Over-dependence on health message is the top cause of failure in functional foods

Twenty-two case studies demonstrate how companies blew it. Learn from their losses.

Relying too much on a health benefit to differentiate a new food or beverage is the most common reason for failure in functional foods and beverages, reveals a new report from New Nutrition Business.

“Surprisingly often, companies make the health benefit the sole point of difference for the product, undervaluing key factors such as convenience. When a product is essentially a me-too, with a health benefit attached, it’s inviting failure,” says Julian Mellentin, director of New Nutrition Business.

Among the 12 key reasons for failure illustrated by the 22 case studies in this report are:
1. Overestimating the potential market
2. Targeting the mass market too early, instead of starting in a niche and growing from there
3. A perceived mismatch between the product and the benefit (such as fish oil in yoghurt)

Drawing on 17 years of qualitative and quantitative research in functional foods, the report also identifies 10 Golden Rules for Success, such as initially targeting a brand at a clearly defined group of consumers, and the importance of a focused benefit message that is easy for people to understand.

Why study failures? American billionaire investor Warren Buffett, speaking at a Coca-Cola shareholders’ conference, said: “I like to study failure.”

“The smartest people know that studying the failures of others teaches us how to succeed,” adds Mellentin. “Examining the most common mistakes that companies make enables others to avoid them – and increases their chances of success.”

New Nutrition Business is the worldwide expert in understanding the causes of success and failure in functional foods and beverages. No one has done as much research or created as many case studies on this subject.

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