Consumers don't want to eat from their medicine cabinets, they just want foods that taste good and offer a health advantage. Marketing analyst Peter Leighton offers food for thought.
Products that enhance consumer lifestyles. That's the primary reason why functional foods and beverages are seeing such explosive and sustained success. Consumers are moving away from the "food-negative" paradigm (do not eat fat, sodium, high-calorie treats, etc.) and are seeking the "food-positives"— food choices that offer functional enhancement benefits.
Traditionally, foods have provided either taste/convenience benefits or nutrition/ enhancement utility. But functional foods and beverages offer the consumer both. They address consumers' increasing concerns about their diet by offering the nutritional solutions sought in dietary supplements but with the taste and pleasure of traditional foods.
Today, three types of functional products have emerged successfully on the market.
Consumers believe that the food they eat can make a significant difference in their health, but many admit that their own diet needs improvement, according to "Shopping for Health 2001," by the Food Marketing Institute (FMI) and Prevention magazine. Nearly two-thirds (64 per cent) say they eat foods they enjoy, even if theirs are not the best nutritional choices. Sixty per cent of shoppers blamed factors such as nutritional confusion, the perceived high cost of healthy foods, the inconvenience of preparing healthy meals, and the lack of healthy fast-food options as reasons for their own poor eating habits.
All these factors support the growth of those functional foods and beverages that can deliver a wellness benefit—enhancement, not medicine—without sacrificing taste or convenience.
How To Deliver Wellness
Sales of dietary supplements have been sliding for the past two years. Interestingly, those dietary supplements that are not marketed as alternative Rx/OTC therapeutics (but rather as lifestyle enhancers) continue to thrive. Omega-3 fatty acids and probiotics such as Lactobacillus acidophilus are current examples of this positive trend. But consumer need and interest in a nutritional solution has not deteriorated—they are merely seeking lifestyle antidotes in the form of functional foods and beverages.
Functional foods and beverages should not be positioned as therapeutics since consumers don't want to eat from their medicine cabinets. Consumers are no longer seeking products as much as they are looking for experiences. Starbucks offers consumers a complete experience, not just a more expensive cup of coffee.
The functional foods and beverage pasture is green from the cash consumers are spending on products that can deliver an innovative functional solution. One need only look at the explosive sales growth of the nutrition bar category to validate the migration to and adoption of functional benefits. Between 1995 and 2000, nutrition bar sales have increased nearly 567 per cent (ACNielsen, 2001), and international marketing consulting and training company Frost & Sullivan is predicting sustained double-digit growth for several years.
In analysing the highly successful products in the functional foods category, five common denominators prevail.
- They all created new brands rather than leverage existing ones. Gatorade, Red Bull, Viactiv and PowerBar were successful because the brands were new, innovative and relied on marketing for the products' unique functionality.
- They all built new categories or subsegments in the market. There was no "energy bar" category prior to PowerBar, and Luna created a "women's bar" subsegment and came on the market with no rivals. In classic "first-mover advantage" fashion, these successful products were innovative and delivered on an unarticulated consumer desire.
- They all are marketed for their enhancement or wellness benefit, not for the science or clinical data that supports them. Yakult yoghurt, unquestionably the most prolific functional beverage in the world, does not make any health claim or "push" its voluminous scientific story to consumers; instead it is marketed for its "drink it and be healthy" message. Although most of these products have significant scientific support and credible validation, it's not the science that sells the product—it's the experiential quality, the taste and mouthfeel of the product, plus knowing there's an additional health benefit, that consumers respond to.
- They all offer the consumer a portable and convenient alternative. The key word here is alternative—consumers can frame a new product as an alternative to one they currently consume. When Tropicana Pure Premium offered an alternative orange juice that included calcium, it became an easy choice, considering consumers were not compromising on taste or price, but were gaining a valuable benefit.
- And finally—something many dietary supplements could not offer—they all have an experiential quality, whether through taste or physiological effect. If consumers can taste it or feel it, it's likely they'll want it.
A Cautionary Tale
Functional foods and beverages are simply food and beverage products that provide a health advantage—nothing more, nothing less. The day when industry tries to follow the US dietary supplements model by forging a new regulatory classification you can bet will be the first day of the demise of the industry. So long as we take the approach of delivering to consumers a healthier alternative to the current consumer product offerings, we will be providing a service to society. If the industry were ever to market food and beverage products as therapeutics, consumers would lose out.
One need only look at the significant failures to understand. Benecol was launched as a margarine that lowers cholesterol; $100 million in marketing could not convince consumers to spend more for a therapeutic margarine. Campbell Soup Company fared no better trying to deliver cholesterol- and blood pressure-lowering frozen foods. Campbell spent $50 million to try to force a therapeutic message upon consumers and the products were taken off the market within a year.
If consumers are looking to treat a disease, they have a plethora of pharmaceutical options available—options that work and are covered by insurance carriers. We eat foods for pleasure and socialization, and the data suggest that all other things being equal, consumers will choose one product over another if it can deliver an added wellness or enhancement benefit.
Peter Leighton is a founding partner of Copernican Associates, a California-based business consulting practice. He has 20 years experience in launching hundreds of consumer products. He can be reached at +1 925 944 9945 or via E-mail at [email protected]