Niche foods sell well if price is right

Condition-specific foods are likely to remain niche products for some time, but the performance of Coca-Cola?s new Minute Maid Premium Heart Wise Orange Juice will be key to future success, according to some industry experts.

Colleen Zammer, principal of food and beverage technology at Massachusetts-based consultancy Tiax, said: ?We have seen little to no activity from our clients in developing condition-specific food and beverages. Instead we are seeing more products focused on wellness in general, or weight management.?

According to industry analyst and editor of New Nutrition Business Julian Mellentin, the only way these products could become mass-market is for prices to fall—and consumers? knowledge to improve.

?Specific foods could do well as niche products targeted at people with diagnosed conditions or at high risk of medical conditions. But it can be tricky when people don?t know whether they have a problem or not.?

He cited a study on cholesterol carried out by Pfizer that found most people don?t know what their cholesterol level is.

Lowering cholesterol is a benefit that appeals to large numbers of people and Coca-Cola has been able to capitalise on this with its Premium Heart Wise orange juice, according to John Roddey, director of innovation for juices, teas and emerging brands business units at Coca-Cola North America.

?We did a lot of research before launching the product, and we know that over 105 million people have high or borderline high cholesterol—that?s basically one adult in every US household. It was a mainstream opportunity we were able to capitalise on.?

The product has only been marketed since the beginning of the year, but already its sales have ?exceeded our expectations and targets in terms of market share,? Roddey said. ?Even after only five months of marketing, it is one of our top-selling SKUs. It is well on its way to being one of the more successful product launches we?ve had in years.?

But he acknowledged that not every functional benefit can be translated into a mass-marketed product. ?That?s especially true for orange juice—which is premium real estate in the chilled section. The functional benefit has to be broad enough to appeal to large numbers of people.? The key to Premium Heart Wise?s success may be the fact it sells without a premium—unlike most other condition-specific foods. ?Minute Maid is eating some ingredient costs and their sterol supplier, Cargill, has also dropped their price—both probably in the hope of getting volume,? Mellentin speculated. ?This is an experiment to try and propel sterol-based foods into the mass market.?

Zammer is optimistic about the future of condition-specific products. ?There have been some enquiries for clinically backed ingredients that companies can license and leverage for the right benefit,? she said. ?I have seen this more since Danone launched their yoghurt drink in the US, DanActive, which makes an immunity claim on the package.?

Lynea Schultz-Ela of A Natural Resource, a Colorado-based consultancy firm, agreed. ?As the baby boomers age, the conditions they are seeking relief from are very specific to ageing—just as one example, the stabilisation of blood insulin levels,? she said. ?Inflammation, prostate, menopause, sexual dysfunction and weight management are all popular in the supplements sector. If you also look at the growth trends in ingredients sales for foods, that also indicates condition-specific formulas are lucrative.?

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