When is it safe — and savvy — to brand your ingredient, and what are the potential risks and benefits? Shane Starling talks to leading companies who have taken the plunge, and shares what they have learned
A starting point: Branding ingredients can be valuable but not all ingredients require branding. Another point: Most of the money thrown at branding ingredients is wasted.
Because the wrong ingredient is selected.
Because the wrong name and logo are chosen.
Because the scientific backing for the ingredient is insufficient.
Because the ingredient is poorly sold and communicated on a B2B and B2C level.
Exercise caution if your company is thinking about going down the branding route. Sure, everyone wants to reach the Intel Inside point — your branded ingredient dominating its category, its name even substituted for the ingredients actual moniker. Only a few get there. So be careful.
But if you are confident your ingredient is sufficiently unique and efficacious to justify it, the branding option is a compelling and potentially lucrative one (but be prepared to spend some money and be patient).
This is the kind of advice Jeff Hilton, co-founder and president of Utah-based marketing and branding agency Integrated Marketing Group (IMG), might give your company if it took of its services. He's an expert in the business of branding ingredients and has assisted companies like Sabinsa, Pronova, Embria Health Sciences and BioLogic Health Solutions develop their branded ingredient strategies.
"If you're in the commodity ingredient category, branding may be of little value to you," Hilton observes. "Branding denotes added value for an ingredient, but if you don't have that added value behind your ingredient in the form of intellectual property or patents or a lot of science and technical differentiation, then you have to ask yourself just what is it that you are branding? Suppliers need to think carefully about the pros and cons of what it takes to make a successful brand. It's not always the right strategy."
He adds: "A branding programme is a long-term proposition, and it takes time to build awareness. Most branded ingredients go for a higher-end image. You've got to have a story to tell, and you need to think very carefully about how you are going to tell that story." There are many branded ingredient success stories from one of the first in Zila's ester-C; to Cognis' and Cargill's sterol ingredients, Vegapure and Corowise, respectively; to any number of DSM ingredients; to Lycored's trailblazing Lyc-O-Mato lycopene.
Illinois-based SourceOne specialises in supplying ingredients to the supplements industry but also has food customers. Its vice president of business development, technology and science, James Roza, says ingredient branding is vital in an increasingly sophisticated industry.
"There was a time when you could establish consumer acceptance through anecdote or personal testimony," he notes. "While these are still important factors, they have given way to hard science because the products we sell impact people's health. Consequently, safety and efficacy are of paramount importance. Branded ingredients have a cache that's based on perceptions, which are born of scientific or technological research, marketing, consumer awareness and value-added aspects. Getting your customers to associate a trade name with an ingredient that symbolises elements such as safety, quality or efficacy sets your product apart from similar products in that same category."
SourceOne's flagship ingredient, Sytrinol, extracted from palm fruit and citrus fruits and marketed for its heart-health benefits, has proved most successful, and its patented proprietary combination is co-branded in supplements from the likes of GNC, Jarrow and Nature's Way.
New Zealand multinational supplier Fonterra is at the beginning of the ingredients-branding cycle with its dairy protein crisp called Powercrisp. Dairy protein crisp business manager Anthony Lawler says Fonterra understands the level of commitment required and is supporting PowerCrisp with a large B2B and B2C media spend, as well as targeting opinion leaders including those within nutrition bar, snacks and cereals companies it views as potential clients. A multifaceted PR campaign, direct marketing and strong trade-show presence is also under way.
California's Cyvex Nutrition has so many branded ingredients, it selects a handful each year to throw its marketing weight behind. "We are confident in telling that story for each of our ingredients. Brand marketers, retailers and consumers are all made aware of Cyvex's quality and science that ensure the integrity of the product," states director of marketing and sales Charlene Lee. "A brand can tell a compelling story of origination, scientific research and its unique bio-personality, so that consumers may more easily understand why they are taking it. It is up to the brand manufacturer to know to whom the resulting product is targeted — what the audience's specific motivating factors are for purchase and repeat use, then to tailor an innovative awareness campaign that stimulates purchase and retrial."
New Jersey supplier Pharmachem employs a variety of techniques to reach its target audience. "I'm a strong believer in utilising health care professionals to communicate to the consumer via publicity in both print and broadcast media," says spokesman Tom McCartney. "I believe this is the best and most cost-effective?way to build the brand. If you can do nothing else, utilise publicity. Once the brand is established, I recommend using advertising to communicate unique benefits and product superiority."
Cyvex also employs a branded quality assurance system, NutriPrint, which validates its scientific claims and includes "identity testing of incoming raw materials, third-party certification by independent laboratories for active ingredients, microbiology, heavy metals, and even pesticide and solvent residue when applicable."
Says Lee: "All Cyvex-branded items have technical markers so that the compound can be validated, and that it includes the active ingredient the research shows is responsible for the intended beneficial physiological effect in the structure or function of the body."
Lifting the brand
Trina O'Brien, marketing and PR specialist for Colorado-based GTC Nutrition, notes branded ingredients must be thorough in researching all the potential applications they may end up in. "There is always a risk when introducing a branded ingredient (to a new food or supplement application), but the intention is always that the brand will succeed and ultimately lead in its category," she says. "The brand development process relies heavily on research, strategy, development and evaluation in the various matrices to ensure the highest rate of success."
"It is critical that the ingredient supplier provide all relevant and known information about ingredient formulation issues and the scientific documentation on formulation," agrees Colorado-based Oat Ingredients president and CEO Scott Dumler. But he notes: "The ingredient supplier loses control of the finished product and the potential impact of processing that is outside their knowledge and control."
Supplements ingredients specialist TSI's US operations president, Larry J. Kolb, believes branded ingredients lift the status of the whole ingredients business via their reliance on solid and communicable science. "Many consumers have been fooled in one way or another by false or misleading claims and they are sceptical," he says. "Confirming levels of efficacy that are tied specifically to science is a goal for a brand and this builds confidence in the industry (not only with formulators and consumers) but with brand manufacturers who are more inclined to build products that meet an efficacious dose, and that's what's needed in our industry."
He says ingredients suppliers could deliver on both the food/beverage and supplements fronts, even if the requisite expertise has to be outsourced. "Building supplement ingredients into foods is a process that requires a different skill set than what your typical supplements formulator possesses. I've collaborated with food labs that assist us when we attempt to address delivery through specific food systems."
Get all this right and you could, as Hilton observes, do an Intel or a Splenda, and own your category. Or at least dominate it in a very rewarding way, on many levels.