Marketers eager to profit from the surging demand for soy products are wasting millions of promotional dollars in categories that don't match consumer desires, according to research from FIND/SVP.
Few "alternative foods" have had as much success gaining a stronghold in the mainstream markets of the Western world as soy. As the soy market grows and new soy-based foods and beverages are introduced, mergers and acquisitions are commonplace and advertising budgets have multiplied many times over.
But according to the report, "Main-streaming Soy: Seize The Opportunities With Key Profit Strategies," this very success has led some marketers to misspend millions of dollars, in a market estimated to be worth $8 billion in the US alone by 2007.
With new soy products ranging from breads and breakfast cereals to yoghurts and meat alternatives, the competition among soy products has never been more fierce. But with only limited shelf space available, the need for soy marketers to develop sophisticated strategies to maximise exposure for their products has never been more urgent.
Know The Market
The report suggests marketers must grasp the following four points if they are to garner their products' full potential:
- Know what the next major soy foods category will be—dairy alternatives, meat alternatives, snacks.
- Identify where the market potential lies within the overall population and create marketing efforts to overcome consumer preconceptions, misconceptions and fears.
- Know how to relay the health benefits of soy products to consumers, including how to make health claims work for your company (if they are permitted in your jurisdiction).
- Know how to meet retailers' needs and know which products are really selling.
A shake-up may already be on the way as major food and beverage companies such as Kraft, Heinz, Kellogg's, Bestfoods, Dean Foods, General Mills, Coca-Cola and ConAgra enter the soy market. Major ingredient suppliers such as DuPont and ADM have launched branded soy ingredients campaigns that are raising the profile of soy products in the eyes of consumers with "Intel Inside"-style campaigns.
The balance of soy products is also shifting from 'old-school' products like soy milk and tofu to products like nutrition drinks and infant formulas. The idea behind most of these foods is the same—attract consumers who aren't lactose-intolerant or vegetarians, the so-called "un-soyed."
"Health concerns are the context for consumers trying soy—they know they need it for health reasons—so with that as a given, they want the best-tasting product they can find," the report states.
In the UK, DuPont Protein Technologies is involved in a joint venture with Australian health food company Sanitarium (So Good International) that aims to do just that. So Good decided to emphasise good taste and sell its milk products only in supermarkets to maximise mainstream exposure.
Another DuPont joint venture, this time in the US with General Mills (8th Continent), follows a similar strategy in targeting the mainstream. US market leader White Wave, recently acquired by Dean Foods, is sold in health food and mainstream stores.
In FIND/SVP's consumer breakdown, these products are targeting both 'cutting-edge wannabes' (consumers willing to try new things once the real 'cutting-edge consumers' have given it their seal of approval); and 'beyond wannabes' (those who may be completely unfamiliar with these products).
Soy product manufacturers in the UK have recently benefited from a decision by regulators to allow health claims on soy products. Similar claims have been allowed in the US since 2000, when sales doubled. Research has indicated up to 40 per cent of people are more willing to eat soy foods if they carry an authorised health message. The same survey found 69 per cent were pleasantly surprised by the taste.
Soy product manufacturers could also benefit from fears about GMO and mad cow disease, the report notes. Researchers, such as those at ADM, are conducting significant work, exploring soy isoflavones' potential as a cure for cancer and alcoholism.