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.
