vendredi 30 juillet 2010

"CONCENTRATED DOSE" IS REDEFINING FOOD & BEVERAGES

CONCENTRATED DOSE

New Nutrition Business July 2010


The “daily dose” or “concentrated dose”

format has become one of the defining

product formats of the global nutrition

business – in Asia at least, where it is long established.

But in the West it is still an

embryonic concept and one most marketeers

continue to shy away from.

The concept of a “concentrated dose”

– meaning a high, and effective, dose of

an active ingredient in as small a package

as possible (for example a beverage in a

1.7oz-6oz or 50ml-180ml package) – has been

growing in popularity in Europe over the last

decade, and the idea is now, at last, taking off

in America, after years of resistance to the

concept from marketers.


PROVEN TRACK RECORD IN LAUNDRY

PRODUCTS

It’s a format that achieves differentiation

and premium pricing, and reassures

consumers that they are getting a guaranteed

“concentrated dose” of the effective

ingredient that provides the benefit they are

looking for.

It’s a compelling idea and one with a

proven track record – “concentrated doses”

have long been established as one of the most

powerful concepts in consumer marketing.

In laundry powders and liquids for example,

products that offer a “concentrated dose”

have been redefining the market for a decade.

The reason for this development is a very simple one,

as a senior Unilever executive was quoted as saying:

“Consumers are looking for convenience

and ease of use. Convenience is the big trend

as consumers’ lives get more hectic.”

As a result of the willingness of companies

such as Unilever and Proctor & Gamble

to respond to consumers’ needs for ultraconvenient

products, in the $34 billion (€27

billion) global laundry powders and liquids

market “concentrated dose” powders and

liquids have grown to a 35% market share, a

retail sales value of $9.5 billion (€7.6 billion).


NEGLECTED OPPORTUNITY IN FOOD AND

DRINK

“Concentrated dose” is an opportunity that

has been neglected by all but a few food and

beverage companies. However, that is slowly

beginning to change.

On a conservative estimate, global sales

of concentrated dose beverages are, at retail

prices, already $8.5 billion (€6.9 billion), of

which probiotic dairy and energy shots are

the single largest segments.


This change is driven by three very

compelling factors:


1. Differentiation through

packaging: Good packaging, particularly

innovative packaging, is crucial to creating

successful health propositions in increasingly

over-crowded markets. At its best, packaging

supports the brand in asserting its difference

from the competition. It’s the best way to

catch the consumer’s eye and earn premium

prices and better-than-average profit margins.


Innovative packaging performs several

important functions:

• It signals to consumers that “this is

something very different”.

• It can be used to mask a price premium.

It is a good way of achieving high

margins since consumers have no

similar existing products to function

as a comparison. Using packaging,

companies can create new price points

and achieve much higher selling prices

for their products. In particular, selling

in single-serve packages makes it very

difficult for consumers to easily compare

prices, whereas putting your new product

in a standard 1-litre gable-top carton

makes it look like every other brand on

the shelf and enables consumers to easily

compare prices between your product

and regular products.


• When you use packaging innovation

to create a new category then you are

defining the direction in which many

of your competitors must go and you

are defining the packaging format they

must adopt. You are in effect establishing

your credentials as a market leader and

innovator.


2. I-Nutrition: We live in an era in

which there is an increasing desire for

customization to meet individual needs. It

applies across all categories of products,

and one of the best examples is the iPod

or the iTouch, which enable an individual

to carry around with them thousands of

their favourite pieces of music and listen to

them alone, through a set of headphones,

whenever and wherever they like. For our

ancestors music was a social and collective

pleasure, with people coming together with

friends, relatives or fellow villagers to enjoy

the same music together, as a group. Today,

thanks to technology, its enjoyment is more

often a solitary, individual activity.

So too with food. As a result of longer

working hours, greater social and geographic

mobility, greater social isolation (33% of

households in Amsterdam are single-person,

for example, and 25% in Australia) and the

breakdown of traditional family structures

and meal occasions, more and more people

eat alone.

At the same time, even where people live

in traditional families, their food choices are

dictated less and less by custom, tradition

and family and more and more by highly

personalised views about health and nutrition

and a desire for products that meet an

individuals’ own health needs – a result of

the huge attention given to diet and health

by the media, where you will find thousands

upon thousands of articles in magazines,

newspapers and on websites relating to

health. It sometimes seems that almost every

media source offers a “nutritionist” giving

advice.

As a result of the flood of what is often

conflicting advice, people have given up on

trusting experts and have decided to instead

form their own views about what works

for them as individuals, which means that

consumers are increasingly customising their

nutritional choices every day. The 45-year-old

mother drinking a dairy drink to boost her

bone health, for example, or her husband

consuming something to keep his cholesterol

level down, are both making individual

choices which might not be seen as relevant

by any other family members.

In short, we live in the era of I-Nutrition,

in which – when it comes to health – singleserve

packages have more appeal than family

packages.


3. Better sales, better margins,

better profits: If neither of the above

factors is persuasive enough, then the one

that should be is that the few companies

who have adopted the concentrated dose

packaging format have found that the format

delivers:

• Higher sales

• Increased profit margins

• New consumers who are loyal, with

repeat purchase rates of 80% and above,

and willing to pay premium prices even

during recession


WHAT THIS MEANS FOR INNOVATION

Customisation towards individual nutritional

preferences is not only a strategy worth

adopting by companies planning to develop

their presence in health, in many cases it is

the only strategic choice available.

Every company that’s looking to target

particular health benefits has to consider, as

part of their innovation process, whether,

and how, it can produce a product that could

deliver the maximum effective dose of a

health ingredient in a small and thus ultraconvenient package.

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