By Len Monheit
Attending last week’s Nutracon Europe was a very interesting experience. Observing the global constants of the dietary supplements / functional food current business reality, superimposed on local market drivers and issues was useful in understanding the developments and drivers for a series of key platforms that are fundamental for industry growth, wherever in the world one resides.
In the upcoming weeks and in my blog, I’ll describe some of the key realizations from the intensive two day event, but in this week’s column, I wanted to develop a thought that has its roots in a Nutrition Business Journal survey of manufacturers which indicates that more and more, they are looking at developing condition targeted products, rather than ingredient directed or driven. This development has, I believe, some serious implications and eventually ties to the question of strength of ingredient brands and ultimately ingredient brand strategy.
It has been argued that there is a disconnect between ingredient science and consumer comprehension of the real and substantiated benefits of these functional ingredients – a gap that many believe is the fundamental responsibility of the ingredient companies to fill with category and brand specific education. If this is in fact the case, doesn’t the manufacturer’s move to health condition oriented products, rather than focusing on the ingredients themselves, make it even more challenging for an ingredient-specific message to be delivered? And if the mantra of ‘keep it simple’ is to be observed, doesn’t this provide even less time for a single ingredient element to be featured or promoted in any way?
Yet ingredient companies continue to pursue that ‘Intel inside’ ideal. They continue to attempt to create a resonating message that can be effectively delivered to consumers – about their proprietary ingredient and its unique attributes and benefits. And the debate goes on about whether there’s room on the label and in consumer minds for that much brand. Particularly in the case of strong finished brands, especially in the functional food category, one would argue that the identification and promotion of an ingredient brand is a distraction and over-complication. Co-branding, some experts argue, dilutes both brands. If that is the case, is a consumer branding exercise a waste of time and money? With strong food brands it’s really difficult to believe a co-branding approach is viable. Not to say the money involved would be prohibitive to pretty much any ingredient company in the world.
One figured that across the pond, things would be different, or at least maybe they'd have figured this branding thing out. But after a presentation and certain amount of defense of its branding strategy by Lipid Nutrition, and vocal debate (formal and informal) following, and its Pinnothin(TM) branded ingredient at Nutracon Europe, it became quite clear that on both sides of the Atlantic, this debate rages on.
Some of those in the audience, myself included, settled on an alternative strategy.
Perhaps a portion, at least of these funds and efforts could be redirected to education and collective category building and the branding be intended towards trade differentiation only? That way, what is increasingly believed to be a key aspect of the ingredient companies’ contribution, category building, can be performed. And presumably, all those leaders in the marketplace, those vested in the sector, (often with strong trade brands), will participate in this exercise and be recognized for it. And those not participating (and not part of trade associations) will also be recognized for their lack of contribution and therefore not favored in the marketplace because of their lack of support.
And this brings us to what I believe is a fundamental market flaw - When buying decisions begin to be based more on support for the market in general and less on price, the issues described on last week’s Associated Press articles on ingredient substitution and adulteration will be squarely behind us and not an ongoing issue, despite some trade association protests as to their current existence.