N EW N UTRITION BUSINESS · N EW N UTRITION BUSINESS ... vice president of marketing for Hero/White Wave, the 50-50 joint venture that is based in White Wave’s home state, Colorado

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

B U S I N E S Swww.new–nutrition.com FEBRUARY 2009 ISSN 1464-3308VOLUME 14 NUMBER 4

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 10-12

Continued on page 4

Page 5 Pages 15-16

How to reinvent a category – and build a

billion dollar brand

Sales collapse for Coke’s calorie-

burner

Hoping to continue the stream of major better-for-you product innovations that have moved successfully from the European theatre to the American market, dairy giant Dean Foods is placing a big bet on Fruit2Day as it rolls out what it hopes will be a category-busting brand across the United States this spring.

The largest US dairy late last year established a joint venture with Switzerland-based Hero to take Fruit2Day, a brand that has proven very successful in the Netherlands and elsewhere in Europe (see box on page 4) to the US market, and executives of Dean’s White Wave subsidiary (the biggest brand in the soy milk category in the US) are confident that Americans will embrace the unusual new fruit-delivery idea the way Europeans have over the last few years.

“We’re excited about what this is going to do for the US consumer,” said Scott Stevens, vice president of marketing for Hero/White Wave, the 50-50 joint venture that is based in White Wave’s home state, Colorado. “We’ve already heard great feedback from retailers on the innovation aspect of it, because they’ve been looking for innovations in the fruit and snack area.”

Fruit2Day is a beverage but contains tiny bits of fruit so it must be chewed as well as sipped. The pieces are bigger than,

say, the pulp in a thick orange juice, so they can’t simply be swallowed. The liquid contains both juice and puree and is about the consistency of a thin smoothie. In short, when Fruit2Day appears anywhere, it’s unlike any kind of mainstream product that consumers have encountered.

“It’s a product I can’t figure out,” said Tom Pirko, one of the world’s foremost beverage-industry consultants. But, he added, Hero “has created a niche for it, and a fairly secure one. And they probably have a pretty good opportunity [in the U.S.], especially with Dean – they’re good marketers.”

North American consumers are ready for

the “ground-breaking, chilled-fruit category innovations” of Fruit2Day, Hero Group CEO Stefan Heidenreich said in November.

Stevens told New Nutrition Business that Fruit2Day will be available nationwide by early May at mainstream supermarkets, mass merchandisers with groceries, club stores and natural-foods outlets. White Wave is adding a manufacturing line dedicated to production of Fruit2Day to its existing processing plant in Virginia.

Fruit2Day initially will be offered in four flavours: strawberry-orange, pineapple-banana, mango-peach, and cherry-grape. Each bottle contains two servings of fruit and

Dairy aims to shake up fruit snack category with

European innovationBy Dale Buss & Julian Mellentin

Unilever debuts Germany’s first

probiotic spread

FEBRUARY 20092

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Beneo ................................19,20Beneo-Orafti .....................19,20Bio-Synergy .......................23,24Birds Eye ................................21Boost .......................................14Coca-Cola .........................15,16Costco ....................................14CSM .......................................18CVC Capital Partners ............18Dannon ........................10,11,12Danone Actimel ...............6,7,10Danone Activia ......6,7,10,11,12Danone DanActive ......10,11,12Danone ........................6,7,10,11Dean Foods ......................1,4,10DSM .......................................25Elations ..............................13,14Ensure ....................................14Enviga ...............................15,16Equilibra ................................20

Evian ......................................24Findus .....................................22General Mills .........................10GO3 .......................................22GoodBelly ..............................10Hero ......................................1,4Harrods ..................................23Huhtamaki .............................18John West ...............................21Joint Juice ..........................13,14JW Childs ...............................13Katjes Fassins .........................18Kroger ....................................15Lätta .........................................5Leaf ...................................17,18Lipid Nutrition .......................25Living Essentials .......................3Malaco Truly ....................17,18Müller Dairy ....................6,7,21Müller Vitality ......................6, 7

Naturally Drinks ....................25Naturally Gorgeous ................25Nestlé .................................15,16NextFoods ..............................10Nordic Capital .......................18Ocean Spray Plus Probiotic .....5Orafti ...................................6,20Pechugas de Pavo Grill ..........20Pernil Al Horno .....................20PinnoThin ..............................25Princes Foods ..........................21Procter & Gamble .............13,14PhytoPharm .............................8Raftiline ..................................20Raftilose .................................20Red Band Truly ................17,18Red Bull ...................................3RügenFisch ........................19,20Safeway ..................................15Sam’s Club .............................14

Sant Dalmai ...........................20Silk ..........................................10Südzucker Group ...................20Sunny Delight ...................13,14Target .....................................15Teavigo ...................................25Tesco .................................23,24Top Shop ................................25Tutti Frutti Naturals ...............18Unilever ....................5,8,9,16,21Valio .........................................4Waitrose..................................25Wal-Mart ................................14White Wave ............................10WHSmith ..........................23,25Yakult ....................................6,7Yoplait ...............................10,12Young’s Chip Shop Omega-3 21Youngs Seafood ......................215-Hour Energy Shot ................3

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LEAD STORY

1,4 Dairy aims to shake up fruit snack category with European innovation

NEWS ANALYSIS

3 Red Bull to move into daily dose format in US, Europe next?

5 Unilever debuts Germany’s first probiotic spread

6-7 Probiotics: economic down-turn highlights the strong strategies and the weak ones

EDITORIAL

8-9 Risky science and timid marketing strategy combine to unravel Unilever’s weight management plans

CASE STUDIES

10-12 PROBIOTIC: How to reinvent a category – and build a billion dollar brand

13-14 JOINT HEALTH: Elations gets moving

15-16 BRAND FAILURE: Sales collapse for Coke’s calorie-burner

17-18 CONFECTIONERY: Sweet success with less sugar

19-20 INGREDIENT STRATEGY: Fibre- fortified fish carries Beneo seal of approval

21 OMEGA-3: “Natural source”: is best selling message for omega-3

22 MARKETING: Can David Beckham score with omega-3?

23-24 BEVERAGE: Bio-Synergy takes health water from the athletics track to Harrods

25 START-UP: Naturally Gorgeous gets into shape

NEW PRODUCTS

26-28 Functional & healthy-eating new product launches

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31 10 Key Trends in Food, Nutrition & Health 2009

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FEBRUARY 2009 3


N E W S A N A LY S I S

Red Bull is to enter the “daily dose” energy drink category in the US. It’s a market that’s been long-established in Asia, where the concept was invented, but it’s only recently been established in the US. Red Bull can be expected to pioneer the creation of the category in Europe, where the concept is still unknown.

Red Bull remains dominant globally in the mainstream energy drink category that it essentially created. But the opportunity to get high retail selling prices (200% above regular energy drinks), very high profit margins and very high growth rates (over 100% a year according to industry sources) has prompted the company to announce its entry into a market where the average pack size is just 60ml-180ml (2oz-6oz).

“We recognize that some consumers are interested in a smaller package to deliver their energy needs in the form of an energy shot,” Red Bull North America spokeswoman Patrice Radden said late last year. “Currently, there is not a premium brand in this fast-growing segment. Red Bull plans to fill this void and offer Red Bull Energy Drink in a shot format in 2009.”

The pricing of Red Bull Energy Shot won’t be known until its launch in February 2009, but it is likely that the look of the new 2oz (60ml) Red Bull drink will closely follow that of the mainline Red Bull energy drink can. The straight-sided container will carry a shrink-wrap label with the iconic Red Bull red, silver and blue colors with a screw cap. It will be available in regular and sugar-free versions.

Tom Pirko, one of the world’s leading beverage-industry consultants, explained his take on the company’s approach: “They were watching the advent of a whole bunch of these [energy-shot] products, but they saw it as more of a fad – like an over-the-counter medication,” said the head of California-based Bevmark, based in Santa Inez.

Energy shots have grown rapidly and appeal to the many consumers who need an energy lift but are turned off by the packaging, brand imagery and sugar content of existing energy drinks, all of which are sold in packages of 250ml and above. With

little or no sugar, easy and convenient to drink, energy shots are low in calories while high in stimulation.

“These are more contained and concentrated,” than energy drinks, Pirko explained. “You can forget about having to drink a bad-tasting beverage and just mainline it.”

The segment began with the introduction of the two-ounce 5-Hour Energy Shot in 2005 by Living Essentials, which Nielsen and IRI data suggest rocketed to $70 million (€52 million) in retail sales in 2008. Other startup brands included Nitro2Go and ZipFizz. Then followed energy-shot entries by major existing energy drink brands that are big competitors to Red Bull, including Rock Star and Monster. By 2008, the category had grown to well over $100 million in retail sales, and some projections call for it to grow to more than $200 million (€150 million) this year.

“They didn’t believe it was going to work

or that consumers would pay that amount of money for the effect of shots,” Pirko said. And Red Bull “just wanted to be in the beverage business. They saw their future as being in the functional-beverage area compared with something that they thought was maybe a fad.”

Leaping into the shot category presumably was not an easy decision for management. “Red Bull is the market leader in energy drinks,” noted John Sicher, editor of Beverage Digest magazine in the U.S., “and they are rightly careful about extending their powerful brand.”

Now that Red Bull apparently has committed itself to launching its own energy shot product, Pirko believes that it will be a success. “They’ve attained a currency in our culture where they’re now synonymous with energy drinks,” he said, adding that Red Bull “has a real opportunity to make some money with shots. The depth of their trademark is more and more apparent.”

Red Bull to move into daily dose format in US, Europe next?

By Dale Buss & Julian Mellentin

ENERGY DRINKS ARE PREMIUM-PRICED DAILY DOSE ENERGY SHOTS ARE SUPER-PREMIUM - US energy drink prices compared with one-another and with a “standard” mass-market non-energy product such as Coca-Cola Classic

Price per 32 fl.oz. (approximately

1 litre)

0CocaCola Classic

1 litre $2.19

$2.195

10

15

20

25

30

35

40

Monster Energy Drink

16 fl.oz. $2.29

$4.58

Red Bull8.3 fl.oz. $2.09

$8.06

Cranergy12 fl.oz. $3.99

$10.64

Living Essentials 5-Hour Energy12 pack $33

2 fl.oz. bottles

$41.25

Source: Wal-Mart, Albertsons, Walgreens

45

FEBRUARY 20094



110 to 120 calories and contains no added sugar or preservatives.

Packaged, exactly as in Europe, in a 2-pack of distinctive, 6.8-ounce (205ml) plastic bottles, Fruit2Day will retail at a suggested $3.59 to $3.79 (€2.70-€2.85) per pack. Measured on a price-per-32 oz basis (equivalent to a litre) Fruit2Day’s retail price will be $8 (€6), approximately a 250% premium to Tropicana Pure Premium orange juice.

It seems contradictory that a product can be both super-premium-priced and mass-market, but that is exactly what the brand has already achieved in the Netherlands, a European market that is even more price-sensitive than the US. It is the brand’s promise, positioning and packaging that have enabled it to pull off this feat.

The proposition behind Fruit2Day, in Europe as well as in the United States, begins with consumers’ increasing recognition that they simply don’t get enough fruit in their diets – certainly, for most people, far fewer than the several servings that are recommended daily for every individual by governments and nutritionists.

The second aspect of the idea, as Stevens explained, was: “How do you give people a new way of getting fruit into their diet that also is an enjoyable experience?”

Third, Hero and White Wave have aimed Fruit2Day at the understandable disappointment that many consumers – raised largely on processed foods – express with the “inconvenience” of eating fresh fruit and with its inconsistency in taste and texture.

Plus, there’s an under-recognized problem in American households: the vast waste of fruit that is purchased but never eaten and is thrown away. That ends up being the fate of about 25% of the fresh fruit purchased in America, Stevens said.

But putting those factors together and coming up with Fruit2Day remained a big stretch for Hero, and it’s one that White Wave is being careful about translating effectively to American consumers.

Stevens explained that Hero/White Wave is “trying to pull off a balancing act. We need to make sure people understand that [Fruit2Day] isn’t like a fruit cup, where people have to pull out a fork to eat it – but neither is it a typical juice that they’re going to drink like their OJ in the morning.”

When consumers try it, he said, they typically enjoy the fresh-fruit taste. And “the vast majority are pleasantly surprised and really interested in continuing to finish

the bottle and maybe purchase some.” A minority of consumers, Stevens conceded, “probably won’t understand or like the experience because of the fruit bits. And there are some people we will never get converted.”

In any event, ensuring consumer trial will be crucial to gaining acceptance and generating a fast start in the US market.

“We have to build awareness and trial among that target consumer – 25- to 45-year-olds, health-conscious people with busy lives who are really interested in making healthy choices and getting more fruit in their diet,” Stevens said.

To that end, Hero/White Wave will be doing both traditional and online advertising. But most important, the joint venture will mount an exhaustive effort to get samples to consumers in many hundreds of retail stores and in out-of-store venues such as events.

Like chilled juices and other new fruit products, Fruit2Day will be merchandised in supermarkets’ produce sections. Its unique bottles – resembling two round fruits stacked on top of one another – have an existing parallel in the market in PomWonderful’s innovatively shaped bottles, which suggest two pomegranates stacked on top of one-another.

Allusions to PomWonderful are purposeful, because Fruit2Day will be charging what consumers must see as a hefty premium over the cost of any two other servings of fruit,

such as a fresh apple or banana.“The way consumers will look at it is

[Fruit2Day] is in the world of convenient ways to get fruit, like super-premium juices, or chilled, cut fruit,” Stevens explained. “And it’s very [price-]competitive with other products in that set.”

If not by Fruit2Day’s price point per se, Pirko, suggested that Hero/White Wave could be tripped up by American consumers’ general belt-tightening in the face of growing economic stresses.

Fruit2Day “may look good, and you may want to try it,” Pirko said, “but you’re not going to continue to spend the kind of money that you did two years ago.

But Stevens said that the main market characteristics that bode well for Fruit2Day – consumers being “on the go” and wanting to “make smart choices” – haven’t changed. “So [Fruit2Day] has a core proposition that has a lot of interest for consumers. Might they scrutinize the choices they make a little bit more? Sure. But certainly foods and beverages in [U.S.] grocery stores are still being purchased and consumed at roughly the rates they have been.

“And, he concluded, “consumers clearly have told us that they’re willing to pay for healthy products that offer convenient solutions and smart choices.”

HERO FRUIT2DAY – A MASS-MARKET AND PREMIUM-PRICED SUCCESS STORY

Launched in 2004 in the Netherlands, each 205ml bottle of Fruit2Day delivers two of your recommended daily servings of fruit.

Priced at around €2.15 ($2.85) for a pack of two bottles, that’s equivalent to €5.24 ($6.96) a litre. On a per litre basis that’s an impressive 170% premium over a 1-litre pack of Tropicana Pure Premium orange juice.

Privately-owned Hero does not disclose sales figures and has always declined invitations to talk about its brands but industry sources put retail sales of Fruit2Day in the Netherlands at over €30 million ($39 million).

To put those figures into some context, the Netherlands has a population of just 17 million. If it achieved a similar level of penetration in the US it would be a $580 million brand, making it mass-market.

Fruit2Day, as a result of its innovative packaging, easy-to-understand health benefit, snack, positioning as a healthy snack and good taste has achieved the remarkable coup of being both mass-market and premium-priced.

Continued from front page

FEBRUARY 2009 5



Unilever’s Lätta spread, the best-selling low-fat margarine brand in Germany, has recently received a probiotic boost. Introduced in January, Lätta mit Probiotik claims to be the first margarine in Germany to combine both immune enhancement and weight management benefits.

Unilever’s probiotic spread is based on LGG, the world’s most-researched strain of probiotic bacteria, licensed by Finnish dairy pioneer Valio. LGG can be found in dairy products in over 30 countries around the world. Besides Valio’s LGG logo which appears discreetly on the bottom of Lätta packaging, the following claims appear on the packaging:

With active lactic-acid bacteriaBoosts the immune systemTwo daily portions (2 x 10g) deliver the daily dose of probiotics

The revamped Lätta package design includes a bottle-shaped icon to make the connection to probiotic drinks. In addition to the probiotic message the package carries the “choose responsibly” (in German: “bewusst wählen”) tick, developed and promoted by Unilever, which guarantees that the product follows internationally accepted recommendations for a healthy diet, and Lätta communicates that it:

contains only 28% fat provides 30 kcal per 10g portion

According to Unilever’s consumer communications, probiotic Lätta provides “an alternative to yoghurts and minidrinks, and is a convenient way to enhance the immune system during breakfast – already two margarine-spread breads daily are enough to boost the immune system with a long-lasting effect”.

The primary target consumers are described by Unilever as young shoppers who not only appreciate the pleasures of life but are also aware that what they eat will have certain consequences on health and wellbeing. “You could call them healthy hedonists”, Unilever spokesperson Ute Altenhein told New Nutrition Business.

Lätta mit Probiotik retails in a pack of 500g at a recommended price of €1.99 ($2.62) per pack. By comparison, a regular Lätta margarine in a 500g pack costs €0.99 ($1.30), and private label products may sell as low as €0.55 ($0.72). Despite the 100% price premium, Unilever has not altered the size or shape of the package design, allowing a direct price comparison between probiotic Lätta and equivalent “regular” spreads.

Unilever is said to have reserved a six-digit marketing budget to support the product launch in Germany. “We are planning a full 360° support including TV, print, separate online microsite, PR, point-of-sales and other promotions,” confirms Altenhein.

Unilever’s new TV spot, airing nation-

wide in February, features a young, blonde “Lätta-girl” catching a ride with a whale in scenic lake surroundings. “A whale represents ultimate strength and power unlike any other animal, and those are the attributes we want our consumers to associate with our probiotic novelty,” explains Alexander Pess of Lätta’s brand development team in Germany. The TV advertisement can be viewed at www.laetta.de.

TWO-IN-ONE IS OFTEN A NO-GO

Lätta’s brand heritage is tightly anchored in weight management: it was introduced in Germany more than two decades ago as “the light butter”, and has since become the country’s number one low-fat brand. By widening Lätta’s offering into probiotics, Unilever is dangerously close to cannibalizing its main brand’s equity.

The biggest success stories in functional foods are brands that are highly focused on a single proposition: Red Bull in energy; Actimel for immunity; Activia for digestive health – and Lätta in weight management. A brand that tries to offer multiple benefits is often one that often attempts to stand for everything and ends up meaning nothing. Unilever will have a hard time proving that probiotic Lätta can buck the challenges other companies offering “new benefits” to existing brands have already faced.

Probably Unilever’s strategy is to increase the shelf space occupied by Lätta brand and double the profit margin while doing it – sadly the company has missed the point of differentiation. With an uninteresting package design, 100% price premium and a health benefit that consumers already get

from a range of dairy products, probiotic Lätta is in danger of ending up in the hall of fame of “probiotic stretch” failures.

Unilever debuts Germany’s first probiotic spread

By Kati Leskinen

Lätta carries the LGG logo as well as the “choose wisely” symbol.

FEBRUARY 20096


E D I T O R I A L

Tough consumer markets are exposing which strategies are weak and which are strong. “Follower brands” and brands that have not established their point of difference are finding it increasingly difficult to keep hold of customers. The keys to creating a sustainable health brand are:

• be either the market leader, or• be the niche “expert” brand• have a clearly defined benefit• and a strong identity

One example of how a brand can suffer when it measures poorly against the criteria above can be found in the UK’s probiotic dairy market, where in 2008 German-based Müller Dairy experienced an accelerated decline in sales of its Vitality brand – 12% in 2008 after an 8% decline in 2007. It’s a problem that can’t be blamed primarily on economic circumstances – the probiotic drink market remained static and the yoghurt market grew in double digits even as Vitality declined.

PROBIOTIC DAIRY DRINKS

Despite recession, the UK market for probiotic daily dose dairy drinks held steady in 2008 with branded product sales at around £167 million ($233 million/€177 million) and a further £8 million ($11 million/€8.5 million) of private label product.

Market leader Danone Actimel maintained its high level of marketing investment behind its brand and increased sales by 4% to £108 million ($150 million/€115 million), giving it an impressive 65% market share.

Rival Yakult, which uses a scientific message to position itself as “the expert brand”, maintained its grip on its high-value niche (it is the most highly priced daily dose brand selling at a 70% premium to Actimel, measured on a price per litre comparison) and finished 2008 with sales and market share unchanged.

As the Table shows, the brand which was third to market in the category, which it entered in 2002, Müller Vitality, experienced an 8.8% sales decline in sales of its dairy drink in 2008 following a 14% decline in 2007.

The most recent new entrant to the category, Ocean Spray Plus Probiotic, saw its sales fall more markedly. This brand is a particularly good example of an ill- thought-out brand strategy that breaks all the rules: Ocean Spray is an “expert brand” in cranberry and its health benefits, but it has no credibility in probiotics or in dairy; the Ocean Spray brand is a “me-too” probiotic in a category that’s already well-established, bringing no new benefits and no point of difference from the current players. Hence it isn’t surprising that it has attracted no consumer interest.

SPOONABLE YOGHURTS

Danone is also the leader in this segment

of the market. It has cleverly managed to position its Activia yoghurt as both “the expert brand” – the one that is most effective and most scientifically grounded – and made it the market leader by supporting the brand with consistently high levels of marketing expenditure on a consistent marketing message. Activia recorded a breathtaking 37.5% increase in retail sales in 2008, to £161.7 million ($225 million/€171 million), making it the second biggest yoghurt brand in the UK and driving a 20% growth in the probiotic yoghurt market.

The achievement is made all the more impressive by the fact that Activia sells at a 100% premium over own label and 30% more than other brands and grew against the backdrop of a severe economic downturn which so many companies have used as an excuse for their failures.

In contrast Müller Vitality, first launched in 2000, experienced a 17% decline in sales (its second year of falling sales) to £20.9 million ($29 million/€22 million).

Probiotics: economic down-turn highlights the strong

strategies and the weak ones

FEBRUARY 2009 7


E D I T O R I A L

STANDING IN A STRATEGIC BLACK-HOLE

Since its launch back in 2001, the Müller Vitality probiotic dairy brand has been in about the worst position a brand can be in:

• it offers a benefit no different from its better-established competitors, Actimel and Yakult in dairy drinks and Activia in yoghurt.

• the Vitality probiotic yoghurt and dairy drink brand had neither the benefit of a consistent and heavy promotional spend, such as market-leader Danone Actimel used, nor the benefit of being the “most scientific”, an uncompromising expert brand position, such as that of Yakult.

• the Müller brand was associated with the mass-market and price competitiveness (a strategy that had propelled the company to number one in the UK yoghurt market) and the brand’s image had little appeal to the higher value-added, lifestyle-of-health segment of the market.

In 2005 Müller resorted to a strategy which has been tried – and has failed – time and again for many brands in many countries: the functional food make-over. This is where you add a new ingredient and a new benefit to a brand in the hope of boosting flagging sales.

The addition of omega-3 did at first achieve results – sales jumped 30% in 2006, the first full year in which Vitality was marketed as the probiotic and prebiotic brand that also offered the benefit of omega-3.

Vitality seems to have picked up the niche of consumers who are motivated by the benefits of omega-3. But once you’ve got them on board, there’s limited

room for further growth – as Müller soon found. Despite trying to make a virtue of its products’ three different ingredients – probiotics, prebiotics and omega-3, calling it “3 in one” and adding a logo to that effect on the packaging of Vitality – the brand’s sales fell in double digits in 2007.

In early 2008 omega-3 was dropped from the formulation of Vitality, with Müller saying that: “We found in our new research that people simply weren’t interested in having omega-3 in a yoghurt product.” After a packaging make-over and a relaunch in 2008 the brand was back to where it was in 2004, talking about “probiotic and prebiotic”.

As we said in NNB at the time, in terms of brand positioning it was a “back to the

future” strategy – the same positioning the brand held between 2002 and 2005 – and as we forecast in early 2008, it didn’t work last time round and it hasn’t worked this time either.

As a point of difference the term “prebiotic” has little value in the UK market. Even a consumer survey by Orafti, the world’s biggest supplier of prebiotic fibres, found that, on a scale of 1 to 10, where 10 is the most appealing and 1 the least, prebiotics scored just 5.88 with UK consumers. As many brands have found, the term “prebiotic” just isn’t a motivator.

Müller Vitality’s travails are far from over. The brand has few roads open to it from here – and none of them are attractive. It cannot dislodge Actimel and Activia from their leadership positions, nor can it credibly compete with Yakult’s expert position. It could aim to be the low-cost, budget competitor – which was what Vitality was when it was launched back in 2000. But the core consumers for foods with serous health benefits, who are the vital niche that drives all functional food markets, are more motivated by benefits than by price. It’s one of the key lessons of the last decade and it is becoming apparent even in the US probiotic market (see page 12), where Activia has come to dominate a market which is often described as price-sensitive, despite its premium pricing.

A low-price strategy might, at the very best, halt the slide in Vitality’s sales. But it may be too late even for this.

2007 2008 % CHANGE

PROBIOTIC DRINK BRANDS

DANONE ACTIMEL 103.7 108.1 4.1%

VITALITY 36.2 33 -9.7%YAKULT 25.1 25.1 0.0%OCEAN SPRAY 1.1 0.7 -57.1%TOTALS 166.1 166.9 0.5%

PROBIOTIC YOGHURTS

DANONE ACTIVIA 117.6 161.7 27.3%VITALITY 25.2 20.9 -20.6%TOTALS 142.8 182.6 21.8%

Source: Nielsen data, year to 4th October, as published in UK trade journal The Grocer.

TABLE 1: PROBIOTIC DAILY DOSE DRINK AND SPOONABLE YOGHURT MARKETS RESIST RECESSION, BUT VITALITY STILL DECLINES

SALES SHOWN IN BRITISH POUNDS

FEBRUARY 20098


E D I T O R I A L

Unilever is a company that seems to be willing to take huge risks in science, speculating millions on projects with uncertain outcomes – even buying a cactus plant in a bid to create new science. But when it comes to marketing it seems to be highly averse to risk. The result? Unilever’s weight management strategy is in tatters, foundering for lack of risk-taking in market innovation, while its investment in science (specifically: Hoodia gordonii) has come to naught because of an excess of risk-taking – as New Nutrition Business accurately forecast back in February 2005.

In late 2004 Unilever announced that it was to invest a total of $40 million to secure an exclusive global licence to the botanical extract Hoodia gordonii from Phytopharm plc – a company quoted on the NASDAQ and the London Stock Exchange.

The extract of Hoodia gordonii, a rare cactus plant native to the Kalahari desert, was licensed exclusively by Phytopharm from the South African Council for Scientifi c and Industrial Research (CSIR) in 1997. Phytopharm says that it has been actively developing the extract – called p57 – for incorporation into weight-loss products.

The molecule is thought to target the satiety centre in the brain, reducing the desire to eat. Historically, Hoodia has been used by the indigenous people of the Kalahari to promote a feeling of satiety in times of famine.

For the record, this is what NNB said at the time:

“On Unilever’s part this move is either a piece of visionary thinking or it’s a spectacular blunder. We believe that it will likely turn out to be the latter.

“After setting up production of the raw material (Hoodia takes two years to grow), Unilever must also manage Hoodia through Europe’s notoriously slow Novel Foods approval process. Then Unilever will want products bearing it to carry regulator-approved weight-loss claims – assuming that the EU permits such claims (proposed health claim regulation specifi cally forbids such claims). At this point it will have to reveal – at least to regulators – the evidence for its claims and somehow this as-yet unpublished data is going to have to be peer-reviewed if it is to be credible.

“A huge amount of science, as well as product development, will have to be done to get to that point – no-one yet knows whether it’s possible to formulate enough Hoodia into a food or drink to be effective for the product to still taste palatable.

“In short, Unilever is embarking on a massively risky venture. For a company that has historically shown itself to be risk-averse – and so failed to catch many of the health trends that have proven so profi table for other companies – it’s a 180 degree shift.

“There’s a lot of great things that Unilever could have done with $40 million to give itself a stronger place in the nutritional fi eld, but buying a cactus isn’t one of them.”

TOO MUCH RISK

And so it has proved. In late 2008 Unilever and Phytopharm announced that trial data indicated that the extract would not meet safety and effi cacy standards and the two companies would end their partnership. Data from a clinical study using Hoodia extract in a drink-based product led Unilever to conclude that it was unsuitable to move forward with the product concept, according to a press release from Phytopharm.

Some will say that the demise of Hoodia is just a typical example of the risks involved

Risky science and timid marketing strategy combine to unravel Unilever’s weight

management plans

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when you innovate in science. And so it is. But Unilever took on far more risk than most other consumer food companies, for whom it is a key requirement that would-be science and ingredient partners have established the safety of their ingredients and have some peer-reviewed published data on efficacy. Unilever could have demanded that Phytopharm invest in creating this data – as all ingredient suppliers must do to be credible. Seen from a shareholders’ perspective the licensing of Hoodia was more like speculation than investment.

In contrast to the way Unilever embraced massive risk with Hoodia, every aspect of its marketing of weight-management products has been risk-averse.

Unilever has seemingly developed an obsession with extending its existing brands – either geographically or into new formats – and a phobia about creating new ones. It seems odd that a company would invest $40 million in highly speculative science but won’t invest in creating a new brand.

These extensions usually go far beyond the point where the extension makes sense. They also show that Unilever’s senior executives know less about marketing than we might imagine – most business school studies of brand extensions have found that they rarely contribute little additional sales, most end withdrawn or as marginal brands.

For example, when the company’s Slim-Fast brand experienced a 20% drop in sales in 2003-2004 in the wake of the Atkins’ Diet craze its response was to extend the brand beyond its traditional heartland of bars and shakes to include pasta, soups, salads and frozen salads. Unsurprisingly they didn’t perform and have been withdrawn. In the US market Slim-Fast today maintains what it calls a “laser focus on what we do well” – meaning its traditional territory of shakes and bars.

HUNGER SHOT A MISSED OPPORTUNITY?

In Europe the latest Slim-Fast product failure is Hunger Shot, a 100ml yoghurt drink with 6g of fibre and 4g of protein per bottle marketed with the message: Helps you want to eat less.

Launched in February 2008 as a snack replacement, by the end of the year Unilever, had withdrawn Slim-Fast Hunger Shot, saying: “It achieved just under £1 million ($1.5m/€1.2m) retail sales in the first months of launch. However it has not met the internal benchmarks Unilever had set at launch for performance within the category and for return on investment.

“Unilever therefore wishes to proactively manage an exit from the UK market, rather than accept under-performance against category and financial objectives.”

The failure of Shot was unnecessary. The brand achieved a respectable level of sales in a short time despite its unattractive medicalised-looking packaging, despite the fact that the brand was appearing – for the first time – in the crowded chiller cabinet (all other Slim-Fast products are shelf-stable) and despite the fact that the UK was in recession.

Such satiety drinks are by their nature niche and super-premium (see New Nutrition Business June 2008 and December 2008 for case studies) and they need time, patience and investment in consumer education to grow their sales (see every previous issue of NNB for case studies that show this truth). If Unilever’s management had put behind this new concept just a fraction of the time

and money they were willing to gamble on Hoodia, the outcome might have been very different.

2008 marked the eighth anniversary of Unilever’s acquisition – for $2.3 billion (€1.7 billion) – of the Slim-Fast brand, an acquisition which then-chairman Niall Fitzgerald said, “will significantly increase our presence in functional foods.”

Today, sales of Slim-Fast are, according to IRI data, almost half of what they were in 2000. Unilever’s investment in Hoodia has come to naught and the company has failed to create a single innovative product or brand in the weight management space, while smaller, less well-resourced competitors have forged ahead.

Innovation in science and in marketing is in both instances about taking risk. To pursue innovation means that you run the risk of failure. But in marketing when you are trying to build a new health proposition – as Unilever must in weight management – to “play it safe”, as Unilever has done, means that failure moves from being a possibility to a certainty.

Unless Unilever changes its ways and embraces true market innovation, as its competitors’ successful brands do (see September 2008 NNB Why extreme innovation is the least risky road), then it will be left on the sidelines of the weight management market and billions of dollars of its shareholders money will have been spent for naught.

Dutch dairy group Campina, a much smaller and less well-resourced company than Unilever, has out-innovated and out-marketed its larger rival in weight management every step of the way. Its Campina Optimel Control brand has become a successful niche brand in Germany and the Netherlands while Unilever’s has little to show for its efforts.

Unilever has shown itself to be willing to gamble large sums on science – investing a reported $40 million on its failed commercialization of Hoodia gordonii, the cactus with a claimed satiety effect that has become (quite independently of Unilever) the celebrities’ weight-loss pill of choice. Fans include Paris Hilton, seen here popping a Hoodia pill. But Unilever seems to be risk-averse when it comes to marketing innovation, limiting itself to endless extensions of the under-performing Slim-Fast brand, almost all of which have failed.

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P R O B I O T I C C A S E S T U D Y

Groupe Danone almost single-handedly has won over Americans on the subject of gut health during the last few years, with the success of its probiotic DanActive and Activia lines.

But the executives running the company’s Dannon USA arm believe that those products – and the probiotics market in America – have only begun their ascension. And so they’re rolling out next moves that include a stronger consumer-education push and a way to help retailers literally accommodate more DanActive and Activia in their refrigerated sections.

“Activia was launched in France and Spain in the Eighties, and it is still growing there,” Marc Jove, senior vice president of marketing for White Plains, N.Y.-based Dannon USA, told New Nutrition Business. “So for [the U.S.] it’s a very young brand. The implication is that we have to keep investing in making consumers aware that [Activia and DanActive] exist and to make consumers understand what these brands are providing them.

“The figures speak for themselves. There might have been some questioning about touching certain areas and taboos and talking about digestion, but we have international expertise, and we have been successful with that in all kinds of markets. The U.S. is not an exception.”

There’s no understating what Dannon already has accomplished here. From nothing in 2006, Dannon built Activia into at least a $330 million (€243 million) brand in the U.S., per IRI data through November 2008, positioning the spoonable yogurt primarily as a digestive-health product.

And Dannon has overcome the false start in America of a product once known as Actimel to make DanActive into at least a $75 million (€55.2 million) brand, according to IRI, while promoting it prominently as an “Immunity” product.“They’ve grown

up yogurt in this country,” said Steve Demos, founder and CEO of NextFoods and developer of the increasingly popular GoodBelly brand of probiotic fruit drinks. “They’ve reinvented the yogurt category in this market.”

The former CEO of White Wave, originator of the Silk soy-milk brand and now part of Dean Foods, said that Danone has “taken the original equity associated with the category, gut health, and revalidated it in a meaningful way that shows people you can actually impact your gut health.”

The yogurt category in the U.S. market, Demos maintained, “had just gone sideways and turned into a candy bar for a while,” as Dannon, rival Yoplait owned by General Mills, and other American yogurt brands focused on diversifying flavours and textures for many years.

“Now,” Demos concluded, Dannon USA is saying, “Look, yogurt really does have food value and the catalyst effect of aiding in digestion.”

Danone’s reinterpretation of the yogurt market in the US has allowed it to price

Activia at a 100% premium to supermarket own-label yogurt and a 30% premium to regular yogurt brands from rival Yoplait. A typical retail price for Activia is $2.59 (€1.90) for a four-pack of four-ounce cups; DanActive typically retails for a price of $2.69 (€1.98) for a four-pack of 3.1-ounce bottles.

Despite Jove’s bravado, however, it turns out that Dannon’s success in this country has come by modifying its approach to Americans’ digestive qualms rather than addressing them head-on.

As Danone readied for the U.S. launch of Activia, for example, it contracted Affinnova Inc., a Waltham, Mass., research outfit, to help determine positioning for the American market.

“Their strategy was to maintain global positioning, but that was simply being challenged because U.S. consumers weren’t responding the same way European consumers were,” said Kevin Karty, Affinnova’s vice president of analytics.

In Europe, according to Affinnova’s research, of the relevant insights and

How to reinvent a category – and build a billion dollar brand

If you can win the loyalty of the niche of most motivated, most health-conscious consumers you can build a very successful business. It’s something that is being amply demonstrated in America, where the Activia brand has been propelled to more than $327 million (€251.7 million) in retail sales in three years by the loyalty not of the mass-market, but of just 5% of consumers. What’s more, this premium brand has defied recession logic, growing 33% in 2008. Danone is now starting to apply in the US the same approach to merchandising that it has long used so successfully in Europe. By DALE BUSS.

The recently created Shelf Obsession Team ensures that the in-store presentation and shelf-space for Activia and DanActive is the best possible.

FEBRUARY 2009 11



messages that resonated with consumers, 46 of them were negative, such as, “Are you bloated?”

By contrast, among American consumers, Karty said, “Virtually all of the insights that consumers like the most were positive – no one in the U.S. market wanted to hear about negative insights.”

And Dannon USA reflected such findings, for example, in relegating the “nitty-gritty about how this product works,” as Karty put it, to the relatively fine print on its packaging.

Another crucial point that Danone has embraced about Activia is that, according to Karty, “It doesn’t have broad penetration among consumers but rather dedicated usage among a narrow slice of consumers – sales are driven by about 5% of consumers.”

Danone has sought out these people by using its successful two-week consumer challenge to buy and eat Activia and “feel the difference”.

So in addition to fantastic growth statistics, along the way Dannon USA has been reaping overwhelmingly positive consumer feedback, said Michael Neuwirth, Dannon USA’s marketing-communications manager. Among consumers who contact Dannon for any and all reasons, he said, “the favorability ratios are most positive – that is, the ratio of ‘favorable’ to ‘unfavorable’ contacts – about Activia and DanActive,” among all of Dannon’s products.

Such response has enabled Dannon USA to make credible use of real consumer testimonials in its TV advertising for Activia. “Intensive testimonials are a new technique in the category,” Jove said. “It’s a way to deliver truth from personal experience, and that’s what we want to have: satisfied consumers expressing how our products have worked out for them.”

Neuwirth noted that, by U.S. law, “It’s only permissible to use testimonials if in fact that experience of the people in the ads is representative of the real experience of actual consumers.”

As for DanActive, Neuwirth said, “We have not employed a testimonial strategy. But we wouldn’t rule that out as a possibility for the future.”

In the meantime, Jove, Neuwirth and their colleagues are developing new ways to increase educational marketing. “We’re focused on delivering nutritional educative messaging that allows the brands to stand alone from traditional yogurt because they are different.”

The executives declined to offer many

details about Dannon USA’s new consumer-education initiatives. But they did count one new initiative in that category: a new program that also is aimed at helping retailers sell more DanActive and Activia.

In an effort to help U.S. retailers find more space for merchandising the two products, the company recently created what it calls a “Shelf Obsession Team” that came up with a cooler that organizes and promotes the health benefits of yogurt products and already has been rolled out to more than 2,500 participating stores.

“We pulled together a team of marketing and sales people and they developed a very specific mission for themselves: grow and physically expand the yogurt shelf by about four feet,” Neuwirth said. “To date they’ve already accomplished the task while organizing to help improve the shopping experience in these stores.”

Both products’ growth has been so strong, Neuwirth explained, “that it was growing faster than the linear footage of the shelves. So we were leaving uncaptured growth in the stores – both us and the stores themselves.” The primary evidence of that development, he said, was fast turn rates and rising numbers of out-of-stock situations. Dairy is a fast-turning part of every supermarket anyway, but Dannon USA executives recognized the classic symptoms of insufficient display space.

Key to solving the problem – and optimizing the growth opportunity

– was understanding how shoppers actually experience the yogurt section of the store. To solve its American challenge, of course, Dannon was able to apply what its counterparts within the company already had learned around the world.

And in the United States, Jove said, “We looked at the turn and velocities of different items and talked to shoppers to try to capture their decision tree and, specifically, how they shop this category.”

Constructing the shopper decision tree, Jove explained, involved “a series of market-research techniques that we use to identify how people structure their mind when they’re going to shop. They can think about brands, they can think about occasion moments for consumption, and benefits. So we try to identify which are the No. 1 drivers, and build trees showing what are the second-level decision-makers and the third-level ones.

“With yogurt,” he said, “consumers typically enter by benefit, sort of, ‘Help me with my issues.’ Once you’re in the category, the next decision level is brand, then flavour, then format.”

With that understanding – and the strong growth data for DanActive and Activia – in hand, Dannon’s Shelf Obsession Team tackled the first obstacle in their plan: other dairy products that were in the way. Because of the capital involved in establishing and maintaining refrigerator space in stores, the dairy sector tends to be one of

Since launch in 2006 Activia has proven itself to be one of the most successful products in the US dairy market. Together with the probiotic daily dose yoghurt drink DanActive, Activia has propelled Danone to the No.1 slot in the US yoghurt market.

Source: IRI

CHART 1: ACTIVIA & DANACTIVE RETAIL SALES IN THE U.S. 2006-2008

0

50

100

150

200

250Activia Light

$62m(€45.6m)

Activia$183m

(€135m)

2006 2007 2006 2007Activia DanActive

US $ (millions)

300

350

2008 2008

$130m

(€95.6m)

$245m

(€180m)

$327m

(€241m)

$74m

(€54.4m)

Activia Light$112m

(€82.4m)

Activia$215m

(€158m)

$21m

(€15.5m)

$62m

(€45.6m)

FEBRUARY 200912


the most fixed spaces in any supermarket.“But we had to get some reallocation of

space to faster-growing areas – yogurt – so what loses?” Neuwirth said. “We helped stores to understand that it didn’t have to be a single section as much as some from a combination of categories, butter among them.”

Where retailers agreed with their objective, however, Dannon USA still had to take maximum advantage of the opportunity both for sales of their products and for their retailer partners. The solution devised by the Shelf Obsession Team was a dedicated, refrigerated display unit that it calls a Proactive Health kiosk.

“These go in or around the dairy section,” Neuwirth said. “They help shoppers and become disruptive in the store from a traffic perspective. They invite shoppers to stop and look inside.” And, he added, the kiosks don’t necessarily have to take space away from other dairy categories; they can be “incremental” for the overall dairy segment.

But the kiosks, Jove and Neuwirth explained, are reserved for dairy products that have promoted and acknowledged “functional benefits.” Sections of the cooler are colour-coded to help consumers quickly identify the benefits provided by a given product: green for digestive benefits, yellow for immunity benefits. “It helps the shopper understand what’s in there,” Jove said.

Not accidentally, green also is the primary colour of the packaging of Activia; and the packaging for DanActive is dominated by yellow.

The role of participating retailers is a strong one, both men insisted. “It’s a decision that the retailer makes” whether to use the coolers, Neuwirth noted. “It’s their real estate; we really don’t have a say. They’re already always looking at maximizing sales per square foot, and this is their decision entirely.”

And while Dannon is more than happy to provide brand-specific signage for the kiosks, Neuwirth noted that “everything depends on the retailer – how they want to tailor and customize things. We’ve been very flexible in working with them.”

Dannon has been renting the coolers to retailers for “a limited period of time,” Jove said, and the company moves some of them from one store to another, “If the retailer decides that we’re there to stay, we end up reaching an agreement with them,” Jove said.

“It depends on the partnership you have with your customer.”

In any event, Jove said, the push behind the kiosks is “a category exercise. It’s to maximize sales of the category, from any producer. Our intention is to keep the category hot.”


Danone Activia has been phenomenally successful despite selling at a signifi cant price premium over regular, non-probiotic yoghurt brands such as Yoplait Trix in US supermarkets. As the chart shows, Activia sells at a 100% premium to supermarket own-label regular yoghurts.

Source: Albertsons.com

CHART 2: PRICE COMPARISON OF SPOONABLE YOGHURTS IN THE U.S.

0

0.5

0.10

0.15

0.20

0.25

$0.10/oz

AlbertsonsOwn-label

$0.154/oz

YoplaitTrix

$0.20/oz

YoplaitYo-Plus

$0.218/oz

Danone Activia

US $per

ounce

The two-week challenge is a consumer education tool which has proven itself to be a key driver of sales growth in the US and almost every other market where it is used.

L.A. LAW ATTACKS ACTIVIA

In a society as litigious as America it was inevitable that someone would challenge Activia’s claims. In early 2008 Dannon was accused of false advertising in a class action lawsuit in California.

The lawsuit is being brought by the LA-based law firm Coughlin, Stoia, Geller, Rudman & Robbins which specialises in consumer class-actions, where an allegation is brought on behalf of a number of individuals.

The allegations claim that Dannon used a false advertising campaign to convince customers to pay more for its Activia yoghurt because of its health benefits.

Dannon’s advertising, the lawsuit alleges, for its Activia, Activia Life and DanActive yoghurts failed to support the advertised claims that the products were “clinically and scientifically proven” to have health benefits that other yoghurts do not.

A spokesman for Dannon said that the firm stood by the claims of its products and the clinical studies which support them.

The lawsuit attracted a flood of media interest at first which has since ebbed. That the lawsuit might have any adverse effect on sales of Activia, which are driven, worldwide, by the fact that the product does have an effect that most people can feel, is unlikely.

FEBRUARY 2009 13


J O I N T H E A LT H C A S E S T U D Y

Elations has seemed about as arthritic as the knees that the joint-health beverage is supposed to heal, having apparent trouble settling on a viable product and marketing strategy. As a result it’s made limited progress since a buyout firm purchased the former Procter & Gamble (P&G) brand four years ago.

But now, executives of the Cincinnati-based company say, they’ve got a solid approach in place and are gauging that their product has already grown into a $40-million-a-year (€28.6 million) business after having come out of test marketing a year ago.

The new direction which has produced these results has included a product reformulation, new flavours and packaging, a change of target customer, a boost in advertising to $17 million (€12.1 million) in 2008, a new TV advertising campaign and a significant additional distribution channel.

“We expect Elations to become a general long-term-health brand for the consumer,” Mike Burton, the company’s recently arrived director of marketing, told New Nutrition Business. For now, however, Burton and his colleagues would be happy if Elations would start meeting its potential as a joint-health beverage and become a serious competitor to Joint Juice, the San Francisco-based ready-to-drink beverage brand that offers mainly glucosamine.

Proctor & Gamble scientists came up with the Elations concept several years ago, squeezing 1,500mg of glucosamine and 1,200mg of chondroitin into an eight-ounce (237 ml) bottle of a clear, juice-based beverage. Those are the daily amounts tested in a National Institutes of Health (NIH) study that showed the substances to be effective in reducing knee-joint pain. The beverage also contained 100% of the RDI of vitamin C and 30% of the RDI of calcium, as well as added boron, which is thought to help bones absorb calcium.

But P&G had already begun its exit from most categories of the food and beverage business and sold the embryonic joint-health product, the Sunny Delight brand, and the

rest of its juice business to investment firm JW Childs Associates in 2004. Childs had bought and revived Snapple beverages, among other brands.

Elations executives have always been confident in their product, which aims to make it possible for ageing, aching baby-boomers to ingest significant amounts of glucosamine and chondroitin in a good-tasting and convenient form that’s an alternative to multiple supplement pills.

But for the first few years, they weren’t exactly sure how to bring it to market, how to get Americans to consume the product daily – which is required for efficacy – and where to merchandise Elations in the store.

Now, however, after a long test market in the cities of Louisville and Lexington, Kentucky, Elations executives seem confident. It also took the arrival in late 2007 of Burton after a career that included a stint involving the Remington shaving brand and that originated at P&G.

“The first thing I did is re-examine the targeting of the audience,” Burton said.

Elations had been more focused on getting new users into the category, “but I changed the focus to current pill-takers”.

One reason Burton made that decision is that Elations had been spinning its wheels – and wasting precious marketing spending – by trying to attract completely new customers to the joint-health category.

“If you’re the new guy in the category, it’s not your position to worry about category growth – you have to build the base of your own users,” he explained. “Because we were focusing most of our time and communications on the category, we weren’t communicating the points of differentiation of our products.

“We wanted to be more competitive as a brand and strengthen our communications points about why we’re better.”

Besides, Burton concluded, there were plenty of American baby boomers who already were taking pills and other supplements for joint pain but willing to consider alternatives.

“Boomers don’t like to take pills – that’s something that always has been associated with getting old and sick, and they don’t want to feel old or sick, especially when they’re only in their 40s and 50s,” Burton said. “They view themselves as much more active and able to continue with their lives than people of their age a few generations ago, and a beverage fits better into their overall lifestyle.”

Burton also had observed that joint-health supplement pill brands had become more vulnerable to competition. “They’ve all been reducing the levels of their core ingredients to protect their [profit] margins because they’re getting squeezed by private labels – and chondroitin is an expensive component,” he maintained.

Many pill makers, he elaborated, are coming up with proprietary blends that include new ingredients and reduce the amounts of chondroitin, glucosamine or both. “These are things that are unproven and untested, and they really just muddy the waters with consumers and create confusion,” Burton said.

Elations gets movingOver the years there have been several failed attempts to create successes in the joint health area. But one brand may have found the ingredients of a successful joint health strategy. Following more than two years of test marketing Elations joint health juice is outselling cholesterol-lowering juice brands. By DALE BUSS.

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J O I N T H E A LT H C A S E S T U D Y

In targeting pill-based competitors, Elations executives decided to focus on a major advantage of a beverage over a capsule or tablet: quicker delivery of the active ingredients. The company has been conducting a clinical study so that it can objectively validate such a claim.

But in the meantime, it has proceeded strongly with a claim that Elations is “more absorbable than pills” because its core ingredients are more bioavailable in the beverage than they are in pill form, Burton explained. The presence of boron in Elations also assists absorption of glucosamine and chondroitin in the body – “and,” he added, “it’s an analgesic, so you get more pain relief earlier.”

The added vitamin C has also been removed from Elations. “It was causing product-stability issues,” Burton explained, “and consumers weren’t buying our product for the vitamin C. It was a throw-away; it had been a stupid decision to include it.”

Along with the brand’s change in focus to existing pill users and a comparison with supplements has come a change in marketing strategy. In its test marketing, Elations had relied heavily on a TV-advertising spot it called “I Am Your Knee.”

The ad depicted a woman reflecting on her youth as a gymnast, showing her landing a flip off a balance beam – and focusing on her knee. Then it cut to her as a young mother, bouncing her baby on the same knee. Her knees had never let her down, the woman said, but were starting to hurt a bit and get stiff now that she was older. Elations, of course, is the answer.

“This was a category message,” Burton said, “where the target was getting new users into the [joint-health] category.”

Burton was convinced that TV, though very expensive, was the best advertising medium for Elations. “Day One, you turn on the TV, and Day Two, you see results” from ad expenditures, he said.

The brand’s new advertising campaign, which broke over the summer of 2008, explains directly that Elations is a better option for joint-pain relief than taking pills. A 30-second spot is aimed at 45- to 65-year-old women who already are familiar with the benefits of glucosamine and chondroitin.

The spot opens by alluding to a 2005 study from the NIH that showed those two substances may be effective in reducing pain from osteoarthritis. “First there was the proof,” the voiceover said. “Then there were the supplement pills, up to six a day.

Those days are over.” A bottle of Elations is described as “the future of joint health”.

Meantime, Elations has formed a partnership with the very popular WebMD.com medical-advice web site and has created its own would-be “social network” online called LiveElated.com. It includes forums about life and self care not limited to joint health.

“We’re starting to see people interacting with it,” Burton said, “but it’s a slow build with something like that when you’re starting from square one.”

Elations also is doing some business-to-business marketing with healthcare professionals including physical therapists, personal trainers, alternative health practitioners, and tennis and golf instructors with samples to pass along to clients.

“But how do you break through that when a general practitioner now is getting hit with 70 or 80 different marketing messages a day?” Burton said. “It’s a challenge.”

Burton has stuck with the brand’s initial decision to market Elations as a supplement rather than a beverage per se. “We’ve had conversations about whether this should be a supplement in liquid form or a beverage with nutritional benefits,” he said.

One reason Elations has continued to pursue its initial strategy is that it’s less restrictive for the brand to make claims as a supplement than as a beverage. “You still have to be careful what you say,” Burton acknowledged, “but it isn’t regulated by the Food & Drug Administration, so you’ve got more leeway.”

Retailing at a suggested price of $6.99 (€5) for a six-pack of the eight-ounce bottles at Wal-Mart stores and $7.99 (€5.75) at supermarkets, Elations is typically shelved near Boost, Ensure and other adult nutrition product lines.

The company is testing a powder version that will stretch its product line to more closely compete with such multi-platform brands. Also, in 2009, it plans to add new flavours and enhanced packaging.

In the meantime, Burton said, “We’re looking to get more closely aligned with pills” in the store. In part, that’s because consumers who take the trouble to figure out the comparative prices will observe that a daily intake of glucosamine about equal to the amount in a serving of Elations carries a price of about $1 a day.

Of course, Elations also is constricted from repositioning as a beverage by the fact that it doesn’t turn fast enough to justify space in single-serve chillers.

“The turns are so much faster in the chiller space with Sunny Delight or water that we would have to be selling at a rate that we couldn’t achieve,” Burton explained. “Besides, our target audience is fairly narrow, and if we didn’t have it near supplements, consumers would have a hard time finding it.”

Burton also is unfolding another gambit to increase the exposure of Elations: pursuing the mammoth club-store market. About 35% of sales volume in the joint-health category overall is done in Costco, Sam’s Club and smaller regional warehouse-store chains, Burton said, but until recently Elations had been shut out of most of those outlets.

“Costco is tough, for example, because it’s doing pretty well with Joint Juice, and they’re fairly loyal there, so it’s been hard to get a meeting with a buyer,” Burton said.

But last year, Elations began a test market with 80 Sam’s Clubs, mostly on the Eastern seaboard. “If the results of the test are positive,” Burton said, “they’ll take it national. [And] without club distribution, it’s hard to have growth.”

The Elations brand of joint health juice has steadily grown to over $40 million in retail sales based on its “movement” message.

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In one of the more spectacular recent flame-outs of a new functional beverage, Nestea Enviga – Coca-Cola’s “calorie-burning” drink – experienced a 65% drop in volume over the first nine months of 2008 and Coca-Cola has pulled back its supermarket distribution only to the central part of the United States.

“We’re taking more of a segmented and targeted approach to Enviga now,” Ray Crockett, a marketing-communications executive for Coca-Cola, told New Nutrition Business. “Clearly, it was a niche brand, and we’re approaching it that way. We’ve learned more about the brand and consumers.”

Coca-Cola is now making Nestea Enviga available nationally through the online sales of the Kroger, Target and Safeway chains, but not in any other supermarket chains. And it has restricted Enviga’s availability in stores only to the Midwest, ending its grocery-store presence in the East and West coasts.

Launched nationally in supermarkets and mass merchandisers with lots of hoopla only two years ago by Coca-Cola and Nestlé, Enviga “got a lot of attention and started off with a bang,” Crockett noted.

In fact, Enviga became the highest-profile example of beverage marketers applying so-called “structure-function” claims to a product – claims that are more typically used on dietary supplements. The front of each can of Enviga prominently carries the words: “The calorie burner”.

Enviga’s promise was that it would create a “negative-calorie” effect – meaning that consumers burn more calories than they ingest from drinking it. This effect comes from a

combination of caffeine with epigallocatechin gallate (EGCG), an antioxidant found in green tea.

The partnership said at the time of the launch that, under research conducted at the University of Lausanne, near Nestlé’s Swiss headquarters, scientists proved a healthy person of normal weight could burn anywhere from 60 to 100 additional calories if he or she consumed three 12oz cans of Enviga over a 24-hour period.

However, assuming a 60-calorie loss from three cans of the drink, a person would have had to drink more than fi ve cans a day of Enviga, at a cost of $6.45 (€4.64) or more, to burn the number of calories found in two Oreos, as The Wall Street Journal pointed out at the time of Enviga’s launch. More than 28 cans of Enviga would be required to wipe out the calories consumed with one McDonald’s Big Mac.

“As this kind of understanding gets more widespread, it’s the kind of thing that will

debunk the essential consumer belief that is required for this kind of a product to succeed,” beverage industry consultant Tom Pirko said at the time of Enviga’s launch. “And I’m not sure Coke’s marketing team is up to this”.

The gimmick worked for a while. Enviga surged to achieve $31 million (€22 million) in retail sales in U.S. supermarkets, drug stores and mass merchandisers in 2007, its first full year on the market, according to Information Resources Inc. (IRI), the Chicago-based concern which tracks supermarket sales data.

And as recently as early 2008, Coke executives professed satisfaction with

an initial sales surge that saw Enviga grab a 0.9% share of sales in the ready-to-drink-tea category, according to Beverage Digest.

“We’re very happy with its performance,” Deborah Roberts, Enviga’s senior brand manager, told New Nutrition Business in early 2008. She said Enviga had achieved “strong repeat and continuous repeat” among early customers.

But the bottom began dropping out of the market for Enviga several months ago. The 65% drop in sales through September was reported by Beverage Digest. IRI supermarket data showed that Enviga’s sales for the year to November 2nd 2008 were less than $11 million (€8 million), representing a 62% drop from a year earlier, according to its calculations.

Crockett declined to say why Coke was concentrating its marketing and distribution in the central part of the country now. And what went wrong? Crockett offered little of Coke’s analysis, saying only that, “as time went by, it became clear that a different approach was needed” to the strategy for Enviga.

Here are the problems with Enviga as enumerated by two of the most prominent experts in the U.S. beverage business, Tom Pirko – president of Bevmark Consulting – who back in 2006 had forecast problems ahead for the then newly-launched Enviga, and John Sicher, editor of Beverage Digest:

Problematic proposition: because it is counterintuitive, Enviga’s promise is a difficult one for consumers to understand. There’s the further difficulty of the fact that someone must consume three cans of the drink over a 24-hour period to burn only an additional 60 to 100 calories – which seems a lot of effort for relatively little return.

“It is a complicated product to explain,” Sicher said, “so there was too much expectation. It’s a problem with anything in the consumer-product industry to get

Sales collapse for Coke’s calorie-burner

Described by Coca-Cola as a “breakthrough” concept at its launch in 2006 – and planned to appear in Europe and Australia as well as North America – the company’s green tea-based “calorie burner” drink Enviga failed to achieve much beyond niche status in the US before its sales plummeted. As we suggested it would in 2006, Enviga can take its place in the museum of failed carbonated beverage comeback attempts. By DALE BUSS.

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people to understand something that is unlike other products that they’re used to buying. It would have been much easier for them to understand, say, lemon flavoured Coke than this completely new product.”

Pirko said that Enviga “never was going to be a panacea”, as some ever-hopeful dieting consumers certainly hoped it would be. “But when a product makes all kinds of claims about literally causing you to lose weight, a lot of people will become first-tryers, and buy in. But usually they’re the most fickle consumers, and they’ll usually fall away.

“To really sustain a market for a green tea product, you have to have day-in, day-out drinkers who think they have something special.”

Wrong parent: Despite its link-up in the Enviga venture with Nestlé, which has long experience with better-for-you beverages, Pirko believes that Coca-Cola just isn’t the right partner for Enviga.

“Coke doesn’t have the acumen or capabilities or insights to sell these kinds of products,” said Pirko. “The further they move away from sugar water and the closer toward truly nutraceutical products, you’ll often see the company quickly lose interest.”

Moreover, Sicher added, Coca-Cola’s distribution system isn’t a good match for Enviga, which remained a relatively tiny product even at its sales zenith in 2007. “It’s complicated for the big [soft-drink] bottling systems to handle small-volume products,” he said.

False start: While Enviga was widely touted not only by its parent venture but also by the American press when it debuted, Pirko said that the hullabaloo created a false impression of the real size of its market. And he asserted that Coke was too slow to recognize that.

“This product was discounted at retail all over the country, in grocery stores and drug stores, within the first few months that it was out there – meaning it didn’t really ‘set’ with consumers,” Pirko said. “To do well, it would have to bury deep and set at the root, and this product didn’t do it.”

Nevertheless, neither expert discounted the possibility that Coke and Nestlé would stick with Enviga and try to grow it again. “Coke has switched distribution from the bottling system to warehouse delivery,” Sicher explained. “They want to incubate it to see if it can still develop greater scale and then [again] justify a bigger presence in the bottling system.”

The badly battered Enviga is “an

interesting product, and it still could have a future, but it needs to be incubated slowly – the way Coke is doing it now.”

For his part, Crockett said that Coca-Cola had concluded that it was better to build the brand organically. To assist the effort, Enviga has become available in a new flavour, Tropical Pomegranate, that has replaced the original Peach flavour. Enviga remains available in Green Tea and Berry flavours.

Enviga retails for suggested prices ranging from $1.29 to $1.49 (€0.93-€1.07) for a single serving, packaged in sleek, energy-drink-like, 12-oz/355ml cans. It’s also available in 6- and 12-can multipacks.

ENVIGA AND EGCG

Enviga depends on epigallocatechin gallate (EGCG) for its calorie-burning effects, which is the principal active ingredient in the product. Coke and Nestlé’s research came up with a formula that optimises the interaction between EGCG and caffeine (each can contains 90mg of the alkaloid) and produces the calorie-burning effect through a metabolism-accelerating process known as thermogenesis. EGCG makes up more than half the total antioxidants in Enviga and the product is said by Coca-Cola to be made only with green tea sourced from a Nestlé-owned plantation in India that grows green tea with naturally high levels of EGCG. The leaves are then said to be “hand-selected” and processed nearby the plantation to maximise the EGCG levels in the tea.

In recent times green tea has attracted increasing interest for its possible connections to weight loss. After the FDA banned the herb ephedra from being used as an ingredient in weight-loss products in 2004 there was a surge in demand from American supplement makers for green tea extract as the “active ingredient” in weight-loss formulas. The surge in demand created an influx of supply from China and this led to a price slide. Green tea extract prices tumbled 40% in 2005 to an average price of $25 per kilo, while volume surged 30% to 1,000 tonnes. As a result, even adding as much as one whole gram of green tea extract to a beverage now adds no more than 2-3 cents to the cost of the product – making green tea a very attractive active ingredient for companies like Coca-Cola, and others, such as Unilever-owned Lipton. But no-one has gone as far as Enviga in the claims for a green tea product.

The website www.enviga.com explains to visitors the weight-loss powers of EGCG – epigallocatechin gallate.

FEBRUARY 2009 17


C O N F E C T I O N E RY C A S E S T U D Y

Malaco Truly (known in some countries as Red Band Truly) is a new and successful candy brand that stands out by being healthier and more natural, without compromising on taste. Packaged in a white paper-like material with label text that looks handwritten, with the tagline “It’s ok to enjoy”, Malaco uses a playful voice recognisable from the smoothie category to speak to the health-aware and educated consumer, who likes to enjoy candies but wants to make a healthier choice. TASTES AND BEHAVIOURAL PATTERNS VARY GEOGRAPHICALLY

Malaco Truly is a pan-European brand that takes account of local tastes, explains Cecilia Krook, Marketing Manager for Malaco Truly: “Each area has its own preferences, tastes that consumers have grown up with. As an example, liquorice is extremely popular in the Nordic countries, whereas it is a definite no-no south of the Netherlands.”

Krook also points to the social patterns related to candy. In Scandinavia candy is often bought for oneself, as an individual treat, whereas in the Netherlands, and many other countries, it is something you buy for the whole family or for your guests. There are also wide differences in consumption: in Finland and Sweden per capita consumption is around 7 kg-8 kg of candies a year, whereas in Italy annual per capita consumption is 2 kg and in Portugal just 1 kg.

Though consumers still want candy to be candy, the desire for healthier alternatives has reached the confectionery aisle just as much as many other parts of the supermarket. Krook says Leaf saw the trends coming through their consumer research. The “sugar debate” in Sweden in 2006 – where media and consumers began to scrutinize the sugar levels of most foods, causing a fall-off in sales of high-sugar yoghurts, among other products – also worked like an alarm bell.

Before starting on test marketing in 2006, the company experimented with everything from vitamin C to toothfriendly sweets. The team brainstormed around different fruits

and finally came up with 13 concepts, which were tested on focus groups in Finland, Sweden, Italy, the Netherlands and France. The challenge was to find concepts that would be accepted across borders – and the commonalities that were identified as a result of this research became the pillars of the Malaco Truly brand: real fruit juice, less sugar, no artificial colourings or sweeteners.

All products carry the claims: 30% less sugar, colours from nature and a third claim referring to the ingredients used, such as “real liquorice extract” or “real berry juice”.

In all, there are about 15 different products in the range, of which 6-8 are launched in each country, depending on its specific characteristics. There are four main groupings in the range, representing different candy types: Truly Juicy is recognized by a heart; Truly Smoothy is represented by a swirl; Truly Black is symbolized by a star and Truly Splashy with a drop.

MARKETING AND COMMUNICATIONS: CANDIES GROWING IN NATURE

Malaco Truly is serious in its ambition to produce healthier candies but takes care not to lose the fun and pleasure aspect. “It can’t be too fact based,” says Krook. “Candy is all about fun – and that is what Malaco Truly wants to convey.”

Therefore, marketing communications have focused on the question of what it would look like if candies were completely natural and grew in nature and a TV ad on this theme has run in all targeted countries. The advertisement shows spectacular natural views where candies are part of the landscape and the animals: everything from fields of candy cereals to chewing gum popping frogs.

“It seems to have cut through the media buzz by being different enough,” says Krook.

The target consumers of Malaco Truly are described as men and women who make active and aware lifestyle choices. The consumer response to Malaco Truly has been swiftest in Sweden and Finland, where consumers in general are well educated and aware of health issues. These aware

consumers also have a general concern for the environment and society. Krook says Malaco Truly can, from time to time, carry campaigns and messages on pack that get the attention of these consumers. For example, in one campaign a package tag explained that Leaf takes part in the United Nation’s campaign Plant for the Planet. If you buy three bags of candy, Leaf plants one tree.

Regional variations have also been taken into account in the communications. Krook says the communications in the Netherlands are more for the mother and child, whereas they are individual-oriented in the Nordic countries.

THE RULES OF THE GAME

Krook says that the Malaco experience has shown Leaf that there are three keys to success in natural and better-for-you candies:

Excellent taste. “If you miss out on the taste you will never get the consumer back. Candies are only about enjoyment – you can’t go wrong on the taste.” Malaco Truly involved consumers from the earliest stages of

Sweet success with less sugarThrough its brand Malaco Truly, confectionery company Leaf has grown the natural and better-for-you candy category in Sweden from almost zero to a retail sales value of more than €5 million ($6.3 million) in less than two years. The successful concept is based on the promise of “100 % passion, always 30 % less sugar and always coloured by nature”. PATRICIA WIKLUND spoke with Malaco Truly’s Marketing Manager, Cecilia Krook.

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concept development and asked them what they liked. They wanted reduced sugar and naturalness. In the product development, the optimal solution for reduced sugar ended up at 30%. “If you reduce more you can’t guarantee the taste or the texture,” Krook explains. The reduction is made possible through the use of fruit juices and added fibre.

Create trial. Through marketing you establish awareness, but a natural, sugar-reduced candy will meet with suspicious consumers in the shop. “The consumer may be indecisive – wondering whether this candy will be as tasty as others,” says Krook, adding that it is important to encourage consumer trial in as many ways as possible. Leaf has used sampling in shops and sampling events and coupons.

A consistent concept. Malaco Truly is very consistent in all its elements: packaging, the website, marketing and all other forms of communication. Everything is in line with the aim of positioning Malaco Truly as a playful, positive brand that speaks to the consumers’ emotions.

Rivals have entered the category, which Krook expects will help develop it further. The main brands are Finnish company Fazer’s Tutti Frutti Naturals and German company Katjes Fassin’s Berry Dessert. According to Krook neither has been able to take market share from Malaco Truly, possibly because their market positioning is not as clear as Malaco Truly’s.

Malaco is ahead of the others, but the task is to keep developing new concepts. “We also work hard on quantifying the existing concepts,” Krook says. “We have created a new standard and we have to keep communicating who we are. Many consumers know who we are but haven’t tested our products yet.”

Krook believes that if the 1980s were about “light” products, the 1990s about adding value through different ingredients, the 2000s are about adding value through the emotional aspects – speaking to consumers’ feelings: “The questions that pop up now are: How far can we go? What are the next segments? How natural can we be? You can’t forget your roots either and where you come from,” Krook adds. “We are working with healthier candies, but you will never be able to say that it is all healthy. It is a constant balance between being unique and being credible.”

LEAF INTERNATIONAL

Leaf is one of the major players on the European candy market. The company became independent in 2005 when it was divested from sugar manufacturer CSM. Today is owned by the risk capital companies Nordic Capital and CVC Capital Partners. The company is strong in the Nordic countries because during the 1990s, CSM bought up the major regional candy players – Huhtamäki in Finland and Malaco in Sweden – and integrated them into one company which is today market leader in chewing gum, pastilles and candy in Finland and Sweden.

With its head office in Amsterdam, Leaf International has 14 manufacturing plants across Europe and in 2007 had revenues in 2007 of €640 million ($825m).Its products are sold in more than 50 countries and the company profiles itself as an innovator in the areas of functionality, health and wellbeing.

Malaco is the company’s main brand in Sweden and Malaco Truly is a strategically important brand within Leaf International. Truly also carries the name Red Band Truly in markets like the Netherlands.

Sweet and Salty Berries in love Berry Busters

Nutritional content per 100g Per 100g Per 100g

Energy 1300 kJ / 310 kcal

1200 KJ /280 kcal 1440kJ /340 kcal

Protein 7.0 g 6.5g 0.7gCarbohydrates 74 g 78g 86g- of which sugar 37 g 38g 50g- of which sugar alcohol 10 g 9.5g 9.5g

Fat 0.2 g 0.5g 0.3g

- saturated fat 0.2 g 0.5g 0.1gFibre 0.1 g - -

Sodium 0.07 g 0.7g -

MALACO TRULY NUTRITION FACTS

MALACO TRULY TV ADVERTISING

Television adverts imagining what the world would be like if candies grew in nature have run in all targeted countries and seem to have made an impact.

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

Fish tends to enjoy a lofty status as an intrinsically healthy food, and is something people are consistently urged to eat more of. Certain species can also lay claim to being “naturally functional”, thanks to their high content of omega-3, and have seen sales surge as a result.

But it is less usual to come across fish products which have been fortified with added ingredients to provide a health benefit and positioning.

There are signs this is changing, however. In Germany, for example, a small but innovative canned fish producer, RügenFisch, has developed a range of shark catfish products enriched with Belgium-based Beneo-Orafti’s Beneo-branded inulin.

The new range, sold as Leichte Linie, is marketed on the platform that it is low in fat and high in fibre. Neatly, the inulin supplies both of these benefits, as it acts simultaneously as an effective fat replacer and a prebiotic.

The ingredient is added to the sauces and the dressings which accompany the products in the range. It is the oil in these marinades that is responsible for most of the fat content in these kinds of products, not the fish. This means replacing fat with inulin can make a big difference to their nutritional profile.

Adding 4g of inulin to a 100g Leichte Linie product means cutting the fat content to less than 5%, compared with about 15% for an equivalent standard product. But Liv Janvary, from Beneo-Orafti Germany, says the fibre-enriched Leichte Linie range has given RügenFisch the opportunity to differentiate its product not just from rivals that are higher in fat but also – thanks to the fibre message – from those offering high levels of omega-3, a much better-established benefit in the canned fish arena.

“We hadn’t worked with RügenFisch before but we thought the market was right now for such a product,” recalls Janvary. “When we approached the company they were actually already in the process of

evaluating new concepts for lighter and better-for-you products. They thought that something involving prebiotics would be an interesting alternative to omega-3, which was already in the market.”

Janvary says fish is the perfect vehicle for prebiotics. “Functional products fit really well with this kind of application because fish has health at its core. The requirements of the European Nutrition & Health Claims Regulation will make it even more important that you start with a fundamentally healthy product before you make health claims, and that means fish is a great carrier for functional ingredients.”

On-pack, space is restricted by can size and the requirement for minimum legal labelling requirements. For this reason, RügenFisch has restricted itself to stating simply that Leichte Linie is low in fat and a source of fibre. But it has also included Beneo-Orafti’s ‘Beneo’ label, designed by the ingredients company as both a means of communicating the benefits of prebiotics,

and a seal of quality, demonstrating there is enough of the active ingredient in the product to have an effect.

The logo carries a web address – www.beneo.com – which consumers can use to gain more information about inulin and oligofructose, the chicory-derived prebiotic ingredients with which the Beneo-Orafti name has become synonymous. On the site, visitors learn not just about the fact Beneo prebiotics are a source of fibre, but also that they offer benefits in terms of gut health, boosting the immune system and calcium absorption.

The Beneo label is Beneo-Orafti’s means of communicating the benefits of its prebiotic ingredients to consumers who, it appears, do not necessarily understand what they are. This has been borne out by Orafti’s own research, conducted among consumers across Europe and the US. At time of writing, Orafti had released preliminary results from the UK, which indicated that when asked to rate the appeal of ingredients on a scale

Fibre-fortified fish carries Beneo seal of approval

The company behind an innovative fish product fortified with Beneo-branded inulin hopes that presence of the Beneo ingredient brand on its labels will make it easier for consumers to understand the added-fibre, low-fat benefits. By RICHARD CLARKE.

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

of one to 10 (10 being very appealing), prebiotics scored just 5.88 – compared with 7.61 for calcium, for example.

However, on the flipside, the benefits conveyed by prebiotics were valued highly by consumers, according to the research. When asked to grade the appeal of benefits in the same way as they had ingredients, ‘builds stronger bones’ scored 8.01 and ‘boosts the friendly bacteria in your digestive system’ scored 7.95. Both are benefits claimed for Beneo prebiotics.

For Beneo-Orafti, the Beneo logo is a means to communicate better the benefits of a product containing its prebiotics, says Janvary. “Our customers say they are convinced about prebiotics because they have been exposed to them. But if the consumer doesn’t know enough about them it’s very hard to make them aware of the benefits. There are now users from different parts of the food industry using the label, and the feedback from our customers is that it makes things easier.”

It is particularly useful for smaller companies with little or no marketing budget, says Janvary – just like RügenFisch, in fact. “RügenFisch is a really good example because they are a company saying, ‘we can’t get through to consumers just through our own efforts because we don’t have the marketing potential’. But by joining forces with Beneo-Orafti they can really make consumers aware of the benefits of their products.”

SPANISH TRY OUT FIBRE-FORTIFIED CHICKEN

As well as fish, Beneo-Orafti has also made inroads into the meat category via a partnership with a Spanish company, Sant Dalmai, which has embraced the concept of functional meat with enthusiasm.

In February 2008 Sant Dalmai introduced a range of turkey products enriched with Beneo oligofructose, under the brand Pechugas de Pavo Grill. It was the first time Orafti had supplied its ingredients for a meat application.

In April, the company launched a line of larger joints, Equilibra, which consists of ham, chicken and turkey, fortified in the same way. And in November, it brought out a low-salt, high fibre ham under the brand Pernil Al Horno.

The Sant Dalmai products all contain 3.2% oligofructose and carry Beneo-Orafti’s Beneo label. Beneo-Orafti’s research indicates that this will give them an edge over their competitors, according to Beneo-Orafti marketing and communications manager Tim Van der Schraelen. “We have found that in Spain over half of those questioned were prepared to pay more for a product with added health benefits and that bear the Beneo label, than they would for a standard product with no logo,” he says. “This confirms what we already knew: consumers see the label as a symbol for health, have a preference for such products and will also pay a price premium for products with scientifically proven added health benefits.”

THE BENEO INGREDIENT BRAND

Beneo-Orafti, the world’s largest producer of dietary fi bres, launched its Beneo ingredient brand initiative back in 2000. The fi rst country to see consumer brands carry the Beneo ingredient brand was Belgium and it has since been extended to Spain, Switzerland, the Netherlands, UK, US and elsewhere.

The Beneo branded ingredient programme was developed by Belgian-based Orafti to communicate the scientifi cally-established health benefi ts of its chicory-derived ingredients Raftiline (inulin) and Raftilose (oligofructose). The Beneo programme aims to enable food manufacturers to better communicate the health benefi ts of products made with Orafti’s fi bres. The Beneo symbol indicates that the products carrying it contain enough of the active ingredient to have the claimed health effect.

The components of Orafti’s communication strategy include:

•The Programme for Health Care Professionals. Orafti believes that it is important to build awareness and knowledge of the ingredient.

•A dossier for healthcare professionals summarising the scientifi c and nutritional research which underpins the Beneo programme.

•The Beneo website (www.beneo.com), which provides information for consumers and health professionals.

• The Beneo Info Line, a toll-free service enabling consumers and healthcare professionals to put their questions to trained advisors, including a dietician.

• Consumer leafl ets and booklets, designed to deliver, in consumer language, a clear understanding of the benefi ts of products carrying the Beneo symbol.

Beneo-Orafti was formerly known as Orafti. The name changed to incorporate the company’s ingredient brand in 2007. The business is part of the Beneo Group, a division of the Südzucker Group, one of Europe’s biggest sugar producers. Beneo-Orafti is the world leader in the market for food ingredients derived from chicory. With a head office in Tienen, Belgium, Beneo-Orafti operates in more than 75 countries and has production units in Belgium and Chile.

RügenFisch’s new line uses Beneo-branded inulin to cut fat and add fibre.

FEBRUARY 2009 21


O M E G A - 3 C A S E S T U D Y

Consumers’ awareness of omega-3 and its benefits is growing in the UK, but so too is their preference for foods that are a natural source of this essential fatty acid.

It’s a conundrum that’s causing a headache for functional foods producers, as dairy company Müller will testify. Müller decided to remove fish oil from its Vitality yoghurt range after research indicated consumers found its inclusion in a dairy product to be “confusing”.

Dairy giant Müller’s UK marketing director Chris McDonough told NNB in August 2008, following the company’s decision to drop omega-3 from the ingredients in its Vitality yoghurt brand (for a while the biggest omega-3 dairy brand in Europe) that: “We found in our new research that people simply weren’t interested in having omega-3 in a yoghurt product.”

Problematic though this trend might be for companies wanting to add fish oil to non-fish products, it’s proving an opportunity for seafood suppliers – and some are taking full advantage.

One of these is Princes, a canned fish producer, which has introduced a new range of mackerel and pilchard recipes that the company says were specifically designed “to meet growing demand for food products rich in natural Omega 3”. The products clearly flag up their high omega-3 on the front courtesy of a logo that states: “High in Omega 3 fish oils”.

Explaining the reasons behind the launch, the company cites two pieces of third party research. The first was conducted by Unilever and showed that awareness levels of omega-3 in the UK grew from 58% in 2003 to 72% in 2006.

The second piece of research, a qualitative survey carried out by Dragon Brands, indicated that

consumers were increasingly choosing foods naturally high in omega-3 in preference to supplements or functional foods.

Neil Brownbill, marketing director for Princes Foods, says: “As people take more of an interest in where their food comes from, we’re definitely seeing a shift away from artificially fortified products.”

The natural message has also appeared in the frozen fish aisle, where rivals Young’s Seafood and Birds Eye are successfully marketing products as a natural source of omega-3.

Birds Eye launched a range of Omega 3 Fish Fingers in 2007 (see NNB November 2007 for full story). In March 2008, Young’s Seafood introduced a range of frozen fish called Young’s Chip Shop Omega 3.

Both are made from Alaskan Pollock, a white fish species heralded as an environmentally friendly alternative to cod and haddock, stocks of which are dwindling. But the sustainability message failed to motivate consumers.

However, the “natural source of omega-3” message has worked where the environmental message did not and highlighting on-pack that Alaskan Pollock is a natural source of omega-3 – it contains about 25% more than cod and haddock – has proved a useful lever.

Last summer, Birds Eye told The Grocer

magazine its Omega 3 Fish Fingers had achieved awareness levels of 78%, household penetration of 15% and incremental sales of £6 million ($8.7m/€6.2m) since launch. Young’s Chip Shop Omega 3 lines have also been a success, earning an impressive £20 million ($29m/€20.8m) in sales in 2008 out of total Chip Shop retail sales of £60 million ($87m/€62.6m) a year, according to Young’s.

“We know that people understand the omega-3 health message and find it motivating,” says Charlotte Broughton, marketing controller (coated) at Young’s. “Consumer awareness of fish as a natural source of omega-3 is widespread. We believe people appreciate the naturalness of fish and value it as part of a healthy diet.”

What exactly constitutes ‘natural’ is, of course, open to conjecture – and one seafood company pushing the boundaries is John West, which is Princes’ main rival in the UK canned fish market.

John West has launched a canned tuna steak enriched with omega-3 from added tuna oil. It contains 0.4g of omega-3 per 100g of drained product. This means a 160g can provides 100% of a person’s recommended daily intake, says John West, and five times more omega-3 than is in standard canned tuna, which loses most of the essential fatty acid during processing.

“Tuna fish oil is naturally rich in omega-3,” says Fiona O’Keeffe, John West marketing manager, in a comment clearly designed to reassure consumers with a distaste for the idea of putting tuna oil in a yoghurt that there’s nothing wrong with adding tuna oil to tuna.

This has a certain logic about it. Nevertheless, it will offer little comfort to functional food manufacturers wanting to harness the marketing potential of omega-3 outside of the seafood category. The upper hand, it seems, is with those companies harvesting the oceans from where this wonder ingredient first came.

“Natural source” is best selling message for omega-3

It’s an established rule of the nutrition business that consumers prefer to get their health benefits in as natural a form as possible. As a result fish products, trading off their obvious connection to omega-3 in consumers’ minds, are starting to win the omega-3 war. A year ago Europe’s biggest omega-3 brand was a yoghurt – today that yoghurt is no more and the biggest brand is a frozen fish. By RICHARD CLARKE.

FEBRUARY 200922


M A R K E T I N G C A S E S T U D Y

As a marketing edge, it takes some beating. Not only does David Beckham endorse the new GO3 kids’ food brand, but the world’s most famous soccer player actually owns a major share in it. He’s both credible and likeable. If anything can get kids interested in eating healthier foods, then it’s going to be the presence of David Beckham’s face and endorsement on the package and in advertising.

Debuting in late 2008, GO3 is a new range of omega-3-enriched frozen ready meals designed specifically for children. The GO3 meals concept is healthier versions of everyday recipes, sold at an accessible price point. Carrying the on-pack tagline “Making your favourites better for you”, some are positioned as main meal solutions, others as snacks.

Each product in the range is formulated to contain three positive qualities – or “great things” as they are called on-pack. These components are drawn from a list of nutrients that includes omega-3, calcium, protein, “hidden vegetables” and wholegrain.

The GO3 Bolognese Pasta Pot, for example, boasts protein, wholegrain and omega-3 as its trio of “great things”. The protein and wholegrain are provided by the meat and pasta, respectively, and the omega-3 comes from added anchovy oil.

The range is the brainchild of Geir Frantzen, the owner of frozen food brand Findus UK, which is making the GO3 meals (although it operates as a separate company).

Frantzen first got to know Beckham through the footballer’s David Beckham Academy, which has soccer training centres in London, where Beckham was born, and in Los Angeles, where he plays for LA Galaxy.

Neil Sanderson, managing director of GO3, says Beckham owns a “substantial shareholding”

in GO3 and his involvement in the venture is no celebrity lip-service designed solely to sell products.

Although GO3 trumpets the three “great things” about each product on-pack, no specific health claims are made for omega-3. Text on the back of the pack reads: “With GO3 it’s easy and fun to be a bit healthier. We have made your everyday favourites better for you. GO3 has carefully selected food, Omega-3 and vitamins that will fuel active minds and bodies throughout the day. David Beckham is part of the team and together we are passionate about providing choices that make it easier to eat more healthily and be more active.”

Unsurprisingly, given his enormous global appeal, Beckham features prominently on the packaging. Each meal carries a message from the man himself. On the Fish Fingers, for example, he says: “I ate fish fingers as a boy and still do. They’re a great source of omega-3 for everyone.”

It’s a big range for a new line, incorporating nine recipes at launch. Most contain added omega-3, which is the nutrient

at the heart of the GO3 brand. Added omega-3 levels vary – from 170mg per 100g for the fish fingers to 75mg per 100g for the cheese and ham wrap. This is partly down to price, Sanderson admits. “We wanted to make the products affordable. We didn’t want to end up with a range of foods that was unobtainable by the mass population.”

Frozen food, traditionally much cheaper than chilled, is enjoying a renaissance in the UK, partly because of the economic downturn. “I think frozen is a good place to be at the moment from a meals perspective,” says Sanderson, “although it was actually growing before we went into the credit crunch.”

The GO3 meals were sold exclusively through Tesco for the first three months of their life, but rolled out to other retailers in early 2009. The launch is being backed by a significant marketing budget – expected to be up to £5 million ($7.4m/€5.3m).

GO3 has plans to take the brand global. It intends to launch meals in the US, where frozen food is popular. Asia, where Beckham is enormously popular, is also in GO3’s sights,

and mainland Europe is also a priority. Beckham formerly played in Spain (for Real Madrid) and in 2008 signed a short-term loan deal to play for AC Milan in Italy.

“A partnership between a celebrity and a brand has an intangible sort of magic,” as one marketing guru put it. But association with a celebrity is not enough to build a brand. The celebrity supports the brand in its quest to build a strong personality in the market. Success still lies in the other factors which can make or break any brand. GO3 will be hoping that “Beckham’s magic” can dazzle in food as well as football.

Can David Beckham score with omega-3?A new brand partly-owned by David Beckham is attempting to use his celebrity as a lever to get healthier ready meals into children. Beckham has the US and Europe in his sights.

FEBRUARY 2009 23


B E V E R A G E C A S E S T U D Y

Bio-Synergy entered the functional drinks market by a pretty unusual route. The UK-based company had been making dietary supplements in pill and powder form for sports enthusiasts since it was founded in 1997. Then, in 2002, the company was approached by the chief nutritionist of the Manchester Commonwealth Games, Louise Martin.

Martin had worked with Bio-Synergy before in her previous role as chief nutrition-ist with the Scottish Premier Soccer League. Now working for the Commonwealth Games, she was overseeing the development of a sports drink free of artificial colours and flavours and low in sugar, for athletes taking part in the Games, and needed someone to manufacture it.

Bio-Synergy took on the task, producing 150,000 bottles at cost price. In return, the company got to keep the rights to manufac-ture the recipe – a combination of complex carbohydrates and B vitamins – and market the drink, which was subsequently branded as Liquid Energy.

Fast-forward to the present day, and Bio-Synergy has a range of six functional beverages, offering a variety of fitness, health and beauty benefits. The company

has listings in 600 Tesco stores, as well as in newsagent giant WHSmith, drug store chain Superdrug and high end retailers Harrods and Selfridges.

Bio-Synergy’s expansion into mainstream retail channels has been possible thanks to the evolution of its product portfolio beyond its core customer base of fitness fanatics. Since the launch of Liquid Energy, the com-pany has introduced five more functional beverages:

• Skinny Water (profiled in NNB July 2007), a fat-burning drink containing 500mg of L-carnitine and 0.2mg of chromium. It is thought to be the first product of its kind on the UK market.

• Fitness Water, a fat burning, immu-nity boosting energy water fortified with L-carnitine, calcium, zinc and vitamin D3.

• Gym Tonic, an energy and recovery drink with glutamine, amino acids and açai.

• Sub Zero, a performance boosting, fat burning beverage containing creatine, green tea, L-carnitine and glutamine.

• Beauty From Within, a skin health drink with vitamins, aloe vera and green tea.

All the products are “free-from” gluten, aspartame and artificial colours and flavours.

As the names of the products suggest, Bio-Synergy is not backwards in coming forwards when it comes to highlighting the promised benefits of its drinks. With Skinny Water, for example, text on the front of the bottle promises the active ingredients will “reduce sugar cravings and improve the body’s ability to burn fat”.

Beauty From Within contains, says the label, “a unique combination of antioxidants to help you glow from the inside out.” Fitness Water, meanwhile, will help the drinker “burn fat more easily”, according to the bot-tle.

Packaging for the drinks has attracted attention – and even complaints – but has met all legal requirements, says Bio-Synergy managing director Daniel Herman. “All the product packaging is signed off by Trading Standards,” he says. “In the case of Skinny Water, the packaging has actually been approved by three different regional Trading Standards offices, because people do like to try to rubbish us!”

Nonetheless, Herman recognises that there are regulatory changes afoot in Europe in relation to health claims and acknowledges

Bio-Synergy takes health water from the athletics track to Harrods

A small company has successfully made the transition from supplier of dietary supplements to niche player in lifestyle waters. Using PR to counter a relatively small marketing budget, Bio-Synergy has won listings in main-stream UK retailers, from Tesco to Harrods. By RICHARD CLARKE.

Bio-Synergy broadened its appeal beyond fitness fanatics by adding five new functional beverages to its line-up: Skinny Water, Beauty From Within, Gym Tonic, Fitness Water and SubZero.

FEBRUARY 200924


B E V E R A G E C A S E S T U D Y

packaging may have to be adapted in the light of this.

Bio-Synergy’s products haven’t been sub-jected to clinical studies, but are tested among consumers before launch. Typically, this will involve sending them out to existing custom-ers to try out. After launch, Bio-Synergy sends samples out to radio stations, newspa-pers and magazines – both specialist sports titles and lifestyle publications – to be tried and tested. One woman featured in consumer magazine Fabulous lost nine pounds (4.5kgs) in two weeks drinking Skinny Water every day, says Herman.

BROADER APPEAL THAN PILLS AND POWDERS

Bio-Synergy still markets supplements in pill and powder form, but Herman says it was important to launch functional drinks to appeal to a wider consumer base. “The reason we started in the first place was to offer a lifestyle sports nutrition brand with credibility and authenticity, but in a user-friendly and understandable format. In a way, our products were designed as a mainstream alternative to the products available in the body-building market.

“Later, we looked at our range and thought, if you’re serious and want to use a product regularly, pills and powders are probably the most cost effective route. But not everyone uses these kinds of products regularly and a drink is an obvious and con-venient solution for these kinds of people. But we’ve used a lot of knowledge and experience from the pills and powders side of the busi-ness to develop our functional drinks, which offer measurable benefits in a format that easily be drunk on the go.”

INNOVATIVE APPROACH TO MARKETING

Bio-Synergy’s development as a branded drinks supplier was boosted in 2005 and 2006 when the company received investment from private individuals. One of these was Sebastian Coe, a British athlete who won the 1,500m gold medal at the Olympic Games in 1980 and 1984 and headed London’s success-ful bid to host the 2012 summer Olympics. Coe’s involvement demonstrates the respect Bio-Synergy commands in sporting circles.

Nonetheless, that’s not enough to achieve mainstream acceptance. Like many func-tional brands, Bio-Synergy remains a niche player and as a small business – turning over in the region of £6 million ($9.2 million/€6.6

million) a year – is not in a position to plough millions into major advertising campaigns to change that.

The company, which spends about £500,000 ($770,000/€590,000) a year on marketing, has invested in some print and outdoor advertising. But it also tries to raise its profile through links with charities. It shares its profits with Cancer Research and recently donated sports drinks to 500 athletes taking part in a Unicef running event.

Bio-Synergy drinks retail for up to £1.49 ($2.29/€1.75) for 500ml, says Herman, who adds that this is “in line with high-end energy drinks and expensive imported waters”. In Tesco, the UK’s biggest supermarket chain, Skinny Water was retailing for 99p ($1.52/€1.16), at time of writing, a fairly hefty premium over standard waters. A 500ml bottle of Evian natural mineral water, by comparison, retails for just 42p ($0.84/€0.62) in Tesco. It also means the recommended four-a-day dose of Skinny Water would set someone back £1,445 a year ($2,890/€2,145).

The company’s products appeal to a broad range of people, says Herman. “Anyone aged from 18 to 80, literally,” he says. “Some people buy our drinks for the functionality, some people buy them for the taste, some

people for the shape of the bottle. The product delivers what it says on the tin at a very reasonable price point.”

PR is a key part of Bio-Synergy’s communications strategy, which sees product samples sent out to radio stations, newspapers and magazines – both specialist sports titles and lifestyle publications. Above is an example of positive coverage for the company’s Skinny Water. A reader of consumer magazine Fabulous lost nine pounds (4.5kgs) in two weeks drinking Skinny Water every day, providing a perfect free testimonial.

Bio-Synergy’s original drink Liquid Energy was created for the Manchester Commonwealth Games.

FEBRUARY 2009 25


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

The company behind axed satiety smoothie brand Naturally Gorgeous is bringing back the beverage range in a new format, after admitting it made mistakes with the product first time around. The brand’s active ingredient will be, as before, PinnoThin, an appetite-suppressing ingredient based on Korean pine nut oil developed by Netherlands-based lipids specialist Lipid Nutrition.

Naturally Drinks launched Naturally Gorgeous smoothies onto the UK market in December 2007, gaining a listing with upmarket supermarket chain Waitrose, but was withdrawn less than a year later.

The shortfalls of the Naturally Gorgeous brand proposition were analysed in the November 2008 issue of New Nutrition Business. To re-cap, we said that the range was too expensive; that the brand and ingredient were hindered by being unknown to consumers at time of launch; and that the company behind the range was small and lacked marketing clout.

We also pointed out that it was a fruit juice/milk blend, a recipe type not widely consumed in the UK. And we argued that the brand’s packaging format, a one-litre carton, made it too easy for shoppers to compare its high price point with other, cheaper, similar-sized packs.

Brand owner Naturally Drinks, it turns out, agrees with parts of this appraisal, if not all of it. In an interview with NNB, company founder Franco Beer said he still believed in the basic concept of the Naturally Gorgeous smoothies.

But he also admitted the range had been launched in the wrong format – although he insisted the company had only done this after taking external advice.

“Originally we’d wanted to target people who might have skipped breakfast and could pick up something on the way to work that would keep them full till they were able to have something more substantial,” said Beer.

“That meant we’d wanted to launch Naturally Gorgeous smoothies in 250ml bottles. But we were advised to launch in one-litre packs, because it was an easier way of doing it for supply chain reasons. However, I think it was difficult for people to get the idea of measuring out 250ml every day from a one-litre pack. If you have a 250ml bottle you know exactly what you are getting.”

Beer also said he regretted being advised to launch in December. “We were also told to launch the brand at the wrong time of the year. You don’t really launch a satiety drink when people are looking to eat mince pies.”

In terms of the price of the range, £3.29 a litre ($4.90/€3.62), Beer said: “It was the same as Innocent smoothies, so it was a premium product. But of course we are not as well known as Innocent by any stretch of the imagination so it was quite challenging to get people to buy into it.”

In spite of its failure, Naturally Gorgeous won an innovation award in 2008. Beer said this had generated a lot of interest in the product, which should serve the company well in 2009, when it will undertake a relaunch which will see Naturally Gorgeous smoothies return in the 250ml bottles Beer craved all along.

In the meantime, the company has been rolling out the Naturally Gorgeous brand to other areas, launching a chocolate bar and

an oat bar, both of which contain PinnoThin and are marketed with the tagline, “Helps keep you fuller for longer”. Beer said these had proved a small-scale hit, with listings won in WHSmith travel outlets and even large stores in the Top Shop women’s clothing chain (90% of Naturally Gorgeous consumers are, perhaps unsurprisingly, female).

Beer is keeping faith in PinnoThin: “I don’t think there’s anything else out there that’s as good. But the consumer needs to be made more aware of it, and we are working with Lipid Nutrition to achieve that.”

Naturally Drinks’ newest launch, taking place in January 2009, is a range of three products containing not PinnoThin, but DSM’s Teavigo green tea ingredient.

Naturally Gorgeous Mints is a pack of 25 mint sweets in a tube, each containing 6mg of ECGC, the active component in green tea. Naturally Gorgeous Metabolic Boosters is a jar of 60 tablets, each containing 75mg of ECGC. And Naturally Gorgeous Antioxidant sticks are apple and lemon flavour sachets, designed for diluting in a glass of water, which contain 50mg of ECGC each.

“The UK isn’t massively into green tea as a nation,” says Beer. “But we found people know the benefits even if they don’t particularly like the taste. This is a quick way of getting the benefits of green tea without the taste.”

Naturally Gorgeous gets into shapeUndeterred by the failure of its satiety smoothie, a start-up company is planning a relaunch which will incorporate the lessons it learnt from the experience. It is also debuting powders and tablets based on DSM’s Teavigo green tea extract. By RICHARD CLARKE.

FEBRUARY 200926


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

N E W P R O D U C T S

BAKERY

Canada Flax 4 Life Flax 4 Life by Kasondra Flax Muffins in Zesty Orange and Ginger flavour

Free from wheat, preservatives, cholesterol, hydrogenated fat and trans fat. Each 99g muffin provides 3200mg of omega 3, 10g of fibre and 160mg of lignans.

USA Brownberry Brownberry Grains & More Double Oat Bread

A 100% wholegrain and wholewheat hearty oatmeal bread, which contains 22g of whole grains and is a good source of fiber. The product is cholesterol free, low in fat and contains no high fructose corn syrup or trans fat.

BEVERAGES

USA Nestlé HealthCare Nutrition Boost Plus Vanilla Flavoured Nutritional Energy Drink

Reformulated, this drink is claimed to provide 50% more calories and 40% more protein than regular Boost. It contains 26 vitamins and minerals, plus the extra protein and 360 calories for healthy weight management. Also a “great meal replacement for busy consumers on the go”. This kosher certified product contains antioxidants-C, E and selenium, and is free from gluten and lactose.

USA Fast-Ade Simpl1fast All-Natural Detox Fasting Beverage with Lemon Breeze flavour

This product is claimed to cleanse, energize and restore, and features a high fiber content, with electrolytes, antioxidants, vitamins and minerals. It is free from preservatives, low glycemic and provides fast weight-loss. Also available in a Strawberry Essence variety.

USA HydroOne Rev Diabetic Nutritional Beverage A functional water range that comprises the following varieties: D Diabetic Nutritional Beverage with cinnamon extract and berry flavour; A Arthritis Nutritional Beverage; O Osteoarthritis Nutritional Beverage; and K Kidney Health Beverage. These products are all natural, enriched with vitamins, sweetened with xylitol and free from calories, carbohydrates, sodium and caffeine.

CONFECTIONERY

Canada Big Sky Brands Yogen Fruz Smoothies All Natural Hard Candy

Made with delicious natural fruit flavour and probiotic yogurt. Each piece contains only three calories with zero fat. This kosher certified product is available in Strawberry Banana flavour and retails in a can containing 36 pieces. Also available in the following flavours: Blueberry Breeze (with Acai); and Tropical Storm.

DAIRY

Canada Lucerne Foods Eating Right Blackberry and Pomegranate Stirred Probiotic Yogurt

Contains 55mg polyphenols per 175g serving and is available in a 6.18-oz. tub. Also available is Plain Probiotic Yogurt, which is available in a 26.46-oz. Tub. A 175g serving provides 80 calories and 25% recommended daily intake of calcium. Both fat-free products contain a friendly culture that remains active in the digestive system.

USA Kraft Foods Kraft Mexican Style 2% Milk Shredded Reduced Fat Cheese

Contains 1/3 less fat compared to normal Kraft Mexican Style shredded cheese. The product, with added calcium, is made with milk from cows not treated with the growth hormone rbST. Comes in an 8-oz. resealable pack. Available are: Cheddar Jack; and Taco Cheese varieties.

MEALS & MEAL CENTERS

USA Nestlé Lean Pockets Grilled Chicken Supreme Calzones

Whole grain dough pockets containing grilled white chicken meat, vegetables, cheese and turkey pepperoni. A good source of fiber, contains 5g of fat and 250 calories per serving. The microwavable product is available in a 10-oz. pack containing two calzones.

Canada Lucerne Foods Eating Right Wild Pacific Salmon In White Wine and Herb Sauce

High in protein and is a source of omega-3. A 5-oz. fillet contains 120 calories and 2g fat. Comes in a 24-oz.pack.

USA Target Market Pantry Diced Grilled Chicken Breasts

These fully cooked chicken breasts are said to be easy to prepare and can be microwaved in 1½ minutes. Each serving contains 0g trans fat, 2.5g fat, and 21g protein. Market Pantry also offers a Diced Over-Roasted Turkey Breast variant; these fully cooked turkey breasts are 97% fat-free and contain 1g fat per serving.

SAUCES & SEASONINGS

USA Red Gold Tuttorosso New World Style Tomato Sauce

Fat free and 100% natural. The product contains no artificial colors, flavours or preservatives, and provides a source of lycopene, a natural antioxidant.

Canada ConAgra Foods Hunt’s Thick & Rich Four Cheese Premium Pasta Sauce

Low in fat and a source of vitamins A and C. It is claimed that each half-cup is equivalent to two servings of fruit and vegetables. Available in a 680ml can.

USA Pompeian Pompeian OlivExtra Plus Canola Oil & Extra Virgin Olive Oil with omega-3 DHA

Said to be “the smarter cooking oil”, and to nourish brain, eyes and heart. This premium product is retailed in a 32-fl. oz. bottle.

USA Marie Callender’s Croutons Marie Callender’s Organic Seasoned Multi-Grain Croutons

Made with three fresh-baked breads: white, wheat, and rye and free from cholesterol, preservatives and trans fat. Retails in a 5-oz. resealable pack.

SNACKS

Canada Diva Delights Diva Delights Crisps Come in Cranberrylicious; Peppy Pecan; and Rosemary Raisin and Almond variants. The baked crisps are free from trans fat and cholesterol, low in saturated fat and are a good source of Omega 3. Come in 14.1-oz. packs.

Canada Honeybar Products Everyone’s Organics Trail Mix Bar A good source of fiber and provides 1g of omega-3 polyunsaturates. This organic snack bar is free from trans fat, cholesterol and is also low in saturated fat.

Canada Jessica’s Kitchen Jessica’s Kitchen Protein Crunch Snack Made from pumpkin seeds, this snack is 100% natural and a source of Omega-3 and Omega-6. This “heart-healthy and energy-packed” product is wheat-free, gluten-free, dairy-free, cholesterol-free and contains no trans fat and no artificial ingredients. It is retailed in a 156g pack.

SWEETENERS & SUGAR

USA McNeil Nutritionals Splenda Liquid Spray Sweetener A no calorie sweetener, suitable for people with diabetes. It is kosher certified and is available in a 0.49-oz. pack.

PROCESSED FISH, MEAT & EGG PRODUCTS

FEBRUARY 2009 27



BAKERY

Australia Tip Top Bakeries Tip Top 9 Grain Plus Soy and Linseed Bread

Contains wholegrain and omega 3 ALA to help maintain a healthy heart and is high in fibre to help maintain a healthy digestive system. Free from artificial preservatives and cholesterol, and contains folate.

Belgium Damhert Damhert Nutrition Taga Twins Biscuits These biscuits with a blueberry filling contain tagatose (produced by Arla Food Ingredients), which is a prebiotic with a very low glycemic index and which does not cause tooth decay. Said to contain only 10% fat, is rich in fibre and retails in a 6 x 30g pack.

Japan Asahi Food & Healthcare Slim Up Slim Precious Baked Meal Bars (Cocoa & Sesame)

This cookie-style weight control product is formulated to support consumers on a diet who want to snack on something sweet. Flavoured with cocoa and sesame while providing a variety of nutrients including collagen, co-Q10, hyaluronic acid, 10 vitamins, four minerals and apple polyphenols.

Japan Nissin Cisco Lact In Body Pirukuru Cream Sandwich Biscuits

Filled with cream flavoured with Nissin Yolk’s Pirukuru lactic acid bacteria drink. Contains live lactic acid bacteria that is claimed to reach the intestines alive, as well as iron, calcium and eight vitamins.

Japan Yamazaki Nabisco Chocolate Cream Wafers with GABA Wafers with milk chocolate cream containing 70mg GABA (gamma-aminobutyrate) per pack, for stressed, busy individuals. Comes in a 50g pouch.

Russia Khlebny Dom Khlebny Dom Taliya Multiseed Bread Buns

Contain no GMOs and have a glycemic index of 54. Recommended by the Academy of Health for consumers who are on low calorie diets, in the early stages of cardiovascular disease or suffering from Type-2 diabetes.

BEVERAGES

Chile Vital Aguas S.A. Dasani Anti Ox Agua Gasificada con Antioxidante (Antioxidant Sparkling Water)

Fortified with vitamin E to neutralize “the oxidant molecule that forms in blood and damages cells”. The water is calorie-free and available in a Citrus flavour.

Japan Shiseido Peucedanum Japonicum Drink Peucedanum Japonicum is a plant that grows on Yonaguni Island, the westernmost island in Japan. It is said to contain many nutrients and vitamins beneficial to beauty and health. It is rich in polyphenols such as chlorogenic acid and rutin.

Spain Expanciò Isotop Isotop Bebida de Protección Solar (Solar Protection Drink)

Enriched with lutein, vitamins and minerals, and is said to provide special protection for the retina and the crystalline lens during solar exposure to ultraviolet radiation. Recommended for summer and winter sports activities or tanning sessions and is claimed to protect skin cells from external agents and free radicals. The 550ml bottle features an Isotop Squeeze System. Once the seal of the bottle is broken, squeeze and shake the bottle to dissolve the minerals and vitamins in the cap. This system is claimed to stop vitamins and minerals oxidising.

BREAKFAST CEREALS

Japan Asahi Food & Healthcare Balanceup Cocoa Flavoured Soy Crisp A breakfast cereal containing fibre, calcium, iron and 10 vitamins. The bite-sized crispy soy puffs include bitter chocolate chips and coconut. Each 30g pack contains only 151kcal.

South Africa Bokomo Foods Bokomo Right Start Functional Breakfast Cereal

The new range includes: Oat Flakes For Heart, which is rich in beta-glucan and calcium; Multigrain Flakes For Figure, with B-vitamins and calcium;.Bran Flakes For Vitality and Raisin Bran Flakes For Vitality. Start Fibre Plus For Digestion is high in fibre. The whole range is approved as part of The Heart and Stroke Foundation of South Africa eating plan.

Argentina Unilever Ades Verano Mix Alimento de Soja Líquido con Jugo de Mandarina con Durazno (Mandarin & Peach Soy Juice)

Enriched with iron, zinc, vitamins C, B1, B2, B3, B6 and folic acid. Free from preservatives and gluten.

Australia Jalna Dairy Foods Jalna Vitalize Immune + A milk drink with vitamin C, echinacea and acidophilus, Bifidus and casei cultures. The 98% fat free drink is also free from gluten, added sugar and preservatives, and has a low glycemic index. It is available in an Açai and Raspberry & Pear flavour.

Austria Pinzgau Milch IQ Plus Brain Drink Contains ingredients to increase mental performance as they stimulate the brain-metabolism for better communication of the brain cells. The cocoa-milk drink contains 2.5% fat, can be stored at room temperature for six months, and retails in a 200ml bottle.

Austria Schärdinger Schärdinger Bewusst Leben (Conscious Living) Vitamin Gouda

First in this new range are three reduced fat cheese varieties that contain no lactose or GM ingredients: Vitamin Gouda, which is a rich source of calcium and vitamin D and is retailed in a 150g pack; Soja Käse (Soya Cheese) contains 15% soy protein and only 13% fat; and Joghurt Gouda (Yogurt Gouda) features probiotic cultures.

Colombia Lafrancol Soy Plus Mujer Soy-Based Drink for Women

Enriched with isoflavones and calcium, cholesterol- and lactose-free.

Ireland McNeil Nutritionals Benecol Dairy Free Strawberry And Berries Fruit & Soya Drink

Proven to reduce LDL cholesterol. Each bottle contains strawberries, raspberries, blueberries, soy and plant stanol esters. This dairy-free drink is available in a pack of 6 x 65.5g bottles.

Country Company Brand & Product Description

PART 2: REST OF THE WORLD – FOODS & BEVERAGES

DAIRY & DAIRY SUBSTITUTES

FEBRUARY 200928



Italy Granarolo Yomo Leggero Thè Mela Verde in Pezzi e Tè Verde (Low Fat Yoghurt with Green Apple Pieces and Green Tea)

Sweetened with fructose and contains only 0.1% fat per serving. Free from aspartame, preservatives and colourings. Green tea is described as having an antioxidant action and to help protect the skin from UVB sun rays.

Italy Parmalat Parmalat Fibresse Pera e Fiocchi d’Avena (Pear and Oat Flakes Yogurt) with Rego Plus

Contains a combination of fibre, vitamin E and biotin to help maintain intestinal flora. Retails in a pack of two 115g tubs. Also available is a Coffee and Wheat Germ variant.

Japan Ohayo Dairy Products 0% Fat Yogurt (Grape) This yogurt features a yogurt base made with nonfat fermented milk. It is blended with a grape sauce, made with fruit that is treated in a sealed environment for a short time, allowing the fruit to retain its freshness and flavour.

Japan Yakult Honsha Shes Drinking Yogurt Yakult This peach flavoured lactic acid bacteria drink is targeted at women in their 30s to 40s who have a high level of awareness about beauty and anti-aging. It is a product to fill in the company’s demographic product gap as all other lactic acid bacteria drinks from the company are mostly purchased by consumers aged 50 and up. The product contains added calcium, iron and collagen and is only moderately sweet. The product contains 30 billion L casei (YIT 9029) and 25g of galacto-oligosaccharide.

Mexico Ganaderos Productores de Leche Pura

Alpura Vivendi Alimento Lácteo Fermentado Regenerante (Regenerating Fermented Lactic Food)

Low in calories, made with fruit and vegetables and enriched with vitamins A, B, C and E. Available in guava, aloe vera and grapefruit varieties.

Netherlands Unilever Becel Pro-Activ Goed Voor de Bloeddruk (Margarine)

Claimed to be good for blood pressure, as it is low in salt and sodium. Added potassium helps the body remove excess salt. Also contains added omega-3 and omega-6 fatty acids.

Portugal Clesa Clesa Activ Soya Defensas Orange Soya Drink containing Lactobacillus Casei

Claimed to help the immune system and digestive system. Low in calories, contains 0% fat and is suitable for coeliacs.

DESSERTS & ICE CREAM

Brazil Bretzke Alimentos Bretzke Gelatina Light (Light Gelatin Mix Powder)

Enriched with collagen to help maintain healthy skin, bones, cartilage and tendons. This gluten-free product is available in a Strawberry flavour, and is said to be a good source of protein.

MEALS & MEAL CENTERS

Japan Sokensha Soup Risotto with Domestic Barley in a Tomato & Vegetable variety

Made with Japanese barley and is naturally rich in dietary fibre. A 23g pack provides 2.1g of fibre and 2,000mg of odourless collagen peptide. Targeted at dieters, and is intended to be a snack or meal substitute. Can be prepared within three minutes after pouring hot water. Each pack contains five 23g servings.

UK GO3 GO3 Sweet and Sour Chicken Noodle Pot

Made with omega-3 and vitamins and is said to be healthier, tasty and easy to prepare. The microwaveable product is low in saturated fat and comes in a 200g carton with an image of David Beckham.

SNACKS

Japan Otsuka Phamaceutical Soyjoy Folic Acid Plus Bar in an Orange variety

A new addition to the range, this product offers the same rich nutrition of soy but also a refreshing orange flavour and the pleasant texture of orange peel, as well as 200mcg of folic acid.

Poland Raisio Elovena Przekaska Owsiana z Cynamonem (Oat Snack with Cinnamon)

An oat cookie with cinnamon, baked from whole grains. It is rich in fibre, vitamin B1 and magnesium and is said to satisfy hunger for a long time. The product is preservative-free, does not contain eggs and has a low glycemic index. It is retailed in a 30g pack.

Switzerland Mars Balisto Activo Feige (Fig Cereal Bars) Fruit and cereals coated with yogurt, these bars contain 16% prebiotic fibres and come in a pack containing six bars.

SOUP

France D.L.P. Leader Price Les Veloutés Poireaux Pommes de Terre (Leek & Potato Cream Soup)

Features a guaranteed level of vitamins B5, B2 and B9 and is free from colourings or preservatives.

Japan Morinaga Diet Soup A pack of dry soup for calorie-control, which is targeted at middle-aged to senior consumers. Each pack contains three flavours: Refreshing Tomato, Sweet Pumpkin, and Creamy Spinach. Formulated with soy protein, L-carnitine and dfibre and contain only 210kcal per pack.

Germany Wrigley Orbit Balance Heidelbeere-Vitamin C (Blueberry-Vitamin C Chewing Gum)

Provides more than 25% of the RDI of vitamin C. The product will be available in a resealable container with 36 pieces and a Blister pack containing 10 pieces.

Japan Asahi Food & Healthcare Ripe Red Apple Candy This candy contains Fuji apple juice from the Aomori prefecture. It contains 1,000mg of vitamin C as well as apple polyphenols. The candy features Milky Apple and Juicy Apple flavours.

Japan Lotte Xylitol Gum (Grape) This is the first product in the Xylitol series to contain vitamin C based on new technology. The gum contains xylitol to protect teeth and features a juicy grape flavour. A three-pack and family bottle type are also available.

SUGAR & GUM CONFECTIONERY

FEBRUARY 2009 29


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10 Key Trends in Food,Nutrition & Health 2009How to succeed in recessionary times

40 www.new-nutrition.com

many, many other examples:Green Giant Health Blends, marketed in theUS by General Mills, are ready meals formulated to address three common health interests of baby-boomers – without fortification, based on the intrinsic properties of the vegetables in the meals. Described as the “first of their kind in the frozen vegetable category”, the products are Healthy Weight, Immunity Boost and Healthy Vision.

Coconut water is a new development in sports nutrition (at least outside Brazil and the Pacific, where it is traditionally consumed). Coconut water is carving itself a niche as “nature’s sports drink” because 330ml/11 fl.oz. has more potassium than two bananas and 15 times the amount found in the equivalent volume of most sports and energy drinks. Coconut water is said to be naturally able to replenish the electrolytes lost during exercise as

Green Giant’s new Health Blends range, which offers three specific health benefits, is the first of its kind in the US frozen vegetable category.

The message that a product is “free-from artificial ingredients” was once confined to foods in the health-food store. Today it is a basic

requirement for most products. Pepsi Raw promises no artificial flavourings or sweeteners, no artificial colours or preservatives.

Positioned as “Nature’s Sports Drink”, Zico is the second biggest-selling coconut water in the US.


existing energy drink consumers and did not appeal to its target health-conscious consumers. Magic seems to have disappeared from the UK and US markets.New category creation: The answer is not to offer me-toos that mimic existing products’ appearance and marketing, but instead to createa new category based on a new proposition. There have been several attempts to create new propositions in energy. Recent examples include:Cranergy – fruit energy: Consumer research persuaded Ocean Spray, the world’s biggest cranberry company, that mothers and other consumers wereready for a healthier alternative to the sugar-and-caffeine-laced beverages which are increasingly supplanting carbonated soft drinks. Cranergy is a non-carbonated, 20% juice drink, with 35 caloriesper serving. Its “naturally energising” ingredients include green-tea extract and B vitamins, which support “healthy energy production”. After nine months on the market Cranergy has clocked up retail sales of just $14 million (€11 million). It’s too early to say whether that’s a good a start for a niche brand or a disappointment for Ocean Spray.Emminent – dairy energy: Debuting in Switzerland and Portugal from Swiss dairy group Emmi, one of the most innovative dairy companies

in Europe, is the Emminent brand, described as the “first probiotic drink that offers to boost energy levels in a single shot.” “We do not see Red Bull as our direct competitor, although there are some parallels,” Emmi’s media relations manager Stephan Wehrle told New Nutrition Business. “Most classic energy drinks are nightlife products, whereas Emminent will be consumed at home or in the office, and predominantly around breakfast time.”

Emminent is a line of fruit-flavoured probioticmilk drinks enhanced with taurine, guarana, dextrose and green tea extract. The bottles come in a 125mldaily dose format, sold through retailers in packs of four. Single Emminent bottles will also be available at gas stations and railway stations. Each 4-pack of bottles carries the claim “Energize your day” and each pack also carries the statement: “Supports performance and strengthens the immune system”. Emminent is sold at a premium price for dairy but in line with conventional energy drink pricing. On a price per bottle basis Emminent is about 30% below Red Bull, but taking into account thatRed Bull sells in a 250ml can and Emminent is only 125ml, compared on a price per litre basis Emminent is almost 30% more.The product is aimed mostly at men. “Men

CHART 4: ENERGY DRINKS ARE PREMIUM-PRICED - US energy drink prices compared with one-another and with a “standard” mass-market non-energy product such as Coca-Cola Classic

Source: Wal-Mart, Albertsons, Walgreens

Price per 32 fl.oz. (approximately

1 litre)

0CocaColaClassic

1 litre $2.19

$2.195

10

15

20

25

30

35

40

Monster Energy Drink

16 fl.oz. $2.29

$4.58

Red Bull8.3 fl.oz. $2.09

$8.06

Cranergy12 fl.oz. $3.99

$10.64

LivingEssentials 5-Hour Energy12 pack $33

2 fl.oz. bottles

$41.25

45


new point of difference and that can be achieved by segmenting probiotic benefi ts according to age, gender, health conditions or product format.

Even within mature dairy markets there are still opportunities for new digestive health niches – such as products targeting specific conditions and aimed at “the most serious” consumers. In early 2008, for example, Finnish dairy group Valio, one of the global pioneers in the probiotic business, launched Gefilus Max, a patented product containing a combination of probiotic bacteria and targeted at Irritable Bowel Syndrome.

Innovations such as Unistraw’s probiotic straw (see box) also create the possibility of dairy products offering probiotic benefits even in parts of the world where there is no chilled distribution to preserve fresh probiotic dairy products. UHT milk is widely consumed in these regions but it is not a very good delivery medium for probiotic bacteria. Having the probiotics encapsulated in straw attached to the side of single-serve milk or yoghurt carton gets round both problems.

Fruit juice: There’s no reason why dairy (or probiotics) should have such a monopoly. There are significant groups of consumers, particularly in Asia and Africa, who perceive dairy products as having disadvantages in terms of their content of fat or lactose, or who want a plant-based diet, or who simply aren’t used to the taste of dairy.

For the segment of consumers who want digestive health benefits but want them in a non-dairy form there are in most countries almost no alternatives – and certainly none that could be said to be convenient. This is the greatest untapped opportunity.

It’s our belief that fruit juice has the opportunity

to be more successful than any other category and to take a strong second place to dairy products.

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

ProViva, launched in Sweden in 1994, has become one of the very few mass-market functional food brands. ProViva has shown how successful probiotic fruit juice (using a vegetable-source

ProViva, one of the few successful mass-market functional food brands, shows the potential of fruit juice in digestive health.

There are many opportunities to create new niches in digestive health. In early 2008 Finland’s Valio Dairy launched Gefilus Max, a patented product targeting Irritable Bowel Syndrome.


Activia racked up $130 million (€98 million) in

retail sales in 2006 and had grown to over $330

million (€264 million) in retail sales in the year

to October 5th 2008, according to IRI data – a

phenomenal achievement. Activia is marketed in

exactly the same way as in Europe, with an overt,

explicitly communicated health message about

digestion. Activia dispelled the long-held myth that

Americans weren’t motivated by explicit digestive

health messages and unleashed a frenzy of interest

in the US in digestive health products.

In Europe products for digestive health account

for 50% of the functional food and beverage

market. Probiotic dairy brands dominate. Nielsen

estimates that the European digestive health market

is worth about €2.2bn ($2.7bn). The European

probiotic market is now mature, but there are

opportunities for new digestive health niches, such

as for non-dairy delivery mechanisms. The fibre-

fortified market still has unfulfilled potential.

In Japan products for digestive health account

for almost 50% of the $3.4 billion (JPY 362.3bn)

FOSHU market (the portion of the functional

food market that makes regulator-approved health

claims) and 34% of the non-approved functional

foods business. Six of the top-10 FOSHU brands

in Japan target digestive health. However this is a

mature market dominated by a few dairy brands –

the opportunity is to create new non-dairy niches.

In Asia there are still major opportunities.

Apart from Japan and South Korea, say suppliers

of probiotics, there are many dairy drinks but

few with any serious basis in science – most are

based on just “regular” bacteria with little or no

supporting science. This explains the dominance,

these companies say, of Yakult in most countries in

Asia. There is still a gap for “serious” and effective

products.

BENEFITS THE CONSUMER CAN FEEL

The reasons for the success of the digestive health

category are very clear: it offers a wellness benefit;

addresses an everyday lifestyle issue, and provides a

benefit the consumer can easily and quickly feel.

This last factor is a key factor: consumers can

quickly feel the benefits from probiotic and fibre-

fortified products (if they are based on an effective

ingredient).This is going to prove particularly

important at a time when consumers everywhere

will be managing their household budgets with

more care – a product that gives a benefit that you

can quickly see and feel is going to seem like better

value for money than one with a less immediate

benefit (see Key Trend 2).

Digestive health is a “wellness” issue, not (like

cholesterol-lowering) a “death and disease” issue.

And as we have seen again and again over the

last 10 years of functional foods, wellness benefits

appeal to a wider range of consumers looking for

CHART 2: JAPAN’S FOSHU PRODUCT SALES BY HEALTH CONDITION

Source: Fuji Keizai and GNGAnalysis

Triglyceride/Body Fat21.0%

Blood Sugar

Dental Health16.3%

Minerals (Bone Health)1.8%

Blood Pressure4.1%

Cholesterol3.7%

Intestinal Health

49.3%

2007 Total

JPY362.3bn

($3.7bn)

Based on company sales

Published by Report

10 Key Trends in Food,

Nutrition & Health 2009

by Julian Mellentin

Mellentin’s 10 Key Trends for 2009 are:1. Digestive health: the biggest trend

2. Feel the benefit: what consumers want most in recessionary times

3. Weight management: a bright future for foods that make you want to eat less

4. Energy: new markets waiting to be discovered

5. Naturally healthy and free-from: what everyone wants

6. Fruit: the future of functional foods

7. Kids nutrition: make parents’ lives easier

8. Healthy snacks for the “me” generations

9. Ultra-loyal consumers: niches to help brands ride the recession

10. Packaging innovation delivers premium prices

This year the report also includes 5 Micro-Trends. These are:

1. Antioxidants. Not what we think they are?

2. Movement

3. Omega-3 awaits technology to rescue it from its niche

4. Skin and beauty fails the stress test

5. Mood food feels its way

10 REASONS TO BUY:1. We focus on long-term trends, not fads

2. Each trend written with recession in mind, offering practical advice on surviving tough times

3. We show how brands around the world are already profiting from the trends

4. Independent and opinionated

5. 20 years of experience to guide you through the rough years ahead

6. Based on 350-plus interviews with industry executives

7. Supported by supermarket sales data

8. Illustrated with a wealth of colour product images and data charts

9. A very affordable price which is why hundreds of companies large and small, in over 40 countries, buy 10 Key Trends every year

10.Sent to you in PDF or Powerpoint, or both if you want

FEBRUARY 200932


Ordering is easy…see inside back cover or visit www.new-nutrition.com Price: $295/€200/£160/A$345/NZ$395/C$295/¥33,000

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

FEBRUARY 2009 33


Trends & Strategies in Weight Management: Ten Key Case StudiesConsumers’ ideas about weight management have changed. Companies are wrestling with how to successfully create, price, position and market weight management brands. New ingredients – from over 40 different suppliers – are fighting for space in the embryonic market.

This report is written for anyone trying to develop an effective strategy in this challenging and fast-changing area. The report outlines the elements for success both for weight management brands and for ingredient suppliers.

The report begins with a concise 40-page analysis setting out:• Key trends• Which brand strategies are most effective and why• Which ingredient strategies are most effective and why

The analysis is supported by 10 detailed brand and ingredient case studies, which show:• success factors, and common causes of failure• how to extend an existing brand• how to create a successful new brand• how to revive an old brand• how an old brand leveraged an intrinsic weight management benefit

The report covers:• 25 ingredients• Satiety, calorie-burning and fat-burning• The dairy, water, juice and gum categories

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

PRICE €200/$295/£190/A$345/NZ$395/C$295/¥33,000

Weight Management


dairy drink retails for €2.99 for a pack of seven 65ml bottles. That’s equivalent to €6.57 a litre ($9.64). Compare this to regular, non-probiotic milk, which retails for just €0.69 ($1.01) a litre. Needless to say, Yakult is something of a niche brand – its €42 million ($61.7 million) annual sales in the Netherlands amount to just 5.6 million litres a year – a tiny number compared to the 800 million litres of liquid milk sold in the Netherlands. Moreover, Yakult’s sales are just 250,000 bottles a day – suggesting that just 1.4% of the Netherlands population of 17 million people is drinking Yakult each day.

In weight management it already seems that the same high value-low volume niche opportunity exists. For example, in the Netherlands – a highly price-driven market – Optimel Control secured a loyal following among a niche of consumers, despite being priced at a 450% premium to regular yoghurt:

• Optimel Control had retail sales in the Netherlands in 2007 of over €8.8 million ($13.7 million).

• In volume terms Control sold just 1.2 million litres in 2007 (mainstream Optimel sold over 80 million litres).

• Optimel Control sold on average 13,000 bottles a day.

Taking into account that such products have loyal consumers and high repeat purchase rates – 60% is not uncommon – that means that just 0.1% of the population of the Netherlands has consumed Optimel Control. Clearly it is a niche product.

For an expert weight management brand, supported by effective marketing, even in categories where packaging innovation is almost impossible, a price premium can be achieved. Kellogg’s Special K breakfast cereal, for example, sells in Dutch supermarkets for €3.40 ($5.36) for a 300g box. Kellogg’s own Cornflakes retail for €2.20 ($3.47) for a 500g box, and retailers’ own-label products for even less. On a price per kilo basis Special K sells at a 150% premium to Cornflakes and a massive 270% premium to retailer’s own label. It’s a similar story elsewhere in Europe.

2.6 DIFFERENTIATE WITH PACKAGING

One of the key lessons of the last 15 years is that packaging innovation is important to differentiate a brand – as important as the benefit offered and as important as the underlying science, if not more so. Optimel Control comes in a 100ml ‘daily

0Supermarket

Own-labelDrinking Yoghurt

€1.00

Price

per litre

(€)

1

2

3

4

5

6

7

“Regular” OptimelDrinking Yoghurt

€1.24

Optimel Control€2.77 ($4.37)per 4 x 100ml

€6.92

CHART 1: CAMPINA OPTIMEL CONTROL – PACKAGING INNOVATION AND A HEALTH BENEFIT SUPPORT SUPER-PREMIUM PRICING

Source: Albert Heijn Shelf Survey

Weight Management


2.2 BE AN “EXPERT BRAND”

There’s a powerful argument in favour of making weight management the sole focus of your brand. The most successful nutritional brands are those that are “expert brands” – focusing solely on delivering a single benefit, never deviating from their positioning. Examples include Danone Actimel (immunity); Danone Activia (digestive health); Red Bull (energy); Benecol (cholesterol-lowering); Pom Wonderful (pomegranate juice and heart health), to name but a few.

Kellogg’s Special K is one of the best examples, worldwide, of a weight management “expert brand”. With a focused message and skillful marketing Special K has pursued exactly the same line around the world, illustrated by communications such as its ‘Drop a Jeans Size’ promotion. They are as popular in Spain and France as in the UK and US. Planting its flag on expertise helped Kellogg’s to reposition the Special K brand in consumers’ consciousness as one of ‘shape management’ and moved it away from its traditional ‘diet’ image.

Unless you have a brand with a clear healthy image or it is your intention to create a new and

specific weight-management brand from scratch, then the best platform for your weight control product will be as part of a brand with an existing strength in weight control. For example:

Danone Shape Lasting Satisfaction (Case Study 5): Danone has already pursued exactly this strategy with its Shape diet brand in the UK, re-formulating it with added fibre and whey

protein to offer a satiety benefit and relaunching it as Shape Lasting Satisfaction. Shape more than doubled its sales in the wake of this re-positioning.

Slim-Fast Hunger Shots: Unilever’s decision to position its satiety dairy drink under its Slim-Fast brand is a perfect example of a company accepting this reality. Whether it can revive an old brand such as

Slim-Fast, which has a difficult heritage, is another question.

Optimel Control (see Case Study 3):Optimel Control is positioned as an extension of Campina’s highly successful Optimel brand – and to Dutch consumers its message is a logical fit to Optimel, which is a brand targeted at anyone who is conscious about

their weight. However, Optimel keeps far away from messages about “dieting”. In fact Campina Optimel is itself an “expert brand” in eating with a healthy weight in mind, thus providing the Control brand extension with a perfect platform.

Naturlinea (Case Study 4): In Spain the successful Naturlínea range is positioned as an extension of the brand Central Lechera Asturiana, one of the leading brands in the Spanish market. It’s a logical fit, since this brand already has a strong health positioning as Fuente Natural de Salud, meaning, “the natural well of health”.

Kellogg has built its Special K brand into a world-leader in weight management using campaigns that enable consumers to “feel the benefit” by actually losing weight

Weight Management


1. Key trends in weight management

1.1 CONSUMER TRENDS

The clearest trend in European and American markets is the decline of the concept of dieting and the rise of weight management as one component of a broader healthy lifestyle.

While consumers continue to think about their weight, they have become disillusioned by diets focused on what they can’t eat – or offering products that don’t taste good - and are hungry for a different kind of solution. This was illustrated in the UK, where German dairy Müller turned around the fortunes of its ailing Müllerlight yoghurt brand by repositioning it as a healthy product rather than an option for dieters.

As Michael Gusko, managing director of German company Kampffmeyer Food Innovation, which has developed a satiety bread, explains: “People are more or less fed up with diets. Diets fail and they end up having to look for something different. Dieting concepts, such as low fat spreads, tend not to taste as good, either.”

Most consumers are no-longer really willing to follow very structured or regimented dieting programs. They’ve concluded that diets that are deprivational and require strict regimentation are “too difficult” over the long run.

According to Virginia Blake West, brand-

development director of Unilever’s Slim-Fast brand in North America: “Generally speaking, if you ask them, ‘How are you dieting today, and how is it different than three to four years ago?’ they’ll pretty much say, ‘I’m doing my own diet now.’ They’re cobbling together different philosophies and approaches from the wide range of what they see and are exposed to out there.”

While some consumers will be drawn to weight management foods and beverages because they are seriously overweight, the evidence is accumulating that the larger part of the market – and the ideal target market for new products – is people who are only a couple of kilograms overweight. In other words, healthy people with a small and manageable weight problem.

These healthy people are the target group of the successful Optimel Control brand in Europe (see Case Study 3). They are also the people who have driven the weight management market in Japan, a country which does not have a problem of overweight or obesity on anything like the scale of the western world, but it does have the world’s second-biggest market for weight management products after the US. Japanese consumers are mostly healthy people who want to stay that way.

In all markets these healthy people will form the bulk of consumers for weight-management

Fuze Slenderize, a lifestyle beverage brand owned by Coca-Cola, is one of several on the US market that uses Super CitriMax (anextract of the fruit Garcinia cambogia) as its active ingredient. The brand carries the claim that it: Helps support a healthy appetite and a normal metabolism

Published by

Report

Trends & Strategies in Weight Management: Ten Key Case Studies

by Julian Mellentin

FEBRUARY 200934


PUBLICATIONS

REPORTS

10 Key Trends in Food, Nutrition & Health 2009Our 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.

Trends & Strategies in Weight Management: Ten Key Case StudiesOur concise analysis shows which brand strategies are most effective andwhy, which ingredient strategies are most effective and why and sets out the key market and consumer trends. Our analysis is illustrated with tendetailed case studies which cover satiety and fat burning and look at how to use weight management to revive old brands or create new ones.

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: 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 guide provides a checklist for superfruit success.

Probiotics: Successful Strategies from the Global MarketplaceThis 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.

7 Outstanding Companies in Functional & Health-Enhancing FoodsThis 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 Factors for Success in Energy Drinks – Europe and the U.S.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.

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