy body weight in children and adolescents (a portion being specified as 200ml milk, 28g cheese or 125ml yogurt).

4. Another claim from the Irish National Dairy Council for consumption of dairy foods and protection of teeth from decay: “Many foods, including dairy products (milk and cheese), have been shown to have non-cariogenic properties, protecting teeth from decay (referred to as ‘cariostatic factor’). Dairy foods (milk and cheese) demonstrate these qualities and promote dental health in children.”

5. A disease risk reduction claim relating to improvement of blood lipid parameters associated with cardiovascular risks, especially HDL cholesterol, for an ingredient called NeOpuntia, which includes dehydrated leaves of the prickly pear cactus (Opuntia ficus-indica).

6. A health claim related to a compound

Europe’s health claim ‘black box’

The never-ending saga of European health claims regulation took a new direction over the summer when Europe’s regulatory agency, EFSA, made the historic step of publishing its first opinions on eight health claim petitions. The EFSA verdicts give a good clue as to what direction its future decisions might take – and it’s not all good news. Having already changed its criteria for evaluating health claims, EFSA is now operating like “a black box” where people can see what goes in and what comes out – but no-one has any idea what happens in between. LISETTE DE JONG reports.

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R E G U L AT I O N C A S E S T U D Y

called Femarelle, which is claimed to induce bone formation and increases bone mineral density, reducing the risk for osteoporosis and other bone disorders.

7. A health claim related to the regulation of body composition in people with light to moderate overweight for Elancyl Global Silhouette – a compound of conjugated linoleic acids (CLA), polyols, a mixed extract of plants and cocoa extract.

8. An application from a German company called enzyme.pro.ag for a health claim related to a food supplement targeted at children aged 3-16 years. It contains different fruits and vegetables, nuts and spices, which are blended together and fermented stepwise by five different strains of lactobacilli that are filtered away after fermentation.

PASSING THE ‘EFSA EXAM’

Only the Unilever claim on plant sterols passed the ‘EFSA exam’ – although not with an A grade.

According to EFSA, there is enough evidence that plant sterols decrease blood cholesterol levels. However, it says it is not confirmed that the decrease of blood cholesterol reduces the risk of coronary heart disease. This means that Unilever has to cut its claim in two pieces, adding nuances to the second part. A new version of the claim could be: “Plant sterols have been shown to lower/reduce blood cholesterol. Lowering blood cholesterol may reduce the risk for coronary heart disease”.

Unilever spokesman Gerbert van Genderen Stort said he was content with the outcome: “We are the first company in Europe that has obtained a positive advice on a claim referring to disease risk reduction. Until now, only claims referring to health were allowed.”

But EFSA was more skeptical regarding Unilever’s claim on α-linolenic acid (ALA) and linoleic acid (LA): according to the scientific panel the evidence provided does not establish a benefit for normal growth and development of children with LA intakes greater than about 1% of total energy and with ALA greater than about 0.2% of total energy. “These quantities are reported to be consumed by children as part of the recommended balanced diet,” EFSA says.Van Genderen Stort says about this outcome: “In each case, EFSA shares our scientific

evidence on the importance of healthy fats. However, Unilever and EFSA do not share the same opinion when it comes to the optimal intake of ALA and LA. EFSA refers to the level that prevents diseases in the long term, while we use the daily dose needed for optimal growth in both the short and long term as a starting point. According to food consumption surveys, in The Netherlands, intake remains below this daily dose,” he explains. Unilever has submitted its comments on this topic to the European Commission.

The first series of EFSA opinions on disease risk reduction claims and on claims referring to children’s development and health may give some insight not only into the way the ‘Article 13 claim list’ will be addressed, but also into possible future bottlenecks.

“We understand that EFSA intends to use the same criteria to evaluate article 13 claims as for Article 14 claims,” Silva told New Nutrition Business. “This will certainly be a problem because article 14 applications consist of a very elaborate dossier whereas article 13 applications – as indicated in the draft consolidated list – consist of very limited data. On this list you only find proposed wordings, conditions of use, and an overview of scientific references.”

A “BLACK BOX”

Although EFSA’s first eight published opinions look clear and well-argued, until now, the authority has not publicly indicated what criteria it will use to evaluate the proposed claims.

“For the time being, EFSA’s evaluation functions like a ‘black box’. You know what goes in and what comes out, but you do not know what happens inside it,” observes Silva. “In other words, you do not know the essential criteria that make EFSA decide what is an acceptable dossier.”

In addition to the assessment criteria for Article 13 claims, several other question marks remain: “For example, we understand the consolidated list is not yet complete because some member states did not forward to the Commission all the data before the deadline. In addition,” adds Silva, “those that have had a chance to take a look at the draft consolidated list could see that some information has disappeared from some entries, including conditions of use and references. In addition, certain entries were merged without any reason.”

Another issue is the fact that the regulation

does not provide a transition period for the Article 13 health claims that will not be included in the final 2010 community list.

“Manufacturers cannot be expected to be able to remove the non-approved claims from their current labels overnight! Thus a transition period must be proposed,” says Silva.

IS THE WORK LOAD MANAGEABLE?

But the biggest question is: will EFSA manage to do all the assessment work? According to de Luca, the organization is well-aware of the huge challenge that it is facing and has been well-prepared: “The NDA Panel, whose members were renewed in June 2006, is fully operational and has a high level of expertise, in the field of nutrition in general, but also in particular on health claims. In addition to the scientific panel, a working group on health claims has been established, in anticipation of the publication of the regulation.”

EFSA is also setting up five sub-groups for the evaluation of the claims. The working groups will facilitate claim assessment by the scientific panels. The panel and the working group will be supported by EFSA staff. “From the original four people at the time of our claims conference in Bologna, November 2006, we have now 16 people in the unit. More colleagues will be joining by the end of the year,” says de Luca.

EFSA has been working on claims for months now and has so far received more than 220 applications for claims under Article 14, the evaluation of eight of these claims was finalized last August. “EFSA will start assessing claims under Article 13 as soon as the mandate is clarified with the European Commission,” de Luca emphasizes.

Silva is skeptical: “In addition to their work for EFSA, the members of the 19 EFSA panels all have their own normal job. Where will they find the time to read through all the paper work?”

“Qualitatively we think EFSA will be able to handle the work for sure,” observes Unilever’s Van Genderen Stort. “However, from a quantitative point of view it may be a challenge. They have to deal with many dossiers, so they will need a lot of extra hands to get things completed before the deadline.”

According to the Unilever spokesman it does not make much sense if EFSA receives dossiers from each individual company. His advice: “It would be better if national branch organizations coordinate the claim applications and forward them to EFSA.”

OCTOBER 2008 15


S T R AT E G Y C A S E S T U D Y

Among their many positive national characteristics, the Dutch are noted for a down-to-earth, common-sense approach to life – and a sharp nose for a bargain. This has had two consequences for the Dutch grocery market. One is that price competition is intense – for example, the same brand will retail for around 10% less in the Netherlands than it would in the UK. The other is consumer scepticism about many of the marketing claims made for functional foods.

The Spanish are Europe’s biggest enthusiasts for functional foods and you’ll find products with benefits of all kinds – for beauty, heart health, cholesterol, blood pressure, mood, sleep and more – selling well in Spain. But the Dutch consumer is the opposite – a natural sceptic about marketing claims – and in the Netherlands penetration of functional foods and the variety of products on offer is much less.

To take one example, one would expect Unilever’s cholesterol-lowering daily dose dairy drinks, branded Pro.activ, to sell well in the company’s “home” market, but retail sales in 2007 were just €15.3 million ($22.3 million), or just 2.2 million litres, a 10% fall from the previous year. And so low is demand that there’s no other cholesterol-lowering brand on the market – even Benecol, usually Unilever’s closest competitor, has long since disappeared.

Typically, the Netherlands is one of the few countries where low-cost private label has made headway in the cholesterol-lowering niche. Sales of supermarket branded daily dose drinks – led by Albert Heijn, the biggest supermarket chain – grew 500% between 2006 and 2007, to reach €5.3 million ($7.7 million), giving private label a 26% share of the niche (compared to 5% in most European countries).

Even more revealing, private label cholesterol-lowering products are priced,

measured on a price per litre basis, just 20% below Unilever’s Pro.activ brand. Put simply, a small price difference contributed to a 500% surge in growth of supermarket own-label in 2007, expanding the size of the cholesterol-lowering niche by 15% and driving down Unilever’s sales by 10%.

In common with people in most countries, few of the skeptical Dutch are motivated by the cholesterol-lowering message, but they have fallen en masse for the concept of healthy bacteria. About fifteen years ago, when the first probiotic brands debuted, it was easy to find scientists and consumers in the Netherlands who thought that manufacturers of probiotics were building castles in the air. But by 2007, sales of probiotic daily dose drinks were over €149 million ($217 million), representing an impressive 28% increase in sales over 2006. In 2008 sales have revived from a dip early in the year caused by a media scare-story about a probiotic (the story was a very poorly reported scientific study) and overall will be up again on 2007 levels.

DRIVERS OF GROWTH

“According to figures from week 20 in 2007 to the same week this year, products with a probiotic claim had a year turnover of over €142 million ($223 million) and a 9% annual

growth,” confirms Eric Harmsen, Marketing & Brands Director with The Nielsen Company.

Over the last year, the probiotic dairy drinks segment has grown in both value and volume. “The dairy category as a whole has been completely value-driven. Consumers pay more for the same product volume and buy more expensive health products, and consumption rates have stayed at a constant level,” adds Harmsen.

One of the reasons that probiotic products are one of today’s greatest rising stars may be the fact that over the last five years their effects have become better accepted by both scientists and consumers. Theories such as the hygiene hypothesis – which is based on the concept that both we and our food have become so clean that our immune system becomes hypersensitive, increasing the risk for allergy and asthma – has gained currency, supported by media attention to the publication of studies that substantiate the benefits of probiotics in the prevention and treatment of allergic systems, and infectious and antibiotics-related diarrhea.

According to Anita Peerdeman, Brand Group Manager with Campina, marketer of the Vifit probiotic brand: “Probiotics seem to have become common property. Not only people with intestinal problems are now using them, but also people that are in good

Probiotics: future stars of skeptical, price-sensitive markets

Companies worried about how to make money from functional foods at a time when consumer spending is set to become more restrained can take heart from the example of the Dutch market for probiotics. Despite its well-deserved reputation as one of the most price-sensitive markets in Europe, this has not held back the development of a premium-priced – and still fast-growing - probiotic market. It’s a case study that shows what can be achieved by brands with very focused strategies and relevant benefits, even in tough markets – as well as showing the pitfalls that await brands that can’t stay focused and carve out a very clear position. By JULIAN MELLENTIN and LISETTE DE JONG.

Despite initial skepticism, probiotic products have grown over the last 15 years to reach €142 million

($223 million) in turn over.

OCTOBER 200816



shape and that are also conscious about their health.”

THE MARKET LEADER

Key to turning probiotics into an everyday part of the supermarket has been the marketing of the competing brands. No-one has marketed its brand more aggressively than Danone and its no coincidence that the real growth in the market can be dated from the debut of Danone Actimel in 2001. That year the market – then in its seventh years, was worth just €28 million ($40.8 million) at retail prices. In the following six years it grew by over 430%.

Danone’s marketing messages for Actimel are very focused and communicate concrete end benefits for the consumer. The same applies for its digestive-health focused spoonable yoghurt Activia. Launched in 2003 Activia is the only significant spoonable probiotic yoghurt brand on the Dutch market – currently the daily dose format dominates the market for probiotic dairy products – and the clear market leader.

“We say that Danone Actimel helps to improve someone’s natural defences, while Danone Activia helps to improve bowel movement,” explains Joline Zandbergen, Head of Category Management with Danone. “Other manufacturers hold on to more abstract claims, such as ‘good for the intestinal flora’.” According to Zandbergen, this concrete communication message explains part of the success of the products.

Danone Activia and Actimel have been heavily marketed, with particular success coming from consumer challenges, where the consumer is promised that they can have their money back if they don’t feel a difference after consuming Activia or Actimel every day for two weeks.

In addition, says Zandbergen, “Both in the supermarket and the foodservice channel we are looking for new solutions for specific moments. For example, last year, for personnel restaurants, we have developed a tap that enables people to fill their own bowl with Danone Activia yoghurt.”

THE EXPERT BRAND

Yakult effectively gave birth to the probiotic category in Europe when it was launched back in 1994. It’s a brand that has never tried to appeal to the fi ckle, price-driven and new taste-seeking mass-market consumer. It is a “technology brand” – one that sells in

one fl avour, and in one pack size, at a super-premium price (making it the most expensive brand in the category, as Chart 3 shows).

“We do not attract consumers with product promotions, new flavours, or packages with ‘new!’ on it,” says Ad Usman, Director of Communications with Yakult Nederland. “We have been considered as the probiotic expert. Our strategy is focused on building confidence by educating rather than convincing the consumer. This approach may take longer, but we believe it will be more steady in the end.”

This expert focus enables the brand to appeal to the people who are most serious about health and who are the most loyal consumers, with high repeat purchase rates.

THE LAGGING LOCAL BRAND

Of the three competitors in probiotics, Campina is the only brand that belongs to a local dairy group (Danone is French-owned and Yakult Japanese). The story of Campina’s Vifit brand shows the pitfalls found in most functional food markets, where there’s usually room for only two players, making life for whoever is number three very difficult.

Despite being narrowly first to market, Campina’s Vifit brand has experienced a number of mis-steps that have led it to break many of the “golden rules of success” for functional foods – mis-steps for which it is now paying the price with a declining market share and lower growth than its competitors.

At first Vifit seemed to have all the cards stacked in its favour. To begin with, the brand is based on the probiotic bacteria LGG (also known as Lactobacillus rhamnosus), the best-researched commercial probiotic bacteria in the world. Campina licenses the bacteria from Finland’s Valio Dairy (see page 3) which owns the worldwide rights. Supported by some of the best science in the probiotic business, Vifit communicates that it is “Good for your natural defences. Supports barrier function.”

In addition, the Campina umbrella brand is the biggest brand in the Dutch supermarket, the one that’s most trusted by Dutch consumers, and it would be an unusual Dutch home that didn’t have a Campina dairy product of some kind in the refrigerator.

Initially well-marketed, by 2000 Vifit had taken a 50% value share of the burgeoning Dutch probiotics market, then worth €27 million ($38.8 million) at retail prices, with

Yakult having the other 50%. In volume terms Vifit was the larger brand.

Success in functional foods – and any area of probiotics – is about a strong focus and about creating an “expert brand” – as Yakult has shown. But in 2001, for reasons best known to itself, Campina decided to make its Vifit probiotic brand into an umbrella brand for all of its health-enhancing and functional dairy products. Under this new brand architecture the Vifit probiotic drink was sub-branded Vitamel. Other sub-brands included Optimel (a low-fat product for weight management); Calcimel (with calcium for strong bones) and even Vifit Choless Control – a short-lived cholesterol-lowering yoghurt.

But almost simultaneously, the company was faced with new competition from Danone’s highly-focused Actimel immunity brand, in its daily dose format, followed in 2003 by the debut of Danone Activia spoonable yoghurts for digestive health.

It’s perhaps no accident that – according to Neilsen data – faced with intense competition from much better-focused and well-supported brands, sales of Vifit probiotic products actually declined between 2001 and 2004 (see Chart 2).

At some point Campina moved Optimel – now a very successful brand in its own right (see Case Study in June 2008 NNB) – and the other sub-brands out from under the Vifit umbrella and Vifit once again became a probiotic-focused brand.

TRAPPED BY ITS PACKAGING

What was even more surprising was that for the first ten years of its existence Vifit was sold only in half-litre and one-litre gable-top cartons. Not until 2005 did Campina introduce a daily-dose format, with the

OCTOBER 2008 17



launch of Vifit Plus, a 100ml drink. But by then it was too late. The daily dose format was now firmly associated with Actimel and Yakult, and Vifit Plus was just a me-too in the eyes of the consumer, offering neither a new benefit nor new packaging. Unsurprisingly, Vifit Plus failed to make inroads, and by the end of 2006 had been withdrawn.

Packaging innovation is key to success in functional foods, but Campina had chosen not to innovate. The consequence of that risk-averse, conservative thinking is that today Vifit still sells almost entirely in gable-top standard cartons and the brand has as a result failed to capture the value-added, premium-pricing of the probiotic market, which has instead accrued to Actimel and Yakult (see below).

Today, Vifit is positioned as a good-tasting product that helps to meet the daily required intake of dairy and contains probiotics to improve one’s natural defences in an easy way.

“The product can be consumed with breakfast and lunch, so – in contrast to a probiotic shot – you do not have to add an extra moment of usage,” says Campina’s Peerdeman.

Vifit has not only been sold in supermarket and catering outlets, but also at petrol, train, bus and metro stations for on-the-go use. “This makes Vifit more attractive to young people, compared to, for example, Danone and Yakult. We focus on an age group of 18 to 35 years,” says Peerdeman. In 2008 Vifit has been extensively marketed with TV and print advertising, presence at consumer fairs and events and sampling campaigns in city centers.

SUPER-PREMIUM PRICING

It’s a common error to think that consumers for health are strongly motivated by price. More motivating to them are the health credentials of the brand before them and their confidence that it actually gives a benefit they can feel.

As Chart 3 shows, market leader Actimel retails both at a much higher price per pack than Vifit but also a much higher price per litre – a straight 150% premium in fact.

Yakult, the “expert brand”, retails at the highest price – as an expert brand should – at a 220% premium to Vifit. The daily dose packaging of Actimel and Yakult serve to conceal the degree of their price premium. But the Danone Activia spoonable yoghurt is also retailed at a premium price and even though Danone Activia drink is retailed in

the same uninspiring gable-top carton as Vifit, making the premium more transparent, the aura of the Activia brand, its perceived effectiveness and its positioning, enable even this product to sell at a 150% premium to Vifit.

In short, as a result of more innovative packaging and a very clear brand position Actimel and Yakult are both able to capture a much higher price per litre for what is essentially a very similar product – a dairy drink fermented with probiotic bacteria.

This is all the more interesting since many would argue that the LGG-based product – Vifit – contains the ingredient with the most science behind it. Assuming that this is true, it underscores what we have often shown in NNB in the past, that superior science is of no value unless it’s taken to market with superior brand marketing skills.

A HIGH VALUE, LOW VOLUME NICHE

Look at the premium pricing of probiotics and it rapidly becomes apparent that this is a high value, low-volume niche business and the most profitable and successful brands are the ones that make this reality the core focus of their strategy. For example:

• with retail sales of €41.6 million ($60.7 million) and an average retail price of €6.28 ($9.16) per litre, that suggests Yakult is selling about 6.6 million litres a year

• with retail sales of €75.3 million ($109.8

million) and an average retail price of €4.82 ($7.03) per litre, that suggests Yakult is selling about 15.6 million litres a year

• with retail sales of €24 million ($35 million) and an average retail price of €1.92 ($2.80) per litre, that suggests Yakult is selling about 12.5 million litres a year

Put very simply, Vifit sells twice the volume as Yakult and earns half the retail sales. Moreover Yakult earned its sales in 2007 from four SKUs (increased to five in 2008) – compared with eight SKUs for Vifit. Most of our readers will be able to infer that Vifit must be making less profit per litre. Not only that, but Campina’s strategy leaves the brand with less margin to invest in marketing, putting it at a permanent disadvantage to its competitors.

Another interesting fact to note is that, according to Nielsen data, Actimel and Yakult between them sell around 530,000 of their little bottles each day. Compared to a Dutch population of 17 million, that says that only around 3% of the population are consuming these brands, under-scoring their niche status.

NEW DIRECTIONS

Unlike the cholesterol-lowering niche, and other categories of the supermarket, private label has been able to make few

CHART 1:THE DUTCH PROBIOTIC DRINK MARKET HAS GROWN BY 500% OVER THE LAST SIX YEARS

Source: Neilsen

Retail sales(€ m)

02001

28.3m20

40

60

80

100

120

140

160

2002

29.86m

2003

34.76m

2004

49.67m

2005

80.94m

2006

115.4m

2007

146.8m

The Dutch probiotic market is now worth over €146.8 million ($210 million) in retail sales, an impressive achievement in a country which is not only small (with a population of just 17 million) but is also one of the most price-sensitive markets in Europe.

OCTOBER 200818



inroads in probiotics. Despite being priced significantly below the leading brands, sales of supermarket own label products from Albert Heijn, Super de Boer and Aldi peaked at €7.1 million ($10.3 million) in 2006, according to Nielsen data, and then actually fell 15% in 2007.

It’s a similar pattern in much of the rest of Europe – in probiotics a significant segment of consumers, it seems, prefer to stick with brands they can trust delivering benefits they can feel. These consumers have provided a solid platform for Yakult in a price-sensitive and skeptical market and they will continue to be the key target for brands that want to survive any future decline in consumer spending.

SUMMARY

The example of the Dutch probiotic market reminds us that enduring success in any health market, even where consumers are strongly value-driven, arises from a strategy that incorporates as many as possible of the following elements:

• Focus on being an expert brand• A benefit the consumer can quickly feel• A brand well-supported with good

marketing• Innovation in packaging• A focus on appealing to the niche of

most health-conscious consumers

• A focus on premium pricing and sales targets based on value, not volume.

CHART 3: SUCCESSFUL FUNCTIONAL BRANDS ARE PREMIUM-PRICED NICHE BRANDS

Source: Neilsen

As the chart shows, packaging innovation and a strong and distinct brand positioning enable the Danone and Yakult probiotic brands to command much higher prices per litre than does rival Campina’s Vifi t brand.

Retail price per

litre(€)

0Campina Vifi t500ml carton€0.96/$1.38

€1.92

1

2

3

4

5

6

7

Danone Activia drink 450g carton €1.59/$2.28

€3.53

Danone Activia spoonable yoghurt

8x 120g €0.96/$1.38

€4.38

Danone Actimel8x100ml bottle pack

€3.82/$5.49

€4.82

Yakult 15x65ml bottle pack

€6.12/$8.79

€6.28

Source: Neilsen

Yakult

Danone

Vifi t

Private label

0

10

20

30

40

50

60

70

80

2001

€13

.802

€0

.926

€12

.529

€1.

048

2002

€16

.433

€1.

053

€11

.828

€0

.553

2003

€18

.257

€3.

196 €

11.2

23

€2.

085

2004

€20

.386

€13

.270

€11

.030

€4.

984

2005

€29

.393

€28

.212

€17

.475

€5.

865

2006€34

.452

€50

.998

€22

.853

€7.

113

2007

€41

.648

€75

.309

€24

.063

€5.

778

CHART 2: PREMIUM PRICED PRODUCTS WIN, LOW-COST LOCAL BRANDS AND PRIVATE LABEL LOSE (SALES SHOWN IN € MILLIONS)

Retail sales(€ m)

The growth of the probiotic market has been driven by the Actimel “power-brand”, with its very high level of marketing support, and the “expert” brand Yakult. These brands, especially Yakult, retail at very premium prices (see Chart 3). In a market such as probiotics, price is less of a factor than marketing and brand credibility, and more price-competitive brands, such as Campina Vifi t, have failed to keep pace with the growth of the market and have lost share. So much more important is brand credibility than price to the health-conscious target consumer that even low-cost private label has made little headway.

OCTOBER 2008 19


C O M M E R C I A L I S AT I O N C A S E S T U D Y

One year ago Swedish company NutriTech International AB was launching its first line of muesli breakfast cereals made from cholesterol-lowering activated barley, branded Aktiv Everyday (see “Activating the potential of an ingredient” in NNB Sept 2007). Now it has added three new flavours to the super-premium range, which has been renamed Aktiv Müsli, and is launching a new range of muesli bars, also based on its barley ingredient.

NutriTech’s CEO Ruzdi Ekenheim told New Nutrition Business a year ago that “we have got to build a brand”. The company’s initial strategy had been to offer activated barley as an ingredient for brand-owners, but progress was not a big enough basis for a successful ingredient business.

NutriTech found that – no matter how unique the patented barley process is – the big players wanted ready-made concepts and didn’t have the time or willingness to take part in the development process of new products with all the trouble of finding the right category, package and so on. And while big companies had resources but were not prepared to take risks, observed Ekenheim, small companies lacked resources.

So NutriTech rethought its strategy, deciding to market its own consumer branded product. Aktiv Müsli is sold in Sweden and also in Hungary, Romania, Italy, Germany, USA and UK, adopting the same premium positioning in each country.

Ekenheim is happy with the position Aktiv Müsli has gained on Swedish supermarket and health food store shelves in the last twelve months: “There are approximately 2500 different products introduced every year in Sweden and in one year’s time only 70 are still left! We are now the 12th brand from the distribution point of view but we are going to be number fi ve by Christmas,” he told New Nutrition Business.

IMPROVED DISTRIBUTION

Helping to propel Aktiv Müsli into wider distribution will be NutriTech’s new supply agreement with Swedish supermarket chain ICA, which has 50% of the retail market in Sweden. The deal gives NutriTech access to 80% of the market instead of the 30% it had before.

Currently all NutriTech’s products are manufactured by outsourcing, the idea being that NutriTech owns the brand and the intellectual property, with everything else being outsourced. But the company has rethought this strategy in order to achieve its goal of massively increasing its market share by Christmas 2008. As Ekenheim notes, “there is a limit for growing bigger without our own manufacturing infrastructure.”

A PREMIUM PRODUCT

Aktiv Müsli is a super premium product in every sense. Each of its five flavours contains a superfruit, including blackcurrants, cranberries and blueberries. The unique activated barley ingredient gives it cholesterol-lowering properties – the package claims that it will “reduce cholesterol” and help “reduce the risk of cardiovascular disease” – and the product offers the secondary benefits of slow-release wholegrain carbohydrates and fibre for weight management.

The brand’s pricing reflects its position as the most premium muesli brand in Sweden – it retails for $5.79 (€4.20)/0.5 kg package (price per kg $11.58/€8.40). Its closest competitor, Paulún’s Müsli, is $9.69 (€6.95)

Strategy turnaround pays off for NutriTech

Finding, as many science-based ingredient companies do, that marketing its patented cholesterol-lowering barley ingredient to brand-owners was a slow road, Sweden’s NutriTech International decided to cut out the middle-man and launch its own line of breakfast cereals based on the ingredient. One year on and with sales going better than hoped, the company is adding new flavours to the line-up and launching a range of muesli bars. LAURA ENBOM investigates.

NutriTech wanted to step away from traditional fl avours and Aktiv Müsli offers superfruit fi ve ways – Cranberry & Apricot; Hazelnut & Date; Buckthorn & Pumpkinseeds; Blueberry & Coconut, and Blackcurrant & Cowberry.

OCTOBER 200820



per kg, and regular mueslis run at $7.63 (€5.47) per kg.

Ekenheim said great efforts were made in the product development process to attain a very good taste and a healthier image which would appeal to the target consumers – people aged 35+ who didn’t want to compromise on taste or healthiness and are ready to pay for that. The premium positioning is also reflected in the product’s packaging: Aktiv Müsli has a hard pack, (normally muesli packages are soft in Sweden) and a see-through window.

While its competitor Paulúns also sells a premium, barley-based muesli (which in fact uses NutriTech’s barley) Paulún’s müsli doesn’t contain as high a concentration of barley as Aktiv Müsli and thus cannot use a cholesterol-lowering health claim.

SCIENCE IS NICE BUT MARKETING IS CRUCIAL

NutriTech has shifted its focus from science to marketing; it is not currently carrying out any more studies in addition to the earlier clinical studies done by the University of Lund and the University of Uppsala. “We have done the studies we need and it is now more important to get the products to the market,” says Ekenheim. He notes that although product must also be backed up by science, marketing is the ultimate success factor and it’s here where the company is focusing its

limited funds. Marketing communications so far have

focused on the cholesterol-lowering effect of barley’s beta-glucans but in future the message will be broader, with the aim of attracting lifestyle consumers to the brand. Most consumers are not familiar with barley so in order to get wider attention the company believes it is crucial to display other benefits as well.

One of NutriTech’s main pushes has been to create a new communication platform for the brand with the aim of creating a “top of mind” platform with consumers. This is visible in printed media, floor displays, consumer information and especially in the TV commercials – humorous stories of ordinary people struggling with exercising at the gym – which will be broadcast until the end of the year.

WHAT DOES THE FUTURE HOLD?

Ekenheim is full of ideas for the future and enthusiastic about the company’s plans to launch next year an activated barley drink rich in fibre, following the superfruit flavour concept. The drink will be smooth; Ekenheim described it as like a juice with very high fibre content. Ekenheim also revealed that activated barley could be used in yoghurts and smoothies as an added compound; designing this concept was at the top of the company’s current job list.

AKTIV DIET

NutriTech’s oldest brand is a low-calorie meal replacement, marketed under its own brand Aktiv Diet. It was launched in 2006 and its sales have increased about three times from 2006 till now. It is also marketed in the same countries as Aktiv Müsli.

A year ago Ekenheim told NNB that Aktiv Diet had got off to a promising start in the UK markets and was retailed by Waitrose, the country’s most upscale and health-oriented supermarket chain. However, Aktiv Diet’s journey in the UK hasn’t been smooth and the product has now been withdrawn from Waitrose.

Commented Ekenheim: “For branded products the UK is a very difficult market if you don’t know the right people”.

He added: “Aktiv Diet has its markets but we don’t put any money in it at the moment. Powder is always something you have to explain to people, and mueslis bring more customers to Aktiv Diet as well.”

Voiceover:

“Have you also started a battle against cholesterol? Aktiv Müsli and activated barley can help you to lower your bad cholesterol. There are fi ve different fl avours with superfruits and superberries. Good natural energy!”.

AKTIV MÜSLI TELEVISION COMMERCIAL

Frame 1

Frame 2

Frame 3

Frame 4

OCTOBER 2008 21


S TA RT- U P C A S E S T U D Y

Rob Leighton is very familiar with the tepid record of sterols-based cholesterol-management products in the U.S. market. He also understands the difficulty of any new nutrition-bar product breaking into a segment that already is so overcrowded that it’s almost impossible to count all the SKUs at a health-oriented supermarket chain such as Whole Foods.

And the former chocolate-company executive is also aware of the fact that consumer goods marketers big and small are trying to rope American consumers into some kind of “systematic” approach to improving their diets with better-for-you products.

But none of that deterred the 50-year-old entrepreneur in Hamden, Connecticut, from investing a substantial part of his nest egg in creating a brand and a couple of products – nutrition bars and olive oil – that largely rely on sterols and cholesterol management to draw consumers into a devoted relationship.

Kardea bars, olive oil and a handful of supplement products have hit the natural-foods market on the bet that sufficient numbers of American consumers are searching for good-tasting products that offer therapeutic amounts of sterols, fibre and other nutrients that they provide a basis for Leighton’s company to grow.

Leighton founded Kardea - the name is Greek for “heart” - because he wanted those products rather than have to settle for controlling his cholesterol with statin drugs or with the varied array of products that were already on the market.

A LIFESTYLE FOCUS

“It’s really about enabling a heart-healthy lifestyle,” said the former CEO and part owner of a gourmet chocolate manufacturer.

“It’s about how you successfully integrate overall eating behavior and lifestyle. I’m a ‘foodie’ guy; I love to cook and I love social eating, and like me a lot of people are looking for natural, healthy and gourmet at the same time.

“I’m not looking for a huge marketplace,” said Leighton, who just squeezed some his products into Whole Foods Markets stores in the southern United States. “But it’s my niche.”

Leighton’s former company, Thompson Brands, specializes in high-quality chocolate. One of its brands, Adora, is a “gourmet version of Viactiv,” he said, referring to McNeil Nutritionals successful chewy chocolate supplement for women. Adora is sold in Whole Foods stores, so Leighton had some familiarity with the better-for-you market.

Three years ago, Leighton said, he found himself moving from “borderline” high cholesterol to outright high cholesterol. “But I was not ready to start down a pharmacological road,” he recalled.

At the same time, he wasn’t satisfied with cholesterol-fighting products that already were available. “There weren’t a lot of foods I liked,” he said. “I’m not a big oatmeal fan. I don’t eat margarine, and so I wasn’t about to start eating it to be heart-healthy as Benecol and Take Control require – and you have to eat a lot of it too.”

As Leighton investigated his health problem, he came up against a challenging wrinkle – the fact that ultimately led him to start Kardea. “My high cholesterol was more a function of family history rather than diet,” he said. Many people, he explained, are surprised to learn that their bodies produce up to 80% of the cholesterol in their blood, and only a small share comes from the food they eat.

“It’s not dietary cholesterol per se that is the overwhelming problem,” he explained. “I don’t want to dismiss it, but certain nutrients affect the way the body reduces, metabolizes and absorbs cholesterol – and that’s what Kardea focuses on.”

In his research, he was drawn to

“System” takes on natural heart health nicheAn entrepreneur with many years of experience in the food industry is taking a new approach to helping people manage their cholesterol through food. For one thing, Rob Leighton’s Kardea system puts sterols alongside other natural heart healthy ingredients as part of a “naturally healthy” proposition. The other change is that he has learnt from the mistakes made by big companies, which aimed immediately for the mainstream market. “I don’t know a lot of products that could do that and succeed,” Leighton said. Kardea is instead following the well-proven rules of marketing health and beginning with the early adopters. By DALE BUSS.

OCTOBER 200822


S TA RT- U P C A S E S T U D Y

the recommendations of the National Cholesterol Education Program from the U.S. National Institute of Health. In its 2002 report, the NIH concluded that results of therapeutic lifestyle changes “compare well with many cholesterol-lowering drugs.”

The nutrients that can serve as the basis of foods that are integral to such a lifestyle, Leighton said, include not only sterols but also beta-glucans and some viscous soluble plant fibres such as barley, beans, pectins and acacia gums, he said. (Kardea also suggest that customers emphasize, in general, a Mediterranean-style diet high in monounsaturated fats and low in saturated fats.)

TARGETING THE EARLY ADOPTERS

Sterols were at the top of his list despite the highly uneven performance of sterol-based foods and beverages in the U.S. market so far, even those developed and marketed by huge consumer goods companies. “The science behind sterols is so strong,” he said.

But the mistake that Unilever, Tropicana, General Mills and McNeil Nutritionals made in introducing their various sterols-based products over the last decade is that the industry immediately ushered sterols into the mainstream market. “I don’t know a lot of products that could do that and succeed,” Leighton said.

Rather, he said, sterols providers should have been satisfied at first by providing the ingredient mainly to natural- and health-foods producers whose products appear in the better-for-you channel. Like omega-3s, for example, “Most products go into health and natural stores, develop a following and understanding among early adopters, and then try to go from there to the mainstream,” Leighton said. “Sterols never tried that.”

In terms of products, Leighton wanted to introduce enough of a variety – even early in the brand’s history – so that Kardea could make a credible claim to providing consumers with enough products to comprise the basis of a therapeutic lifestyle. He chose bars, olive oil and supplements.

He knew bars would be the toughest segment to penetrate. “There are lots of bars, obviously,” Leighton said. “But I knew that what often gets lost in people creating healthy or natural products is the sensory: You’ve got to want to eat it and enjoy it. So first and foremost, what puts our bars over the top is taste; what gets us through the door is their natural profile. And what gets consumers excited is that they have potentially therapeutic effects.”

Leighton said that most nutrition bars don’t satisfy consumers’ sweet tooth or their craving for snacking, though “they may fill you up.” So he formulated, with some outside-contracted help, a nutrition bar depending on agave as a sweetener “that was akin to a confection.” He couldn’t use his old favorite, chocolate, he admitted – “but we did look to certain desserts that people love.”

So there is a cranberry almond bar “that I wanted to taste like an almond croissant with a nice tart jam,” Leighton said. “Lemon ginger was about how to create the most delicious lemon square. And chai spice was to deliver a great spice sensation, with real cardamom and other spices, so that when you open the wrapper, you don’t get that nasty smell – but a great aroma.”

Such a variety of rich textures gave Leighton and his formulators room, and

taste and texture tolerance, to stash a number of his target ingredients. Each bar contains one gram of sterols, for example; the U.S. Food and Drug Administration qualified claim for sterols requires two grams a day for true efficacy in cholesterol management.

Kardea 1.4-ounce bars retail for a suggested price of $1.99 (€1.38). So far, they’re available in Whole Foods in the South and other natural and gourmet food stores as well as some coffee shops.

Olive oil, Leighton conceded, “is a much more crowded marketplace” than even bars, and so “it is taking more time” for Kardea to reach adequate market penetration with its extra-virgin product. Retailing for a suggested

price of $14.95 (€10.39) for a 500-ml bottle, Kardea olive oil is “on the high side of the market,” he said. But it’s a “very lovely tasting olive oil” that includes a half-gram of sterols in each tablespoon.

Kardea also has introduced some supplements that meet guidelines of the National Cholesterol Education Program, including psyllium and oat bran. But Leighton said he did so mainly to flesh out the brand’s product line and support its “system” positioning.

“We might not offer them from a business point of view, but for consumer education, and presenting the system, and getting people to think about the system approach, we need the supplements,” he said.

Leighton said consumers, even of Kardea products, must be thoughtful about a system approach to cholesterol management. “People ask me how many bars they need to eat to be in compliance with the [FDA claim], and I try not to answer that question,” he said. “I could easily say, ‘Eat two bars a day and you’ll get your sterols,’ but something prevents me from doing that: We don’t want to promote people taking more calories necessarily.

“What we want to promote is people replacing what they’re eating today with products in our portfolio.”

Still, he concedes that the system approach can be problematic, and he cites some of the mainstream food and beverage giants for making it difficult for consumers. “Not many people are doing a good job of developing innovative products that combine the multiple nutrients you need,” he said. “So I’m not sure where the systems approach to Special K takes you, or where Quaker Oats takes you.”

Marketing so far is by word of mouth, Leighton said, and online, where he writes a blog and e-mails a Kardea newsletter to more than 5,000 recipients. “A high percentage of people who do health optimization – and I’m not talking about disease prevention – are on the net,” he said.

Kardea also emphasizes marketing to dietitians, through newsletters and at their trade shows and, ultimately, he said, through seminars. “It’s really important to educate them, because this is their domain,” Leighton said. “They’re the ones who are seeing cardio patients come through their doors, or someone with risk factors, and are trying to change their behaviors.”

OCTOBER 2008 23



A question that new, science-based health ingredient companies and their would-be investors often ask is, “How long will it be before the company is making profits?” Two-three years is usually what they guess and what write in their business plan. And just as often, the backers and managements of new companies are focused on getting a “business-transforming” deal with a giant multinational (such as Nestlé – the name that’s mentioned most often in their meetings) within the two or three years.

The reality, of course, is very different, and plans like those above that actually come to fruition are as rare as hens teeth. Anyone who wants to know how to truly succeed with a science-based ingredients business – and how long that can take – would be well-advised to first look at and learn from the experience of BioGaia.

BioGaia made its first profits in 2006 – ten years after its stock was floated – and in September 2008 Nestlé Nutrition and BioGaia signed an agreement that gives Nestlé worldwide rights to use BioGaia’s Lactobacillus reuteri in infant formula. The first products are planned for 2009. It’s a development that could transform this already successful company.

BioGaia, based in Stockholm, Sweden, owns worldwide patents on L. reuteri, which is a probiotic bacteria found occurring naturally in human breast milk (the particular strain used by BioGaia was derived from the breast milk of a woman in Peru).

The company was founded in 1990 by Peter Rothschild and his business partner, Jan Annwall, who were already successful entrepreneurs. Since then the company has invested over $30 million in research into L. reuteri, secured worldwide patents on its discoveries and in 1996 it listed its stock on the Swedish stock market.

This large, fifteen-year investment is the price that needs to be paid by any company that wants to establish a strong and unique position based on clinically demonstrated effects that will satisfy the world’s increasingly demanding regulators – a position of the kind that a company of Nestlé type might take seriously.

The scientific status of L. reuteri is very

strong, and, with LGG and L. plantarum 299V it is described as being among the probiotics with the deepest scientific foundations. Since 1965, when Dr. G. Reuter of the University of Berlin published his first study of the bacteria which now bears his name, over 100 scientific studies on L. reuteri have appeared. Reuteri’s benefits, according to research carried out thus far, include a proven ability to colonise the gastrointestinal tract and the secretion of reuterin, a natural antimicrobial against bacteria such as E. coli.

The evidence for L. reuteri’s benefits is particularly strong in relation to infant health with 39 published, peer-reviewed, placebo-controlled studies supporting benefits in relation to immune health in young children and neo-nates.

“This agreement with Nestlé is further proof that major organizations appreciate the value of our products, particularly in the area of child health. The safety demands are naturally very high for this type of product and our safety data has been a strong factor in giving Nestlé the confidence to make this

agreement,” Peter Rothschild, managing director, BioGaia AB, told New Nutrition Business in an interview.

Hitherto BioGaia has concentrated on supplying the dietary supplement and dairy markets. Its child-specific supplements have been successful worldwide and can be found in 37 countries. The company is particularly strong in Asia and although BioGaia does not provide a sales breakdown Asia is thought to generate 30%-40% of the company’s annual sales.

BioGaia is a fast-growing and increasingly profitable company. In the six months ended June 30th 2008 BioGaia reported sales of SEK72.4 million ($10.7 million/€7.4 million), up 40% on the previous year, with an operating profit of SEK12.6 million ($1.9 million/€1.3 million), an operating profit margin of 17%.

As a profitable company BioGaia is actually a rarity in the world of health ingredients. What BioGaia has on its side is an ingredient technology whose benefits have been clearly established, and which, by focusing on child health, has a clear point of difference in the eyes of potential business partners in consumer goods.

But to get where it is today has been a long, slow and expensive journey – a journey which most science-based ingredient companies are still making. As our Case Study on another Swedish company, beta-glucan supplier NutriTech, makes clear (pages 19 and 20), most companies have found that working with brand owners to develop new consumer products is a slow route since the large companies are risk-averse and smaller ones lack resources.

NutriTech’s response to this problem has been to cut out the middleman and create its own branded consumer products, so far with promising results. It’s a strategy which BioGaia also adopted, distributing its dietary supplements throughout the world.

As the world gets tougher ingredient companies may find branded goods companies ever-more reluctant to experiment with new ingredient concepts – and increasingly they will find themselves turning to the same strategy model as BioGaia and NutriTech.

Probiotic profitability turns the corner

Nestlé already markets probiotic infant formula, based on Bifidobacterium lactis, in the US, Mexico, Indonesia and the Philippines. However these brands sell in small volumes and the company has so far focused on prebiotics and DHA. Could it be now planning to make probiotics a key plank in its strategy?

OCTOBER 200824



In the rush to field more probiotic products, food and supplement manufacturers are often brushing past one major factor: The bacteria must survive the trip to the small intestines in order to improve gut health, boost immunity and provide the other benefits that are being attributed to the friendly organisms these days.

Nutraceutix’s stance is that most probiotic products – especially food carriers – are failing poorly in meeting this crucial criterion. And, quite naturally, Nutraceutix executives maintain that their company’s probiotics-delivery technology and applications allow their customers to overcome the many forces that would destroy the bacteria and render them probiotically ineffective.

“Viability is important, and in delivering [bacteria] to the intestines, the vast majority of probiotic products don’t have adequate delivery technology,” Tim Gamble, vice president of marketing for Nutraceutix, told New Nutrition Business. “So only a small fraction of probiotic products that are taken orally ever make it into the intestinal tract.”

SENSITIVE HANDLING NEEDED

Gamble’s cautionary note is no less valid just because Nutraceutix has a self-interest in it. All manner of experts, many of them academic or independent, have been warning throughout the recent probiotics boom that the products’ ultimate efficacy may be in question.

“You can’t treat probiotics like Vitamin C or St. John’s Wort or something that doesn’t perish on the shelf,” Gamble noted. “It needs to be manufactured and handled sensitively.”

Three challenges threaten the efficacy of probiotics before they can flourish and do their thing in the small intestine, Gamble said. The first is whether their manufacturing process protects their viability. The second is survival in retail space. And the third is the transit through the harsh, acidic environment of the stomach.

Gamble hailed the contributions to

general appreciation of the potential of probiotics that are being made by food products, including Dannon Activia. But he said that even yoghurts, with their live bacteria cultures, don’t ensure that probiotic bacteria get to the small intestines; and cold cereals and other products have no chance of effectively delivering probiotics.

“The problem with food is that it’s very wet, and you have an organism that needs to stay dry in order to be ready to be activated in the body,” Gamble said. “And it’s usually been very hot because of drying or baking or cooking. This is contrary to probiotics. People are throwing them into all sorts of products right now, but when they test them, generally there are no live organisms.”

Even new food-processing technologies such as microencapsulation can’t do the trick for probiotics, Gamble said, because the bacteria “still want to be dry. Yet the coating may dissolve on the shelf prior to getting into the body”.

Many food and supplement manufacturers have tried the “brute force” strategy of simply loading up a product with many billions of bacteria in the hope that enough will make it to the small intestines to constitute efficacy. Research showing this method works “is not uncommon,” Gamble said; and it’s true that humans “can’t really overdose” on probiotic bacteria.

Nevertheless, he said, this approach constitutes “a huge waste. And it’s hard to translate that kind of dosage into a commercial product”.

The only supplement products that have a chance of delivering probiotic bacteria in live form even to the human stomach are those that have been frozen after manufacturing, Gamble said. But inconsistency in the supply chain dooms many of them. “In every supplement store you go into, it’s hit or miss if that product has been exposed to non-refrigeration at any point in the process,” he said.

Nutraceutix’s strategy is to accommodate dozens of different strains of probiotic

bacteria and to focus on delivering them live to the small intestines. Nutraceutix CEO Steven Moger was vice president of operations of the company when it was a division of SCOLR, a pharmaceutical manufacturer. In 2004, he bought the operation and made it an independent company, based in Redmond, Wash., just down the street from Microsoft headquarters.

The company developed a process for making tablets out of probiotic bacteria that protects them from pressure and heat. Called LiveBac, the process “allows us to generate probiotic tablets, regardless of strain, that have much better shelf life than capsules,” Gamble said: 18 months at room temperature.

And the probiotics in Nutraceutix’s tablets are able to survive gastric acid, Gamble said, through a proprietary formulation that ensures the bacteria are released, alive, into the lower gastrointestinal tract. “It uses controlling agents that, when hydrated, provide a protective layer around the tablet,” Gamble said.

PROCESS KEEPS BUGS ALIVE, LONGER

The company chose that approach rather than rely on a coating because applying a coating after manufacture “introduces air, heat and moisture, all of which ruin shelf life”. Most probiotic pills with coatings, Gamble said, simply “do a good job of protecting dead bugs from stomach acid”.

Gamble opined that understanding of the efficacy issue will increase greatly as probiotics become even more popular with consumers. “Brands and retailers are happy that more consumers are educated about the benefits of probiotics, but this is at only the first level of understanding,” Gamble concluded. “The second level is distinguishing between good and bad products. And that still has to happen in the minds of consumers. But it will happen within a few years.”

Probiotics: getting them to the gutSurviving the harsh environment of the human digestive system is vital if probiotics are to deliver their health benefits via the small intestine. But Washington-based Nutraceutix contends that most probiotic products fail to deliver – and it has developed a process for making probiotic tablets that protects the bacteria from pressure and heat. DALE BUSS reports.

OCTOBER 2008 25


N E W P R O D U C T S

Country Company Brand & Product Description

PART 1: NORTH AMERICA – FOODS & BEVERAGES

All new product information is sourced exclusively from Mintel’s GNPD (Global New Products Database), which can be visited at

www.gnpd.com. Mintel can be contacted at 18-19 Long Lane, London EC1A 9PL, U.K.. Tel. +44-(0)20-7606-4533, Fax +44-(0)20-7600-3327

FUNCTIONAL & HEALTHY-EATING NEW PRODUCT LAUNCHESEach month we summarise new product launches from around the world.• Part 1: North America • Part 2: Rest of the World

BAKERY

USA Kraft Foods Wheat Thins Fiber Selects 5-Grain Crackers

Contain 4.5g fat per serving, an excellent source of fiber (5g per serving), a good source of wholegrain (11g per serving), and free from trans fat. Retail in an 8-oz. pack.

USA Trader Joe’s Trader Joe’s 12 Grain Mini Snack Crackers

Certified kosher and certified vegan. The bite-sized crackers are made with 12 nutritious grains and inulin, a soluble, prebiotic fiber derived from natural chic-ory root. The inulin is said to help support the digestive tract. Retail in a 10-oz. pack. Also available are Roasted Gorgonzola Flavored Oven Crisp Crackers.

BEVERAGES

USA Energy Brands Glacéau VitaminWater B-Relaxed Enhanced Water with Jackfruit-Guava flavour

Contains vitamins V and theanine, said to help relax and deal with “technocha-os”. Comes in a 20 fl-oz. bottle. Also available is a Charge variety in lemon-lime flavour which contains B vitamins and electrolytes.

USA Gu Energy Gu Roctane Ultra Endurance Energy Gel

Said to contain a superior mix of carbohydrates to provide quick and sustained energy, electrolytes for replenishment and caffeine to tap more power and diminish pain. Also contains higher levels of citrate to help speed the conversion of carbohydrates into energy molecules, amino acids that help maintain mental focus and reduce fatigue, and finally the amino acid complex ornithine alpha-ketoglutarate which limits the body’s tendency to break down muscles protein tissue during extremely hard training and racing days. Comes in Blueberry-Pomegranate and Vanilla-Orange flavours.

USA Bednar Red Heel The Party Drink Carbonated Energy Drink

A Swiss product now available in the US, it’s a red-coloured non-alchoholic combination of aloe vera, taurine and caffeine that’s nearly calorie-free. The 250ml can carries an image of a stylish leg with a red high heel.

USA Lucerne Foods Eating Right Kids Fruit Punch Fitness Water

Made with real fruit juice and said to be an excellent source of electrolytes and five vitamins. The vitamin-enhanced beverage contains 15% juice and retails in a 4 x 12-fl.oz. pack featuring Looney Tunes characters. Also available is Orange Vitamin Water. The products are free from high fructose corn syrup.

USA Performance Tea TeaH2O All Natural Performance Water

Said to help improve oxygen delivery and muscle performance while provid-ing great taste. Made with green tea that contains high levels of polyphenols, naturally occurring vitamin B Complex, C, E, fluoride, polysaccharide, flavonoid and magnesium, and vitamin enriched water. Comes in Cranberry Mojito; Mango Lemonade; Blueberry Açai; Tropical Citrus; and Pomegranate Yuzu flavours.

USA Iovate Health Sciences Hydroxycut Instant Energy Drink Contains the same weight-loss ingredients as original Hydroxycut. Claimed to increase energy, control appetite, contains zero sugar and is clinically proven. According to the manufacturer, this product is the first selling in America. Comes in Wild Berry and Lemon flavours, in a pack containing 21 sachets. Also available are Instant Energy Weight-Loss Shots, said to control appetite and deliver instant energy.

Canada Double D Beverage Canadian Beaver Buzz Blackcurrant Energy Drink

Retailed in a 355ml can, the beverage contains vitamins A, B2, B6, B12 and E, gin-seng, taurine, guarana and cane sugar and no high-fructose corn syrup.

CONFECTIONERY

USA Dreamerz Foods Dreamerz Dark Chocolate Pillows Described as an all natural sleep dietary supplement. The chocolates are said to be safe with no after-effects and contain sleep-regulating hormone melatonin and PharmaGABA, a naturally occurring ingredient to promote relaxation. The 10-ct. pillows retail in a 3.5-oz. pack. A Milk Chocolate variety is also available.

DAIRY

USA Clover Stornetta Farms Clover Organic Farms Reduced Fat Organic Chocolate Milk

Contains 37% less fat than regular milk with vitamins A and D. The UHT, grade A, ready to drink milk has been honored by the American Humane Association as is it made from cows which have not been treated with rBST. The free farmed certified product is aimed at children and is retailed in a pack containing four 8.25-fl. oz. cartons with a “Fiddler on the Hoof” design.

USA Nutrabella Belly-Bar Vanilla Dreams Nutritious Milkshakes

Said to be packed with key prenatal nutrients and to provide an extra boost of fiber, protein, calcium, and omega-3 DHA that mothers and babies need. The certified kosher shakes contain no milk from cows treated with artificial growth hormones and are all natural. They are made with Life’s DHA brand omega-3 DHA and retail in a 4 x 8.25-fl.oz. pack. Due For Chocolate variety is also avail-able.

USA Dannon Dannon Light & Fit 0% Plus Mixed Berry with Pomegranate Smoothie

Said to contain 60% less calories than other dairy based smoothies and 10% more of the daily value of vitamins E, B2, B6, and B12 than other dairy based smoothies. The 0% fat smoothie also contains calcium, vitamin D, vitamin A, pro-tein, and active yogurt cultures including L. acidophilus. The product contains 2% juice and retails in a 4 x 7-fl.oz. bottle pack.

SNACKS

USA Carman’s Fine Foods Carman’s Classic Fruit Muesli Bars Described as being soft and chewy and feature lightly toasted wholegrain oats with honey, cinnamon, gourmet nuts and dried fruits. This product is a good source of fiber and contains no wheat, no preservatives and no GMOs. The muesli bars have a low GI. This kosher certified product is retailed in a 9.52-oz. pack containing six bars. Also available are Original and Apricot variants. Carman’s is the major sponsor of the Cancer & Bowel Research Trust.

Canada So Soya+ So Soya+ Crunchers Roasted Soy Nuts with Onion and Garlic

High in protein, rich in fibre, a source of omega 3 and 6, free of trans fat and low in saturated fat. This cholesterol- and peanut-free product is high in isofla-vones. The kosher certified snack is retailed in a 114g pack.

Canada Oberto Sausage Oh Boy! Oberto 100 Calories Beef Jerky

Now available in an Original variety. The solid strips of premium beef have a smoke flavour added. They are high in protein and contain 1g of fat per serving and 25% less sodium than the regular package of Oh Boy! Oberto. Comes in a 34g pack.

OCTOBER 200826


Country Company Brand & Product Description

PART 2: REST OF THE WORLD – FOODS & BEVERAGES


BAKERY

Australia Quality Bakers of Australia Wonder Performance Twice The Fibre White Bread

Free of artificial preservatives and contains: “protein to provide the building blocks of lean muscle growth; prebiotic fibre to energise the digestive system; complex carbs packed with quick release energy; critical cluster amino acids to combine with exercise and build strength; and iron to carry oxygen and energise muscles”. Contains Hi-Maize, a dietary fibre said to give the product twice the fibre of normal white breads. Retails in a 700g pack featuring an offer to win sports equipment for a local school.

Portugal Industrias Rodriguez Virginias B-San Biscuits with Omega-3 Prepared with 100% vegetable ingredients, wholegrain flour and Acti+ formula, with eight vitamins and olive oil. Free from added sugar and fructose, and retails in a 360g pack.

BEVERAGES

Finland MaxMedica Naturdiet Raspberry and Pomegranate Smoothie

A yogurt based meal replacement drink for smart weight control. It contains antioxidants and fruit juices and is formulated with 220 calories per serving. The product retails in a 330ml carton with a straw. Also available in this range are the following varieties: Peach and Mango; and Orange and Banana.

France Tao Tao Awakening Drink Described as a delicious refreshing non-alcoholic drink with natural blackcur-rant, acerola and ginseng praised by the Chinese for centuries for optimizing endurance and mobility. Helps hydrate the body and helps it recover after sporting activity. The product is low in calories and contains no preservatives, no artificial colourings and 100% fructose. It retails in a 250ml recyclable can.

Malaysia PepsiCo Quaker Q-Vital 3-in-1 Oat Cereal Drink

Made with Quaker oats, known for their cholesterol lowering properties. The halal product is naturally high in calcium, and is an excellent source of protein, vital to build and repair body tissues. Available in a new flavour, Creamy Vanilla, and comes in a 580g pack. Also available in: Original; Chocolate Deluxe; and Berry Supreme varieties.

Norway Pharmalogica Smartfish Smartweek Enriched Fruit Juice

Said to contain 940mg omega 3, 300mg DHA, 200mg EPA, 100mg DPA and added vitamin D. Contains no added sugar or artificial sweeteners and is avail-able in a 200ml recyclable pack.

Philippines Sunsweet Growers Sunsweet Plum Smart Plum Juice for Digestive Health

A drink with essential vitamins and minerals, and a combination of unique nutrients: fiber, magnesium and potassium, which are said to contribute to keeping the digestive system healthy and balanced. Contains chicory root, a source of fiber that is said to increase the level of beneficial cultures in the digestive system, which helps fortify the body’s natural defences, and also contains ginger and chamomile, said to be soothing. It is all natural, free from sugar, sweeteners or preservatives and contains 100% juice. Retailed in a 1.42L bottle.

Russia Wimm-Bill-Dann J7 Immuno Fruit Nectar Contains echinacea extract and inulin for the support of the immune system. It has a mixed flavour with peach, apricot, and orange. The product contains a 45% fruit juice and purée content and is retailed in a 1L carton.

Switzerland Diwisa Trojka Energy Drink Supports concentration and performance and prevents tiredness, due to fast available energy and additional vitamins which activate the metabolism and increase overall well-being. It contains caffeine and taurine, is the ideal power-kick for daily challenges at work, sport or leisure activities, and is available in a 250ml can.

BREAKFAST CEREALS

China Beijing Tepin Oat Development Shi Zhuang High Fibre G5 Instant Oat Cereal

Suitable for middle aged and elderly groups and according to the manufacturer, is tested and proven to reduce blood lipids. Said to be free of toxins, chemical additives and sugar. Comes in a pack containing 10 x 30g sachets.

Hong Kong Quaker Foods & Beverages Quaker Oat Bran Rich in carbohydrates and dietary fibre, said to help with weight control. The soluble fibre helps to lower cholesterol, while the insoluble fibre helps to pro-mote a healthy digestive system. Can be added into drinks or food. Retails in a 240g carton containing 24 x 10g sachets.

Mexico Kellogg Kellogg’s Smart Start Original Antioxidants Breakfast Cereal

Lightly sweetened, toasted multi-grain flakes and crunchy oat clusters. Contains antioxidants A, C, E with beta carotene for a strong heart. The kosher certified product has been approved by the American Heart Association and is retailed in a 496g carton.

Philippines Quaker Oats Microwavable Quaker Instant Oatmeal Nutrition for Women

Fortified with calcium, vitamin D and magnesium for bone health, folic acid, iron, plus soy protein, vitamin E and vitamin B6 to help maintain healthy oes-trogen levels. Available with a Golden Brown Sugar flavour, the kosher-certified wholegrain product is claimed to help reduce the risk of heart disease and retails in a pack of eight 46g pouches.

CONFECTIONERY

Thailand Nestlé Nestlé Milo Chocolate Coated Wafer Said to provide “crispy energy”. Fortified with Actigen-E, a combination of eight vitamins and four minerals. It is halal certified and is retailed in a pack contain-ing 5 x 15g bars.

DAIRY

China Australian Biological Technology WishU+ Goat Yogurt Made from goat milk, which is claimed to be healthy, nourishing and easy to digest. Contains five types of lactic acids, 21 amino acids, 12 vitamins, 25 miner-als, enzymes and lactose. The lecithin and nucleotide are said to promote brain development. The friendly bacteria is good for the digestive system. Comes in a 220g pack.

Colombia Imagine Foods Soy Dream Original Classic Soy Milk A premium, rich and creamy soy milk made from organic soybeans. The heart healthy soy milk contains 47mg soy isoflavones per serving and is certified USDA organic and kosher. It provides a good source of iron, copper, folic acid, magnesium and vitamin B1, and is free from lactose, cholesterol and dairy. The vegetarian product retails in a 32-fl. oz. carton.

OCTOBER 2008 27



Finland Mandox Kulta Hera Juoma (Whey Drink) Fermented from natural ingredients, said to be suitable for women and men. The product has undergone clinical research to test the antimicrobial effects on different bacteria. It is said to help lower blood pressure and improve pros-tate health. Available in a 330ml bottle.

Greece Entremont Alliance Entremont Emmental Cheese with Natural Omega 3 is a semi-hard, partially defatted cow’s milk cheese with a 29% fat content. This sliced cheese is a natural source of omega 3 and is available in a 200g pack.

Indonesia Sanghiang Perkasa Prenagen Pregnancy Instant Powdered Milk Drink

Mocha flavoured and specially formulated for women during pregnancy. It con-tains DHA and choline to promote brain development, and folic acid, protein, and iron to help the baby, placenta and other reproductive organs to develop. Said to help with weight gain during pregnancy and to reduce the risk of having a low birth weight baby. This halal certified product is retailed in 200g carton.

Japan Morinaga Milk Industry Calcium Master 500ml The calcium-fortified low-fat white milk with certified health product comes in a new 500ml carton. It contains 100% milk-origin calcium, and vitamin D to aid calcium absorption; 200ml of the drink provides more than half the DV of calcium. Aimed at consumers in their 30s to 40s who are concerned about bone health.

Malaysia Fonterra Brands Fonterra Anlene White Milk Concentrate

Described as a low-fat milk concentrate with four times more calcium in every pack than a regular fresh milk. This certified halal product is available in a pack containing four 125ml servings.

Netherlands Hain Europe Oat Dream Natural + Calcium Oat Drink

Said to be “deliciously different” and a good alternative to dairy milk. The 100% natural product has no added sugars, is low in fat and a good source of cal-cium. It is easy to digest and contains 0% cholesterol and lactose. Suitable for both vegetarians and vegans, the product is available in a 1L carton.

Sweden Arla Foods Arla LaktosFri A range of Lactose Free products. Available are Yogurts in two flavours: Strawberry-Wild Strawberry; and Passionfruit-Vanilla. The yoghurt contains only 1.3% fat and retails in a 750g pack.

Thailand Abico Dairy Farm Co Nutimax UHT Low Fat Milk This cow’s milk product is rich in fibre, calcium, phosphorous, vitamin B2 and contains a 2.5% oligofructose formula, which helps promote digestion. This halal certified product retails in a pack containing 4 x 180ml single-serve car-ton packs with straw.

Thailand Dairy Plus Anlene Chocolate Flavoured Low-Fat Milk

Contains calcium 10, which is claimed to have 10 times smaller particles than normal calcium and to be better absorbed by the inner bone. The milk is high in calcium and phosphorous and contains vitamin D, said to help absorb calci-um and phosphorous, vitamin A, which helps promote visual health, and vitamin B, which helps the body get energy from carbohydrate and protein. This halal certified product is retailed in a pack containing 4 x 180ml carton packs.

Thailand Mead Johnson Alacta-NF UHT Recombined Chocolate Flavoured Milk

Contains DHA and ARA and oil extract formula is said to contain 2.1mg DHA, 4.1mg ARA, 50mg omega-3, 110mg omega-6 and 1,350mg omega-9 per serv-ing. High in vitamins A, B2, B12 and C, calcium and phosphorous, said to help strengthen bones and teeth, zinc for the body growth and iodine for thyroid hormone that controls the body growth and brain development. It also con-tains iron, which is an important component of haemoglobin in red blood cells and necessary protein for damaged cell repairing. This halal certified product is retailed in a pack containing 4 x 180ml single-serve carton packs.

Vietnam Fonterra Brands Anchor Fortified Full Cream Milk Powder

Aimed at children, the product is formulated with iron, vitamins A, C and D3. Iron is claimed to help brain development and in the transport of oxygen to the brain. Choline plays an important role in the development of memory by aiding the transmission of brain signals. Iodine helps ensure proper mental development, while vitamin A helps to keep the immune system healthy and maintain good eyesight. Vitamin C helps to maintain a healthy immune system and improve the absorption of iron from food. Calcium provides the building block for healthy bones and teeth especially during the growing yeas. Vitamin D3 helps improve the absorption of calcium. Retailed in an 800g can.

Vietnam Nutifood Company Ancomilk Strawberry Flavoured Pasteurized Milk

Formulated to keep the body healthy and aid in brain development. It contains choline to enhance memory and concentration. The milk contains no preserva-tives and retails in a 180ml carton with Windy graphics. Also available in this range is a Sweetened Pasteurized Milk, which retails in a 180ml carton with Rainy graphics.

MEALS & MEAL CENTERs

Japan Kagome Meat Doria with Flattened Barley Seven microwavable, low-calorie yet substantial rice products with 50% domes-tic barley, targeted at busy women in their 20s to 30s. The series comprises five risottos and two dories, all prepared free of chemical seasonings or pre-servatives. The barleys’ husks were removed, and the barley was then steamed and flattened with a roller. It is rich in dietary fibre and minerals.

SNACKS

Philippines RPM Pilinut RPM Pilinuts Honey Glazed Pilinut Low in cholesterol and rich in calcium and protein. The pili kernel is high in phosphorous and potassium and helps to lower bad cholesterol without low-ering the good cholesterol. Retails in an 80g pack.

SOUP

Netherlands Nestlé Maggi Opkikker (Pick Me Up) Groente Fit (Vegetable Fit)

A new range of healthy vegetable soups that are full of fibre, fat-free, contain 25% less salt than other Maggi Opkikker products, and are enriched with vitamin C. Claimed to assist in maintaining a healthy weight by satisfying the appetite between meals. Three varieties are available: 9 Groenten (9 Vegetables); Groene Groenten (Green Vegetables); and Bospaddestoelen (Forest Mushroom). Comes in a recyclable 3 x 16.5g pack.

SPREADS

Australia Capilano Honey Capilano Snap’N Squeeze Honey Portions

This portioned honey is said to be mess-free and easy to use as it only needs to be snapped and squeezed. Two varieties are available: Australian Honey; and Honey & Omega 3 DHA, said to benefit the heart and mind. Retails in a pack of twelve 7g portions.

China Fuzhou Xinzhiyuan Biological Product Xin Zhi Yuan Honey for Women Made from natural motherwort honey, with added high quality bifidus factor (isomalt-oligosaccharide) and pollen. The pollen extract has concentrated natural nutrients while the bifidus is beneficial to the digestive system. Retailed in a 456g bottle.

OCTOBER 200828


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Healthy snacks and beverages for kids

The report then sets out ten detailed case studies of success and failure, based on interviews with the companies concerned and supported with supermarket sales data. The case studies cover bars, baked snacks of several kinds and fruit drinks, and include a range of companies large and small, from Unilever’s kids’ “Brain Food” range to Healtheries’ rice snacks.

For any company, large or small, looking to create a successful health proposition in kids’ snacks and snack beverages, this report sets out practical steps that any company can easily take to create new products or revive old ones – and for reducing risks – that are second-to-none.

PDF – 58 pages, over 35 illustrations and charts, supported with brand sales data

The report begins with a concise 23 page summary of:

• The key drivers in kids’ snacking

• The rules of successful marketing communications

• The role of packaging innovation

• The key areas of opportunity

• The summary ends with a practical check-list for new product development

Ordering is easy…see inside back cover or visit www.new-nutrition.com or www.kidsnutritionreport.com

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22 www.new-nutrition.com

14. Developed after extensive qualitative, in-depth research of your target market and their mothers. Become an expert in what they believe, when, where and how they use your product – or why they don’t.

If you can accomplish many or most of these you might well build a successful kids’ nutritional brand. If you are not doing most of the things on the list above, then you should be asking yourself why, since these seem, again and again, to be the questions successful kids’ brand owners ask themselves.

CHART 1: HOW DOES YOUR KIDS’ PRODUCT MEASURE UP AGAINST THE CHECKLIST?

1. Fruit content

2. Natural

3. Low in saturated fat and sodium

4. Free from added sugar

5. Clear health benefit that mothers understand

6. Convenient packaging

7. Eye-catching packaging

8. Aimed at one- to six-year-olds

9. Supported by marketing

10. Marketed with sufficient budget

11. Targeted at mothers, not just children

12. A trusted brand

13. Taste-tested on kids

14. Informed by extensive consumer research

If you score less than 10 you may need to rethink your product development plan

Final score out of 14



understand, the health benefit or the added ingredient that delivers it. The communication of the benefit needs to be directed at the mother as it is her confidence and trust that you have to win. Hence the Yoplait Petits Filous dairy brand (possibly the largest kids’ dairy brand in Europe) works hard on maintaining its credibility with mothers as “the bone-health experts”, based on its content of calcium and vitamin D. The irrelevance of the health benefit to the children themselves makes younger age groups (children aged one to six potentially a more attractive target than older age groups. This is simply because at ages one to six mother is still making most of the decisions about what a child should eat and she is able to respond better to health messages. From seven onwards children attempt to assert their own choices more. The marketing cost accordingly rises when you target older age groups since you must have selling points for both the older child, such as licensed characters, competitions, etc. which have nothing to do with health, as well as the health message to the mother. Older children may even actively reject overtly healthy products.

5.3 TASTE TEST

Finally – it’s obvious but it needs to be stated – your new product must be extensively taste-tested on children themselves and not launched until at least 80 children out of a sample of 100 are wildly enthusiastic about its taste. If a product tastes irresistible, it makes the mother’s job of persuading her child to eat your healthy products much easier. The same is true of your packaging design. While

younger children (aged one to six) are of course less discerning, older children will be highly sensitised to any babyishness in the appearance of the package. For these older children, the look of the package is all about being “cool at school”, which makes marketing to them more challenging.

5.4 THE ROLE OF CHARACTER MERCHANDISING

The question of whether to license a well-known character (such as Mickey Mouse) or create your own is a problem that only the largest businesses usually have the budgets to answer, since character-merchandising often eats into thin margins. However, the drive to health is changing that situation – the Disney brand, for example, sets strict nutritional criteria which only some smaller and more innovative companies can meet.

Use of well-known licensed characters can make a significant difference. In an endeavour to make fruit and vegetable consumption more attractive to kids, Sunkist is taking more marketing initiatives, joining with Sesame Street, the iconic children’s entertainment brand, in a pre-existing network of partnerships that Sesame Street calls “Healthy Habits for Life”. In the case of Sunkist, it involves education, packaging, point-of-sale and consumer promotions of citrus fruit consumption by kids.

Sunkist has become more aggressive in general about finding and developing new ways to process, package and market its products. And the deal with Sunkist is just the latest initiative by New York City-based Sesame Workshop to leverage its brand and recognition among children across a wide variety of foods and beverages aimed at kids.

The Disney brand sets strict nutritional criteria for use of its characters, which

only some smaller and more innovative companies can meet.



As almost all of the case studies illustrate, health-conscious parents are increasingly interested in products that they perceive to be “as natural as possible” – free-from ingredients that they see as undesirable or unnatural or potentially harmful, such as added sugar and “artificial” sweeteners, preservatives, colours or flavours.

Being “as natural as possible” and being able to offer one or more of the benefits of being “free-from” dairy or wheat (to take just two examples) is essential for any brand targeting children and health-conscious parents.

“Natural” has universal, pan-European and trans-Atlantic appeal (and a rapidly increasing appeal among middle class consumers in Asia). As brand strategist Peter Wennström has said, “Consumer research makes it very clear that ‘natural’ is becoming the biggest driver in every country.”

In some countries there’s a sizeable niche of parents who equate “organic” with “natural” and “healthy”, and the extent to which organic matters as a label meaning “healthy” is greater in the UK market than almost anywhere else in Europe. This trend has helped to propel the all-organic

Ella’s Kitchen brand to over £6 million ($11.9 million/€7.6 million) in retail sales in just two years. The trend also helped push up sales of Hipp organic baby food (sold in glass jars) by 22.7% to £32.3 million ($64.8 million/€41.1 million) in 2007 alone. By contrast the established, non-organic Heinz brand saw its sales of baby food in cans and jars fall by 13% to £24 million ($48 million/€31 million) last year.

But you don’t have to be organic to appeal to mothers – what is key is to ensure that your product is free-from the ingredients that parents don’t want to see in their kids’ diets – artificial colours, preservatives and sweeteners, added sugar, gluten and others.

For example, Del Monte’s packages for its Fruitini Juice and Jelly now have “clear health messaging” in the form of a “check list for mums”. On-pack, mums can see portion-of-fruit indicators, stamped-on messaging that touts the brand’s 100% natural ingredients claim, plus supplementary information on the fruit content.

Organix, a UK baby snacks business, carries a “No Junk Promise” on boxes of Organix Goodies Animal Shaped Organic Biscuits. Accompanying

3. Natural and “free-from”

Del Monte’s packaging for its Fruitini Juice and Jelly snacks clearly communicates the products’ health credentials to mothers.



Increasing consumer interest in products that are convenient – that can be consumed “on-the-go” – creates multiple opportunities for companies in most categories, which can be roughly classified as:

1.Many new niches for small companies 2.Creating new categories 3.Breathing new life into established categories

with packaging innovations 4.Breathing new life into established categories’

products with new ingredients and new benefits

These classifications are not intended to be definitive but to help make sense of the different ways in which companies can tackle the healthy snacking opportunity. They are not mutually exclusive; in fact, there are many companies doing several and there are many overlaps.

The concept of “snacks” covers multiple product categories and product types. This reflects the psychology of the consumer: when people think about a snack – be it for themselves or for their children – most don’t limit themselves to selecting from one category and the brands within it. Although some consumers will prefer bars and others will prefer fruit, people are willing to consider anything that sends the right signals – the signals that the individual can identify with in the context of their lifestyle and personal health beliefs. People also seem to be more willing to be experimental with snacks than with other meal occasions.

2.1 NICHE OPPORTUNITIES

While many categories are dominated by a handful of brands belonging to giant companies, the massive fragmentation of the snack concept means that there are a wealth of opportunities for small players to create new products and establish new brands and examples are included among the case studies in this report. Most will remain niche – but a niche is a good place to be if you can earn sufficiently high prices and if you can dominate your niche. And a successful niche product can provide a good springboard from which to grow into the mainstream.

The area of fruit-based products still offers significant potential and our case studies include several examples of companies offering single-serve fruit drinks and fruit smoothies positioned as providing one or more of the recommended “5-a-day”.

There has also been healthy growth in driedfruit sales over the last two to three years. Innovation in dried fruit snacks by several players, including Sunsweet and Ocean Spray, contributed to a 19% increase in the value of the UK’s dried fruit category in the period 2005-2007, compared to an 8% increase in volume, reflecting how the snacking focus has added value. As we have stated elsewhere and will go on reminding our readers, the nutrition business is about value, not volume.

An example of a dried fruit that is repackaging itself for greater snacking convenience is the humble prune. The world’s biggest prune producer, California-based Sunsweet, had long been examining how to make more of prunes. They are one of the highest-scoring fruits in antioxidant content, even topping blueberries and strawberries

2. The future of snacking

Fruit-based products offer significant potential – Flat Earth’s

crisps come in six varieties of fruit and vegetable flavours.

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Report


OCTOBER 2008 31


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This concise 28 page case study shows how this brand’s strategy successfully combines:• Continuous innovation in science and technology• A clinically proven position• Innovative and eye-opening marketing communication techniques• Packaging innovation• A premium price position

This practical analysis includes examples of the brand’s communications and is illustrated with supermarket sales data.

For any company, large or small, looking to create a successful health proposition the story of Anlene shows what can be achieved in a tough, highly competitive market. Anlene’s strategies are not elusive, nor unachievable – they are instead steps that any company can easily take to propel its brands to new levels.

Anlene: What makes the world’s biggest bone health brand so successful?

PPT – 166 slides, product illustrations, charts and tables of data

PDF – 97 pages, 50 product illustrations, charts and tables of data

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Positioned as “the expert in bone nutrition”, New Zealand dairy giant Fonterra’s Anlene brand is the biggest bone-health brand in the world.

Anlene


2. Communicating the benefit

One aspect that has made Anlene stand out among nutritional brands, worldwide, is the way the brand has always worked to establish the benefit in the mind of the consumers. It has done this in several ways.

2.1 ANLENE BONE HEALTH CHECK

Since the mid-1990s Anlene Teams – consumer education teams, made up of trained health professionals – have visited clinics, supermarkets and shopping malls where they set up bone scanning machines and offer free bone scans to passers by.

The bone scan is a measure of bone-mass density and it’s a safe and reliable way for people to find out about their bone health. The Anlene test includes an interpretation of the results by a health professional as well as nutrition counseling and people are also sampled with the product.

The Anlene Teams were the pioneers in the practice of demonstrating to consumers the health benefit of consuming a product and this approach provided the model on which all subsequent efforts – such as the cholesterol-testing offered in Europe by brands like Pro.activ – have since been based.

To support the brand’s position as “the bone health experts”, Anlene Teams visit shopping malls and provide a free bone scan to anyone who wants it.

People who have a scan get a one-to-one consultation with a dietitian, an information booklet about bone health and a sample of Anlene.

Anlene has carried out 15,000 bone scans in Malaysia alone and across the whole of Asia has provided more bone scans than the entire region’s hospital system!

This picture shows scanning in progress at a shopping mall in Taipei, Taiwan.

Anlene


ANLENE PLUS IS A LOW LACTOSE VARIANTOF THE RANGE.

Ingredients: Skim milk powder (non fat),calcium, magnesium, vitamin A, D3, B6 & folicacid

Nutrition facts: Per 100g:Energy 1,520kJ/360kcalProtein 34.1gCarbohydrate 53.6gLactose <38gVitamin A 990ug/3330 IU Vitamin D3 10ug/400 IUVitamin C 16mgThianine 0.3mgRiboflavin 2.1mgVitamin B6 0.9mgPantothenic acid 3mg

Folic acid 250ugVitamin B12 3.8ugBiotin 38ugCholine 140mgCalcium 2000mgPhosphorous 1020mgMagnesium 200mgZinc 3.9mgIodine 53ugSodium 440mgPotassium 1570mg

ANLENE GOLD PROVIDES A HIGHER DOSEOF CALCIUM AND IS INTENDED FOR PEOPLEAGED 51 AND OLDER.

Ingredients: Skim milk powder, milk powder,calcium, fructose, premix vitamins & minerals,vanilla flavor, nano calcium (calcium carbonate,gum arabic, dextrin)

Nutrition facts:Serving size 25gEnergy 100kcalFat 2gProtein 8gCarbohydrates 12g Sodium 90mgPotassium 310mgVitamin A 250µgVitamin C 3.5mgVitamin D3 7.5µg

Vitamin B2 0.4mgVitamin B12 1µgCalcium 600mgPhosphorous 190mgMagnesium 28mgZinc 0.8mgIodine 10µgBiotin 7µgCholine 22mg cholinePantothenic acid 0,76mg

Nutrition facts: Serving size 35g: Energy 140kcalFat 2.5g Protein 8gCarbohydrate 20gSodium 110mgPotassium 520mgVitamin A 270mcgVitamin C 16mgVitamin D 2.5mcg

Vitamin B1 800mcgVitamin B2 0.6mgVitamin B6 900mcgVitamin B12 1.2mcgCalcium 510mgPhosphorous 210mg Magnesium 53mgZinc 1.5mgIodine 26mcgPantothenic acid 1.7mg

ANLENE ACTIFIT IS AIMED AT PEOPLE UP TO THE AGE OF 50. SHOWN IS THE INDONESIANPACKAGE.

Ingredients: Skim milk powder, milk powder, sucrose, cocoa powder, calcium, premix vitamins &minerals, chocolate flavor, soy lecithin, salt, nano calcium (calcium carbonate, gum arabic, dextrin),artificial sweetener sucralose (7mg/serving), malt flavor

Anlene


Launched in 1991 in Malaysia, Taiwan, Hong Kong and Singapore, the Anlene brand can today be found across Asia. Although a niche brand, sales top US$300 million (€191million), an almost 200% increase over the last five years, and are still growing. Key toits success has been the decision to make an integrated bone health education service for consumers the core of the brand’s identity.

The market strength of Anlene is based on its bone expertise, underpinned by the fact that it is the only brand to have completed long-term human clinical studies to prove that consumption of Anlene actually does prevent bone loss. It’s a focus which has made Anlene a best-practice model for anyone with ambitions in the nutrition business.

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 RDIof calcium and the product is also fortified with vitamin D3, magnesium, zinc and other nutrients which are important in bone formation.

Anlene is the only calcium-fortified dairy brand on the Asian market to have conducted long-term clinical trials on the product “as consumed” to establish that it has the desired effect on bone density. The company has invested heavily in its science – some $40 million (€25 million) over the last 10 years – and the benefits of Anlene in increasing bone densityare supported by five published, peer-reviewed, long term, randomized, controlled studies on large sample populations.

It’s growing fast in Indonesia, the biggest market, and in China, and it has the dominant share – at over 75% – of the high-calcium milk market in Asia. It’s the biggest brand ofits kind not only in Asia but worldwide.

The success of Anlene is all the more significant because drinking two glasses of milk a day is a difficult thing for many people in Asia, where there is no tradition of dairy consumption and per capita consumption of dairy is only a fraction of that in the west. In addition, marketing a high-calcium milk is one of the most difficult things a marketer

Anlene’s variants include: Anlene Gold for consumers aged 51+, Anlene Actifit for people under 50 and Anlene Plus, a low-lactose product.

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Case Study

Anlene:what makes the world’s biggest bone health brand so successful?

OCTOBER 200832


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Published June 2008

Superfruits are the product of a strategy, not something you fi nd growing on a tree.

Superfruits are revolutionising the way consumers relate to fruit and fruit-based products and they’re growing their market fast – from 40%-100% every year. And yet just a handful of fruits have crossed over from commodity status to superfruit stardom.

This 268-page book provides a checklist for superfruit success that is written as a practical “how-to” guide for:

• food and beverage marketers

• R&D managers

• fruit growers, processors and marketers

• ingredient manufacturers

This book is the answer for every industry professional who has ever wondered how to use fruit to target the wellness foods trend.It contains 12 detailed case studies, based on interviews with senior executives, and supermarket sales data.

268 PAGES, 35 CHARTS AND TABLES, 271 COLOUR ILLUSTRATIONS, 12 DETAILED CASE STUDIES

About the authors Karl Crawford is Business Leader for Health and Food at New Zealand’s world-renowned fruit science company HortResearch. Julian Mellentin has spent many years as a food industry analyst and consultant, and is also editor of New Nutrition Business Journal.

Superfruit: strategy for success

OCTOBER 2008 33


Powerpoint Slide Presentations All New! For the first time many of our most popular reports are available as Powerpoint Presentations – Ready to use instantly!

10 Key Trends in Food, Nutrition & Health 2008

PPT – 166 slides, product illustrations, charts and tables of dataFully updated June 2008! The Powerpoint version includes new data and covers the latest developments in the Key Trends.

Probiotics: Successful Strategies from the Global Marketplace

PPT – 181 slides, product illustrations, charts and tables of dataPublished July 2008! This report is written for anyone trying to develop an effective strategy in the challenging and fast-changing area of probiotics.

Innocent Drinks: What makes Europe’s fastest-growing smoothie brand so successful?

PPT – 71 slides, product illustrations, charts and tables of dataPublished July 2008! For any company, large or small, looking to create a successful health proposition the story of the meteoric rise of smoothie makers Innocent Drinks shows what can be achieved in a tough, highly competitive category.

10 Factors for Success in Energy Drinks – Europe and the U.S.

PPT – 99 slides, product illustrations, charts and tables of dataPublished July 2008! This new report uses case studies from the energy drink market, supported by supermarket sales data and primary research.

Strategies for successful innovation in kids’ nutritional dairy: Six key case studies

PPT – 59 slides, product illustrations, charts and tables of dataPublished July 2008! To make your life easier this is an explanation of the six steps for successful new product development in kids dairy, set out in a concise, powerpoint format.

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REPORTS

CASE STUDIES

OCTOBER 200834


PUBLICATIONS

REPORTS

Healthy Snacks & Beverages for KidsThis report begins with a concise 23 page summary of the key drivers in kidssnacking and ends with a practical check-list for new product development.The report then sets out ten detailed case studies of success and failureand includes a range of companies large and small, from Unilever’s kids’“Brain Food” range to Healtheries rice snacks.

Superfruit: new book defines strategy for superfruit successSuperfruits are the product of a strategy, not something you find growing on a tree.Superfruits are revolutionising the way consumers relate to fruit and fruit-based products and they’re growing their market fast – from 40%-100% every year. And yet just a handful of fruits have crossed over from commodity status to superfruit stardom. This book provides a checklist for superfruit success.


This report is written for anyone trying to develop an effective strategy in the challenging and fast-changing area of probiotics. It sets out the seven steps to creating a successful probiotic brand and describes probiotic strategy both in dairy and emerging new segments such as fruit juice and solid foods.

NOW AVAILABLE IN PPT WITH NEW INFORMATION!

7 Outstanding Companies in Functional & Health-Enhancing FoodsOur latest report provides insights into the strategies of the most outstanding companies in the field of food and health. Companies featured in the report have the most advanced and successful strategies in nutrition and health; have strategies which illustrate the future direction of functional foods; and deliver valuable lessons about how to be successful in the business of food and health. Our selection includes: Danone, Unilever, PepsiCo, Emmi, Yakult Honsha, Pom Wonderful and Innocent Drinks.

10 Key Trends in Food, Nutrition & Health 2008Our annual review, 10 Key Trends in Food, Nutrition & Health, is one of the most sought-after publications in the food industry. The report identifies the 10 mega-trends that will have the most impact on the food and beverage industries over the year ahead. It points companies towards some clear and practical strategies for their functional food and beverage developments, production and marketing.

NOW AVAILABLE IN PPT WITH NEW INFORMATION!

5 Key Trends in Kids’ Nutrition 2008In a world in which health is becoming a standard for the entire food and beverage industry, one of the current challenges (and a fecund opportunity) lies in the kids’ nutrition market. The report identifies the five mega-trends that will have the most impact on the market for kids’ healthy food and beverages and provides detailed scrutiny of the links between kids’ food, nutrition, health and business.

10 Factors for Success in Energy Drinks – Europe and the U.S.Now in Powerpoint!10 Factors for Success in Energy Drinks looks broadly at strategy and success in the energy drinks category in the US and Europe. It examines key players, new entrants and new niches within the market as well as providing market data.

Functional and Health-Enhancing Juices: 7 Key TrendsUsing 15 detailed case studies this report analyses the functional and health-enhancing juice business. It explains that digestive health, behind superfruits, is the single most-promising trend for the juice industry – and demonstrates how two companies have quietly built digestive brands worth over $50 million in annual sales. It explores juices with added ingredients and it points out that

the areas of beauty, energy and weight management all have the potential for profitable growth.

Failures in Functional Foods: 10 Key Case Studies & 10 Key LessonsThe functional foods market is a highly complex one. Success with a new product or ingredient in this harsh and demanding market is very rare. In fact, failure is far more common than success and most products sell on a niche basis with very, very select few ever graduating into the mass market. The report analyses some of the more spectacular failures and offers strategies for reducing risk in the functional foods world.

Success and Failure in Functional Water: Eleven Case Studies from Europe, the US and AsiaWhat makes consumers choose functional waters? What are the critical success factors in marketing waters with added health benefits? Why is the category mass-market in Japan, but still only niche elsewhere in the world? Why have so few brands been successful? And why have most product launches failed? The report examines the marketing strategies of 11 different functional water brands and identifies the critical factors for bringing functional waters to market.

The Food & Health Marketing HandbookIn a competitive world how do you take your technology to market so that it’s your product that wins at the point of purchase? This handbook tells you how to get the best out of the science and the health benefits of your ingredients or products.

Price per unit SOLE USE ONLY (Multiple user price on request)

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CASE STUDIES

Anlene: What makes the world’s biggest bone-health brand so successful? NEW! Available in both pdf and powerpoint!Positioned as “Expert in Bone Nutrition”, Fonterra’s Anlene dairy brand dominates the high-calcium milk segment in Asia and is the biggest bone health brand in the world. Anlene has achieved that position as the result of both innovation in science and innovations in marketing, marketing communications, packaging and products. It’s a case study that provides a model of best practice for anyone looking to communicate clinically-proven benefits.

Danone Actimel: Innovation Builds a Probiotic Mega-BrandDanone’s Actimel probiotic drinking yoghurt is the world’s biggest immunity brand and one of the world’s biggest and most successful probiotic brands. In this report Actimel’s marketing communications, pricing, packaging, labeling, merchandising, advertising and consumer insights are analysed and explained in detail and illustrated with colour photographs, charts and images from advertisements to provide valuable lessons from which all food and beverage businesses can learn.

Innocent Drinks: What makes Europe’s fastest-growing smoothie brand so successful? Now in Powerpoint!For any company, large or small, looking to create a successful health proposition the story of the meteoric rise of smoothie makers Innocent Drinks shows what can be achieved in a tough, highly competitive category. Innocent’s strategies are not elusive, nor unachievable – they are instead steps that any company can easily take to propel its brands to new levels.

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Our case studies and reports give you unique insights into the vital and changing food, beverage and nutrition market.

For more New Nutrition Business case studies visit www.new-nutrition.com

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N EW N UTRITION BUSINESS · 2014-03-25 · N EW N UTRITION BUSINESS VOLUME 14 NUMBER 1 –nutrition.com OCTOBER 2008 ISSN 1464-3308 THE JOURNAL FOR HEALTHY EATING, FUNCTIONAL FOODS