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October 1, 2008
The essentials of branding ingredients
What are some elements of a successful branded-ingredient campaign? Science? Intellectual property? Designed logo? Consumer research? Get in on this conversation with leading suppliers who discuss the many ways manufacturers can tap into suppliers' know-how and offer improved consumer packaged goods.
PARTICIPANTS: John Alkire, president, AHD International; Kristina Williams, vice president of marketing & sales, Natraceutical Group; Suhail Ishaq, vice president, BioCell Technology; Karen E Todd, director of marketing, Kyowa Hakko USA; Paul A Willis, president/CEO, Cypress Systems; Ron Udell, president/CEO, Optipure Brand/Kenko International; Lori Covert, vice president of marketing and communications, Ocean Nutrition Canada; Bob Green, president, Nutratech; Ali Patel, BENEO-Orafti; Sarah Sullivan, senior marketing manager, Martek Biosciences; Pam Stauffer, global marketing programmes & communications manager, Cargill Health & Nutrition
Does a branded ingredient connote superior ingredient quality compared to a commodity ingredient? Is that always the case?
John Alkire: Generally, a branded ingredient does connote higher quality because there tends to be some IP or research support for the ingredient that would warrant setting it apart from other offerings. High-value branded ingredients must have several points of differentiation to command long-term success. That does not mean that success will come easily, either. It takes money and commitment from the top of an organization to successfully promote the unique benefits of the ingredient and educate consumers so that they seek out products containing that ingredient specifically.
Kristina Williams: The expectation on the marketplace is that branded ingredients are held to high quality standards. To avoid tarnishing the brand, it is important to meet this expectation, and quality assurance and control are therefore essential. The quality of a commodity ingredient might not necessarily be lower than a branded ingredient, but branded ingredients stand to lose more if the quality is not upheld.
Suhail Ishaq: Just because an ingredient is branded doesn't necessarily mean that it is superior to the commodity alternative. The real litmus test for determining the superiority of an ingredient lies in the clinical study and IP portfolio backing the branded ingredient. Good science, high brand visibility and strong IP are the ingredients for success, no pun intended! Our flagship ingredient, BioCell Collagen II, clearly meets this criteria, which is one of the reasons why it is a category leader in the collagen and hyaluronic-acid space.
Karen E Todd: I believe that giving a brand name to an ingredient denotes that your ingredient is different or superior from others in the marketplace. A brand can be superior in quality, functionality and scientific support, compared to commodity-type ingredients. It is not easy to simplify some of the scientific messages, but if you can make it so easy that a fifth grader can understand it, you have succeeded.
Paul A Willis: I agree that a branded ingredient should hold a superior position over other related commodity ingredients. For the brand to have 'added value' for our customers, it must offer a differentiated position in superior product quality, solid clinical research, and the ability to build a strong market position and consumer recognition. There needs to be a legitimate answer as to 'Why should I brand with your ingredient?' 'What is the value of your brand and what is the message?'
Ron Udell: Buyers should be leery. It's easy now to register a name, so any brand-name ingredient does not immediately translate to superior quality. Depending on the ingredient, don't discount the quality from a generic supplier. Buyers need to do their homework on their suppliers — it's as simple as that.
Does a branded-ingredient name and its attendant quality make it?easier to sell it at a premium price?
John Alkire: Cost is still the driving factor for most major business decisions, so we tend to look at the cost per 30-day supply of a product to the consumer. It is also important to remember that even truly innovative offerings can be knocked off and priced similarly to commodity ingredients. That is where it becomes increasingly important to protect patents and other intellectual property so there is a solid point of differentiation to manufacturers.
Karen E Todd: Having a branded ingredient does not always mean that you can demand a premium price. You need to have 'added value' behind the branded ingredient to differentiate from other commodity products. The 'added value' or substance a brand provides can be the marketing story, scientific support, quality and added functionality that your brand provides. Suppliers need to establish a need for the added value behind the ingredient in order for consumers to want to take/consume their products.
Kristina Williams: Commodity and branded ingredients target two different markets. Because of the cost to conduct clinical research and other R&D, branded ingredients often sell at a premium price. Consumers are increasingly questioning the efficacy of products and many manufacturers are therefore choosing to pay the higher price associated with substantiated ingredients. Depending on the price sensitivity of the application, manufacturers might however choose a commodity product.
Lori Covert: The MEG-3 brand certainly adds value for our customers because our brand has had significant consumer exposure. However, we do not charge a price premium for our ingredient, as our objective is to increase market share and build a strong base of loyal, satisfied customers.
Paul A Willis: You hope?the brand and supporting position warrants a price premium. In order to ask a higher or premium price for your branded ingredient, it is fair for the consumer to require a superior position. If this is not the case then?your branding position is little more than 'marketing smoke and mirrors' and most likely short lived.
Bob Green: Most quality-minded manufacturers want an ingredient with scientifically supported potency, purity, efficacy and reliability — and they're willing to pay a bit more for these proven benefits. But, unfortunately, our industry is also plagued with companies that are simply out to make a quick buck and are purely price driven — and not particularly concerned with quality.
Ron Udell: Simply having the brand name does not make it easier to sell. It does, however, give it a means of standing out on its own. But, for only a moment. The ingredient really needs the quality and the science to back it up, and to support the marketing of that identity.
In order to introduce a new branded?ingredient, does there need to be a robust scientific and IP portfolio to back up the ingredient's safety and efficacy?
Karen E Todd: Not always. This goes back to establishing a story behind why a consumer would want to take a particular product. You don't always need new science or IP protection to get your message across to consumers without new or additional science.
Suhail Ishaq: Certainly, any serious effort to launch a branded ingredient should be well planned. The branded ingredient should be highly differentiated, supported by proprietary science and a strong IP portfolio.
Paul A Willis: Your branded ingredient must have a robust quality, science and/or IP position. The brand must have a solid foundation to support your marketing position. There are several companies that can throw a boatload of money behind a branding campaign, but at the end of the day, the brand and product must have a proven value in the marketplace.
Ron Udell: No. There are some companies that rush to market, take a generic and give it a name, but do not have the platform to support the ingredient. Again, this is why it's imperative for buyers to do due diligence when seeking ingredients for new formulations.
What are some elements of a successful branded-ingredient campaign?
Kristina Williams: For a successful branded-ingredient campaign, you need to identify the target market and create an appropriate campaign that will appeal to this market. The logo must be clear and distinguishable. Consumers and manufacturers want to know more details regarding efficacy and scientific substantiation. To ensure the uniqueness of the product and protect it against competitors, the brand should be trademarked and the process protected by patents.
John Alkire: The key to LuraLean's success lies in its extensive library of more than 100 scientific studies, all of which were conducted using the same grade/composition of LuraLean available to manufacturers, as well as at the recommended dose for finished products. Fourteen safety studies also confirm that it is safe for human consumption at the recommended dosage.
Bob Green: It is also important to partner with manufacturers who use Advantra Z in their formulas. For example, companies that place the Advantra Z logo and patent/trademark statement on the product label can receive a marketing allowance. In addition, as a certified vendor for many manufacturers, Nutratech can provide all necessary testing documentation, saving both time and money. We also support manufacturers with a complete array of marketing and educational materials. In addition, we run ongoing advertising and public relations campaigns that publicize and profile consumer products that feature Advantra Z.
General industry advocacy is also essential. Nutratech is involved with issues facing the natural-products industry, and is active with our industry associations such as the American Herbal Products Association and American Botanical Council.
Ali Patel: Being part of the Beneo Program provides manufacturers with some major benefits. These include scientific credibility with a number of accredited health claims, a vast knowledge and understanding of consumers and the functional market that can guide food producers when they are launching a new functional product containing the Beneo ingredient, and the network of communication channels that are at BENEO-Orafti's disposal.
Sarah Sullivan: We employ a number of tools from public-service announcements and broadcast advertising to print advertising and media outreach, to trade and medical show participation, and new media tactics to support our brand. Of course, one of the most valuable tools we employ is the usage of our life'sDHA logo on partner products. The success Martek has had in infant formula also shows consumer acceptance and the willingness to pay a premium for foods with added nutritional value. In addition, we offer formulation assistance and access to our database of clinical studies. Martek's DHA comes in oil or in microencapsulated powder forms. There are also additional forms of DHA in the developing stage. All of these formats will increase the convenience for companies to incorporate DHA into their products and improve the shelf life.
What are some of the considerations when coming up with the name? For instance, a branded-ingredient name might symbolise elements such as safety, quality, efficacy, origination, unique bio-personality or the health condition it addresses.
Pam Stauffer: Starting with the consumer is key to developing an ingredient brand. It is critical to understand how your ingredient brand can add value to the end product, or why should manufacturers use up the space on their label? Extensive consumer research in the US and Europe led to a clear articulation of the CoroWise brand value proposition. We gained valuable insight from how to name the product to how to design the logo to what kind of imagery and language should be used on the end product. Because of this, the CoroWise brand has earned its way on to packaging and plays a key role in some of our partners' marketing campaigns. A recent example includes Wyeth's Centrum Cardio TV advertising campaign that illustrates THE difference between Centrum and Centrum Cardio IS CoroWise.
Ron Udell: The name has to be easy to pronounce and remember. We like to have our branded ingredients reflect what the key benefit is. For example, Gluco-Help reflects the connection between OptiPure's product and glucose-management properties.
Ingredient naming is challenging. There are more branded ingredients on the market, month after month, that target specific conditions. So, in some cases, we look to the root word of where the ingredient comes from. In the case of Loquoro, our ingredient for healthy blood-sugar management, we crafted a rather exotic name based on its derivation — loquat leaf.
Karen E Todd: We have a few good examples of this: our Cognizin brand name brings to mind 'Cognition or Cognitive Health.' The tagline, For the Evolution of Your Mind, was developed to explain that it is more than just a brain-health ingredient, but it is part of a healthy lifestyle.
The powerful image of the man holding up a surfboard embodies physical strength, mental fitness, and overall wellbeing. The earth, sun and sky are the perfect environment to represent mind, body and spirit. The vivid illustration of mental and physical power embraces a well-nourished, rejuvenated mind and body.
Kristina Williams: Our branded ingredient is a highly concentrated soluble fibre called Viscofiber. Since all fibres are not created equal, and achieving multiple health benefits is connected to the fibre's ability to create viscosity, we have tied the product name to this attribute.
When selling your ingredient to manufacturers, must your ingredient logo appear on the finished-product packaging? Are manufacturers ever hesitant to do so? Why or why not?
Kristina Williams: We recommend manufacturers use our logo since this is a win-win situation. When we market Viscofiber, we indirectly market their product as well. Additionally, the advantage is the reference to the clinical studies. Not all manufacturers choose to use our logo, often due to space limitations.
Lori Covert: Many of our customers co-branding with us see the value in the MEG-3 brand. Co-branding also enables them to participate in our co-operative marketing programs. However, we do not require our customers to co-brand with us.
Does the science/research/IP make its way into all your communication efforts, including advertisements?
Ron Udell: Yes. Good quality science sells. It provides confidence and security down the line and straight to the consumer, where it counts most.
Paul A Willis: Because we are involved in 'Gold Standard' double-blinded, randomised, placebo-controlled clinical trials, we have to be very careful not to directly link SelenoExcell to any specific cancer-prevention trial using SelenoExcell as the intervention agent. This kind of advertising that directly referenced a specific trial using SelenoExcell would jeopardize the blinding and integrity of the trial, and not have the support of NCI. We are allowed to utilise advertising statements that outline our general cancer-prevention research position with NCI and build on the fact that SelenoExcell has been standardised with NCI and is supported by a Clinical Trial Agreement.
In addition, selenium is the only ingredient supported by an approved Qualified Health Claim from the FDA for the prevention of cancer. This FDA-approved claim and the supporting clinical research position is a solid foundation to build a branding position for SelenoExcell.
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