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In a tight economy, new products need 'benefit-immediacy,' Natural Marketing Institute concludes

Despite optimism for the strength of the natural products industry during this recession (see Fi Dec. 1) and despite record visitors at the Expo West trade show (see Fi March 10), there is no doubt that the economy "is changing consumer behavior on many levels," the Natural Marketing Institute (NMI) reports.

As part of its latest research report, titled "Shopping for Wellness in a Tight Economy," NMI surveyed more than 12,500 consumers via a variety of NMI proprietary consumer databases throughout 2008 and early 2009.

Fi sat down with Maryellen Molyneaux, president of NMI, recently, to find out what the findings mean for companies planning or preparing to launch new products. This is what she said.

Fi: What should product developers keep in mind as they brainstorm or prepare new products?
Developers always need to follow a process, and the first step is looking at the landscape. From the point of view of consumer need, what health conditions are they treating, and within that, what is not being provided for that need? These are your white space opportunities. It is possible to look at white space opportunities by category, demographic and psychographic segmentations. When you can address consumer need, both physical and psychological, you will have a better market success with your launch.

"When people are pulling back, you need to reach their physical and psychological needs with a product that has specific benefit-immediacy. As a consumer, if I can see feel or touch the benefit, or if there is evidence I am receiving the benefit, I am much more likely to try or to continue using that product."

These things are always true, but it is particularly applicable right now. When people are pulling back, you need to reach their physical and psychological needs with a product that has specific benefit-immediacy. This is one of the key differences I am seeing this year in all functional areas. As a consumer, if I can see feel or touch the benefit, or if there is evidence I am receiving the benefit, I am much more likely to try or to continue using that product.

Conversely, the further out the benefit-immediacy, the more likely I am to give it up in a tight budget circumstance. For example, if I don't see it or feel it right now, I may think: "I can do this differently right now, less expensively, or I can wait to add this to my health regimen when the recession is over."

Fi: How long will these kinds of changes in consumer shopping patterns last?
Molyneaux: For products ready to launch now, or within the next 12-18 months, benefit-immediacy will be very important. Beyond that, there will be more opportunities for products with more long-term benefits.

But I expect there to be permanent changes in how consumers shop. One thing that has permanently changed is relevance — how consumers talk about how a functional product is relevant to them.

Consumption is being replaced with sustainability, possessions with purpose and perceived value with real value. It represents a total realignment of consumer behavior based on a reevaluation of priorities.

Fi: Can you think of any products that have had a particularly successful launch in the current economy?
Molyneaux: One mainstream example that has had tremendous success in the past year is the re-launch of FritoLay's SunChips, because it hit the sweet spot fusion of health and sustainability that was relevant to not only the healthiest consumer segments but to all. They cleaned up their product ingredients, took care of fat and cholesterol, made it whole grain, and then they re-launched it with a sustainability message about solar power.

In the first year of the re-launch, their sales rose 38 per cent because they hit the target of healthy consumers. More importantly, they over-indexed in dollar volume and repeat trial with the leading segment of healthy consumers — those who spend more and become brand loyal. They were speaking their language: a basically healthy product that tastes good, and oh, by the way, it's good for the planet too! Now they have the opportunity to build on that message with this leading edge consumer segment.

Fi: How about an example from the functional category?
Molyneaux: Dannon had a successful launch of Activia, and one of the reasons is because of its benefit-immediacy. Consumers know it is working, they enjoy the taste and get the benefit of a yoghurt they like, and they get immediate benefit of improved digestion, improved bowel habits, and for some, improved skin complexion, due to the yoghurt's multiple probiotics. Interestingly, they sold the benefit and never talked about probiotics!

Fi: So if a company has a product ready for launch next week, and it does not have strong benefit-immediacy, should they delay their launch?
Molyneaux: Not at all. Hopefully, they have done the process, the concept test, the volumetric estimate – they're going into the launch fully aware of what it is they're going to get back now, in this type of economy. If the company has the wherewithall to do the launch, they might even have an advantage launching right now, because if they wait, their competitors may be launching once the market gets better. By then, they may have already won over consumers by being smartly positioned.

Concept testing in a market like this is truly key. When things get tough, some companies pull back on the research of their new products, thinking: "We need all that money for the launch." That's a mistake, as in-market mistakes are much more costly.

Fi: In times of economic downturn, we often think in the negatives: What is difficult, what people don't have. But might there be opportunities in this recession? Might there be new doors that are opening, that weren't open before?
Molyneaux: One thing I am hearing more often in qualitative interviews is consumers saying things like "I'm going to eat that really good food with a functional benefit for me and stop taking a 'specific' supplement because I am probably getting enough in the food."

For information on NMI's report "Shopping for Wellness In a Tight Economy," contact: [email protected] or visit

Consumers are also looking for products that provide more than one benefit. Can we simplify things by providing multiple benefits for related conditions in one product? For example, one consumer of Promise Super Shots recently related the desire to get two or three benefits in one shot. What should those benefits be? How do they work together? Those are all questions that can be answered.

I think the challenge to marketers and product developers is thinking more outside the box, and thinking along the lines of benefit-immediacy or multiple benefits are real opportunities.

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