N EW N UTRITION BUSINESS · N EW N UTRITION BUSINESS ... Eugenio Perrier, director of marketing for ... pays off for Yakult 28-29 DIGESTIVE HEALTH: Sunsweet success

N E W N U T R I T I O N

B U S I N E S Swww.new–nutrition.com NOVEMBER 2007 ISSN 1464-3308VOLUME 13 NUMBER 1

T H E J O U R N A L F O R H E A L T H Y E A T I N G , F U N C T I O N A L F O O D S & N U T R A C E U T I C A L S

Pages 16-20

Continued on page 4

Pages 28-29Page 3

Red Bull far from being tamed in

Europe

Sunsweet success in digestive

health

With the introduction of Alixir, a complete family of 10 functional foods and beverages billed as Il segreto del vivere meglio (the secret of better living), Italian food giant Barilla is reviving a strategy that we haven’t seen in the West since the early days of functional foods. Barilla has spent €10 million ($14 million) and three years developing Alixir and plans to spend the same amount again over the next 18 months on a “360º communications campaign”. The company is going all out to persuade health-conscious Italians aged over 35 to regularly consume all 10 Alixir products as part of a programma alimentare (food programme).

Targeted at four health areas – heart health, immunity, anti-ageing and digestive health –the Alixir range is currently being rolled out to Italian supermarkets and consists of the following products (see Table on page 4 for full descriptions and prices):

• Products offering a heart-health benefit:Pan di Brioche – Brioche (200g) Pane ai Cereali – Whole-Grain Loaf (400g)

• Products offering an immunity-

enhancing benefit:Snack Biscotto con Cacao – Cocoa Biscuits (8 pieces/128g) Fiocchi di Cereali con Cioccolato – Chocolate Cereal Flakes (4 servings/168g)

• Products offering an anti-ageing benefit:

Barrette di Cereali e Frutta – Cereal & Fruit Bars (4-pack/132g) Bevanda ai Frutti Rossi – Red Fruits Beverage (250ml) Té Verde – Green Tea (250ml)

• Products offering a digestive-health benefit:

Biscotti – Biscuits (6 pieces/300g)Cracker – Crackers (8 pieces/340g)Bevanda Arancia e Carota – Orange & Carrot Juice Drink (250ml)

At the press conference announcing the launch in late September company president, Guido Barilla, said:

“We have tried to respond to a need; people want to have long lives and realise their full potential … Alixir is a project that brings together the food industry and scientists, not to create a new need but to provide Italians with a balanced proposition with regard to taste, benefit and price.”

Eugenio Perrier, director of marketing for Alixir, elaborated on the price points Barilla settled on for the range:

“Alixir’s pricing reflects the same kinds of premiums currently commanded by functional dairy products.”

The range’s bold, black packaging gives the products a super-premium look and feel and “confers authority” upon Alixir products, Perrier said at launch, but just what that authority might be in is, like the packaging, opaque. No pictures of the foods within appear on the packaging, nor are the contents visible – there are only symbols representing the four health areas targeted by the range.

Many of our readers will find that Barilla’s new Alixir range looks eerily similar to the ill-fated Novartis Aviva range of functional foods, launched in 1999 in Switzerland, Austria and the UK. Aviva foundered within

Barilla tries to revive old strategy with Alixir

by Paul Vincent

Emmi’s bold plan to beautify Europe

NOVEMBER 20072

N E W N U T R I T I O N B U S I N E S Sw w w. n e w - n u t r i t i o n . c o m

C O N T E N T S & C O N TA C T S

LEAD STORY

1,4,5 Barilla tries to revive old strategy with Alixir

NEWS ANALYSIS

3 Emmi’s bold plan to beautify Europe

6 Minute Maid judges America ready for omega-3

7 Birds Eye offers ‘Good Mood Food’

NUTRITION RESEARCH

8 For healthy eyes, cut the carbs

8 GI & breast cancer

9 Omega-3 fats linked with lower risk of type 1 diabetes

9 Slaves to chocolate

10 Global waistline bulging out of control

10 Vitamin D nature’s painkiller?

EDITORIAL

11-12 Barilla – back to the future

13 European beauty

INTERVIEW

14-15 Chewing the better-for-you fat with Brian Wansink

CASE STUDIES

16-20 BEVERAGES: Red Bull far from being tamed in Europe

21-22 PRIVATE LABEL: Swiss private labels zero in on functional brands

23-24 STRATEGY: The secrets of the original little bottle’s success

25-27 HEART HEALTH: Blood pressure focus pays off for Yakult

28-29 DIGESTIVE HEALTH: Sunsweet success in digestive health

30-33 INGREDIENT: Does calcium need an extreme makeover?

NEW PRODUCTS

34-36 Functional & healthy-eating new product launches

IMPORTANT NOTICE

37 A polite reminder to our subscribers

NEW NUTRITION ON THE NET

38 Get the most from your subscription

NEW CASE STUDIES

39 Kids’ Nutritional Dairy: 10 Key Case Studies

40 Functional and Health-Enhancing Juices: 7 Key Trends

41 Danone: The World’s Biggest Functional Dairy Company

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Barilla ..................... 1,4,5,11,12,24Barr Soft Drinks ........................ 18Blendax ..................................... 18Calpis ........................................ 25Coca-Cola Co. ........ 6,17,18,19,20Danone ....... 3,4,13,18,21,23,24,29Despar ......................................... 4Dole ........................................... 28DSM .......................................... 30Ezaki Glico ................................ 26Emmi ................................. 3,13,21Glanbia Ingredients .................. 30GlaxoSmithKline ................. 16,18

Hartwall .................................... 16Health Focus International ......... 4Kagome ..................................... 24Kellogg ................................... 4,15Kamps ......................................... 5Kroger ......................................... 6Marigot ................................ 30,31Martek Biosciences ..................... 6McDonald’s ............................... 14Microsoft ................................... 19Migros .................................. 21,22Morrisons .................................... 7Nestlé ......................................... 21

Nisa-Today’s ................................ 7Novartis .................................. 1,11Ocean Nutrition Canada ............ 6Osotspa ................................ 18,20Parmalat .................................... 13PepsiCo .................................. 6,15Permira ........................................ 7Red Bull GmbH .... 16,17,18,19,20Sainsbury’s .................................. 7Somerfield ................................... 7Swiss Coop ................................ 21Subway ...................................... 14Sunsweet Growers ................ 28,29

TC Pharmaceutical ................... 18Tesco ...................................... 7,20Tonkin Consulting .................... 30Unilever .................................. 7,13Valio Dairy .................................. 3Waitrose....................................... 7Wal-Mart ................................ 6,30W.R. Grace ................................. 5Yakult Honsha ....... 23,24,25,26,27Zenith International ........ 16,17,19

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NOVEMBER 2007 3


N E W S A N A L Y S I S

Earlier this year we called the February launch in France and Spain of Danone’s Essensis beauty yoghurt one of the boldest moves in the nutrition industry in recent years. Essensis’ impressive debut turned a lot of heads, not least of which, it seems, those of the Swiss dairy Emmi’s R&D department: the company announced in October that its Beauty Case Sensitive Yogurt will be available in European supermarkets next spring.

Beauty Case Sensitive Yogurt will contain “Emmi Beauty Guard Complex”, a proprietary blend of skin-preserving nutrients claimed to protect and maintain the natural moisture of skin. Its ingredients include aloe vera, green tea extract (250mg per pot), milk proteins, vitamins B and C, biotin and folic acid. The yoghurt is low in fat (0.8%) and also contains the probiotic LGG, the most-researched probiotic in the world, which is licensed from Finland’s Valio Dairy. To reduce the calorie content, the product is partially sweetened with sucralose.

The new yoghurt will be available in four fl avours: Aloe Vera, Mango, Pomegranate, and Green Tea-Lime. Two pots of each fl avour are packed in a stylishly designed carton of eight 125g yoghurts.

At this stage, Emmi is not disclosing any specifi cs about the planned launch but corporate communications offi cer Monica Senn did reveal to New Nutrition Business that the company is still fi ne-tuning the product with its scientists and nutritional experts.

Emmi’s home market looks certain to be among the fi rst countries Beauty Case Sensitive Yogurt is launched in, however, as the company successfully introduced its fi rst nutricosmetic or

“skingestible” concept, Aloe Vera Sensitive Yogurt, there back in 2003.

Despite the slightly unconventional taste and texture of aloe vera, it has found a niche among female consumers who are familiar with the plant’s health and beauty benefi t from its use in cosmetics. Emmi was careful not to make bold claims on the packaging of its fi rst beautry yoghurt but next year it will be meeting Danone Essensis head on with a straightforward promise that its Beauty Case Sensitive Yogurt will moisturise, strengthen and protect the skin.

Following Danone’s lead, Emmi is mimicking the vocabulary and visual elements commonly used in the marketing of cosmetics, and the packaging of Beauty Case strongly uses visual cues that are found in skincare packaging. In a product leafl et distributed at the recent ANUGA trade fair in Cologne, Emmi makes the following claims for Beauty Case Sensitive Yogurt:

Nourishes the skin from inside

Our skin regulates the water and temperature levels of the body. Emmi Beauty Guard Complex nourishes the skin cells, ensuring their optimal functioning.

Supports optimal skin elasticity

The elasticity of our skin depends on the correct development of collagen as the basic element of healthy skin cells. Emmi Beauty Guard Complex supports correct development, so that the skin cells can build their structure properly.

Supports the skin’s own cell protection

As a result of environmental pollution, the skin is under constant attack by free radicals. Emmi Beauty Guard Complex provides the skin cells with the special green tea extract OM24, which strengthens the defence mechanism of the skin and effi ciently captures free radicals.

The front of the 8-pack sports text that translates as for healthy and protected skin and moisture – elasticity – cell protection.

While cross-category innovations are blurring the lines between food and cosmetics, the legislative framework still lags behind. For example, the new EU Health Claims directive on foods does not specifi cally regulate cosmetic claims, so it may ultimately be left up to the consumer to judge whether skincare yoghurts deliver their promise or not.

Emmi was reluctant to share any details about the science behind its Beauty Guard Complex formula at this stage. “We’ll be happy to address this question as soon as the project is fully developed,” Senn told NNB.

Emmi’s bold plan to beautify Europe

by Kati Leskinen & Paul Vincent

INSIDE EMMI’S BEAUTY CASE SENSITIVE YOGURT

Ingredients: Partially skimmed yoghurt with probiotic LGG culture, Milk protein, Agave juice, Sugar, Starch, Natural fl avouring, Green tea extract, Lemon juice concentrate, Vitamins B and C, Sucralose. Also, according to variety:

– Pure aloe vera– Aloe vera with strawberries & pomegranate– Aloe vera with mango & passion fruit– Aloe vera with orange & lime

Energy value per 100g: 253 kJ/60 kcal

See the Editorial on page 13 for more comment.

NOVEMBER 20074


18 months (see the November 1999 and March 2002 issues of New Nutrition Business). The parallel was certainly very striking for Peter Wennström, the respected Swedish-based brand strategy consultant who works extensively with functional food brands and ingredients across Europe and Asia.

“Alixir looks very confused – it’s like Novartis Aviva all over again,” Wennström told NNB. “It looks like a brand going in different directions. At first glance it looks super-premium with the black packaging design but there are “healer” [medicalised] symbols on them.

“I could hardly believe my eyes when I saw the symbols on the packaging. On one pack there is something that looks like a pile of worms – and then I realised they were using wheat to represent the intestines.”

Barilla’s foray into functional foods goes against the nature of its long-established expertise: simple, everyday food products like pasta, pastries and biscuits, and Wennström is quick to point out that the company has little brand equity beyond such products:

“The Barilla brand is mass-market but with Alixir the company is using super-premium packaging design with medicalised positioning and attempting a portfolio strategy, with products targeted at people struggling with a range of health issues.

“Alixir is trying to be an expert brand in a number of different areas, but the company behind it does not have any expertise in any of them. The most successful brands focus on one benefit area – Danone Activia in digestive health, for example – and build credibility with consumers as the expert brand for that health benefit. Consumers do not find brands claiming to be experts in multiple benefits credible.”

SUPER-PREMIUM PRICING

Apart from the black design, Alixir products are packaged exactly like their “regular” alternatives, enabling consumers to easily compare pricing. As the Chart on page 5 shows, premiums over comparable regular products range between roughly 55% and 155%. Alixir’s sole point of difference over regular products is the health benefit.

As a result, the pricing of the range has already drawn negative comment in the Italian blogosphere. One blogger was amazed at the price of the 200g brioche (€4.00/€5.76), which works out to €20/kg ($28.78/kg), and another felt Alixir products “cost an arm and a leg”.

Indeed, one can buy a non-functional 200g brioche under the major Italian brand Panem from the leading supermarket chain Despar for almost half the price of the Alixir offering (€2.26/$3.25).

Priced at €4.20/$6.05, the 400g Alixir Pane ai Cereali (Whole-Grain Loaf) is more than twice the price of Barilla’s own Mulino Bianco brand Pane ai Cereali e Soia (Whole-Grain & Soy Loaf), which costs €1.56/$2.24 per 400g at Despar.

And the comparisons don’t get any more flattering when we turn to the Alixir products offering an immunity-enhancing benefit. Alixir Fiocchi di Cereali con Cioccolato (Chocolate Cereal Flakes) retails at €3.90/$5.60 for 168g, or four servings, while a 300g, or seven-serving box of Kellogg’s Special K Cioccolato Fondente costs just €3.27 ($4.71). Barilla is therefore asking consumers to pay an extra 20% for little more than half as much cereal.

The touchstone immunity-enhancing

product in Italy – and indeed in all 27 EU countries – is Danone Actimel, which sells at Despar for €3.78 ($5.45) for a 6-pack of 100g bottles, or €0.65 per 100g. Alixir Chocolate Cereal Flakes weigh in at a hefty €2.30/100g, or more than three-and-a-half times as much. On a per day basis, this makes the cereal – which comes in four-serving boxes, roughly 50% more expensive than Actimel, itself a premium-priced brand.

Wennström also points out that the Italian market stands out in Europe for its being completely dominated by products positioned as “natural”, a point of view supported by consumer research conducted by Health Focus International.

He believes that a more sensible strategy for Barilla would have been to develop a range of “Barilla Superfoods” designed to occupy exclusive product segments with strong “all natural” – rather than medicalised – brand values. And the brand consultant’s

N E W S A N A LY S I S

BARILLA ALIXIR AT A GLANCE

Benefit claimed/Symbol on pack

Functional ingredients Products Price

Helps heart health Alixir Cor (marine omega-3, barley beta glucan, & folates (B vitamins))

Brioche (200g)

Whole-Grain Loaf (400g)

€4.00/$5.75

€4.20/$6.05

Helps to reinforce immunity defences

Alixir Immunitas(Probiotics: Bifidobacterium longum & Lactobacillus acidophilus)

Cocoa Biscuits (8 pieces/128g)

Chocolate Cereal Flakes (4 servings 168g)

€3.90 ($5.60)

€3.90 ($5.60)

Slows down cellular ageing

Alixir Iuvenis(Vitamins C & E, green tea catechins)

Cereal & Fruit Bar (4-pack/132g)

Red Fruits Beverage (250ml)

Green Tea (250ml)

€3.90 ($5.60)

€1.90 ($2.75)

€1.90 ($2.75)

Improves intestinal functions

Alixir Regularis(Prebiotics: Fructo-oligosac-charides, galacto-oligosaccharides & resistant starch)

Biscuits (6 pieces/300g)

Crackers (8 pieces/340g)

Orange & Carrot Juice Drink (250ml)

€2.90 ($4.20)

€3.60 ($5.20)

€1.90 ($2.75)

Continued from front page

NOVEMBER 2007 5



THE BARILLA GROUP

Barilla S.p.A. was founded in 1877 in Parma by Pietro Barilla and was recently described as the world’s leading pasta-maker by The Economist. It’s also a major player in pasta sauces across Europe; in bakery in Italy; and in crisp bread in Scandinavia.

The Barilla Group’s brands include Barilla, Mulino Bianco, Pavesi, Voiello, Academia Barilla and now Alixir (in Italy), Wasabröd (in Sweden), Misko (in Greece), Filiz (in Turkey), Yemina and Vesta (in Mexico).

Barilla controls 40%-45% of the Italian market for pasta and 25% of the US one, after launching there just 10 years ago.

In Sweden Barilla controls 70% of the crispbread market through the Wasa brand. In contrast to Alixir, Wasa has been very successful in growing sales by focusing solely on one benefi t – that of being “the best source of whole grains”.

When Pietro Barilla opened his shop in 1877, he sold bread as well as pasta. The company got out of breadmaking in 1952, but current president, Guido Barilla, returned to it in 2002 by buying a controlling stake in Kamps, a German bread company.

“It seemed a great opportunity from the outside, but it was a disaster,” Barilla told The Economist in June this year – he is now preparing to withdraw the company from the international bread business all over again. Kamps contributed €1.2 billion ($1.7 billion) of Barilla’s turnover of €4.1 billion ($5.9 billion) last year, but nothing to its operating profi t of €480 million ($691 million).

The family certainly doesn’t follow the proverb “once bitten twice shy”: in 1971 the Barillas sold their bakery business to W. R. Grace, an American fi rm, which in turn sold it back to the family eight years later, having created Mulino Bianco and launched an advertising drive to promote it and Barilla’s other brands.

0.25

Batik O

range

, Carr

ot &

Lemon

Drink (

250m

l)

– €0.80

($1.1

5)

€0.30

Alixir

Orange

& Carrot

Juice

Drink (

250m

l)

– €1.90

($2.7

5)

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

€0.75

Mulino

Bianco

(Barilla

)

Whole-

Grain L

oaf w

ith So

y

(400g

) – €1

.56 ($

2.24)

€0.39

Alixir

Who

le-Grai

n

Loaf (4

00g)

– €4.20

($6.0

5)

€1.05

Pane

m Brioch

e (20

0g)

– €2.26

($3.2

5)

€1.15

Alixir

Brioch

e (20

0g)

– €4.00

($5.7

6)

€2.00

Kello

gg’s S

pecia

l K

Chocol

ate Fo

ndan

t (300

g)

– €3.27

($4.7

1)

€1.10

Alixir

Chocol

ate

Cereal

Flakes

(168

g)

– €3.90

($5.6

0)

€2.30

Vitali

s Mue

sli Bars

(6-pa

ck/12

0g)

– €2.27

($3.2

7)

€1.90

€2.95

Alixir

Cereal

& Fruit

Bars

(4-pa

ck/13

2g)

– €3.90

($5.6

0)

€/100g

Price comparison of sample Alixir products with non-functional equivalents (per 100g)

Source: Barilla Group & Despar supermarkets (www.spesaonline.com)

thinking concurs with the online reactions of Italians: “Barilla is targeting ‘aware consumers’ so why on earth didn’t they make something organic, which would surely have been preferred by such consumers?” one blogger asked.

Barilla’s “360º communications campaign” for Alixir will see €10 million ($14 million) spent over the next 18 months on print ads, billboards, internet advertising and in-store promotions.

Half of Alixir’s €10 million development cost was devoted to concept and marketing – the range has an elaborate and sophisticated website (www.alixir.it). Visitors to the site can download the Alixir food programme, read about the science behind the ingredients and enter a competition to win a “well-being sojourn” at a world-famous hotel.

Visitors to www.alixir.it can take a guided tour complete with interactive animations that explain the “action mechanisms” of the functional ingredients in Alixir products.

NOVEMBER 20076



The Coca-Cola Co’s Minute Maid unit has added Pomegranate Blueberry Flavored Blend of 5 Juices, fortified with life’sDHA omega-3s supplied by Martek Biosciences, to its Enhanced Juices line in the US. The launch comes nearly a year after Tropicana, owned by Coke’s arch rival PepsiCo, began rolling out its Tropicana Essentials Healthy Heart Orange Juice – enriched with marine omega-3s supplied by Ocean Nutrition Canada – to US supermarkets (see the March 2007 New Nutrition Business for full coverage).

Both Minute Maid and Martek – the world’s biggest supplier of algal-sourced DHA – are bullish about the potential. “We knew of some value-added ingredients that consumers were looking for, and one of them was omega-3s for brain health,” Robin Bell, brand manager for chilled orange juice for Minute Maid, told New Nutrition Business.

Joe Buron, Martek’s vice president of sales and marketing, called juice a “logical continuation in this process of beverage applications. This is significant because it’s another beverage other than dairy that is widely consumed every day and gives us an opportunity to fortify another product with life’sDHA”.

Minute Maid chose the new Pomegranate Blueberry to carry omega-3 to market because, says Bell, “it’s one of the fastest-growing flavour trends”. “Consumers are still asking for it, and it’s been common in the market for a few years now.” Apple, raspberry and grape juices from concentrate are also present.

Executives of the Houston-based Minute Maid were also convinced that the combination has staying power: the company is likely to put omega-3s in other juice products as well, Bell disclosed.

Pomegranate Blueberry is 100% juice and carries a suggested retail price of $2.99 (€2.11) to $3.59 (€2.53) for the standard 59oz plastic bottle Minute Maid uses for its Enhanced Juices line.

Though pomegranate-juice-based products tend to be expensive in general, the company viewed the suggested price range as comparable to prices for orange juice, which have been volatile recently but have ranged

from $2.99 to $3.70 (€2.61) for the Enhanced Juice orange-juice products.

Minute Maid has begun shipping the product to Wal-Mart and Kroger stores and marketing it through point-of-purchase displays and sampling. National TV advertising is slated for 2008.

TARGETING KIDS’ BRAIN HEALTH

The new product carries the claim, “Helps nourish your brain” on the packaging. It contains 50mg of life’sDHA per 8oz serving as well as four other nutrients that Minute Maid says “[help] nourish the brain and body”:

• choline and vitamin B-12, which play a role in brain and nervous-system signals• vitamin E, an antioxidant that helps shield the omega-3s in the brain from free radicals• vitamin C, an antioxidant that is highly concentrated in nerve endings.

Minute Maid is aiming the product primarily at mothers of young children because “they know so much about omega-3s,” Bell told NNB, given that most infant formulas now are enhanced with omega-3s. “They continue to look for omega-3s in products that are relevant to their children as they get older.”

At the same time, the company believes its Pomegranate Blueberry blend will appeal to adult tastes as well. It’s just that, at this point in time, the omega-3-related science related to nutritional benefits for adults is a little murkier than it is for children.

Minute Maid has deliberately avoided making heart-health claims for the omega-3s in its new products. One reason is that a pre-existing entry in the Enhanced Juices line, Heart Wise – which is fortified with plant sterols – continues to occupy the primary cardiac-health positioning in the product line. “You also need a specific combination of omega-3s to be able to make a heart-health claim,” Bell pointed out.

Buron added that “there are many products focusing on heart health and there will continue to be; but there are fewer

products that are related to brain health”. Still, he observed, a heart-health claim requires 32mg per serving and the 50mg per serving of Minute Maid Pomegranate Blueberry exceeds that threshold. (The US Institute of Medicine recommends a total of 160mg a day of DHA omega-3s for heart health.)

Also partly out of concern for undermining its pre-existing Enhanced Juices products, Minute Maid decided to concoct a Pomegranate Blueberry blend rather than simply enhance orange juice with life’sDHA.

“A fourth orange juice in this line might have been too much,” Bell explains. “Also, by going into pomegranate and blueberry, we’ve got a flavour that can be consumed all day long. It just enhances the entire line.”

NOVEL GUARANTEE TO BOOST TRIAL

Out of concern that consumers accustomed to orange juice might hesitate to buy a pomegranate-blueberry-flavoured product, Minute Maid is taking an unusual step to try to gain trial of its new product. It’s called a Love It or It’s Free Guarantee: consumers can purchase Minute Maid Pomegranate Blueberry, take it home – and if they’re not happy with it for whatever reason, call a company-operated 800-phone number and receive a refund.

“Many consumers react one of two ways to pomegranate juice: they think it’s too sour or they know about its benefits and believe they have to sacrifice an ‘off ’ taste for the nutritional benefits,” says Bell. “”But we’ve combined the nutritional power with an excellent Minute Made taste. And we want everyone to try it at least.”

Minute Maid judges America ready for omega-3

by Dale Buss

NOVEMBER 2007 7



UK frozen food brand Birds Eye is ramping up its healthy image with the launch of a new spin on its famous fish fingers.

Instead of the cod or haddock in its standard fish fingers, Birds Eye Omega3 fish fingers are made from Alaskan pollock, a kind of fish the company says is higher in omega-3 fatty acids. No omega-3 is added to the product, with the packaging declaring the fish fingers to be “a natural source” of the healthy fat. Three 30g Alaskan pollock fish fingers contain 79mg of omega-3, or 18% of the recommended daily intake, according to the company.

The launch is being backed by a £2.7 million ($5.5 million/€3.9 million) TV advertising campaign featuring 1980s pop star Suggs, lead singer of the band Madness, and run with the tag line “Good Mood Food”.

This slogan may hint at some kind of beneficial effect on the consumer’s mood, but in fact, says Birds Eye, it simply “sums up how mums, kids and retailers feel about Birds Eye frozen food. Mum is happy to serve it because it’s nutritious, kids eat it because they love it and retailers stock it because they will benefit from increased sales”.

Pricewise there is little difference between Omega3 fish fingers and the cod and haddock varieties – although at first glance there appears to be a premium on the Omega3 product because it is sold in larger quantities.

A 360g box of 12 Omega3 fish fingers retails in Tesco for £1.99 ($4.08/€2.85) – equivalent to £5.53 ($11.34/€7.92) per kg. That’s a little more expensive than the kilo price of cod fish fingers, with a 300g box of 10 retailing for £1.64 ($3.36/€2.35), or £5.47 ($11.23/€7.83) per kg.

The Omega3 Fish fingers are actually cheaper than Birds Eye haddock fish fingers, however. A 300g box of those retails for £1.69 ($3.47/€2.42), or £5.63 ($11.55/€8.06) per kg.

The pricing tells a story of its own – and demonstrates how Birds Eye has been rather clever. With global cod and haddock stocks dwindling, seafood companies are under intense pressure to switch to alternative,

sustainable kinds of white fish.For some time now, manufacturers have

been trying to steer consumers onto varieties such as Alaskan pollock, stocks of which are more plentiful, but have so far had little success. Time and again British consumers have made it clear they want cod and haddock most.

What Birds Eye may succeed in doing with the launch of Omega3 fish fingers is to finally give shoppers a reason to switch to the Alaskan pollock, until now an unpopular choice with shoppers. And with such a heavyweight advertising campaign behind it, there is every chance of success.

Birds Eye, which was owned by Unilever until the brand was bought by the private equity firm Permira, is not averse to challenges, as the launch of frozen soy beans just over a year ago demonstrated (see the October 2006 New Nutrition Business for full coverage).

Launched last year, the beans were marketed as a delicious vegetable product in their own right – similar in nature to peas – but with the added bonus that they could reduce cholesterol levels.

How have they got on? Well, they were until recently still being offered in Tesco in 10p trial sized bags, which suggests getting shoppers to pop them in their trolleys was not proving easy.

Nevertheless, Tesco has launched an own label version and Birds Eye has now achieved listings in Sainsbury’s, Morrisons, Waitrose, Somerfield and Nisa-Today’s – a decent

distribution probably aided by the company’s significant clout in the frozen category as a whole. A much smaller player launching that kind of innovation may well have struggled to find anyone willing to sell them.

Birds Eye is reluctant to go into detail regarding the performance of the soy beans, except to say: “Since the launch in October 2006, Birds Eye Soya Beans have already been bought by nearly one million UK consumers.”

This doesn’t tell us much in terms of the value or volume of what has been sold, bearing in mind many of those shoppers may have only picked up the 10p trial packs. It also doesn’t tell us whether any of those one million consumers were repeat purchasers, a factor that will certainly be crucial if soy beans are to become an enduring fixture in supermarket freezer cabinets.

This year Birds Eye is spending a total of £25 million ($51 million/€36 million) on marketing alone, as it bids to build on the success of its ‘Truth’ campaign, which was designed to highlight how freezing was a natural way to preserve food and that Birds Eye products contain no artificial additives. That drive has helped boost the fortunes of the frozen category as a whole, which had been in the doldrums for some time.

Now, with the launch of Omega3 Fish Fingers and soy beans, Birds Eye will hope it can make frozen food part of the UK’s growing market for food offering health benefits.

Birds Eye offers ‘Good Mood Food’

by Richard Garton

NOVEMBER 20078


Eating fewer refined carbohydrates may slow the progression of age-related macular degeneration (AMD) – a disease that causes partial or total blindness in 7% to 15% of the elderly – according to a new study from the Jean Mayer USDA Human Nutrition Research Center on Aging at Tufts University(1).

“Dietary changes may be the most practical and cost-effective prevention method to combat progression of AMD,” says Allen Taylor, PhD, director of the Laboratory for Nutrition and Vision Research at the USDA HNRCA. “It is surprising there is so little attention focused on the relationship between AMD and carbohydrates.”

The current study builds on a recent analysis by Taylor and colleagues (reported in NNB August 2007) that found men and women older than 55 who ate diets with higher-than-average dietary GI foods appeared to have an increased risk for both early and later stages of AMD.

In the present study, Taylor and colleagues analysed diet questionnaires completed by 4,757 non-diabetic men and women participating in the nationwide Age-Related Eye Disease Study (AREDS). The eight-year AREDS study enrolled participants between the ages of 55 and 80 with varying stages of AMD. Taylor and colleagues examined the participants’ carbohydrate intake over a one-year period and used the data to calculate the participants’ dietary GI.

“Our data showed those people in the high-GI group were at greater risk of AMD progression, especially those already in the late stages,” says first author Chung-Jung Chiu, DDS, PhD, scientist in the Laboratory for Nutrition and Vision Research at the USDA HNRCA and assistant professor at Tufts University School of Medicine.

“Participants who consumed the most refined carbohydrates were 17% more likely to develop blinding AMD than the group that consumed the least.”

According to the authors, public health officials believe the condition could spur a public health crisis in the US by 2020, when they predict the cases of AMD-related vision loss will have doubled to three million.

“No one has been able to identify an effective non-invasive intervention that will slow the progression of AMD,” says Taylor, who is also a professor at the Friedman School of Nutrition Science and Policy at Tufts and Tufts University School of Medicine. “We feel we have identified a risk factor that could postpone the debilitating loss of vision with very little economic or personal hardship. Based on our data, limiting refined carbohydrate intake, such as by limiting sweetened drinks or exchanging white bread for whole wheat, in at-risk elderly could reduce the number of advanced AMD cases by 8% in five years. This can equate to saving the sight of approximately 100,000 people.”

However, a UK study published in the same journal could not fi nd a protective effect of dietary GI and GL (glycemic load) on diabetes risk(2).

Researchers examined the associations of dietary GI and GL with clinical variables at baseline and the incidence of diabetes in 7,321 participants, followed for 13 years.

“The proposed protective effect of low-dietary GI and GL diets on diabetes risk could not be confi rmed in this study,” they conclude.

1. Chiu, C-J. et al., American Journal of Clinical Nutrition, October 2007.2. Mosdøl, A. et al., American Journal of Clinical Nutrition, October 2007.

N U T R I T I O N R E S E A R C H

NEWS DIGESTHOMOCYSTEINE & EYE DAMAGEHomocysteine, the amino acid believed to contribute to heart attack, stroke and dementia, probably also plays a role in retinal damage and vision loss, researchers say. Homocysteine levels rise when folic acid levels drop, a common problem for Americans whose diets are often poor in folate-rich fruits, tomatoes, vegetables and grains, according to Dr Sylvia Smith, cell biologist at the Medical College of Georgia. And it seems those high homocysteine levels could damage eye tissue.

Smith and Dr Vadivel Ganapathy, chair of the MCG Department of Biochemistry and Molecular Biology, have been studying how folate gets to the retina and how diseases such as diabetes interfere. They found it hard to ignore homocysteine as they studied folate, and now they are studying a mouse model with a slightly elevated homocysteine level that simulates a low-folate diet in humans; a version of the mouse that also has diabetes, which goes hand-in-hand with cardiovascular disease and retinopathy; and a second model of the rare genetic defect that results in extraordinarily high homocysteine levels. They will follow the mice over their lifetime, putting them on diets that elevate and lower folate levels, measuring resultant homocysteine levels and the impact on the retina. Next year they will test the animals’ vision.

The researchers hypothesise that sustained elevation will compromise retinal function and degrade the once well-stratifi ed tissue. They have shown in pilot studies that adding diabetes to the mix makes bad matters worse.

LOW FAT MILK LINKED WITH HIGHER RISK OF PROSTATE CANCERResearchers at the University of Hawaii and the University of Southern California, Los Angeles have found that the fat content of milk is linked with prostate cancer risk. Their analysis of data from 82,483 men revealed that while dairy product and total milk consumption, calcium and vitamin D intake were not associated with prostate cancer risk, low-/non-fat milk was related to a 12% increased risk and whole milk to a 16% decreased risk of total prostate cancer. “Although the fi ndings from this study do not support an association between the intakes of calcium and vitamin D and prostate cancer

For healthy eyes, cut the carbs

GI & breast cancerA high-glycemic-load diet may increase the risk of breast cancer in Italian women say researchers who examined the link between diet and the disease in 8,926 women over more than 10 years(1).

The effect was particularly strong in premenopausal women and those with a normal body mass index.

The study found that the relative risk (RR) of breast cancer in the highest (versus lowest) quintiles of GI and GL was 1.57 (95% CI: 1.04, 2.36; P for trend = 0.040) and 2.53 (95% CI: 1.54, 4.16; P for trend = 0.001), respectively. Total carbohydrate intake was

not associated with greater breast cancer risk, but high carbohydrate from high-GI

foods was. When women were categorised by baseline menopausal status and BMI, the increased risk of dietary GL was confi ned to those who were premenopausal (RR = 3.89; 95% CI: 1.81, 8.34) and who had normal BMI, i.e. one less than 25 (RR = 5.79; 95% CI: 2.60, 12.90) (P for trend = 0.001 for both).

Interest in the roles of GI and GL in breast cancer aetiology has been stimulated

by indications that disease risk is linked to insulinemia, sex hormone bioavailability, and insulin-like growth factor 1.

1. Sieri, S. et al., American Journal of Clinical Nutrition, October 2007.

Continued on page 9

NOVEMBER 2007 9



NEWS DIGESTContinued from page 8

risk, they do suggest that an association with milk consumption may vary by fat content, particularly for early forms of this cancer,” conclude the authors.

Park, S-Y., et al., American Journal of Epidemiology, published online 8 October 2007.

VITAMIN C KEY TO YOUNGER SKIN?According to the authors of a new study, little is known about the effects of diet on skin-ageing appearance. Researchers at Unilever tackled the subject using data from the fi rst National Health and Nutrition Examination Survey (NHANES), examining associations between nutrient intakes and skin ageing – defi ned as having a wrinkled appearance, senile dryness, and skin atrophy – in 4,025 women aged from 40 to 74.

They found that higher intakes of vitamin C and linoleic acid and lower intakes of fats and carbohydrates were associated with better skin-ageing appearance. Higher vitamin C intakes were associated with a lower likelihood of a wrinkled appearance and senile dryness. Higher linoleic acid intakes were associated with a lower

likelihood of senile dryness and skin atrophy. A 17g increase in fat and a 50g increase in carbohydrate intakes increased the likelihood of a wrinkled appearance and skin atrophy.

The associations were independent of age, race, education, sunlight exposure, income, menopausal status, body mass index, supplement use, physical activity, and energy intake. “Promoting healthy dietary behaviors may have additional benefi t for skin appearance in addition to other health outcomes in the population,” the researchers concluded.

Cosgrove, M. C. et al., American Journal of Clinical Nutrition, October 2007.

LOW VITAMIN D LINKED WITH HIP FRACTUREUniversity of Pittsburgh researchers studying the role of vitamin D in bone health found that women with low levels of vitamin D have an increased risk of hip fracture. Jane A. Cauley, DrPH, professor of epidemiology, and colleagues evaluated patient data on 400 women enrolled in the Women’s Health Initiative Observational Study Cohort who had experienced hip fracture, confi rmed by

Omega-3 fats linked with lower risk of type 1 diabetes

Children at increased risk for type 1 diabetes could benefit from eating omega-3 fatty acids, suggests preliminary research from the University of Colorado.

The study found that dietary intake of omega-3 fatty acids was associated with a reduced risk of pancreatic islet autoimmunity, which is linked to the development of diabetes.

Jill M. Norris, MPH, PhD, of the University of Colorado at Denver and Health Sciences Center, Denver, and colleagues examined whether consumption of omega-3 and omega-6 fatty acids is associated with the development of pancreatic islet autoimmunity (IA), the development of antibodies against the cells in the pancreas that produce insulin, in children.

The study included 1,770 children at increased risk for type 1 diabetes, defined as either possession of a high diabetes risk HLA (human leukocyte antigen) genotype or having a sibling or parent with type 1 diabetes. The average age at follow-up was 6.2 years. The researchers assessed IA in association with dietary intake of polyunsaturated fatty acids starting at age one year, as reported on a food

frequency questionnaire (FFQ). Fifty-eight children became positive for

IA during follow-up. Adjusting for HLA genotype, family history of type 1 diabetes, caloric intake, and total omega-6 fatty acid intake, higher total omega-3 fatty acid intake was associated with a 55% reduced IA risk. The association was stronger when the definition of the outcome was limited to those positive for two or more autoantibodies.

The scientists also conducted a case-cohort study of 244 children in which risk of IA by polyunsaturated fatty acid content of erythrocyte membranes (outer portion of the red blood cell) was examined. They found the omega-3 fatty acid content of erythrocyte membranes was associated with a 37% decreased risk of IA.

“Our study suggests that higher consumption of total omega-3 fatty acids, which was reported on the FFQ, is associated with a lower risk of IA in children at increased genetic risk of type 1 diabetes,” the researchers write.

Journal of the American Medical Association, 26 September 2007.

Can’t resist chocolate? Blame your genes – Nestlé researchers have linked the desire for chocolate to a specific, chemical signature that may be programmed into the metabolic system and is detectable by laboratory tests. The signature reads “chocolate lover” in some people and indifference to the popular sweet in others, the researchers say.

Sunil Kochhar and colleagues studied 11 volunteers who classified themselves as “chocolate desiring” and 11 volunteers who were “chocolate indifferent”. In a controlled clinical study, each subject – all men – ate chocolate or placebo over a five day period while their blood and urine samples were analysed. The chocolate lovers had a hallmark metabolic profile that involved low levels of LDL-cholesterol (so-called “bad” cholesterol) and marginally elevated levels of albumin, a beneficial protein, the scientists say.

The chocolate lovers expressed this profile even when they ate no chocolate, the researchers note. The activity of the gut microbes in the chocolate lovers was also distinctively different from the other subjects, they add.

“Our study shows that food preferences, including chocolate, might be programmed or imprinted into our metabolic system in such a way that the body becomes attuned to

a particular diet,” says Kochhar, a scientist at the Nestlé Research Center in Switzerland.

“We know that some people can eat a diet that is high in steak and carbs and generally remain healthy, while the same food in others is unhealthy,” he explains. “Knowing one’s metabolic profile could open the door to dietary or nutritional interventions that are customized to your type so that your metabolism can be nudged to a healthier status.”

In the future, a test for determining one’s metabolic type could be performed as part of a blood or urine test during a regular visit to the doctor, Kochhar predicts. But a reliable test to measure one’s metabolic type may be five years away, as more research is still needed in this area, he noted.

Women were not included in the study in order to avoid any metabolic variations linked to the menstrual cycle, which can influence metabolic differences, Kochhar says. But the researchers plan to include women in future clinical trials on metabolic responses to chocolate to see if there is a gender-specific response to the treat.

Study scheduled for publication in the American Chemical Society’s Journal of Proteome Research, 2 November 2007.

Slaves to chocolate

Continued on page 10

NOVEMBER 200710



NEWS DIGESTContinued from page 9

their medical record, over a median of 7.1 years.

Levels of 25 hydroxyvitamin D, an indicator of vitamin D status, in the bloodstream were measured for these patients and compared with those of a control group matched for age, race, ethnicity and the date of relevant blood work. As vitamin D concentrations decreased, the risk of hip fractures climbed. “The risk of hip fractures was 77% higher among women whose 25 hydroxyvitamin D levels were at the lowest concentrations,” said Dr Cauley, who has spent much of the past 15 years investigating the physical changes that take place in postmenopausal women.

“This effect persisted even when we adjusted for other risk factors such as body mass index, family history of hip fracture, smoking, alcohol use and calcium and vitamin D intake.”

Study presented at the annual meeting of the American Society for Bone and Mineral Research, 16-19 September 2007.

WHOLE GRAINS, HEALTHY HEARTMen who eat more whole-grain breakfast cereals may have a reduced risk of heart failure, according to researchers at Brigham and Women’s Hospital (BWH) and Harvard Medical School, Boston. Luc Djoussé and Michael Gaziano analysed the association between breakfast cereal intake and new cases of heart failure among 21,376 men (average age 53.7) participating in the Physician’s Health Study I. During follow-up (on average 19.6 years), 1,018 of the participants experienced heart failure. This included 362 of 6,995 participants who did not eat any cereal, 237 of 4,987 of those who ate one serving or less per week, 230 of 5,227 of those who ate two to six servings per week and 189 of 4,167 of those who ate seven or more servings per week.

“Our data demonstrate that a higher intake of whole-grain breakfast cereals is associated with a lower risk of heart failure,” the authors conclude. This association may be due to the benefi cial effects of whole grains on heart failure risk factors such as hypertension, myocardial infarction [heart attack], diabetes mellitus and obesity. “If confi rmed in other studies, a higher intake of whole grains along with other preventive measures could help lower the risk of heart failure.”

Archives of Internal Medicine, 22 October 2007.

A new global study has revealed that 40% of men and 30% of women are overweight, while 24% of men and 27% of women are obese(1).

Doctors evaluated 168,159 people (69,409 men, 98,750 women) from 18 to 80 years old (average age 48) in 63 countries across fi ve continents.

“This is the largest study to assess the frequency of adiposity (body fat) in the clinic, providing a snapshot of patients worldwide,” said study lead author Beverley Balkau, PhD, director of research at INSERM in Villejuif, France.

“The study results show that excess body weight is pandemic, with one-half to two-thirds of the overall study population being overweight or obese,” Balkau said. “Central adiposity adds signifi cantly to the risk of developing heart disease and particularly of developing diabetes.”

Being overweight or obese has health consequences, but abdominal obesity has even worse consequences, she added. More than half the study population – 56% of men and 71% of women – had abdominal adiposity.

“Overall there’s a signifi cant increase in the frequency of heart disease and diabetes with increasing waist circumference,” Balkau said. “For men, each increase of approximately 5.5 inches (14 centimeters) means an increased frequency of about 35

percent for heart disease and for women an increase of approximately six inches (15 centimeters) equates to a 40 percent increase for heart disease. Even in people who are lean, an increasing waist circumference means increasing risk for heart disease and diabetes.”

Balkau called upon governments to take more preventive measures to stem the tide of obesity and overweight, such as providing more access to physical activity and encouraging people to exercise. “Physical activity and good nutrition are the key,” she said.

Other fi ndings include:• As measured by BMI, more than 60% of men and 50% of women were either overweight or obese, with a BMI of 25 kg/m2 or more. • The overall frequency of heart disease was 16% in men and 13% in women, ranging from a high frequency of heart disease in Eastern European men, 27%, and women, 24%, in contrast to Canada where the frequency in women was 8%, and in men 16%. • The frequency of diabetes varied more across regions than CVD. Overall, 13% of men and 11% of women were diagnosed with diabetes.

Balkau, B. et al., Circulation: Journal of the American Heart Association, October 2007.

Global waistline bulging out of control

Vitamin D nature’s painkiller?One in four patients who suffer from chronic pain also have inadequate blood levels of vitamin D, say researchers at the Mayo Comprehensive Pain Rehabilitation Center in Rochester, Minnesota, and patients lacking suffi cient vitamin D also required higher doses of morphine for a longer period of time. The researchers suggest the low vitamin D levels may contribute to the patients’ ongoing pain.

The study involved 267 adults undergoing outpatient treatment for chronic pain. The researchers recorded their serum vitamin D levels, pain medication (morphine), as well as general health.

Of these patients, 26% had vitamin D inadequacy and needed almost twice the dose of morphine of the group with adequate vitamin D levels, using morphine for an average of 71.1 months compared to 43.8 months for the other group. As well, the vitamin D defi cient group showed lower levels of physical functioning and poorer overall health.

Inadequate levels of vitamin D have long been associated with causing pain and muscle weakness, but “… this is the fi rst time that we have established the prevalence of vitamin D inadequacy among a diverse group of chronic pain patients,” said study author, Michael Hooten, medical director and anaesthesiologist at the Mayo Comprehensive Pain Rehabilitation Center.

“The implications are that in chronic pain patients, vitamin D inadequacy is not the principal cause of pain and muscle weakness, however, it could be a contributing but unrecognized factor,” said Hooten.

Vitamin D inadequacy can be easily and inexpensively treated using a prescription supplement, once or twice a week for four to six weeks, Hooten added. He’d like to see further study testing whether treating low vitamin D improved the health of people with chronic pain.

Study presented at the American Society of Anesthesiologists’ annual meeting, 13-17 October 2007.

NOVEMBER 2007 11


E D I T O R I A L

“History, by appraising men of the past, will enable them to judge of the future,” Thomas Jefferson, a founding father of the United States, wrote in 1807. Unfortunately, the board of Italian pasta giant Barilla seems not to have appraised themselves of the lessons of the last 10 years of functional food marketing.

Barilla – the biggest pasta brand in Italy, the US and elsewhere – has recently launched onto the Italian market a new “complete range” of functional foods, called Alixir, as we report on the front page of this issue. Worryingly for Barilla’s management, Alixir’s strategy seems eerily similar to that used for Aviva, also a complete range of functional foods which addressed multiple health benefi ts. Launched in 1999 Aviva went on to be one of the most spectacular failures in the history of functional foods.

Back then, Swiss pharma giant Novartis was Europe’s highest-profi le new entrant in the fi eld of functional foods. With Aviva, Novartis claimed that it had created the fi rst complete family of functional foods with mainstream supermarket distribution. Novartis believed Aviva would establish the company as a world leader in the fi eld and enable them to set the future direction of the functional foods revolution.

In fact all Novartis achieved was to teach the entire industry how not to position, price, package and market functional foods – lessons that have been re-learnt again and again since 1999 by companies making the same mistakes.

Here are three of the ways in which Alixir struggles:

1. It’s not possible to make complete ranges succeed – health brands must be focused, ‘expert’ brands.

The idea that a brand with a health benefi t can somehow be stretched to include other health benefi ts or the core benefi t stretched to cover a variety of product formats has been disproved again and again over the last decade. Such stretches simply do not work and result in ultra-niche levels of sales at best.

A brand that tries to offer multiple benefi ts is one that attempts to stand for everything and ends up meaning nothing. The biggest success stories in functional foods are brands that are highly focused on a single proposition and provide the benefi t in only a very limited range of product formats: Red Bull in energy (see page 16); Danone Actimel for immunity; Danone Activia for digestive health; Unilever’s Pro.activ for cholesterol-lowering.

To be credible to the consumer a brand must be the “expert” in the benefi t it is offering. To fi t into the consumers’ lifestyle the single benefi t must be in the product format that the consumer will fi nd most convenient and credible – the consumer doesn’t fi ll their cupboard with multiple products offering the same benefi t.

Over the last 10 years company after company has attempted to stretch brands to encompass multiple health benefi ts – all have failed. Novartis Aviva is perhaps the best example – its strategy most closely parallels that of Barilla Alixir. For example:

• The Aviva range consisted of nine products (two cereals, two cereal bars, two kinds of biscuit, an orange juice and two hot chocolates). Each Aviva product was targeted at one of three areas of health: heart health, digestive health and bone health.

• Like Aviva, Alixir is also committed to the “complete family” strategy, with 10 products (one cereal, one cereal bar, two kinds of biscuit, one type of cracker, three beverages, a bread and a brioche) targeting four health areas: heart health, digestive health, immunity and anti-ageing.

Barilla – back to the future

Alixir – a brand without a point of difference. The Alixir range offers four health benefits from 10 products and very high price points compared to “regular” products. The benefits are already available from other brands, often in more convenient forms and at lower prices.

NOVEMBER 200712


E D I T O R I A L

Other notable “family failures” include Benecol and Pro.activ: these pioneering cholesterol-lowering brands were launched as ranges that included spreads, milks, yoghurts, cereal bars, salad dressings and others. Today only the spreads and the daily dose 100ml dairy drinks sell – almost all the other product formats have disappeared.

We expect few of the Alixir products to endure for more than a year. In the end, possibly only the beverages – the most convenient formats – may survive.

2. A benefi t that makes sense for the brand?

Heart-health benefi ts in Europe have been captured in two ways – on the one hand by dairy products that offer an added ingredient, such as plant sterols, and on the other by products that offer heart health as a natural benefi t that’s intrinsic to the product. The former have achieved a successful niche position. For the latter products, the benefi ts are something that is communicated as a secondary benefi t for an existing, trusted brand. While this may not do much for sales growth, it does defend the brand.

Alixir’s heart-health products do not meet either of these criteria. As a primary selling proposition, particularly for new and unknown brands, heart health is not a strong motivator, other than to the minority of people who are in real fear of heart disease. The heart-health segment of the market is already well supplied – and bread is of very limited appeal as a carrier for heart-health benefi ts, unless they are “natural” to the product and the bread is itself priced at close to “regular” bread prices. The Alixir brioche retails at an incredible 74% price premium over Barilla’s own Mulino Bianco brand of brioche.

However, Alixir offers more than just heart-health benefi ts – and that is itself a problem, since consumer research and market experience over the last decade show that consumers fi nd multiple messages both confusing and lacking in credibility.

The presentation of the range – both the symbol on the packaging and the website communications – looks highly medicalised, meaning that normal healthy consumers will perceive the products as being for people with an illness and not applicable to them.

Moreover, the Barilla brand has no strong health heritage to build upon. Its heritage is pasta, tradition and naturalness – not added functional ingredients, not bread, green tea

drinks or breakfast cereals. Alixir is new and unknown to consumers, without heritage; it offers nothing new in terms of benefi ts (these are all available from other existing brands) and its imagery combines super-premium packaging colour with medicalised symbols.

A strong brand always has very clear and credible positioning and is found only in a category or categories that make sense for the brand, in the mind of the consumer. Alixir looks, as brand strategist Peter Wennström describes it, with understatement, “confused”. In its current state and without a brand heritage to draw on, Barilla will have to spend millions of euros over many years to grow Alixir and explain it to consumers – if, of course, they are willing to listen.

3. No point of difference to support a price premium

What’s worse, Barilla is adopting a “new product substitution” strategy with Alixir. This term, made popular by Harvard Business School, refers to the practice of entering a market with a product which, it is hoped, consumers will buy as a substitute for existing brands.

Like Aviva, Alixir is offering benefi ts that are already available to consumers in other product formats – usually more convenient formats, such as dairy. And even the convenient formats – the drinks – are offering benefi ts which are already available from

better-known brands with more credibility in health. The Alixir immunity biscuits and breakfast cereal, for example, are offering a benefi t that is already available from Danone’s Actimel brand – a huge seller in Italy – at a lower price and in a more convenient format.

The substitution strategy has been adopted again and again – mostly unsuccessfully – by new functional food brands. Getting consumers to substitute your new brand for their existing brand is close to impossible if you set the price differential for your product too high – as Alixir has done.

If you want to enter a segment with a benefi t that’s already available and also command a price premium then you must use packaging design to make your product “as different as possible” from any other on the shelf and to make it diffi cult to compare its price with competing products. Alixir’s use of black packaging is eye-catching but it doesn’t achieve enough differentiation – consumers can still easily compare the price with “regular” products and see the price premium. Using packaging innovation to make it diffi cult for consumers to compare prices is one of the key elements in the success of the best-known health brands on the European market.

SUMMARY

Alixir offers health benefi ts that are already available in more convenient forms from other product types, and are already available from brands that have more equity in the Italian consumer’s mind.

If you wanted to be kind to Barilla, it’s possible to say that if its goal with Alixir is to create a medicalised, premium-priced niche brand with sales of €20 million ($29 million) a year across all products, then Alixir will meet that goal. But if Barilla has more ambitious goals it will surely be disappointed, for the design of Alixir seems to have ignored every lesson learned in the last 10 years of

Novartis Aviva, launched in Europe in 1999, was remarkably similar in positioning and pricing to Alixir. It went on to be one of the biggest failures in functional foods.

The Barilla brand has no

strong health heritage to

build upon.

NOVEMBER 2007 13


E D I T O R I A L

If there is one thing you can be sure of in business it’s that you should “expect the unexpected”. When we published the first issue of New Nutrition Business in October 1995, the “rational” forecasts for the future of functional foods charted a path to a world of mass-market foods that would lower your blood pressure and your cholesterol, or tackle some other medicalised condition. But that’s not how things have turned out.

Red Bull’s energy proposition was – let’s not forget – dismissed as a youth fad with no future. Today, as we report on page 16, the European energy drink market is worth at least €3 billion ($4.3 billion). That’s five times the size of the European market for cholesterol-lowering foods – which is the biggest such market in the world. And from what we’ve seen this year in the business of nutrition and health, it’s by no means beyond the realm of possibility that the market for beauty foods might one day be as big or bigger than that for foods that lower your cholesterol.

As we have said many times before, the future of functional foods is all about a future of niches – and in particular its about creating demand in new niches, just as Red Bull did – not waiting for consumers to tell you what they want. Consumer research is never going to define the unexpected for you.

The race to stake out territory in a new beauty niche is currently being led, as always in Europe’s functional food market, by the dairy sector, with Danone, Emmi and Parmalat all active in France, Spain, Italy, Belgium and Germany.

The quest is driven by companies’ very clear need to find new benefit areas that they can compete in and capture more value. Selling “standard” products is no longer enough if you want to survive. “Regular” dairy products are under assault from equally good but more aggressively priced private labels, which in some European markets (see Case Study on page 21) have already taken a 50% market share.

In terms of the more value-added areas of health, the market for probiotic products for digestive health or immunity is already well supplied and in fact dominated in most countries by Danone (with its Activia and Actimel mega-brands) and a few other players. New points of entry are few and far between.

The heart health/cholesterol-lowering/blood pressure-lowering area is not only a niche but also one that is well supplied by existing competitors. A new ingredient such as omega-3 doesn’t provide enough of a point of difference to give a competitive edge in the heart-health market and its brain-health benefits are still ultra-niche interests confined to a handful of health-conscious mothers.

Beauty foods, on the other hand, offer a real opportunity to create new demand in a place where there are few competitors. They are capitalising on the connection the cosmetics industry has been building in consumers’ minds over the last 3-4 years between antioxidants from food and skin health.

One ingredient in particular has been used as a point of reference for skin health in cosmetic advertising: green tea. It has also become nicely established as a wellness-oriented superfood thanks to the marketing efforts of tea companies (particularly Unilever). So it’s no surprise to find green tea extract included as an active ingredient both in an upcoming launch from Emmi (see page 3) and in Danone’s Essensis beauty yoghurt (see the June 2007 NNB).

Danone is determined to be No. 1 in this emerging segment, but there will be space for another brand to be a strong No. 2 in every country, and that’s what makes Emmi’s launch of Beauty Case Yogurt so significant.

Emmi is one of the most innovative dairy companies in Europe and was among the first to launch probiotic daily dose drinks in the mid-1990s. On the back of this and many other functional innovations it rose from the humble position of Switzerland’s third-biggest cheese producer to a multinational giant whose functional brands can be found in almost every European country.

Any dairy planning to enter the European beauty foods market had better do it soon – or they will find themselves struggling to get a toehold as a No.3.

European beauty

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Roberta Capua

� LO TROVI NEL BANCO FRIGO

NOVEMBER 200714


I N T E RV I E W

Q. You’ve just published research demonstrating that Americans routinely underestimate the number of calories they consume when they eat at the sandwich chain Subway. You called it the result of a “biasing health halo” of health claims that are made by fast-food restaurants. Tell me more about that research.

A. One part of the research was asking people who were eating a sandwich, soft drink and a side order from Subway or from McDonald’s how many calories they thought those meals contained. The meals actually had the same number of calories. But the Subway diners thought their meal had 151 calories less than it actually had – on average, a 21% underestimation. Another thing we did was hand out coupons for a Subway 12-inch Italian BMT sandwich and for a McDonald’s Big Mac. When we asked them what they wanted with their sandwich, the Subway diners were more likely to pick a high-calorie side order.

Q. So what did you make of those results?

A. It showed that there are two downfalls of eating in a restaurant that has positioned itself as “healthy”: you can possibly underestimate the calories you’re eating, and you end up ordering more “sight” items than you would otherwise. People are really infl uenced by their perceptions of what the brands stand for. From the companies’ point of view, it suggests that when they selectively advertise healthy fare, it trips up lots of consumers. And it may be a little concerning to a chain like Subway because people could say, “Why should I bother eating there when I can be eating

something that I like better and not really pay the price in calories?”

Q. Turning to restrictions on marketing food to kids in the US, are we headed down “Tobacco Road”, or will this issue follow some other path?

A. We’re seeing more thought about redefinition. It’s not clear to me that there will be a whole lot less advertising to children, but there will be a redefinition of what’s appropriate.

Q. Will this all be voluntary or forced by regulation?

A. I think it’s going to happen pretty voluntarily. There’s credible creative capacity within the food industry to make this shift, but

I think that doesn’t bloom when they have a circle-the-wagons mentality. What I would like to see is citizens in the public health arena and policy makers try to be more supportive of companies experimenting with win-win ways to help de-market obesity.

Q. Such as?

A. No company is going to say I’ll just stop selling food if it’s going to make people fat. They want to sell better food, but how can they do it profitably? 100-calorie packs are one means. New product introductions are another means. New packaging is another. But it’s not clear what their direction is. It’s just clear that the more they experiment, the more they stumble across great win-win ideas.

Some new product reformulations, such as “stealth-health” products, are great ideas. Some modifications in how they advertise are great ideas. But there are hundreds more tremendous ideas that haven’t yet been discovered because the industry spends a lot of time in a very defensive position toward a lot of vocal critics. If those critics were more supportive of experimentation, we’d find companies really stepping up to the plate more.

Q. Speaking of the critics, it’s interesting to note the successes that the Center for Science in the Public Interest (CSPI) and others are having in making mainstream companies back off some better-for-you marketing claims, such as 7-Up with its “All Natural” claim. What do you make of that?

A. There are two ways to look at failed claims. One is that the company was lying to begin

Chewing the better-for-you fat with Brian Wansink

Brian Wansink is a pioneer researcher into the American better-for-you food marketplace. His Mindless Eating: Why We Eat More than We Think was a New York Times bestseller last year and he is also the author of Marketing Nutrition: Soy, Functional Foods, Biotechnology and Obesity (2005). The 47-year-old is director of the Food and Brand Lab at Cornell University where he focuses on the psychology behind what people eat and how often they eat it. He is also heavily involved in a new initiative by the US Department of Agriculture aimed at encouraging kids to make healthy food decisions without having to narrow their range of food choices. Wansink recently discussed these topics and more in conversation with DALE BUSS, North American Editor of New Nutrition Business.

NOVEMBER 2007 15


I N T E RV I E W

with, and it’s a big PR smokescreen. Another way to view it is that they were well-intended or perhaps overly enthusiastic announcements that weren’t realisable when it came down to it, or only partly realisable.

Q. Does the distinction make a difference?

A. It’s good to hold them accountable. But it’s one thing to say that you really messed up because you didn’t score 100 points in the game. It’s another thing to say that you tried, and you scored 80 points, and that’s a good start – but things could be better. There are two ways – a supportive way and a very debilitating way – to say the same thing.

Q. But don’t the critics have their own agendas that don’t involve helping the companies they criticise save face?

A. That’s true. And in their view, anything that’s done isn’t enough and isn’t fast enough. I can see where that could be the view, but sometimes it may serve to hinder progress compared with something that might be more supportive. [The CSPI] has a very important voice that’s making a big difference. But there are encouraging ways to do things; they could be more or less encouraging.

It’s important to think about what that balance should be to best support smart innovation in the future. Some of this browbeating – we’re not thinking innovatively. If there is more support then companies can test things and try to bloom things. They are just humans, so they don’t always rise to the occasion.

Q. What do you think of Kellogg’s move to market to kids only the 50% of its brands that meet certain nutritional criteria, thereby self-limiting advertising of “junk food” products?

A. It’s a great direction that Kellogg is moving in, and they’re to be applauded for it – it’s a positive and leadership move and they’re stepping up to the plate. But you wonder if they can fully deliver. It’s better to be in the arena, but my guess is they’ll have a real hard time pulling it off unless they define some [products] in a very unusual way. Yet I think that the changes they’re going to make are going to be ones for the better, and it’s a pioneering position that will help other companies do it better too.

Q. Is there such a preoccupation with changing marketing to kids that the industry is going to get somewhat of a pass when it comes to changing adult marketing such as fast food advertising?

A. That’s a good question. By doing what they’re doing with the most vulnerable population, it could somewhat [inoculate adult marketing]. It might buy companies some credit in some other areas. The good thing about it would be that it could loosen up resources to focus more creatively in these areas without feeling like they’re so much under the gun.

Q. How far along are mainstream companies in their understanding of how to approach the better-for-you market?

A. One thing that’s changing is, instead of being seen as a fringe element of a company that isn’t deserving of their best talent, [better-for-you] now is seen as somewhat of a fringe area that deserves their best talent because it might grow. And part of MBA training now is to think more in terms of those kinds of products. It necessitates some out-of-the-box thinking. And that’s really hard in some of these companies that have huge ROI requirements.

Q. How well is the industry doing in appealing to American consumers on a better-for-you basis?

A. Not well, and that’s where some of the struggle is coming in. The struggle is trying to see what real benefits people want from healthy food. It’s not really clear that people want health. If you end up looking at the underlying motivations of big [consumer] segments, the problem is that to grow a segment, you can’t focus on health when health has somewhat of a means-to-an-end sort of a connotation to a lot of people.

Part of what happens is a marketer says something is “healthy” or “good for you,” and people say it probably isn’t that good. They’re dealing with the two warring parts of the consumer psyche: the indulgent self and the utilitarian self. That’s what they’re having a hard time with.

Q. Are we reaching a turning point – either inside companies or in the

consumer marketplace – towards better-for-you?

A. We’re still a few years away from that. It may come through the use of icons to market these foods, such as PepsiCo’s Smart Spot, and the star system at some supermarket chains. These represent attempts to make things easier in terms of standardisation of healthy products. But I don’t see true standardisation happening within five years or so. The big champion of that would have to be the FDA, and they don’t really seem to be [that interested]; they’ve got some more immediate things they’re focusing on such as food safety, labelling away-from-home foods and so on. And a lot of the existing programmes aren’t perfect; they’re only great starts.

Q. When does success in this overall effort start making a difference in the nation’s obesity rate and overall healthfulness?

A. The important thing to realise is that over 80% of North Americans who gain weight only gain it at rate of less than 2.5 pounds a year. That’s the equivalent of eating one extra Hershey’s Kiss a day. So any sort of small change that happens because companies start marketing better-for-you more effectively can help arrest the growing obesity problem among a number of Americans – but it’s not going to turn around the whole nation. It took a lot of people 25 years to invest in that tummy; it’s not going to disappear in five years. You don’t gain weight overnight and you’re not going to lose it overnight. So we’ll see a slowing down of things, but it will be a while before you see a reversal of things.

Q. What’s happened to functional foods, per se? Aren’t consumers demonstrating that they’re more interested in foods with inherent nutrition?

A. The primary value of processed functional foods is that the less we cook, the more we eat something that is already cooked. They’re fitting a niche, though you’d certainly rather have people eat real blueberries. But it’s better than nothing. We need to be realistic that a lot of people don’t have the talent or the time to always get the functionality that comes from the real stuff, and the only way you can get it is through more processed versions. It’s better than nothing but it’s not great.

NOVEMBER 200716


B E V E R A G E S C A S E S T U D Y

In 2007 the European energy drinks market is characterised by buoyant demand in most countries being supplied by a smaller group of players, a scenario due to a shake-out in the number of mainly start-up brands that followed the supply explosion seen at the turn of the century.

“What we saw back in 2002 were a lot of Red Bull me-too brands,” Gary Roethenbaugh, research director at beverage market analyst, Zenith International, told New Nutrition Business. “There was a lot of clutter out there and a lot of them have gone by the wayside. Those that have remained have consolidated and built distribution strength. It is not just about the power of Red Bull – it’s also the cash-fl ow problems that come with being a start-up.”

Another defi ning characteristic of the European market today is its movement towards the mainstream; garage forecourts, supermarkets and smaller retail outlets such as convenience stores, sports clubs and gymnasiums now marginally outsell the traditional energy drink bastions of nightclubs and bars. Zenith International estimates sales have moved from a 70/30 split in nightclubs/bars versus conventional retail outlets to about 50/50 in the past two years.

EVER-WIDENING DEMOGRAPHIC PROPELS SALES Energy drinks are not just for “kids” anymore. While young adults seeking an energy boost during a night out still consume the greatest volumes in the highest numbers – drunk either straight or mixed with vodka or some other alcoholic spirit – energy drinks have won an acceptance in the mainstream that has seen a broad demographic from truck drivers and other motorists to students, housewives, athletes, offi ce workers and even the elderly

buy into their energy-boosting promise. In an environment where carbonated

soft drink (CSD) sales continue to slide, energy beverage revenues have moved in the opposite direction. With consumers tiring of the sugary, empty calories typical of CSDs, they are turning to alternatives like energy drinks which, while they might not offer the healthy halo of superfruit juices and other non-carbonated offerings such as fortifi ed waters, do provide an increasingly sought-after functionality. When survey after survey returns “fatigue” and “energy levels” as priority health concerns among consumers of all ages, it’s easy to see why. Industrial societies have an energy defi cit energy drinks can help to reduce. That’s the bedrock imperative.

To paraphrase Red Bull’s slogan, energy drinks “give you wings”. It’s a powerful sell that is scientifi cally backed. Most energy drinks, unlike a lot of other functional beverages, do what they claim on the tin – boost your energy. Most tend to have similar ingredients, with the energy-boosting properties usually coming from caffeine, taurine, glucuronolactone, glucose and herbs like spirulina and ginseng.

THE SHAPE OF THE MARKET

Zenith notes that between 2001 and 2006, western European sales grew by 9% while eastern European sales vaulted 22%. But western European sales grew by 15% and 11.9% in 2005 and 2006 – after slower increases between 2002 and 2004 – to reach a value of €3.1 billion ($4.42 billion) in 2006.

In 2006 the fi ve biggest European markets were the UK, which accounted for 26% of all energy drinks sold, followed by Germany (16%), Spain (12%), Austria (10%) and the Netherlands (8%). Austria, Europe’s oldest energy drinks market at a venerable 12 years,

had the highest per capita consumption at 4.8 litres per person.

Red Bull remains the runaway market leader in every European market in which it operates except Finland (where ED, a local brand manufactured by Hartwall, leads) and commanded an impressive 60%+ share of the 383 million litres of energy drinks sold in 2005. This fi gure has fallen, however, from about 70% in 2003, Zenith points out. In 2005 the next highest-selling brand was Shark, accounting for just 3.2% of volume. While private label offerings are the rising stars, with about 15% market share, Zenith notes that the top fi ve brands accounted for 71% of the market in 2005.

While Red Bull is outsold by GlaxoSmithKline’s Lucozade in the UK, the latter sells under a slightly different proposition as a glucose-based sports beverage. Lucozade has a long history of

Red Bull far from being tamed in Europe

This decade has seen a plethora of energy drinks launched on the European market and, as we have seen in other parts of the world, most have since been withdrawn. It’s proved perilously diffi cult for brands to put down roots in the towering shadow of market leader Red Bull, which continues to dominate the European (and global) energy drinks scene. But there are two offerings – Shark and Burn – that have managed to grow wings of their own. SHANE STARLING recently interviewed the top-3 European players to gain as accurate a picture as possible of the market and the shape it will take in the years to come.

NOVEMBER 2007 17



mainstream consumption in the UK, so much so that it is the No.2 selling soft drink there behind Coca-Cola, according to Nielsen fi gures from March 31 this year. Red Bull ranks eighth in the same data, with annual growth of 14.7%, outselling the likes of Fanta, and now has Volvic bottled water (11% growth) and Ribena (2.4% contraction) in its sights.

Red Bull and other beverages that incorporate taurine are banned in France but are present regardless in a thriving grey market there. Shark acquiesced to French law by removing taurine from its Gallic batches – something Red Bull has said it would never do. “Red Bull is not available in France,” Caroline Jacomb, channel marketing director at Red Bull UK, told NNB. “We wouldn’t alter the formulation of the product for any market so we are waiting for the French law to be altered, which apparently may happen in the short term.”

Coca-Cola’s Burn joined Shark in changing its formula to stay on market there: “We reformulated Burn in France because of the regulations,” Clemes says.

It’s interesting to note that in Europe, unlike the US, the growth of the sports drinks market is slowing markedly. Zenith data reveals that between 1997 and 1998 the volume of sports drinks consumed in Europe nearly doubled. By 2000 growth had dropped to 31% and in the last two years the percentage has dipped below double fi gures (see Chart 4).

Charts 2 & 3: West Europe energy drinks’ volume & growth, 2005-06

Source: Zenith International

Volume share

% of 2006 volume

Growth share

Extra 45 million litres% of 2005-06 growth

UK (1)28.0%

Others24.2%

Others23.8%

Germany17.5%

Spain12.9%

Austria9.5%

Netherlands7.9%

UK (1)32.9%

Germany18.2%Spain

10.7%

Austria7.7%

France6.7%

(1) UK includes Red Bull parallel imports from various other European countries

RED BULL SALES SET TO ENTER STRATOSPHERE

Red Bull GmbH saw its worldwide annual sales leap by 23% to a phenomenal €2.64 billion ($3.43 billion) in 2006, according to the Austrian news agency APA.

In volume terms, just over 3 billion 250ml cans (i.e. 750 million litres) of Red Bull were sold in 130 countries last year. Sales in Eastern Europe soared, by 53% year-on-year, Latin American sales were up by 31%, while the US posted a lift of 27% on 2005.

This year the company is expanding into Russian, Mexican, Japanese and Chinese markets, which will no doubt send sales soaring by an even higher percentage.

85 101

164

235285 296 317 333

383428

0

100

200

300

400

500

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006e

Million litres

+3.9 +6.8% chg +5.1 +15.0 +11.9+21.5+43.0+62.2+18.5

Chart 1: West Europe energy drinks’ resurgence


(est)

0.290.29

0.31 0.350.37

0.43

0.960.900.830.800.67

0.54

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2001 2002 2003 2004 2005 2006e

Energy

Sports

Billion litres

Chart 4: West Europe energy & sports drinks’ volume, 2001-06 (est)


(est)

NOVEMBER 200718



FOLLOWING THE FAR-OFF LEADER One of Red Bull’s few long-term rivals in Europe is Shark, whose Thai owner, Osotspa, is happy with its development. Shark is now distributed in over 65 countries – its European debut was in Austria in 1998. In Thailand, Osotspa claims a 70% share of the two billion energy drinks sold per year. In Europe Shark has managed to eke out an identity, niche-level sales and even leadership in select markets.

Another keen competitor, the pan-European Burn, “outsells Red Bull in France, Turkey, Denmark, Ukraine and Norway,” Brad Clemes, commercial marketing director of innovation at Coca-Cola, told NNB.

Less threatening, at this stage at least, is Danone’s V, which has been available in the UK since 2000 and recently launched in the Netherlands and France. While it outsells Red Bull in Australia and New Zealand, its country of origin, V has struggled to gain a foothold in the UK and has just over 1% of the energy drinks market there.

In most European countries the situation is remarkably similar – a host of local brands as well as offerings such as Burn, Shark and others attempting to wrestle market share from Red Bull via point-of-sale (POS) displays, exclusive distribution deals, minor price discounting, and the tactic that has worked so successfully for Red Bull since it set up base

in Austria in 1987: product sampling and giveaways.

But Red Bull could hardly be described as feeling anxious about this scenario. “Our stance on new products within sports and energy is that we absolutely welcome them,” Jacomb says. “They are providing true value to the category and word-of-mouth around the category. That is always going to be benefi cial to us. Despite huge NPD from our competitors we remain the leader.”

BULLISH MARKETING SPENDS THE KEY Red Bull may have kept NPD to a minimum – introducing only a sugar-free version, multi-packs, and this year a 375ml version of its 250ml staple product that’s particularly popular with motorists – but its marketing spend is huge and dwarfs all its competitors’, including Coke’s Burn. In the UK alone, Red Bull was due to spend £24 million ($49.1 million/€34.4 million) in 2007 compared

with the £8.5 million ($17.4 million/€12.2 million) that GSK had ear-marked for Lucozade Energy.

Coca-Cola recently launched another energy drink, Relentless, on the UK market. Relentless comes in a 500ml can that has been called irresponsible by health bodies – not to mention competitors – for containing what they consider potentially unhealthy levels of caffeine and other stimulants. It is being supported by a marketing spend of just £1.5 million ($3.1 million/€2.2 million) in its fi rst year by Coke.

Danone’s 2007 UK marketing spend for V is £3.3 million ($6.7 million/€4.7 million), including TV, radio, press, posters, on-line engagement and sampling.

Meanwhile Scottish beverage giant Barr Soft Drinks is spending £1 million ($2 million/€1.4 million) on Irn-Bru 32, an energy drink launched in 2006 that is seeking to go beyond the predominantly Scottish crowd that drink the regular Irn-Bru soft drink version. Signifi cantly, Irn-Bru nearly matches Coca-Cola for sales in Scotland; Coca-Cola, Diet Coke and Irn-Bru had sales of £48.3 million ($98.2 million/€69.3 million), £44.1 million ($89.7 million/€63.3 million) and £41.1 million ($83.6 million/$59.0 million) respectively in 2006, according to Nielsen data.

Barr has also engaged in discounting its 250ml Irn-Bru 32 can to 79p ($1.62/€1.13), where Red Bull often retails outside of supermarkets for £1.20 ($2.45/€1.72) or more. Discounting is becoming more prominent as private label moves in on the sector but whether consumers are interested in purchasing a one-litre PET bottle of a generic energy drink for 69p is yet to be verifi ed in sales fi gures. Certainly most of the marquee brands rarely engage in discounting, although they do employ a two or three-tier pricing

THE ORIGIN OF THE RED BULL SPECIES

The beverage that Red Bull is based on was developed in Thailand by the company TC Pharmaceutical, and sold there under the name “Krating Daeng”, which is Thai for Red Bull. The recipe was based on that used for Lipovitan, an earlier energy drink that had been introduced to Thailand from Japan in the 1960s.

The Thai product was transformed into a global brand by the Austrian entrepreneur Dietrich Mateschitz who was international marketing director for Blendax, a German toothpaste company, when he visited Thailand in 1982 and discovered that Krating Daeng helped to cure his jet lag.

Between 1984 and 1987, Mateschitz worked with Chaleo Yoovidhya, who formulated Krating Daeng for TC Pharmaceutical (a Blendax licensee), to adapt Krating Daeng for European consumers. Mateschitz and Yoovidhya then co-founded Red Bull GmbH and launched the “Austrian” Red Bull in 1987, which is carbonated and less sweet than the original Thai recipe.

Red Bull entered its fi rst foreign market, Hungary, in 1992, and was launched in the US in 1997. It’s now sold in more than 130 countries worldwide.

The Thai owners of Shark, Europe’s No.2 energy drink, have released a vodka pre-mix version in an attempt to boost sales among clubbers and partygoers.

NOVEMBER 2007 19



system that is split between nightclubs/bars, impulse outlets and supermarkets.

Aside from its ongoing guerrilla sampling campaigns, Red Bull conducts mainstream radio, TV, newspaper, magazine and electronic media campaigns, sponsors numerous sporting events, teams and individuals, and maintains a strong presence in nightclubs and bars throughout Europe.

Red Bull has been astute enough to move with its changing demographic. Whereas once it was typically involved in the sponsorship of extreme sports such as mountain biking, kite surfi ng, skateboarding or more dangerous and glamorous pursuits such as elite motorcycle racing, Formula 1 (in which it sponsors not one but two very expensive teams), it is now involved in sponsoring activities such as golf and cricket. This is in keeping with the broadening of Red Bull’s demographic but also the manner in which the beverage is being consumed.

“We have associations with cricket and golf – sports you normally wouldn’t associate with Red Bull,” says Jacomb. “But a game of golf or test match cricket is so long, it requires

endurance and concentration. It’s about physical activity and long-term concentration. These kinds of sports open up Red Bull to being seen as more relevant to their players.”

Zenith’s Roethenbaugh notes Red Bull’s deft methods at exposing their brand. “You see cricketers and other sports people consuming Red Bull and a lot of PR on the back of that,”

says Roethenbaugh. “A lot of it is quite subtle. Professional sports people consume Red Bull as a pick-me-up.”

SHARK RULES SEA OF MINNOWS As Red Bull’s popularity has grown it has begun to acquire the kind of ubiquity typical

This example of Red Bull’s ubiquitous sponsorship adds another dimension to the brand’s “gives you wings”

slogan.

RED BULL: HORNS AND SHOULDERS ABOVE THE REST

Caroline Jacomb, channel marketing director for Red Bull UK, shares her thoughts on Red Bull and the wider industry with New Nutrition Business.

On sampling: “A lot of people know about Red Bull. People know Red Bull gives you wings but they don’t know about applying it to a specifi c situation. Sampling is still a huge part of Red Bull because it gives people an opportunity to understand the product when it is most relevant to them. We have sampling all over the world. The samplers are on a mission to fi nd tired people. So that might be going to an offi ce at 3pm on a Wednesday afternoon when people are really feeling tired. They go there and they explain what is in the product and how it can help them. It is fi nding people in a moment of need. That’s when the product works best.”

On Sugarfree Red Bull: “It’s for people looking for low-calorie and defi nitely not just women. A lot of heavy Red Bull consumers are drinking Sugarfree to have that alternative.”

On the recently launched 375ml can (50% more than the standard 250ml slimline can): “It was a direct response to consumer research that showed large numbers wanted a larger format they may drink over a longer period of time.”

On alcoholic pre-mixes: “People will always mix energy drinks with alcohol. But Red Bull is about functionality. It’s about energy. It’s not about getting drunk. There will be an element of that because people do mix it but we wouldn’t pre-mix Red Bull with alcohol. What people do with it is up to them.”

On private label: “Private label is a lot cheaper but do consumers trust these brands? People trust Red Bull and they like the association of being seen with a can of Red Bull. That’s what helps us maintain our price point.”

On the road: “Driving is the area where people really understand Red Bull the best – hence us being the No.1 soft drink in garage forecourts in the UK and many other European countries. Of course we would never encourage people not to take a break. People fi nd that it helps them to concentrate when they are driving.”

On loyalty: “We have found Red Bull consumers are very loyal. 40% would go without or elsewhere if Red Bull was out of stock.”

NOVEMBER 200720



of mega-brands such as Microsoft and Coca-Cola. Indeed it has been called the Coca-Cola of the 21st century by not a few commentators.

This state of affairs is of no concern to Shark, the No.2 European player. Shark’s longevity where so many others have failed can be attributed to the fact it was one of the fi rst to follow Red Bull onto market in Europe and had the heritage of its Thai owner behind it – Osotspa was established in 1900. One of its non-carbonated beverages, called M-150, has captured 60% of the Thai market and will soon be launched in Europe.

Shark has carved out a profi table niche in Europe via strong links with bars and nightclubs that include drink specials, long-term trade discounts and heavy marketing support, often in conjunction with one kind of liquor or another, with vodkas most represented. Consumers are happy to drink an alternative to Red Bull that prides itself on its “party” image as opposed to the market leader’s now much sportier persona.

“We have always maintained the

proposition that we don’t compete with Red Bull,” Shark’s UK-based marketing director, Justin Sadaghiani, told NNB. “We want to create our own sector within the market. For instance, we don’t sponsor sports except for surfi ng. That’s the only sport we do. Our sector is the night time, the party scene, as a mixer with alcohol. That’s where the volume is and that’s where our clientele is. We do make it available in shops and supermarkets but anything that comes with that is a bonus.” Another difference between Shark and Red Bull is that the former contains natural caffeine; the latter’s is synthetic.

Indeed Shark has avoided the “day-time crowd” after an initial bad experience. “We did have a dual marketing strategy for awhile where there was the night-time crowd and the day-time crowd but the day time marketing never really took off. The new M-150 will be targeted more to the day-time scene and so we are going to use two different products to target two different outlets. M-150 will be based around the functionality of energy – for people who want a pick-me-up, like drivers,

offi ce workers and students. They are going to be the main targets.”

Both Shark and Red Bull can claim to be genuinely pan-European. If Red Bull has diversifi ed beyond the night-time scene, attracting older drinkers and gaining a presence in retail outlets such as garage forecourts and delicatessens in the process, Shark has stuck diligently to its nightclub guns. It foregoes Red Bull’s links to sport and high-profi le media campaigns and beavers away at maintaining its distribution deals and its hip kudos among clubbers and bar-goers across Europe.

Shark is brand leader in Cyprus, where it is the drink of choice among revellers on the Cyprusian party island of Ianapa. It is also No.1 in Tunisia and Yemen. Unlike Red Bull, Shark has launched a vodka pre-mix version, utilising a vodka brand also launched by Osotspa “to add sophistication to the beverage”. “We didn’t want people thinking it was some cheap supermarket vodka,” notes Sadaghiani.

SUMMARY

Don’t expect the map of the European energy drinks market to change markedly in the near future: Red Bull’s overwhelming leadership in Europe is showing no sign of abating. Its iron grip still clutches a market share of more than 60%, despite the sector drawing in new consumers at a rapid rate, a situation that offers some hope to all non-Red Bull players. In 2005 the top-10 energy drink brands in Europe accounted for 77% of the market; Red Bull stampeded its way to selling 80% of that volume – enough said.

Thai beverage manufacturer Osotspa, owner of Europe’s No.2 selling energy drink Shark, plan to launch M-150, another product in its hugely popular energy portfolio, in Europe in the near future.

0.40

0.80

1.20

1.60

2.00

2.40

2.80

3.20

3.60

4.00

Volvic Revive Berry Blast Water 500ml

£1.20

Powerade Berry/Tropical Fruit 500ml

£1.60

Lucozade Energy Original 380ml

£1.70

V Energy Drink 250ml

£3.10

Innocent Energy Release Smoothie 11

£3.30

Red Bull Energy Drink 250ml

£3.70

Irn Bru 32 Energy Drink 250ml

£3.80

Chart 5: Price comparison of energy drinks available at UK Tesco supermarkets (per litre)

It’s easy to see why everyone wants a piece of the energy drinks market these days: on a per-litre basis, Red Bull sells at more than fi ve times the price of regular Coca-Cola in Tesco, and it’s even more costly than the super-premium priced 1-litre Innocent Smoothie range.*Representatives of all types of beverages stocked by Tesco claiming to boost energy are included.

£ per litre

NOVEMBER 2007 21


P R I VAT E L A B E L C A S E S T U D Y

The retailing duopoly of Migros and Coop makes Switzerland a particularly diffi cult market for brand owners. As a result of the highly concentrated retail market, Switzerland has the highest penetration of private label products in the world. According to Nielsen data, 53% of all food products sold in Switzerland – valued at 46% of the total market – are private label.

In functional foods, however, branded products have so far been able to secure a strong market presence. Coop’s daily dose chiller, for example, is dominated by brands belonging to Danone (Actimel), Nestlé (LC1) and Emmi (Actifi t). But this situation may change now that Coop is focusing more than ever before on replacing manufacturers’ brands with its private labels.

Earlier this year, Coop unveiled JaMaDu, a private label range of healthy products targeted at kids between four and nine (see Box over page). In September, the retailer introduced probiotic daily dose under its own label, Qualité et Prix, which promises discount prices with no sacrifi ce of quality. The product comes in 4-packs of 65ml bottles and is priced at €1.80 ($2.58). Another newcomer is Coop’s Feel Perfect, an organic probiotic daily dose sold in 4-packs of 100ml bottles for €2.35 ($3.37).

The squeeze is clearly on the manufacturers’ brands and Nestlé has already responded to Coop’s moves by increasing the size of LC1 bottles by 10% – without increasing the retail price.

For both Coop and Migros, private labels have traditionally made either “low-cost” or “standard” propositions. What we are seeing now is the emergence of private labels that are differentiating themselves through added value. A prime example of this is Migros’ Actilife range which goes way beyond satisfying consumers’ basic needs, offering them a “lifestyle connection” based around

the three principles of healthy nutrition, exercise and relaxation.

Over the past decade Migros has kept a low profile with its functional offerings, limiting the range to a few products in packaging that closely copied that used by the leading manufacturers’ brands. With Actilife, however, the retailer has made a breakthrough decision to focus all its healthy offerings under one umbrella label. Migros is touting Actilife as a first-of-its-kind private label range and with it intends to “advance the nation’s health”.

Actilife is described by the retailer as a lifestyle programme that takes a holistic view of healthy eating, exercise and relaxation. Carrying the tagline “the healthy plus”, each Actilife food or beverage contains an added ingredient claimed to either revitalise or relax its consumers.

Migros is certainly not doing things by halves with Actilife and is forecasting that the range will grow to include a whopping 250

products over the next two years. New Actilife products include a probiotic

daily dose drink, sports and wellness drinks with coenzyme Q10, high-fi bre cereal snacks and juices fortifi ed with omega-3. All are priced similar to the marquee functional brands – price is no longer the key battleground for Migros, it seems – and are presented in distinctive orange packaging that boldly differentiates Actilfe from its functional rivals like never before.

What’s also new is Migros’ more straightforward use of health claims. Each Actilife label contains a prominent statement about the active ingredients. Translated into English, the packaging of Actilife Wellness Freshlife drink, for example, claims the following:

Q10 plays a signifi cant role in the body’s energy production. Actilife Wellness Freshlife contains Q10 and vitamin E in water-soluble format for optimal absorption. Additionally, Actilife Wellness Freshlife contains L-Carnitine, an amino acid which enables optimal fat-burning in muscles.

In September Migros ran a comprehensive TV commercial and print campaign profi ling Actilife as a new lifestyle credo. The marketing campaign also includes a new website (www.actilife.ch) and an eponymous health-and-wellness magazine which will be distributed to two million Swiss households four times a year.

What makes Actilife truly unique is the fact that it encompasses non-food items with wellness attributes, such as home spa and fi tness products. The connection between the range and sports is further strengthened by Migros-owned fi tness centres offering new Actilife-related programmes.

Swiss private labels zero in on functional brands

Private labels are annexing more and more shelf space in Switzerland’s supermarkets and marquee functional brands owned by Danone, Nestlé and Emmi are feeling the heat more than ever before. In September, Migros, the country’s largest retailer, announced its ambitions in the functional food arena by re-launching and expanding Actilife, its private label functional range. Swiss Coop, the No.2 supermarket chain, also has functional brands in its sights. This year it has expanded its own healthy food portfolio with new products targeted at both adults and kids. KATI LESKINEN reports.

This tableau of Actilife products represents the new private label range’s three guiding princi-ples. The sports drink Fit Q10 offers enhanced nutrition; the stretch band is intended for use in Migros’ fitness centres; and the bath salts “with valuable essential and nurturing oils and balancing aromas” offer relaxation. Continued overleaf

NOVEMBER 200722


P R I VAT E L A B E L C A S E S T U D Y

The three images above are reproduced from the first issue of Actilife, a 48-page quarterly health-and-wellness magazine featuring articles on topics such as how to reduce stress in your life, how to burn calories and how to improve your health through better nutrition. The magazine will be distributed to two million Swiss households each year.

6

Gesunde Ernährung, Bewegung und Entspannung mit Actilife: Crunchy Mix

Fit Müesli ist eines von über 150 Actilife-Produkten für mehr Wohlbefi nden.

Mit Calcium und Magnesium liefert es wichtige Bausteine für die Knochen

und die Vitamine D, E und C geben reichlich Energie für ein aktives Leben.

Mehr erfahren Sie unter www.actilife.ch. Actilife. Das gesunde Plus.

DAS

ERNÄHRUNGS-

PLUS

ENERGIE SCHÖPFT MAN MIT DEM LÖFFEL.

MIGROS SAYS ‘WIELD ENERGY WITH YOUR SPOON’

The large text of this Swiss print ad for Actilife Crunchy Mix Fitness cereal translates as Wield energy with your spoon.

The small print begins by expounding the three core principles Migros has developed the Actilife range around: healthy nutrition, exercise and relaxation, and continues:

Crunchy Mix Fit Muesli is one of over 150 Actilife products that will enhance your wellbeing. It contains calcium and magnesium, which are important for your bones, as well as vitamins D, E and C which ensure that you have enough energy for an active life.

DAS MAGAZIN DER MIGROS FÜR MEHR WOHLBEFINDEN SEPTEMBER 07

Figur-Kontrolle!

Messen Sie den BauchumfangPilates-Training

Die Kraft aus der MitteFrüh übt sich...

Yoga macht Kinder schlau

www.actilife.ch

31

EN

TS

PA

NN

UN

G

Einfach zurücklehnen und sich

relaxed ins bequeme Sofa fl äzen

und die neuste Buddha-Bar-CD

aufl egen. Harmonische Klänge

ausgewählt von DJ Ravin erfüllen

den Raum. Sich ganz auf die Musik

einlassen und den Alltagsstress

aus dem Gedächtnis verbannen.

Das Chill-out entspannt und führt

zur inneren Harmonie.

CD Buddha-Bar IX by Ravin, ca. Fr. 59.-, erhältlich im ex libris. www.exlibris.ch

AUSZE I T MIT MUSIK

Und so geht’s: Entfernen Sie alles, was sie stört oder einengt (Gürtel, Brille, Schuhe). Sitzen oder liegen Sie. Schliessen Sie Ihre Augen. Lassen Sie vor Ihrem inneren Auge das Bild eines Ortes entstehen, an dem Sie sich wohl fühlen, an dem Sie Ruhe und Entspannung fi nden. Vielleicht laufen vor Ihrem inneren Auge auch mehrere Bilder hintereinander ab – wie in einem Film. Lassen Sie diese Bilder eine Zeit lang laufen. Versuchen Sie nun, ein Bild festzuhalten. Richten Sie Ihre Aufmerksamkeit nur auf dieses eine Bild, auf diesen einen Ort, der Ruhe und Entspannung ausstrahlt.Und nun gehen Sie bitte in dieses Bild hinein und schauen Sie sich um an Ihrem Ort der Ruhe und Entspannung. Schauen Sie nach links und nach rechts, nach unten auf den Boden und nach oben zum Himmel. Achten Sie auch auf Geräusche an diesem Ort. Vielleicht spüren Sie auch etwas auf Ihrer Haut, im Gesicht. Verweilen Sie an diesem Ort der Ruhe und Entspannung und geniessen Sie es, dort zu sein (2 bis 3 Min.). Verabschieden Sie sich nun allmählich von Ihrem Ort der Ruhe und Entspannung. Nehmen Sie Ihren Körper wieder wahr. Ballen Sie Ihre Hände zu Fäusten und strecken und räkeln Sie sich. Atmen Sie ein paar Mal kräftig tief durch und öffnen Sie dann die Augen.

Quelle: Vivit Gesundheits AG, www.vivit.ch

Mentales Training

Fantasiereise an einen Ort der Ruhe

Stress lass nach!

Illu

: Ore

ste

Vinci

guer

ra

Einfach warmes Wasser in die Badewanne einlassen, Bade-

salz dazugeben, und während sich der Körper entspannt, auch

in Gedanken ein bisschen abtauchen. Das Badesalz De-Stress

lässt einen anstrengenden Tag auf angenehme Weise vergessen

und aktiviert die Selbstregeneration. Reine Salzkristalle in einer

Kombination mit ätherischen und natürlichen Pfl egeölen

ergeben ein zart duftendes Wellnessbad. Badesalz De-Stress

wirkt entspannend, entschlackend und reguliert gleichzeitig

den Feuchtigkeitshaushalt der Haut. Dermatologisch getestet.

Actilife De-Stress Badesalz, Verkaufspreis: Fr. 8.50, Inhalt: 700 g,

erhältlich in der Migros.

Actilife 09/07

WAS IS T ONSEN?Onsen ist die japanische Bezeichnung für eine heisse

Quelle. Japaner lieben das Entspannungsritual in von

Onsen gespeisten Pools. Das japanische Original ist

für Europäer allerdings etwas gewöhnungsbedürftig,

da die Temperatur des Wassers sehr hoch ist. Eine

etwas kühlere Version des japanischen Kulturguts

hat auch längst Europa erreicht. Onsen-Pools sind

der neuste Trend in den Spas. Foto

: gett

yim

ages

ER

NÄ

HR

UN

G

WA I S T-TO - H I P R AT I O

Da der Body-Mass-Index keinen Unterschied zwischen Fett- und Muskelmasse macht, wird auch noch ein anderes Mass benutzt, um die Fettverteilung im Körper zu beurteilen: das Verhältnis zwischen Taillen- und Hüftumfang. Men-schen mit einer bauchbetonten Fettverteilung (Apfeltyp) haben ein grösseres Gesundheitsrisiko als Menschen mit hüftbetonter Fettverteilung (Birnentyp).

Taillenumfang in cmHüftumfang in cm

Das sagt das Verhältnis von Taillen- und Hüftumfang aus:Männer: alle Werte < 1 gutFrauen: alle Werte < 0,85 gut

D E R B A U C H U M F A N G

Vergangenes Jahr sorgten amerikanische Wissenschaftler mit einer Studie für Aufsehen. Sie zeigten, dass das Messen des Bauchumfangs (auf Taillenhöhe) eine einfache und wirkungsvolle Methode ist, um Aussagen über mögliche gesundheitliche Risiken zu machen.

Ist der Bauchumfang grösser als 102 cm (Männer) bzw. 88 cm (Frauen), müssen Massnahmen gegen die Fettleibigkeit ergriffen werden.

www.actilife.ch

Berechnen Sie Ihren Body-Mass-Index und Ihr Waist-to-Hip Ratio.

11Actilife 09/07

SWISS COOP RUNS INTO TROUBLE WITH NEW ‘HEALTHY’ KIDS’ RANGE

Swiss Coop introduced JaMaDu, a comprehensive private label range of healthy products designed for kids, back in April and found out the hard way that honesty is not always the best policy. JaMaDu’s launch was followed by a baptism of fi re, with the range immediately drawing strong criticism from both media commentators and parents. A number of JaMaDu products drew fl ak for being over-priced, over-packaged and not as healthy as they claimed to be.

Despite engaging both in-house and external nutrition experts, Swiss Coop stepped into a minefi eld when it launched JaMaDu. The retailer mounted a huge advertising campaign around the launch, communicating that the range had evolved from its “longstanding promotion of healthy, well-balanced nutrition and exercise for children”. These noble intentions were crushed shortly after launch by the Swiss consumer magazine Beobachter, which dismissed JaMaDu as “Expensive convenience-food in monkey wrappings”.

“Monkey wrappings” refers to Coop’s carefully chosen packaging for JaMaDu. Currently the range comprises more than 40 products, including dairy products, herbal tea, fruit sticks, cheese snacks, biscuits and cereals, all prominently featuring a cartoon monkey on their packaging.

JaMaDu’s pricing has indeed drawn the heaviest criticism. Take the vegetable products: the mini-sized JaMaDu cucumbers are sold in a 100g plastic pack for the price of €1.20 ($1.66), when a regular cucumber (500-700g) is priced at €1.00 ($1.39) – roughly equating to a 700% premium. Sliced carrot sticks in a 70g JaMaDu pouch sell for €0.90 ($1.25), representing a 230% premium compared to carrot sticks sold under Coop’s budget private label.

On top of this, certain products – especially the 100ml yoghurt drinks which contain 10g of sugar – were claimed to be unnecessarily high in sugar by media commentators. “Why would Coop promote such products as ‘healthy’,” demanded the critics.

Once negative publicity gains momentum it becomes, like a juggernaut, exceedingly diffi cult to reverse. Many Swiss parents seem to agree with Daniel Eugster, father of Sino, 5, who told NNB: “I have never bought JaMaDu products for my son. Wasn’t there some discussion that the products are actually not as healthy as they appear to be?”For full coverage see the September/October 2007 Kids Nutrition Report.

NOVEMBER 2007 23


S T R AT E G Y C A S E S T U D Y

Although its strategy has been evolving since 1955 and it sells almost 24 million bottles of its fl agship product every day – in 28 countries around the world, a number forecast to reach 46 by 2011 – there are still many in the West who don’t comprehend the universal truths to be found in “the Yakult way”.

There are a few that do understand Yakult’s philosophy and Danone is its most diligent follower. The French group owns a 20% stake in the Yakult Honsha company and four senior Danone executives sit on the board of Yakult, the most important of whom is Jacques Vincent, the vice chairman and CEO of Groupe Danone. Together the two companies have formed a joint venture which has the potential to be the world leader in functional dairy. The new venture made its fi rst launch this year in India – and high-growth potential markets such as Vietnam are targeted for future launches.

Sold on an intestinal wellness message and fi rst launched in Japan in 1955, Yakult’s fl agship 65ml probiotic fermented milk drink, made with L. casei Shirota and its variants, earned worldwide sales for Yakult in the year to 31 March 2007 of over $1.5 billion (€1.1 billion) – around 65% of Yakult Honsha’s total sales. Selling its products in the same fl avour and pack design everywhere in the world, with the same benefi t message – digestive health – Yakult has done more than any other company to prove that when it comes to food and health there are more similarities between people around the world than there are differences – and in so doing has demonstrated the universal consumer appeal of the digestive health message.

A HIGH-GROWTH FUTURE IN ASIA

Much of that growth will in future come from Asia which (excluding Japan) already accounts for more than 45% of Yakult sales volume and 70% of all of the company’s business

outside Japan. Total sales of Yakult in Asia were 11.4 million bottles a day in 2007 – an 11% increase over 2006.

In particular, Yakult says in its review of the fi nancial year ending 31 March 2007 – only very recently made available in English – the strategic focus is on China, where sales of Yakult have rocketed from 50,000 to 470,000 bottles a day between 2001 and 2007, even though the brand is on sale in only three cities: Guangzhou, Shanghai and Beijing (the latter added only in 2006).

Elsewhere in Asia, Yakult’s other big opportunity is India, where Yakult Danone India – the name of the two companies’ joint venture – began building its factory in 2006. By the end of 2007 it will be selling product in Delhi, with plans to expand to Mumbai, Bangalore, Chennai and Kolkata in 2008. As in other countries, Yakult will focus on sales direct to consumers – alongside supermarket sales – as the key distribution channel to drive growth.

Next on the Yakult-Danone target list is Vietnam, where the company this year began

construction of a production facility on the outskirts of Ho Chi Minh City.

A SOUTH AMERICAN SUCCESS STORY

South and Central America are other major success areas for Yakult, with 4.25 million bottles of Yakult sold each day in 2007, a 12% increase on 2006. Mexico, Brazil and Argentina are the biggest markets, of which Mexico is the most infl uential. In volume terms Mexico is the third-biggest market in the world for Yakult’s probiotic drinks (after Japan and Korea), with daily sales of 2.63 million bottles in 2007.

Yakult’s stated sales target for the Americas is 4.877 million bottles a day by 2011 – which it intends to meet partly by entering new markets such as Canada, Peru, Chile, El Salvador, Belize and Guatamala.

The company has aggressive growth plans in North America – a natural decision in the wake of Danone’s successful launch of Activia in the US in 2006, which demonstrated to a previously skeptical US food industry that consumers are very motivated by probiotic products for digestive health.

Yakult has, since 1990, been serving Asian and Hispanic consumer markets but this summer saw the start of a ramp-up in effort which will lead to full-scale market expansion on both the East and West coasts of the US. The company says it plans to build a US plant eventually; currently it is importing from Mexico, where the Yakult plant has a capacity of 3.6 million bottles per day.

A FIGHT IN JAPAN’S MATURE MARKET

Japan – the most developed and biggest digestive health market in the world and also the biggest market for probiotic products – is now seeing maturity in the dairy probiotic sector in which Yakult competes. Yakult has

The secrets of the original little bottle’s success

If you want to understand how to succeed in the nutrition business there is one company more than any other that you can learn from. Certainly Danone, the world’s most successful functional dairy company, seems to think so – it has a 20% stake in Yakult Honsha. Yakult’s recently published annual report throws a light on the continuing growth and big ambitions of this extraordinary company. JULIAN MELLENTIN reports.

NOVEMBER 200724


S T R AT E G Y C A S E S T U D Y

experienced modest sales declines at home in the last two years as competition in the probiotic dairy market becomes more intense and probiotic and digestive-health offerings appear in other food forms. An example of the latter is Kagome’s Labre brand of probiotic fruit and vegetable juice, a fi rst-of-its-kind product in Japan, which has achieved over $50 million in retail sales in its fi rst two years (see the August 2007 New Nutrition Business for full coverage).

In response Yakult is focusing its marketing spend, which has been increased on three core products – Yakult, Yakult 300V and Yakult 400. The company is spending more to communicate the scientifi c benefi ts of their probiotic ingredients, while strengthening its sales organisation and in particular its direct sales network, the “Yakult Ladies” (see below).

NO LET-UP IN EUROPEAN AMBITIONS

To put the company’s performance in Asia into some kind of context, after 10 years of marketing in eight European countries, Yakult sells only around 784,000 bottles a day. That’s a 42% increase over the last four years, and the company is targeting sales of 1.4 million a day by 2011 and has plans to go into Greece, Portugal, Poland and the Czech Republic.

The combined effects of Europe’s low-growth food market, intense local competition from major European dairies – such as Danone’s Actimel and Activia brands – and a lack of access to distribution, has resulted in the Yakult brand holding only a very minor market position in most countries. In some markets, such as the UK, sales have actually gone backwards over the last two years. However, it’s clear that Yakult is keen to turn that situation around. It added a new product, the probiotic milk drink Bifi ene, to its range in Europe in 2007 (see the April 2007 NNB) as well as increasing its advertising investments.

THE POWER OF DIRECT SALES

Perhaps one of the key differences between Europe and Yakult’s other markets, which perhaps explains the difference in performance between Europe and elsewhere, comes down to distribution strategy – and in particular to the power of selling direct to consumers.

Founded in 1963, the Yakult Ladies are the supporting pillars of Yakult’s probiotic dairy product sales. The Yakult Ladies are salespeople who deliver products in person to homes and offi ces, taking the opportunity of

these face-to-face visits to educate customers about the benefi ts of probiotics. It is a system which has proven much more effective than advertising in getting across the benefi ts of drinking Yakult and, as the company itself says, this type of face-to-face communication builds trust.

In Japan there are more than 45,000 Yakult Ladies and they accounted for 62.1% of the company’s sales of Yakult dairy products in the year to 31 March 2007. Supermarkets, convenience stores, vending and other channels accounted for 37.9%, a ratio that has changed little since the 1990s.

The Yakult Ladies system has been copied to a greater or lesser extent in many of the countries in which Yakult operates and today there are more than 35,000 worldwide.

In China, for example, Yakult sells through 500 Yakult Ladies – as well as 10,000 stores – and, the company says, “The Yakult Lady home delivery channel will be the major sales channel in achieving our targets [in China and India]”.

Given the success of the Yakult Ladies elsewhere, that aim isn’t surprising. In the Americas, for example, there are 13,200 Yakult Ladies who are identifi ed as key to the company’s success in countries such as Brazil and Mexico and in south Asia (there are 21,870 Yakult Ladies in Asia outside Japan). Yakult has plans to increase their numbers and their role.

In Europe, by contrast, where Yakult Ladies are unknown, sales growth has lagged behind. More than anything else, the difference in performance is a testament to the power of direct communication to consumers – something that other nutritional brands have discovered.

There are, of course, some other factors in Yakult’s success. These are:

• Focus on one brand, one health benefi t• Focus on one product• Focus on creating value, not volume• A steady-as-she-goes expansion strategy• A long-term view of success• Health as a corporate value – not a

marketing add-on.

Many companies are debating whether they can make one brand a credible provider of more than one health benefi t – with, for example, one product variant for gut health or another variant under the same brand for bone health. As our lead story about Barilla’s new Alixir range of functional foods illustrates, there are still those who believe

that this is a feasible strategy, even though the experiences of almost every attempted functional umbrella brand of recent years attest that this is a diffi cult, if not impossible, target to achieve.

By contrast, the Yakult way of offering just one brand with one clear health benefi t (intestinal wellness), such that the brand can become “the expert in gut health”, gives a focus that enables the company to concentrate all its resources on this single goal.

Many Western corporate managements struggle to accept that nutritional products are usually low-volume, high-value and that few, if any, brands have achieved mass status. Yakult, it appears, understands this reality very well and would rather have a successful, low-volume/high-value (and margin) niche brand, based on one product and one health benefi t, in many countries than struggle to build a mass – and therefore lower margin – brand in just one or two.

Yakult began its overseas expansion in March 1964 by starting up business in Taiwan. It has taken the company almost 30 years to expand to a total of 28 countries around the world. That’s a pace of expansion that would be too slow for the shareholders of many Western companies – but it illustrates how long-termism underpins everything Yakult does.

THE FUTURE FOR YAKULT

Although probiotics is the technology that is core to Yakult and intestinal health is the focus of its dairy drinks business, the company has some embryonic developments in other areas. These new developments are taking the company in two new directions (examined on pages 25-27) involving:

• expansion of the benefi ts of probiotics beyond digestive health to encompass mood, stress and blood-pressure

• expansion beyond dairy products to fruit and tea-based beverages.

Yakult Honsha is a company that has, for almost 50 years, demonstrated the benefi ts of a highly focused strategy. The effectiveness of its sales and marketing approach has been proven in all cultures. Yakult is a role-model for the entire industry and no company with ambitions in the nutrition business can afford to ignore the lessons from this extraordinary success story.

NOVEMBER 2007 25


H E A RT H E A LT H C A S E S T U D Y

While probiotics is the technology that is core to Yakult Honsha and intestinal health is the focus of its dairy drinks business, the company has been developing other technologies and other benefit areas, some of which are growing ahead of expectations.

Stress relief and blood pressure-lowering are potentially promising areas in Japan, where the idea of the country being a “Stress Society” has been gaining ground in recent years. Stress afflicts 50% of the population, according to statistics from Japan’s Health, Labor and Welfare Ministry, and the National Nutrition Survey in 2004 reported around 50% of people over 40 have high blood pressure or mild hypertension. It’s estimated that there are 7.8 million Japanese with high blood pressure and more than 30 million with potential hypertensive problems.

Yakult decided to enter the blood pressure-lowering market as a result of developing a process to produce gamma-aminobutyric acid (GABA), an important neurotransmitter in the central nervous system which, in the right dose, can have an anti-anxiety effect.

The process derives from Yakult’s core technology, in that it is based on fermenting two lactic acid bacteria, L. casei Shirota and Lactococcus lactis. The result of work carried out at the Yakult Central Institute for Microbiological Research, the patented process involves L. casei Shirota breaking up milk protein to produce glutamic acid, an amino-acid, which is then converted into GABA by Lactococcus lactis.

Research by Yakult jointly with a team led by Professor Katsuo Kamata of Hoshi University confirmed that GABA lowered blood pressure by inhibiting noradrenaline secretion and constricting intestinal arterioles. Three clinical studies have since established its blood pressure-lowering effect among people with elevated blood pressure who

consumed a 100ml dairy drink containing GABA daily for four weeks.

DEVELOPMENT OF JAPAN’S BLOOD PRESSURE-LOWERING MARKET

The blood pressure-lowering category which this development enabled Yakult to enter didn’t exist prior to 1997 when Calpis, one of Japan’s foremost food companies, led the way with the launch of Ameal S, a product born of Calpis’ research into lactotripeptide (LTP). LTP is produced from the fermented properties of three amino-acid bindings, VPP (valine-proline-proline bond) and IPP (isoleucine-proline-proline bond). Calpis found that these two compounds lower blood pressure by inhibiting ACE (angiotensin converting enzyme), the enzyme that generates angiotensin II in the body which in turn increases blood pressure levels.

Initially sales of Ameal S grew strongly, peaking in 2002 before starting to fall in 2003, the year when the entire blood-pressure lowering segment fell in value by 20% to

JPY8 billion ($70 million/€49 million). With its 70% market share this was a particularly heavy blow for Calpis. Despite the company’s efforts, with a 2004 sales value of just JPY8.8 billion ($77 million/€54 million), blood pressure-lowering was a niche category, accounting for barely 1.6% of the total sales of FOSHU-approved products valued at JPY600 billion ($5.22 billion/€3.66 billion).

Yakult launched its rival technology in a dairy drink format under the Pretio brand in October 2004. It was available only by home delivery, which in Yakult’s case means the Yakult Ladies network, a face-to-face, door-to-door distribution channel developed by the company to ensure that its products are “available at all times in a wide variety of places”. There are more than 45,000 Yakult Ladies, charged with providing health information directly to consumers. Between them they account for over 60% of Yakult’s sales in Japan.

Each 100ml carton of Pretio contains 10mg of GABA and 10 billion L. casei Shirota. Although the blood pressure-lowering market was in trouble, Pretio performed well, hitting JPY4.9 billion ($43 million/€30 million) in sales in 2005.

Sales dropped slightly in 2006, as the chart shows. Yakult’s response was to:

• improve the Pretio package• clarify the benefit by making the

statement For people with high blood pressure bigger on the label

• introduce 7-packs to promote seven-day-a-week consumption

• widen distribution to include grocery stores.

In 2007 sales have recovered and even surged ahead of Ameal S. Based on expected end-of-year sales figures, Pretio looks set

Blood pressure focus pays off for Yakult

Lowering your stress levels and your blood pressure are two areas which should offer signifi cant opportunities and Yakult Honsha is fi nding success in both with products that take the company beyond its traditional probiotics-for-digestive-health focus. In blood pressure-lowering it is now the biggest player in Japan and possibly the biggest in the segment worldwide.

With Pretio (on the left) and Lemoria, Yakult Honsha is moving in two new directions.

NOVEMBER 200726



to become Japan’s biggest blood pressure-lowering brand and possibly the biggest brand of its kind in the world.

Pretio has also benefited from growing consumer awareness of GABA as a health ingredient. The GABA market emerged after the ingredient – originally sourced from rice germ – was introduced around 1990. In 2001 it was listed as a food ingredient, opening the door for the food industry to include it in their products.

Unsurprisingly, consumer recognition of GABA was initially very low and the market size was small. However, Yakult’s launch of Pretio in 2004, supported by consumer advertising and education, led to increased recognition of the ingredient and, in 2005, Ezaki Glico – one of Japan’s biggest confectionery companies – introduced “Mental Health Chocolate GABA”.

The brand targeted not blood pressure but stress relief – another effect of consuming GABA – and was an instant hit, achieving over JPY4 billion ($35 million/€24 million) in sales in its first year, far exceeding the manufacturer’s expectations.

The size of Japan’s market for products using GABA is now estimated at JPY13 billion ($113 million/€79 million), on a company sales basis, in which the two dominating brands are Yakult’s Pretio, with 35.9% of sales, and Ezaki Glico’s Mental Health Chocolate GABA, with 28.4%.

GABA & STRESS RELIEF

To what extent Pretio has benefited from growing media attention to GABA’s benefits in alleviating stress and whether this is now Japanese consuumers’ primary reason for buying the brand isn’t known.

Yakult actually has a specifi c stress-relief brand in its portfolio; Lemoria. Described as a “mental relaxation drink”, it’s a lemon drink containing a 100mg dose of L-theanine – an amino acid commonly found in tea which has been shown to reduce mental and physical stress and may produce feelings of relaxation. Its presence in tea is being increasingly promoted in the West by Unilever’s Lipton tea business (see the August 2007 New Nutrition Business for full coverage). Lemoria also contains seven herbs: catmint, passion fl ower leaf, blueberry leaf, chamomile, linden, lemon verbena and lemongrass.

Lemoria was launched in mid-2001, supported by TV commercials featuring Frankie Goes to Hollywood’s song Relax, which had been hugely popular in Japan in

ADVERTISING MESSAGES – YAKULT GABA

Japanese functional food advertising is usually very detailed with scientific explanations and this example from Yakult is no exception.

It doesn’t advertise a product but rather is part of a one-month consciousness-raising exercise about blood pressure, which in English is entitled The Blood Pressure Improvement Programme.

On the front side of the ad (on the left) readers are presented with a test similar to those found in women’s magazines and are prompted to check those of the 20 boxes which apply to them. Box descriptors include Talking quickly, Drinking more alcohol lately, Often running late for appointments.

After they have finished the test they check their scores against the box at the bottom. There are four categories:

Good condition: 0-2 pointsAverage: 3-6 pointsCaution!: 7-12 pointsExtreme caution!: 13-20 points.

The reverse side of the ad (on the right) describes the physiological causes and effects of stress. For example:

When we are overworked the body secretes adrenaline and noradrenaline into the bloodstream in order to cope. We evolved this way so we could cope with the pressures of primitive existence. When these two hormones build up they can have an adverse effect – by restricting blood vessels and raising blood pressure.

There is a flowchart showing this process and a picture showing green noradrenaline hormones restricting blood vessels. The blood cells and hormones have eyes, arms and legs and those on the noradrenaline team look “evil”.

At the bottom of the page are some suggestions for dealing with stress, including relaxing in the bath, having a massage or listening to your favourite music.

In the bottom right hand corner there is a suggestion that readers take GABA, which – they are informed – contains gamma amino acids found naturally in food products such as brown rice and soy beans. There is a small flow chart showing how GABA intervenes in the body’s natural reactions to stress by controlling noradrenaline levels and reducing blood pressure.

NOVEMBER 2007 27



the 80s. The Lemoria commercials instantly struck a chord with viewers.

Yakult gave the brand a makeover in 2005, when the package was redesigned to better highlight the benefit and the L-theanine content. The Japanese for theanine supplement and alpha wave were added to the front of the package. At the same time the brand name was changed to Lemoria Leaf Herb & Relax, and the tagline to:

Lemoria is the best drink when you want to be free from gloomy or anxious feelings.

The line was then extended with the launch of Lemoria Flower Herb & Refresh, which promises to help you feel refreshed by using flower-based herbals. This variant contains 100mg of L-theanine as well as extracts of jasmine, hibiscus, orange flower, chamomile, linden, rose petal and rosehip.

Lemoria is not distributed by the Yakult Ladies; it’s sold solely through convenience stores and vending machines, the latter being the biggest channel. It’s something of a marginal brand, however, with sales of just JPY500 million a year ($4 million/€3 million).

ADVERTISING MESSAGES – YAKULT GABA

Accompanying the picture of “salary men”, some of whom are wearing hospital robes, crossing the road on their way to work is text that translates as:

This nation’s blood pressure is a concern: about 40% of Japanese have high blood pressure (according to a 2005 survey on the nation’s health and nutrition).

The reverse side of the ad (on the right) includes some statistical data and a pie chart showing that 37.4% of Japanese have high blood pressure. The text adds that around half of people over 40 suffer from this condition. The product, it says, contains two milk derivatives (L. Casei Shirota and Lactococcus lactis) to help drive down blood pressure and there are graphs to demonstrate that people who take Yakult GABA daily for 4 weeks show marked differences in terms of blood pressure compared to those who do not.

The text next to the picture of the package translates as:

Pretio, including gamma amino acids (GABA) is a special health food product especially suited to those with high blood pressure.

NOURISHING BETTER BRAINS IN KOREA

South Korea is one of Yakult Honsha’s most important markets. Here the company recently debuted its first brain-health drink, called Brain Q 148, which is sold in a 140ml bottle and marketed through drug stores. “The main target of Brain Q 148 is high school students who are preparing for the college scholastic aptitude test,” the company says.

Ingredients: ESP-102L 1.37% (Solid powder more than 0.3%); Amur cork extract (Korean origin); schizandrae fructus baill extract (Chinese); sugar; artificial flavour (lemon & icemint); natural colour (safflower); palatinose.

Takeshi Takeda, Managing Director, Global Nutrition Group, can be reached at:

www.global-nutrition.co.jp Tel: +81-3-3560-3638 Fax: +81-3-3560-3639

1

¥4.9bn$4.2m/€2.9m

2

3

4

5

6

Pretio

¥5.15bn$4.4m/€3.1m

Ameal S

¥4.7bn$4m/€2.8m ¥4.3bn

$3.7m/€2.6m

¥5.6bn$4.8m/€3.4m

¥4.1bn$3.5m/€2.5m

2005 2006 2007

Billionsof

yen

Pretio Ameal S Pretio Ameal S(est)

The rise of Yakult Pretio and the decline of Calpis Ameal S

Source: Fuji Keizai & Global Nutrition Group

NOVEMBER 200728


D I G E S T I V E H E A LT H C A S E S T U D Y

The nutritional potency of prunes has long been understood. They’re one of the highest-scoring fruits in antioxidant content, even topping blueberries and strawberries; they’re high in fibre; packed with vitamins A and C as well as iron, magnesium and potassium; and they contain no fat, cholesterol or sodium. This notwithstanding, prunes have traditionally had little appeal to consumers beyond their widely adopted use as a laxative.

But now Sunsweet Growers’ PlumSmart juice and new individually wrapped prunes called Sunsweet Ones are pumping new vitality into the previously moribund business of selling prunes and their derivatives. It’s the success of Sunsweet’s reinvention of prune juice in particular that’s making a significantly greater player out of the California-based co-op that produces about one-third of the world’s dried plums.

“Not a lot of people like prune juice, in part because there’s this stigma that that is what your grandma told you to drink if you were having digestive problems,” Steve Harris, vice president of marketing for California-based Sunsweet, told New Nutrition Business when PlumSmart was launched.

“And prune juice consumers are getting older, and there aren’t a lot of new consumers entering the market. But what do you do? We still had this commodity that we were trying to find another home for.”

Prune-juice drinkers were not only skewing older, they were generally consuming the beverage only occasionally and purchasing it largely for its physiological functionality – not to enjoy daily.

Prune producers have been casting about for ways to squeeze more consumer appeal out of their product for several years now. There was a brief sales bump in 2001,

after the California Prune Board obtained permission from the US Food & Drug Administration to officially change the name “prunes” to “dried plums”. But the name change provided little long-term improvement in sales.

Says Harris: “We began interchanging the names of the fruit and to some degree that confused consumers. They didn’t know what a dried plum was; but everyone knew what a prune was. We didn’t want to get rid of the prune name because of this basic awareness and understanding; but we still want to fight the stigma. So we took the stance of calling them both.”

Sunsweet clearly had to turn to more than just new nomenclature to spark dried-plum sales. Sunsweet executives were convinced that they could effectively leverage the taste and nutritional properties of dried-plum

juice – even its digestive benefits – if they could just reformulate and repackage it for consumers.

The co-op came up with a process that extracts the juice from prune plums while they are still fresh, before quickly cooling it to retain the flavour. This is a decidedly fresher-tasting and less-viscous product than prune juice per se, which is made by drying plums, then rehydrating them with steam and extracting the resulting juice.

“It’s a completely different taste profile,” Harris, told NNB last year. A former marketing executive with Dole’s fresh-vegetable operations, he came to Sunsweet three years ago specifically to figure out the PlumSmart proposition.

“It is sweet and light. It’s a juice you can drink every day because in some ways it can compete with grape, orange and cranberry juices, and not be compared with prune juice which you use for a very specific reason.”

That said, one big reason for the success of PlumSmart to date is that Sunsweet strategically embraced the digestive benefits of the juice. For Digestive Health is emblazoned on the label right under the product name. Sunsweet even added ginger and chamomile, which it calls natural stomach-soothers and chicory root, a natural probiotic. Sunsweet also aimed the product’s positioning and marketing squarely at ageing baby boomers rather than the typically older demographic that prune juice has traditionally been targeted at.

PlumSmart’s robust performance has allowed Sunsweet to grow its overall juice sales by 15% to 20%, Harris told NNB. Now, the co-op is planning the introduction of a new PlumSmart Light juice that’s sweetened with sucralose. The extension has 60% fewer calories and sugar than regular PlumSmart and is suitable for diabetics. “If you look at our core boomer demographic, about 30% of

Sunsweet success in digestive health

Sunsweet Growers has turned its PlumSmart juice, a fresh and untested proposition launched into a heavily crowded marketplace last year, into a $30-million (€21-million) success story (see the October 2006 New Nutrition Business for full coverage of the launch). Thus emboldened, the fruit-growing cooperative has recently been rolling out another major innovation: prunes packaged individually and merchandised like a sexy superfruit. DALE BUSS reports.

Talking about a prune revolution: these three innovative products are making Sunsweet Growers a stronger player in the worldwide dried plum market.

NOVEMBER 2007 29


D I G E S T I V E H E A LT H C A S E S T U D Y

those consumers have some diabetic issue,” he says. “So PlumSmart Light made a lot of sense.”

A DIGESTIVE-HEALTH PIONEER

Sunsweet had tested PlumSmart for two years in St. Louis before taking it national. The co-op didn’t set out to conduct such a lengthy test market, but tight supplies of the plums it uses for the juice meant executives couldn’t be certain they would be able to supply enough fruit for a national rollout.

As it turned out, however, the timing for PlumSmart’s national launch was perfect. “When we were testing it, the marketplace in terms of digestive health wasn’t nearly what it is today,” Harris says. “Now there’s [Dannon’s] Activia and DanActive, and yoghurt and cheese products are all talking about probiotics and digestive health. It’s no longer this stigma that you shouldn’t talk about anymore. The competition among all these products is healthy, and as more people talk about digestive benefits, more consumers are getting more comfortable hearing about them.”

The product’s message, Harris explains,

“is really, ‘Start your day with PlumSmart.’ It’s more of a preventative message than addressing people who may have existing digestive issues. We’re suggesting drinking it four to five times a week for all the fibre and other nutrients that you need”.

In fact, education about plum juice and its digestive benefits has been key to PlumSmart’s success. How the product performed in the St. Louis test with, and without, advertising support really underscored that reality for Sunsweet. The co-op therefore launched a flight of national TV advertising when it rolled out PlumSmart last year and plans another round of television ads for January. Sunsweet has also recently launched a new educational website (www.SmartDigestiveHealth.com).

Retailing at a suggested price of $4.29 (€3.00) to $4.39 (€3.08) for a 48oz aseptic plastic bottle, PlumSmart has reached 85% all-commodity volume (ACV) distribution in US supermarkets, Harris told NNB. Sunsweet is considering launching PlumSmart in the drug-store channel but not in warehouse club stores because, says Harris, Costco and Sam’s Club buyers are looking for higher-velocity juices.

A SINGLE SERVE OF SUPERFRUIT

Sunsweet strongly suspected that repackaging fresh prunes and optimising their superfruit-level nutritional profile would boost sales as well.

“This superfruit makes a super snack, and we’re ready to tell the world,” said Arthur Driscoll II, Sunsweet’s president and CEO, when announcing Sunsweet Ones earlier this year.

During the several months that Ones have been available at retail, Sunsweet’s fresh-prune business has been up 20% overall, according to Harris. “And this is a business that was flat for five years before. The household penetration of prunes has been only 10%. Ones has driven 70% of that overall new growth.”

“A lot of fruits come across these days as being high in antioxidants, making them ‘superfruit,’” says Harris. “The key to our approach here is getting people to appreciate prunes for their benefits other than digestive health, and they truly realise this when you compare prunes to other fruits. So we’re aiming not only for more social acceptance of eating them but also making it more easy and convenient.”

Harris believes the Sunsweet Ones concept “puts prunes in a whole different light for consumers”. Twenty individually wrapped Ones are packed in a 7oz canister that retails for around $2.99 (€2.10). “This makes a different impression than finding them in a big tub where they’re all stuck together,” he explains.

“Many consumers think of candy when they see Ones in their individual wrappings. And we use only our largest and best fruit for this product: if someone is going to eat one prune at a time, we want to make sure they get their fruit’s worth.”

The national TV ads for Ones have depicted consumers of all ages discovering and enjoying the product and in one spot they actually taste test Ones at a farmer’s market. Sunsweet will run the same and similar ads during another burst in the first quarter of 2008.

Fortunately for Sunsweet and its member-growers, prune production volumes have turned around lately so that the co-op has enough fruit to fuel the growth generated by its new products. “And now as long as Mother Nature works with us, there will be enough acreage in the ground to match the needs we have going forward,” Harris

Tropicana Pure Premium Orange

Juice 64oz

$2.20

US$/litre(32oz)

Ocean Spray 100% Cranberry Juice 64oz

$2.35

SunsweetPlumSmart 48oz

$2.80

RW Knudsen Black Cherry Juices 32oz

$5.60

Pom Wonderful 1005 Pomegranate Juice

16oz

$8.60

1

2

3

4

5

6

7

8

9

Price comparison of premium juices available at US Albertsons supermarkets (per litre/32oz)

At $2.80 (€1.95) per litre/32oz, PlumSmart sells at a moderate 30% premium over Tropicana Pure Premium and at a 20% premium over Ocean Spray 100% Cranberry Juice. Signifi cantly, PlumSmart costs half as much as RW Knudsen Black Cherry Juice and less than a third as much as Pom Wonderful on a per litre/32oz basis.

Source: www. Albertsons.com

NOVEMBER 200730


Calcium is certainly not any less nutritionally necessary today – particularly for young people, the elderly and post-menopausal women – and nor has it fallen off people’s nutritional radars. The mineral has been widely familiar for a long time and pretty much everyone knows what it does (supports bone health plus a few lesser functions) but today calcium, it seems, is no longer able to fi re up the public imagination.

The fact that a major ingredient supplier like DSM doesn’t offer calcium is proof enough of the mineral’s current standing. The US Department of Agriculture recommended increased dairy consumption when it reconfi gured the food pyramid in 2003, but statistics still indicate about 80% of Americans don’t get enough calcium. A similar situation across the pond led the British Dietetic Association to state calcium-fortifi ed, non-dairy foods could be “very useful”. It would seem the public simply aren’t all that bothered.

Jim Tonkin of Arizona-based beverage consultants, Tonkin Consulting, agrees:

“Maybe the population isn’t that interested in calcium foods and drinks. It has been around so long people hardly think of it these days. It’s part of the nutritional furniture like vitamin C … Companies don’t have to worry about regulator backlashes or anything like that – but at the same time that makes it a little boring and I think that puts a lot of food and beverage companies off using it.”

Stuart Farr, the editor of UK-based trade journal, Soft Drinks International, notes calcium-fortifi ed beverages are few and far between after a jump in activity 3 or 4 years ago that saw a swathe of near waters and juices hit the market, many to less than overwhelming sales.

Despite Nielsen LabelTrends fi gures revealing that, in the US at least, sales of calcium-claim bearing foods and beverages grew by 3.6% in the 52 weeks ending 27 January 2007 (excluding Wal-Mart), it seems consumers wanting a calcium boost are more

likely to head to the supplements aisle and get their fi x there. It is, after all, one of the highest-selling supplements in the world; as far as minerals go, it is way out in front, outselling the next-highest mineral by more than double in the US.

“Milk is not a regularly consumed item, generally speaking, for adults,” says Tonkin. “A lot of people have become lactose-intolerant or have moved away from milk because of its fat content. So where does the calcium come from? At the moment, it is mostly in the supplements sector.”

Another issue is bioavailability: calcium doesn’t always blend that well in foods and so, again, food makers sidestep it despite ingredient technology improvements that have made it easier to incorporate it into foods and drinks.

Maybe the calcium ingredient industry needs to embark on a serious PR campaign to sex up the mineral because up against the likes of omega-3 and superfruit extracts, calcium has taken on a decidedly frumpy demeanour.

.NOT A PRICEY COMMODITY

With cost prices ranging from $1 (€0.70) to $40 (€27.75) per kilo, Fraser Tooley, director of marketing at Irish-based Glanbia Ingredients, notes calcium is well priced as far

as functional ingredients go. Glanbia has been marketing its own version of calcium, TruCal for several years with limited success, despite gaining GRAS approval in the US in 2002.

“It is a long, slow haul but it is going very well now,” he says.

“The problem calcium has is that its bioavailability and quality varies greatly so it takes a lot of persuasion, a lot of visits to food companies, a lot of clinical data and effi cacy demonstrations. But we are getting some good responses now otherwise we would have stopped TruCal a long time ago.

“I wouldn’t say food makers are fl at out not interested in the ingredient, it just takes time to get them to understand how they can incorporate it into their foods and how they should go about marketing those foods. In its favour, calcium has a health halo and that is why food and drink makers will always be interested in it.”

For Tooley a big issue is persuading processed food manufacturers that Glanbia’s calcium is a superior product and worth adding to their foods. Educating the public is also important. “The public knowledge regarding calcium is a little incomplete,” he says.

“Education campaigns are being carried out by various industry and government parties in different markets but it is a very long process as the message is somewhat complex. It is not necessarily a message that can be easily conveyed on-pack.”

David O’Leary, commercial manager at Irish algae-derived calcium supplier, Marigot, believes the calcium foods market should be doing a lot better, because Western diets have never called out so much for calcium and calcium formulation technology has opened doors that had seemed permanently locked.

Aquamin holds a unique place in the industry as the only major sea-plant-derived, commercially available calcium form on the market. It has proved popular with supplements makers because it is rich in

I N G R E D I E N T C A S E S T U D Y

Does calcium need an extreme makeover?

Calcium is like an old friend you have become a little weary of. You know him or her too well; they’ve lost the spark they once had. Calcium was the supernutrient of the 90s but these days it’s simply not so super anymore. SHANE STARLING investigates what needs to change for the mineral to regain its former status.

“Maybe the population isn’t

that interested in calcium

foods and drinks.”

NOVEMBER 2007 31



calcium (34%) and magnesium (3%) and contains over 70 trace minerals. Aquamin allows clear drinks such as waters and sodas to be fortifi ed more readily than ever, while foods such as chocolates, cereals, yoghurt drinks, cereal bars, beverages, cake mixes and spreads are all ripe for calcium inclusion, says O’Leary, although he wouldn’t reveal the ingredient’s unit cost.

“Calcium is traditionally diffi cult to incorporate into foods because of its physical structure which is very chalky,” he says. “Newer versions of calcium, such as Aquamin, are different because they are very porous. It gives a better mouthfeel in beverages, for instance.

“The food industry may be a little blasé toward calcium but you have to excite their interest by informing the public about the

importance of it. The Western diet has become a very protein-rich or acid-based one which has a lot of negatives because you increase body acidity and any time body acidity is increased, calcium is lost from bone structure.”

BUILDING FORTIFICATIONS

Calcium-fortifi ed orange juices have probably been strong performers so far – at least in the US and Europe – but they hit the market several years ago and while establishing healthy sales (a Coca-Cola spokesperson told Nutrition Business Journal that calcium-fortifi ed orange juices accounted for just under 50% of all US orange juice sales), other food categories have not really followed suit, other than dairy and soy products, which in

addition to being some of the most abundant sources of calcium, are also often fortifi ed with it.

Breakfast cereals have attracted considerable interest and many cereals are fortifi ed with calcium albeit at low levels. Enhanced waters, breads, gums, sports beverages, nutrition bars, confectionery and others have fared less well.

Robert P. Heaney, M.D., an endocrinologist and professor at Creighton University in Nebraska, and a man that has devoted a good part of his adult life to the study of calcium forms and how they are received and processed by the body, believes that calcium fortifi cation should be mandatory, such is the population-wide defi ciency in the nutrient that is often fortifi ed with vitamin D.

“It’s bad enough,” says Heaney, “for the

GETTING CALCIUM INTO MALAYSIAN KIDS

While calcium-fortified kids’ dairy products are ubiquitous in Western countries, in Southeast Asia it’s a very different story. Over the last three decades, attempts by dairy companies to penetrate and grow the Southeast Asian yoghurt category have been largely unsuccessful. In many countries yoghurts are an unsupported niche category without mass appeal, populated by a few imported brands and mainly consumed by higher-income adults, with a bias towards female consumers and a weight-management benefit.

Fernando Bueno, a business development manager at dairy giant Fonterra told New Nutrition Business that the primary obstacles in Southeast Asia are that dairy doesn’t play an important role in the diet beyond infancy, a problem which the company addressed in Malaysia by using calcium’s benefits as the point of difference for its newest product launch.

The brand Fonterra chose was CalciYum, with which the company had already been very successful in New Zealand, and the new product was positioned under the umbrella of the Fernleaf brand, which the company has used in Malaysia for over 20 years. Fernleaf has high brand awareness in Malaysia, underpinned by its strong New Zealand “pure and natural” heritage.

The next challenge was to create an appealing benefit platform. As Malaysian children approach school age, milk consumption drops off as they start to reject milk in favour of foods and drinks that aren’t so strongly associated with babyhood.

“Mums place an importance on their kids’ growing tall,” explains Bueno, “as stature is closely linked to success in school, which many under-privileged mothers associate with their children’s future success as adults. Mums have a strong understanding of the importance of calcium and also make a clear connection between milk/dairy and calcium.”

This led Fonterra towards a calcium-for-growth benefit platform: each 60g pot of CalciYum delivers 136mg of calcium. The benefit is expressed with the brand message:

Fernleaf CalciYum delivers twice the calcium of milk which is essential for kids to grow tall.

Next was the problem of pricing, since the usual retail price of spoonable yoghurts makes them inaccessible to the majority of Malaysians. Fonterra’s solution was to deliver a product that could compete within the kids’ value snack segment, choosing a form-fill-seal manufacturing process that was unprecedented in the Malaysian market and provided a novelty packaging factor, while also creating a barrier to entry for their competition.

The result is that CalciYum is selling more than double what was expected at launch and has actually grown the total cultured dairy category. The Malaysian launch has demonstrated that a brand and benefit concept proven in the New Zealand market could be made to work in Asia. It has also given Fonterra a platform to take the brand to other Asian markets, with the opportunity to develop the brand further by incorporating, if needed, features that have been developed in the NZ market.

Each 60g pot of CalciYum for the Malaysian market delivers 136mg of calcium. The serving size is less than half that of the New Zealand variant, which comes in 150g pottles.

NOVEMBER 200732


Chart 3: Asia Pacifi c new products with ‘added calcium’ by category, year ending 18 October 2007

Source: Mintel

Baby Food

34

Bakery

106

Beverages

38

Breakfast Cereals

41

Dairy

140

20

40

60

80

100

120

140

Snacks

22


US Surgeon General’s Report to state a couple of years ago: ‘Calcium has been singled out as a major public health concern today because it is critically important to bone health, and the average American consumes levels of calcium that are far below the amount recommended for optimal bone health.’”

And that can be translated across the Western world, where typically less than a quarter of populations get the oft-recommended level of about 1000mg of calcium a day per average person although the requirement goes up 20%-30% for younger and older people.

Heaney points to the UK as one of the only examples where mandatory calcium fortifi cation occurs – in wheat fl our – albeit in low doses.

So when about 30% of a person’s Recommended Daily Intake (RDI) can be delivered in a glass of calcium-fortifi ed orange juice or some other functional food without any taste tariffs – and a good slice of the population know they need more calcium in their diet – why is more fortifi cation not happening? The current situation is even more perplexing when some of calcium’s additional health benefi ts are thrown into the hat, such as its potential to prevent colon cancer, kidney stones, obesity, hypertension and preeclampsia, among others.

Although the US Food and Drug Administration (FDA) rejected menstrual, kidney stone, breast and prostate calcium-related health claims due to insuffi cient evidence in late 2005, it did approve a hypertension, pregnancy tension and preeclampsia claim around the same time. This is in addition to the existing bone health claim, approved by FDA in 1998 that allows products to make a claim that reads:

Regular exercise and a healthy diet with enough calcium helps teen and young adult white and Asian women maintain good bone health and may reduce their high risk of osteoporosis later in life.

For Heaney, this claim is barely usable; he considers it to be worded badly and too specifi c in its target demographic – so much so that only a handful of food makers employ it.

CAN CALCIUM MAKE A COMEBACK?

Despite these less than encouraging signs, Marigot’s O’Leary believes calcium is in for a resurgence and justifi es his optimism by pointing to application potential spiralling beyond the supplements aisle.

Chart 1: North American new products with ‘added calcium’ by category, year ending 18 October 2007

Source: Mintel

Baby Food

8

Bakery

17

Beverages

36

Breakfast Cereals

5

Dairy

25

5

10

15

20

25

30

34

40

Snacks

18

Chart 2: European new products with ‘added calcium’ by category, year ending 18 October 2007

Source: MintelBaby Food

34

Bakery

17

Beverages

33

Breakfast Cereals

20

Dairy

80

10

20

30

40

50

60

70

80

Snacks

8

No. ofproducts

No. ofproducts

No. ofproducts

NOVEMBER 2007 33



Marigot set up operations in County Cork 15 years ago and while the calcium market may not have lived up to their initial expectations, the company remains buoyant about the future and its current status.

“The improvement of calcium absorption is an example of how the market is progressing,” O’Leary told NNB. “Combining calcium with other functional ingredients such as vitamin D or probiotics/prebiotics can enhance calcium absorption. There is a move to communicate the additional benefi ts offered by calcium when combined with highly functional foods.”

While the US supplements market remains the company’s biggest, increasingly Marigot is turning its attention to the food and beverage aisles with targeted versions of its patented Aquamin ingredient. “The uniqueness of Aquamin and the product development programme for its use in all food and beverage applications means Aquamin is expanding into all food, beverage and supplement markets globally.” O’Leary says.

“Calcium continues to be of interest to both food ingredients companies and consumers,” he enthuses. “There are signifi cant efforts to increase awareness of the importance of calcium consumption to all age

groups and to young children in particular to promote calcium-rich food for healthy bones. Calcium is also being added by food ingredient and producer companies. Major food companies such as Nestlé, Danone and Unilever are conducting signifi cant advertising campaigns. New forms of calcium are more diverse as well.”

The number of calcium vendors has remained fairly constant over the past three years, O’Leary points out; there has been no mass exodus you might expect from a fl agging industry.

Despite the perceived or otherwise depression in the calcium foods and beverages market, the strength of the global supplements market – calcium is always a top-5 seller in most countries – has given a pricing bedrock to the sector, although new sources are changing this dynamic.

“Prices for calcium remain buoyant,” O’Leary says. “The recent price hikes for milk calcium due to demand outweighing supply is an example of this. Lower-end calcium salt types, however, remain under constant threat with Asian producers offering lower cost bases.”

Marigot is excited by two or three non-supplement sectors, O’Leary told NNB, and

clinical trials had been commissioned. “Sports nutrition and clear beverage applications are growing markets for Aquamin with our new soluble grade. Aquamin, with its unique taste and texture properties and multi-mineral content, is ideally suited to this market. Studies are underway to evaluate the effi cacy of Aquamin in this area and improve performance criteria in athletes. This will help differentiate Aquamin in terms of functionality and content.”

CONCLUSION

Creighton University’s Heaney has put his fi nger on why consumers generally don’t think about whether they’re meeting their daily calcium requirements until it’s too late. He feels much of calcium’s image problem lies in the fact that the consequences of poor calcium intake only become manifest when a person has an accident and breaks a hip or another bone.

Studies have shown those with defi cient calcium intake are much more likely to suffer broken bones in an accident scenario, but for those fortunate enough not to face such a thing, their “bad calcium habits” seemingly come with no tariff attached.

Charts 1-3 on page 32 show the numbers of new products – in the baby food, bakery, beverages, breakfast cereals, dairy and snacks categories – launched around the world over the last year with “added calcium” recorded in Mintel’s Global New Products Database (GNPD).

A total of 109 such products were launched in the US, with 192 recorded in Europe and 381 in the Asia Pacific region.

CALCIUM FORTIFICATION AROUND THE WORLD

KEY

1. Danone Corpus VitaCal Duo Yoghurt (Brazil); 2. Stonyfield Farm 2-a-Day Fruit on the Bottom Yoghurt (US); 3. Puleva Milk Enriched with Soy & Calcium (Spain); 4. Sanitarium Weet-Bix Fruity Whole Grain Cereal (Australia); 5. Nestlé Bonus Soya Drink (Singapore); 6. Yamazaki Calcium Bread (Japan); 7. Hawaiian Punch Plus Beverage (US).

1. 2.

3.4.

5.

6.7.

NOVEMBER 200734


Country Company Brand Description

PART 1: NORTH AMERICA – FOODS & BEVERAGES

All new product information is sourced exclusively from Mintel’s GNPD (Global New Products Database), which can be visited at

www.gnpd.com. Mintel can be contacted at 18-19 Long Lane, London EC1A 9PL, U.K.. Tel. +44-(0)20-7606-4533, Fax +44-(0)20-7600-3327

FUNCTIONAL & HEALTHY-EATING NEW PRODUCT LAUNCHESEach month we summarise new product launches from around the world.• Part 1: North America • Part 2: Rest of the World

BAKERY

Canada Voortman Cookies Voortman Flaxseed Omega 3 Cookies

Made with quality ingredients, without hydrogenated oils and free from trans fat and cholesterol.

USA Weight Watchers Weight Watchers Caramel Apple Muffi ns

Are each worth three Weight Watchers points. The product is available in a 6.9oz pack containing three individually wrapped muffi ns.

USA Lucerne Foods Eating Right 100% Whole Grain Hamburger Buns

Made with 100% whole wheat and said to be a source of fi ve essential nutrients. It contains 0g trans fat and 2g fi bre in each 48g serving. It is also low in saturated fat. The company fi nancially supports Heart & Stroke Foundation. The pack contains 12 buns. Also available in this range is Hot Dog Buns.

BEVERAGES

Canada TPG Enterprises Tart is Smart Organic Tart Cherry Concentrate

A 100% natural juice containing 17 antioxidants to promote better health. This Kosher certifi ed product contains no additives or added sugar and is certifi ed USDA organic. It is retailed in a 236ml bottle. Tart is Smart also releases the non-organic Tart Cherry Concentrate, and non-organic Blueberry Juice Concentrate.

USA Tracy Stern SalonTea Tracy Stern SalonTea The Slimming Beauty

Described as a slimming beauty tea treatment. The product contains green tea leaves, cassis yerba mate, orange tree fl owers, black tea, passion fruit fl owers and guarana extract said to have the natural power to decrease appetite and speed up the metabolism for a slimmer appearance. The SalonTea Beauty Teas contain polyphenols that help eliminate free radicals, protect healthy cells, and aid in weight loss.

USA Golden Bright Nekta Gold Kiwi Drink A product of New Zealand. It is rich in vitamin C and free from added colours, artifi cial fl avours, or preservatives.

USA Future Ceuticals Freeze-Dried Açai Powder Future Ceuticals has introduced a line of açai products including: Freeze-Dried Açai Powder; Organic Freeze-Dried Açai Powder; Drum-Dried Açai Powder; Organic Drum-Dried Açai Powder; and Spray Dried Açai Pulp Powder. The fruit contains more anthocyanins than red wine and higher antioxidants concentrations than blueberries. The fruit is rich in fi bre, amino acids, vitamin C and plant sterols and may help lower low-density lipoprotein (LDL) cholesterol.

BREAKFAST CEREALS

USA Sturm Foods Village Farm Kids Organic Instant Oatmeal

Available in a Caramel Apple fl avour. It is made from organic ingredients, is a good source of fi bre and contains 100% wholegrain. This certifi ed kosher product is free from artifi cial fl avours or colours, and contains soluble fi bre, which can help reduce heart disease as part of a diet low in saturated fat and cholesterol. This product is microwavable and retails in a 11.29oz carton containing eight 1.41oz packets.

CONFECTIONERY

Canada Life Sciences Corporation Heart Chocolate Heart Chocolate now offers a Chocolate Bar with CM-X, which is said to be good for the heart. This product is claimed to lower cholesterol and blood sugar. It contains no sugar added and provides 60 calories per serving. The bar is available in a 43g pack.

USA Innovative Candy Concepts No Guilt Sinfully Delicious Gourmet Dessert Spray

A whole new way of satisfying your sweet cravings! The product contains zero calories, is fat and sugar free, is natural and artifi cial fl avoured and is available in a 0.7oz spray. The product is enough for 50 servings and is available in the following fl avours: Key Lime Pie; Strawberry Cheese Cake; Cinnamon Apple Pie; and Milk Chocolate Turtle.

DAIRY

USA DCI Cheese County Line Probiotic Cheese Available in four varieties: Pepper Jack; Colby Jack; Monterey Jack; and Mild Cheddar. The product contains probiotic cultures, which help to maintain a healthy digestive system and levels of internal bacteria, as well as aid in the activation of the natural immune system. The product is made with active lactobacillus acidophilus culture, which does not affect the texture of the fl avour of the cheese. The product is available in an 8oz pack.

USA Aliments Ultima Foods Yoplait Yoptimal Immuni + Fruit Yogurts

Available in a variety pack. The pack contains three strawberry fl avoured yogurts, three orange and mandarin fl avoured yogurts, three cranberry and raspberry fl avoured yogurts and three wild berry fl avoured yogurts. The product contains two probiotics and polyphenol. These probiotic cultures are friendly bacteria, entering your digestive system where many of your body’s immune defences develop. The pack includes 12 portions of 100g servings.

USA Sorrento Lactalis Sorrento Delicious Fresh Taste Mozzarella String Cheese

High in calcium and vitamin D and allows a better absorption of calcium to build strong bones and muscles (thanks to its +Plus composition). This 100% natural cheese is low moisture part skim and Kosher certifi ed. It only contains 80 calories, 1g of carbohydrate, and 0g of trans fat per serving. It is retailed in a convenient, portable 8oz packaging.

N E W P R O D U C T S

NOVEMBER 2007 35


Country Company Brand Description

PART 2: REST OF THE WORLD – FOODS & BEVERAGES


FRUIT & VEGETABLES

Canada Embassy International Disney Magic Selections Apple Slices Retail in a pack of fi ve 2.8oz bags. These pastries are an excellent source of vitamin C and contain only 40 calories per bag. It is available in Tart Green; Grape; and Sweet Red Apples & Veggie varieties.

HEALTHCARE

Canada North Coast Naturals Veganique Energy Bar Comes in a Mixed Berry & Apple fl avour. The whole food bar is said to be heart healthy, enriched in 17 vitamins and minerals, and is soy-free and milk-free. This product is claimed to be low in saturated and trans fats and is retailed in a 70g bar.

USA Innovative Candy Concepts Kickers Energy Spray Provides an instant energy blast in just 30 seconds. It also burns calories and decreases body fat when used in conjunction with diet and exercise, and keeps you focused. The product contains 20 doses/100 sprays per container.

BABY FOOD

The UK Mummy’s Kitchen Mummy’s Kitchen Organic Ready Meals

Said to have been produced using only the best quality organic ingredients, which are locally sourced where possible. They contain no added salt or sugar, and no high temperature cooking methods have been used, which ensures that all of the nutrients have been retained. The range includes the following products: Creamy Spinach and Garlic Mash; Roasted Squash and Herb Risotto; and Butternut Squash, Potato & Coriander. The meals all retail in recyclable tubs.

BAKERY

Australia Ricegrowers Cooperative Sun Rice Thin Corn Cakes Are low in fat, gluten-free and high in dietary fibre. The product is made from corn kennels, and is retailed in a pack that contains 24 bags. The prod-uct is available in the following flavours: Tomato-Salsa; Sea Salt and Balsamic Vinegar; Sweet Chilli and Sour Cream; Sour Cream and Chives; Sun-Dried Tomato and Basil; and a Multi-Bag containing barbecue and chicken flavours. The Multi-Bag is said to be convenient, designed for kids and made from 100% whole grains.

Norway Mesterbakeren AS Dr. Fedon Lindberg Rough Oat Bread

Developed especially for women. It provides calcium and folate, stable blood sugar, has more fibre, less carbohydrates, favourable fat and more protein. The bread contains 68% of seeds and wholemeal and 10.4% of oat flour and oat brand.

BEVERAGES

China Sanjiu Healthcare Sanjiu Oatmeal Drink An instant high-calcium oatmeal beverage in an Original flavour. It is claimed to be nutritious and is available in a 600g pack. Also available in this range is a Sugar-Free Oatmeal Drink with High Calcium for middle-aged and elderly people.

Finland Biotta Biotta Bio Energy Organic Energy Drink

Carbonated and formulated with caffeine, guarana and other fruit extracts, such as açaí. The product is said to have a high vitamin C content and has been pasteurised. The drink is available in a 250ml bottle.

Germany BioAmazon Vertrieb Rainer Welke BioAmazon Açaí Vitaldrink (Açaí Vitality Drink) is organically produced and contains guarana and antioxidants. The range also includes: Açaí Vitality Drink with Pineapple & Mango and Açaí Vitality Drink Original. The juice is retailed in 33oml glass bottles.

India Yakult Koya Aloe Sugar Free Drink New under the Koya brand is an Aloe Sugar Free Drink that contains vita-min C and calcium and is free from fat and artificial colours. This product is suitable for vegetarians. It comes in a 500ml bottle.

Italy Probios Restart Organic Energy Drink Probios, a firm which has operated in the Italian organic foods market since 1978, has launched Restart, an energy drink made of organic products. Restart is a non- fizzy, non-alcoholic beverage which is also sugar-free and caffeine-free and does not contain added fats, preservatives, or colours. Restart is particularly suited to active sports people as it quickly activates new energy before, during and after physical activities.

Japan Calpis Delicious & Well Ripe Mix Au Lait A non-fat drink made with juices of ripe carrots, apples, mangoes and oranges (less than 10%) in a milky base made with milk from Hokkaido. The brand concept is “healthy, and delicious” (without sacrificing the taste like many healthy products). It also contains three vitamins.

Japan Ito En Vitamin Vegetables A mixed fruit and vegetable juice that contains 12 vitamins including vitamin C and biotin. Packaged with minimum contact with oxygen to keep the vitamin loss to a bare minimum. Retailed in 200ml cartons and 280ml and 930ml PETs.

Netherlands Friesland Foods Coolbest Açai & Passionfruit Flavour Juice Drink

Rich in vitamins C and E, which are antioxidants that protect the body against free radicals. This product retails in a 1-litre carton. Also available as part of this range are Premium Orange, Happy Pomegranate, Red Orange Sunshine, Vitaday Original, Vitaday Tropical, Strawberry Hill, Pink Grapefruit and Mango Dream flavours.

NOVEMBER 200736



Turkey Taris Zeytin Kidonia 100% Olive Leaf Tea A natural product which is said to have natural antioxidant and antibiotic proprieties. This product is also said to help enhancing the immune system, maintaining hormonal balance and delaying ageing, as well as having positive effect on blood pressure, cholesterol levels and high blood sugar. This caf-feine-free product retails in a 30g pack that contains 20 teabags.

The UK The Berry Company The Berry Company Yumberry Drink

Made with yumberry; a fruit similar to lychee but red like a cranberry. The product is described as being high on antioxidants and to promote weight loss as well as improving the complexion.

BREAKFAST CEREALS

Finland Oriola Reformi Femi Soya (Soy Mix) With rosehip and flaxseed component for women with soy protein and vegetable oestrogen. This product is rich in fibre and free from gluten, cholesterol and lactose. It is ideal for breakfast or as a snack with yoghurt, water, milk or juice. The product is available in a 350g pack.

The UK Marks & Spencer Marks & Spencer Pomegranate Infused Granola

Comprises wholegrain oats, naturally sweetened with blossom honey and infused with pomegranate and berry flavours, clustered with seeds. It is suit-able for vegetarians and free from added salt, artificial colours, flavours or preservatives. The product is retailed in a 500g carton.

CONFECTIONERY

Mexico Jelly Belly Candy Jelly Belly Sport Beans Energizing Jelly Beans

A good source of carbohydrates, electrolytes, and vitamins B and C. The product features a fruit punch flavour and it is kosher certified. The prod-uct is available in a 28g pack which features The Breast Cancer Research Foundation logo.

The UK Mars Cocavia Premium Chocolate Contains cocoa flavanol, which helps maintain a healthy heart and blood flow. The product is expected to be in stores next year in three varieties: Dark Chocolate; Blueberry and Almond; and Cranberry and Orange.

DAIRY

Australia National Foods Yoplait Elivae Pear and Prune Yogurts

Contain Digestivus Culturus to help maintain inner digestive health as well as calcium to help maintain bone strength. The yogurts have low GI for longer satisfaction, are low in fat, and free from artificial flavours, colours, gluten and gelatine. This prebiotic product retails in a 4 x 150g pack (two of each flavour).

China Taizinai Bio-Tech Co. Taizi Shuangyouyou Smoothie Yogurt Drink

Contains added DHA and ALA, which are renowned for their brain and eye-health benefits. The product also contains more than 10% fruit juice. It retails in a Peach flavour in a 160ml bottle. Also available is a Strawberry flavour.

France Soja Sun Sojasun Vitalité Pruneaux (Prune Flavoured Soy-Based Yogurt)

This non-GM, 100% vegetable, easy-to-digest product is free from lactose, cholesterol, gluten, and colour. It is a source of vitamin E and of vegetable protein. The yoghurt retails in a 400g pack that contains four 100g tubs. Also available is a Plaisir Biscuit (Biscuit) variety, which retails in the same format.

Hungary Rücker’s Ostsee-Molkerei Proviact Cheese Slices for sand-wiches

Made with fresh milk, vegetable fat and cheese culture. The product is low in cholesterol and available in a 200g pack.

Japan Ohayo Dairy Products Ururin Yogurt A functional yogurt with 30mg of hyaluronic acid to support women’s beau-ty. It also contains cranberry juice for an enjoyable sweet and sour flavour.

South Korea Chung’s Food Bejimil Drinking Yogurt Contains green lactobacillus, oligosaccharides, and dietary fibre. It is avail-able in a bunch of four 150ml bottles.

FRUIT & VEGETABLES

Greece Palirria Palirroia Baked Giant Beans Made with pure ingredients without preservatives. It is made to traditional Greek recipe from Mediterranean cuisine. It is ready to serve and suitable for vegetarians. The pack contains two cans of baked beans, 280g of each. Also available in this range is Vine Leaves Stuffed with Rice, which is free from preservatives and cholesterol.

MEALS & MEAL CENTRES

The UK Iceland Iceland Seven-Strong Seafood A range focusing on sustainable ingredients to improve its environmental credentials. The Frozen Seafood Meals from this range are all priced £2 ($4). It contains Mediterranean Hake in tomato, pepper & onion sauce; Sole Florentine with cheese sauce & spinach; Cod Mornay; Smoked Haddock with cheese & chive sauce; Tuna Steaks with a smoky barbecue flavour glaze; and Sole Goujons with a lemon & pepper coating. Glazed salmon fillets with a honey and soy sauce completes the line up. The sauces and glazes are free from artificial colours, preservatives and hydrogenated fat.

SAUCES & SEASONINGS

Guatemala Flama de Oro Flama D´Oro Aceite de Macadamia (Macadamia Oil)

Described as an oil produced in harmony with nature. It is free from cho-lesterol and additives and is certified by Rainforest Alliance. The product is available in a 16oz pack.

SIDE DISHES

Denmark Pastalife PastaLife Protein Pasta Developed by Pia Leth Andersen and Martin ten Voorde. The product is aimed at consumers who wish to lose weight, and is already being sold in almost 500 Danish supermarkets including Coop and Dansk Supermarked.

SNACKS

The UK Asda Asda Good for You Pomegranate Cereal Bars

Are probiotic and do not contain artificial colours or flavours, as well as being trans fat-free. The product, which is high in fibre, is said to be healthi-er for the digestion. Cereal Bars are low in fat and calories and are suitable for vegetarians. The 132g pack contains six bars of 22g each.

NOVEMBER 2007 37


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NOVEMBER 2007 39


Our analysis draws on:

3 European Case Studies: St. Ivel Advance Omega-3 milk; Yoplait Petits Filous calcium-fortified products; and Nestlé Munch Bunch, with omega-3, calcium and probiotics.

4 US Case Studies: Nestlé Nesquik; Organic Valley of Farms; Danone’s Stonyfield Farm YoBaby & YoKids organic and probiotic brands; PepsiCo’s Quaker Milk Chillers.

1 Asia-Pacific Case Study: Fonterra Calci-Yum, bone-health marketing in Malaysia and New Zealand.

1 Global Brand Case Study: Danone’s Danonino, focusing on its growing omega-3 offering.

1 Global Strategy Case Study: the implications of Danone’s acquisition of infant formula giant Numico, which has propelled the French dairy group to the No. 1 position in kids’ dairy in Europe and Asia.

Kids’ Nutritional Dairy: 10 Key Case StudiesDairy is the most dynamic category in the business of kids’ nutrition worldwide. The three ingredients currently getting most attention from companies are calcium, probiotics, and omega-3. Underpinning these is the strong trend towards “natural”, “free from” and “organic” positionings.

Using 10 case studies from Europe, the US and the Asia Pacific region, as well as one global brand, this report sets out the ingredient, marketing and branding strategies which are driving growth in kids’ nutritional dairy. Our case studies include examples of success and failure, the creation of new brands and the reinvention of old ones.

Our analysis sets out the key strategies that companies can apply to maximise the chance of success and reduce the risk of failure. This report gives you:

• Companies’ own views on the key nutritional aspects of children’s health they have chosen to target and why • Insight into the key areas of opportunity identified in consumer research • Insight into branding, marketing and pricing strategies – and which strategies have worked and why • Understanding of product formats used and ingredients chosen • Demonstration of the value of packaging innovation • Colour illustrations of products and relevant market data.

Available in PDF only

Ordering is easy…see inside back cover or visit www.new-nutrition.com or www.kidsnutritionreport.com

Price: $220/€175/£110/A$260/NZ$300/C$235/¥27,000

Kids’ Nutritional Dairy

42 www.new-nutrition.com

focused makeover. Three key lines in the range – yoghurt, yoghurt Squashams and fromage frais – now feature an ingredient called Calci+, a blend of calcium derived from milk and vitamin D, which the company claims will help the consumer absorb the calcium.

Nestlé boasts on-pack that Munch Bunch products with Calci+ now contain 50% more calcium than leading competitors for stronger bones.

The pots also state:

Nestlé nutritionists have developed Calci+, a natural nutrient that comes from milk and is specially designed for kids to help grows strong bones and teeth.

The look of the Munch Bunch products has also changed – including the Munch Bunch characters that adorn them. They have been reinvented as “health educators”, says the company. They have been created to “help inform children about the benefits and functions of nutrition and healthy eating in a fun and engaging way”.

The characters come in red to promote calcium, green to represent energy, yellow for protein and blue for good bacteria. This last one features on the yoghurt pots, which contain Lactobacillus Forte.

The characters impart information on-pack, such as: Did you know that 99% of the body’s calcium is in the bones and teeth? And: Did you know that milk is white because it contains a protein called casein, which is white?

Another says: Did you know that food gives us the energy to breathe, to use our brains and to move our muscles?

So why Calci+ and not omega-3? Munch Bunch is not a brand in crisis, but nor has it been performing particularly well. In The Grocer’s last Top Products Survey, which is based on Nielsen figures, it was the UK’s 12th largest yoghurt and pot dessert range, with sales of £31.5 million ($62.8 million/€46.4 million) in the 12 months to 7 October 2006. But value was down 2.4% over the period.

Meanwhile, rival yoghurt and fromage frais brands, Yoplait Wildlife and Petits Filous, both marketed by Yoplait Dairy Crest (another dairy desserts joint-venture), enjoyed a year of growth.

Chart 2: Munch Bunch delivers more calcium for your pound with Calci+

So what of Munch Bunchís new calc ium claim? Certainly we can see that Munch Bunch is currently beat-ing its two big rivals hands down on this front.

Each serving of Munch Bunch yoghurt (100g) and fromage frais (80g), and each 60g Squashum pouch contains 240mg of calcium – 30% of the recommended daily allowance.

Label checks reveal that Munch Bunch now considerably outscores its biggest rivals, Petits Filous and Yoplait Wildlife. These brands’ yoghurts and fromage frais supply between 134mg and 145mg of calcium per 100g.

As the chart below shows, Munch Bunch’s 2007 pricing proves competitive too, in spite of the new added-value positioning.

Source: Tesco

1.25

1.00

.75

.50

.25

0

1.50

Petits Filous yoghurt 4x100g

£1.48($2.95/€2.18)

Petits Filous fromage frais

4x100g

£1.48($2.95/€2.18)

Munch Bunch yoghurt 4x100g

£1.39($2.77/€2.05)

Munch Bunch fromage frais

4x80g

£1.39($2.77/€2.05)

£



out the sun – a sunscreen above SPF 8 will block out vitamin D absorption – and foods that contain vitamin D such as oily fish and liver aren’t things kids will eat.”

There are several elements to the vitamin D communication strategy:

1. Healthcare professionals: The brand has historically communicated primarily to mothers of young children but is now engaging in its first major healthcare-professional communication initiative. This began with the establishment of a panel of healthcare experts who prepared a dossier for healthcare professionals about the role of vitamin D in bone health. The dossier was then further developed for consumers. The company has also hired a dietician to lead the healthcare-professional communications and arrange presentations at conferences and other events. “We’ve had a very positive response from the academic leaders and professional bodies,” observed Baggaley, “and it will be interesting to see how that filters down to healthcare-professional nurses and those dealing with people every day”.

2. Advertising: The vitamin D addition is being supported in 2007-2008 by a £2.5 million ($5.1 million/€3.6 million) national TV advertising campaign, part of a total £5 million investment in advertising the Petits Filous brand.

The campaign includes a new execution featuring the popular Marine character and a younger boy called Philippe, which explains

Table 1: Top five selling children’s SKUs in the UK CYD segment (year to March 2006)

Value Change in

%

1 Petits Filous

Line Pots

£21m

($38.9m/

€30.3m)

+15.8%

2 Wildlife

Choobs

£17.8m

($32.9m/

€25.7m)

+9.5%

3 Frubes 9-

pack

£17.1m

($31.6m/

€24.7mm)

+6.2%

4 Petits Filous

Bigger Pots

£11.8m

($21.8m/

€17.1m)

+35.9%

5 Munch

Bunch Pot

Shots 6-

pack

£11.3m

($20.9m/

€16.3m)

-13.1%

Source: IRI

Photo 15: In the latest Petits Filous TV ad, Marine is joined by a younger little boy called Philippe in a rustic French farmyard.



There aren’t many kid-oriented brands around that have passed the $100 million (€78 million) annual sales mark. There are fewer still that are also strongly associated with “all natural” ingredients and health benefits, have the highest trust ratings from mothers and are still able to show impressive annual sales’ growth. But Yoplait Petits Filous is just such a brand. The brand’s core focus on “natural goodness” and a willingness to boldly strike into new territories, such as the added-calcium message of recent years and new product formats, together with a consistently heavy investment in brand-building, have made Petits Filous one of the biggest dairy brands in the UK and the flagship brand of Yoplait Dairy Crest, the joint venture between French-based Yoplait and the UK’s Dairy Crest.

BRAND HISTORY

Launched in 1986, Petits Filous was designed for young children – “Petits Filous” means “Little Rascals” in French – and the image of young children as loveable rascals is one that the brand has continued to foster. When it debuted in the UK, Petits Filous was a true innovation, the first fromage frais on the UK market and the first product in the dairy cabinet designed with the nutritional needs of young children as a priority.

Fromage frais (also known as “fromage blanc”) is a dairy product originating from France. The name literally means “fresh cheese”. It is made in a similar way to cheese, with a starter culture being added to milk. However, unlike cheese, the curds are not allowed to solidify, but are stirred, which gives fromage frais its thick and creamy texture similar to that of yoghurt. Pure fromage frais is virtually fat-free.

Because of its naturally healthy nature and the

smooth, thick and creamy texture, Petits Filous fromage frais is a suitable weaning food and early on in the brand’s life it became popular among mothers as a weaning food for babies aged 6 months and older.

In the 1990s Yoplait reinforced this position in many ways. A key move was to work with the UK organisation Bounty which distributes sample packs of products to new mothers. The Petits Filous website also provides mothers with advice about weaning, though, the company maintains, it’s not intended as a way of recruiting people into the brand. Petits Filous does not specifically communicate with healthcare professionals but because it uses Bounty packs and gives weaning advice health professionals tend to mention it to new mothers.

NATURALNESS IS TRUSTED BY MOTHERS

In terms of ingredients Petits Filous has always been positioned as a very natural product with nothing added. The brand promises mothers that

Case Study 2Petits Filous: Successful little rascals

Photo 11: Advertisements which picture young children in the French countryside evoke the romance and nostalgia of childhood. UK mums find such images appealing.

In 2007 Petits Filous, a French kids’ dairy brand which has grown to dominate the UK kids’ dairy category, turned 21 – but the brand came of age a long time ago. Now the second-biggest kids’ dairy brand in Europe, the secret of Petits Filous’ success is a consistent focus on its “all natural” credentials and its bone-health benefits – which the brand constantly enhances, such as the recent addition of vitamin D and its first major investment in healthcare professional communications.



Asian countries, ahead of Nestlé) has re-positioned most of its infant formula brands on an immunity platform, driven by consumer research that showed that, in Asia and Europe alike, this was mothers’ top concern. The resulting double-digit increases in Numico’s sales confirm that it made the right choice.

It can only be a matter of time before some company pioneers the benefit of immunity in kid-specific dairy products. Numico was acquired in mid-2007 by Danone (see Case Study 10), whose adult-oriented Actimel dairy drink brand is the world’s biggest immunity brand. Danone reports that more than 30% of the Actimel sold is consumed by children and we can therefore safely speculate that the company will be looking to take the Numico immunity message to older age-groups.

While it’s a necessary first step, identifying the health concerns that you intend to target is only a very small part of creating success in the kids’ nutritional marketplace.

Your success will depend on your competence in executing a successful product; a successful package design; a health benefit that is relevant to, and understood by, mothers; and an ingredient which mothers will accept. All of these factors, of course, will need to be heralded by a successful marketing strategy. Here are the key areas such a strategy needs to cover:

Product format is crucial. Although spoonable dairy products have historically been the most successful formats, the real growth is increasingly coming from dairy drinks, and in particular daily dose (100ml/8oz) products. Nestlé, to take just one example, has one brand (see Case Study 3) in which the spoonable products are in sharp decline and only the 90g daily dose product in the range has proven successful – so successful that at one point it offset the decline in the spoonable products.

Packaging format is central to success. The most successful companies are the ones who rank packaging alongside, or even ahead of, the health benefit in their product-design priority list. Products need to offer a high level of convenience and portability, to have child-friendly portion sizes, to be easy to open and to reseal. In fact, as the following case studies show, packaging is arguably one of the most important elements in the success of kids’ nutritional products, with several completely

new market segments being created as a result of packaging innovation.

Being as natural as possible greatly influences your success. Take the example of the highly successful Yoplait Petits Filous brand (Case Study 2): it has always been positioned as a natural product with nothing added. The brand promises mothers that it is free from preservatives, artificial sweeteners, artificial colours and gluten. Reinforcing the brand’s natural position is the “Goodness Guarantee” that appears on every pack.

Success also results from the communications strategy that you choose. This is one of the most challenging aspects, and we give some examples of proven tactics below:

Market the health benefit to mothers.Children are not interested in, and do not understand, the health benefit or the added ingredient that delivers it. The communication of the benefit needs to be directed at mothers as it is their confidence and trust that you have to win. Hence Yoplait Petits Filous works hard on

Even in the US market the daily dose format is being recognised as having potential to grow the kids’ dairy market. In July 2007 General Mills, the American licensee of the Yoplait brand, added a drinkable version of its Yoplait Kids Yogurt with omega 3-DHA.

Available nationally, the Yoplait drink comes in four flavours: Strawberry, Strawberry-Banana, Mixed Berry and Banana. Each pack contains six 3.1oz/90ml bottles at a suggested retail price of $2.99 (€2.15).

Yoplait Kids Yogurt Drink provides 16mg of algae-sourced omega-3 DHA per serving supplied by Martek Biosciences Corporation.

Box 1: America awakes to the potential of daily dose

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Kids’ Nutritional Dairy: 10 Key Case Studies

NOVEMBER 200740


7 key trends in the functional juice market are identified:

1 Beauty, weight-loss and energy – three juice drink opportunities

2 Packaging innovation earns premium prices

3 Naturally healthy fruit earns premium prices

4 Superfruit earns premium prices

5 Heart health in the US and UK – naturally healthy triumphs over added science

6 Digestive health – fibre and probiotics – the future for fruit juice?

7 Free-from and natural lead the way in kids’ fruit juices

Functional and Health-Enhancing Juices: 7 Key TrendsIf you want to know which trends and strategies will lead you into failed product launches, weak sales, poor profits …

... and which ones will reduce your risk and enable you – even if you’re the smallest company – to direct your marketing and product development efforts in the most effective way ...

... this unique report is the one you should read!


Supported with concrete examples from a detailed examination of pricing and packaging strategies for brands in Europe, the US and Japan, this report reviews brand marketing communications and advertising and analyses companies’ ingredient choices and health benefit claims to provide you with a wealth of insights into the functional and health-enhancing juice business.


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New Nutrition Business is the only company in the world dedicated solely to analysing the global nutrition business – we’ve been doing nothing else since 1995. Our trends analysis will give you practical insights for creating success – and for reducing the risk of failure – that are second-to-none.

Functional and health-enhancing juices


Total¥21.8b

($184m/ 134m)

Others16% Otsuka Pharmaceutical

Fibe Mini24%

Kellogg All Bran20%

Psyllium Noodle15%

Kirin Supli11%

Sen’i & Peach8%

Jujitsu YasaiVegetable & Fiber

6%

Chart 8: Market shares of FOSHU-approved gut health products In Japan beverages account for almost 50% of the market for gut health products with dietary fibre.

Source: Fuji Keizai and GNG Analysis

juices can ride upon dairy’s coat-tails but with a clear point of difference, as the example of Kagome Labre (Case Study 13) shows.

6.1 A WELLNESS AND LIFESTYLE ISSUE AND A CLEAR CONSUMER NEED

Although consumer research usually fingers heart health as being consumers’ main health concern, if you look at the sales figures of what people actually buy in the supermarket, it’s clear that – around the world – digestive health is one of consumers’ main concerns. Products with digestive health benefits massively outsell those for heart health and it’s worth bearing in mind that in the home of functional foods, Japan, where the whole “functional food” concept was created and where the market is now twenty years old, it’s products for digestive health that still dominate.

Products with digestive health benefits account for a massive 64% of all sales of approved functional foods (so-called “FOSHU” products) in Japan. It’s a similar story in Europe, where probiotic dairy products (see Box 15 for a definition of probiotic)

account for the lion’s share of functional food sales. The explosion of the probiotic dairy market in Europe has demonstrated over the past decade (and in Asia and South America over a much longer period) that maintaining good digestive health is something that motivates consumers and it’s a benefit that has become the basis for several successful brands.

Even in a market in which digestive health has never really taken off as an issue – such as the US – we are already seeing change. Danone Activia, for example, a spoonable yoghurt, raked in $130 million (€98 million) in 2006, its first year on the US market. It uses an overt digestive health message of a kind that American marketers have shied away from and its success foreshadows the development of many more products targeting digestive health.

Digestive health is a “wellness” issue, not (like cholesterol-lowering) a “death and disease” issue. As we have seen again and again wellness benefits appeal to a wider range of consumers while medicalised benefits appeal only to a niche that is at fairly immediate risk from a medical condition.

Moreover, most people in most countries do not



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Chart 7: Price comparison of premium juice products in Tesco

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1.49

Priceper litre

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Brand(All 1 litre)Tesco

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Chart 6: Price comparison of pomegranate-containing beverages in the UK

Source: Store checks by New Nutrition Business at west London branches of Tesco 2007

Source: Store checks by New Nutrition Business at west London branches of Tesco 2007

been key to the company’s success. “We run a very successful PR campaign,” says Pritchard. “We built our consumer base up through PR, we’re very good at it. It’s just what we do.”

Look closely at Pomegreat and it soon becomes clear that this company hasn’t just ridden the wave of consumer buzz about pomegranate and its

benefits. The company’s success has come in large part because it has been a crucial catalyst of the buzz about pomegranate and a proponent of the halo-effect of pomegranate in all forms. Without Pomegreat’s PR it’s very doubtful whether the small UK market for whole fresh pomegranates would have grown 212% in one year (in the time that

£1.29

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£1.62($3.27/€2.38)

£1.68($3.39/€2.46)

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($4.02/€2.92)£1.74($3.51/€2.55)

£2.79($5.64/€4.10)

£4.10($8.28/€6.02)



In late 2003 Coca-Cola-owned Minute Maid, the second-biggest orange juice brand on the US market, embarked on one of the boldest initiatives to market a product made with cholesterol-lowering plant sterols ever seen on the North American market. Two years later Coca-Cola was proclaiming its Heart Wise cholesterol-lowering orange juice a success: “We call Heart Wise an unqualified success at this moment,” Ray Crockett, Minute Maid spokesman, told New Nutrition Business at the time. But what exactly is a “success” in this market?

First a market fact: according to data from Information Resources Inc. (IRI), in supermarket, drug and mass-merchandise stores (with the exception of Wal-Mart, which does not supply data) Minute Maid Heart Wise had sales of $27.8 million (€20 million) in the 52 weeks to October 2005. By the end of 2006 Heart Wise’s sales had crept up to $35 million (€26 million) – and had plateaued there.

That’s a very respectable performance, but it’s only a 1.5% value share of America’s massive $2.6 billion (€1.9 billion)

refrigerated orange juice market. And it’s also a very modest level of sales for a brand that started

out with Heart Wise’s advantages. A senior US food industry executive told New Nutrition Business that sales of less than $100 million (€73 million) were regarded as fairly “niche”

in the US market, a point of view we’ve often heard before.

What’s more this level of sales is all that has been achieved despite attractive packaging, product format, branding and a very clear cholesterol-lowering health claim on the label. And notably this level of sales has occurred despite attractive pricing, for Heart Wise, until early 2007, retailed at exactly the same price as regular Minute Maid orange juice, thus eliminating the barrier to purchase represented by the massive price premiums normally associated with cholesterol-lowering products (such as spreads like Benecol, which are typically priced at a 300% premium over regular spreads).

Such aggressive pricing suggests that the original strategy conceived for Heart Wise may have been to achieve a mass-market level of sales – as Tropicana did for its calcium-fortified orange juice when it priced

Case Study 8: Coca-Cola learns a hard lesson about the crowded world of heart health

Coca-Cola has learned the hard way that adding to juice an ingredient with a clinically proven heart health benefit, using an approved health claim on the package, and pricing the product just like regular juices in order to make it easier for consumers to choose the enhanced product over the regular are no guarantors of success. In fact, the heart health proposition of Coca-Cola’s Minute Maid Heart Wise brand turned out to be a lot less compelling to American consumers than the all-natural heart health benefits of Pom Wonderful, which has outsold Heart Wise twice over, despite being priced at a massive price premium. With Heart Wise languishing in a niche, Coca-Cola seems to have accepted the reality of the market and begun pricing and positioning the Heart Wise brand like a premium niche product. This case study is a sharp reminder that in the juice business natural health will always outsell – and get a better price – than health from added, science-based ingredients.

Photo 48: In early 2007 Minute Maid re-thought its strategy of mass-market-pricing Heart Wise. Minute Maid moved the brand out of its undifferentiated standard carton into a new plastic bottle format and increased the price by 40%.



two entrepreneurs approached the company and suggested marketing its products in the Netherlands.

“We weren’t really thinking about doing that, but I thought: you know what, let’s give it a go and see

what happens. But we said: rather than you start a business, come and join us and set up an office for us. They did a fantastic job with absolutely no support.”

In the Netherlands, Innocent has recently

Photo 34: Innocent’s advertising makes it stand out from all its competition.



Danone’s communications also help reinforce the link in consumers’ minds between antioxidants, beauty and health.

It isn’t surprising that it’s selling best in France. With Spain and Italy it’s one of the countries where women take greatest care over their appearance. The French cosmetics and skincare market – the type you put on your skin, not the type you eat – is worth €2.2 billion ($3 billion), making it the biggest in the world.

Juice drinks which relate to this trend are only just beginning to appear – and unsurprisingly

they’re appearing first in Spain and France, where women are most motivated about maintaining their appearance and willing to spend heavily to do so:

Spain: At the end of 2006 Coca-Cola Spain launched its renewed and revitalised Minute Maid range which now includes Minute Maid Antiox Fruit Juice with Natural Antioxidants. This is the first time that a major company has launched a product in a Western market with an antioxidant-beauty positioning.

Packed in 1-litre plastic bottles, the pack

Advertisement text translates as:

The secret of beautiful, supple and glowing skin?

Discover Essensis, the latest innovation from Danone. Essensis nourishes your skin from the inside for a healthier and therefore more beautiful skin!

Essensis contains ProNutris, an exclusive complex of essential fatty-acid omega-6, natural antioxidants, vitamin E and Danone’s secret enzyme. The ProNutris works from the inside by nourishing the cells of the deeper layers of the skin, where new skin cells are formed.

On top of that, Essensis has the velvety sensation of a cool, smooth low-fat product.

Skin cells renew themselves within 4 to 6 weeks – meaning you will be enjoying the effects of Essensis after just 6 weeks.

Photo 4: Coca-Cola, through its Minute Maid brand, has launched a fruit juice with “natural antioxidants”. It’s the first time that a major company has launched such a product in a Western market. The drink is aimed at women interested in protecting their “cells” and living “a healthy lifestyle”.

Box 1: Danone’s Essensis - an advertisement from Belgium

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NOVEMBER 2007 41


Danone: Building brands focused on health


Photo 13: Danone’s Actimel is known as DanActive in the US. The Dannon DanActive website carries a consistent message about DanActive’s capacity to service the entire family.

Focusing on well-known brands such as Activia, Actimel, Danacol, Danaten, Danonino (Danimals), Essensis and Mizone and covering products ranging from 100ml daily dose probiotic dairy drinks to energy waters, each section examines Danone’s branding, advertising, pricing and merchandising strategies. As with our first company case study PepsiCo: The world’s biggest functional food company, Danone: The World’s Biggest Functional Dairy Company, gives readers in-depth insight into another highly successful

functional foods company.

Danone: The World’s Biggest Functional Dairy CompanyDanone is one of the biggest and most successful functional food companies in the world. With health at the heart of its strategy, Danone is without equal in the realm of functional fresh dairy. Remarkably, just four functional dairy mega-brands account for over half of the company’s total dairy sales.


Danone: The World’s Biggest Functional Dairy Company sets out the key lessons that everyone can learn from Danone’s strategies in digestive health, immunity, heart health and kids’ health. It also draws on the recent launch of Essensis beauty yoghurt and the success of the Mizone functional water brand – one of the largest brands of its kind in Asia – as indicators of the company’s strategy in newer categories.


Price: $220/€175/£110/A$260/NZ$300/C$235/¥27,000

Danone: The World’s Biggest Functional Dairy Company is authored by Julian Mellentin – an acknowledged international expert on the business of functional foods and beverages and editor of New Nutrition Business.



10

20

30

40

50

60

70

80

90

100

110

120

1999

£4.7m($9.3m/ 6.9m)

2000

£15.2m($30m/ 22m)

2001

£28m($55m/ 41m)

2002

£32m($63m/ 47m)

2003

£48m($95m/ 70m)

2004

£81m($160m/ 118m)

2005

£114m($225m/ 167m)

2006

£107.9m($21m/ 158m)

RetailSalesValue

Chart 3: The rise and rise of Actimel in the UK (values shown are retail sales)

Source: ACNielsen supermarket scanning data

selling non-carbonated beverage. According to ACNielsen, Actimel’s UK sales were £114 million ($196 million/€163 million) in the 52 weeks to 1 October 2005, with year-on-year growth at 36%.

To put this into some kind of context, by 2005 Actimel was worth almost as much as the UK’s top cheese brand, Kraft Dairylea (£117 million/$203 million/€169 million) and nearly twice as much as the UK’s top mass-market indulgent ice-cream brand, Unilever’s Magnum (£64 million/$111 million/€92 million).

But all markets mature – or at least take a pause from growth at some point until participants have figured out a way to revive consumer interest – and in 2006 Actimel’s sales fell 5.4% in 2006 to £107.9 million ($210 million/€158 million). That’s a radical turnaround from the 50% growth it enjoyed in the previous year. However, with a current value share of 57% Actimel is still the undisputed market leader.

Actimel may have suffered in 2006 when the Advertising Standards Authority (the UK’s regulatory body for advertising) forced it to withdraw an advertisement in which a little girl licked a bus window, suggesting that Actimel could protect kids against germs. But new advertising for Actimel is

back on screen with a £5 million ($10 million/€7 million) campaign launched in January 2007 and under-pinned by an on-pack “Actimel Challenge”. Danone reckons January 2007 will turn out to be Actimel’s most successful on record.

Overall the probiotic daily dose category grew less than 1% in 2006 – the slowest growth rate ever recorded for a category that has never experienced annual growth below 25%. Nonetheless, it’s an impressively large category. As Table X shows, the combined sales of the brands are worth around £189 million ($368 million/€283 million) at retail values – not bad for a category which, prior to 1996, simply didn’t exist. In addition to the branded sales there’s perhaps another £30 million ($59 million/€44 million) in sales of low-priced supermarket own labels and back-water brands.

But why has overall growth been pegged back so much? Price promotions will have had some impact. The category is now so crowded that multibuys (buy-one-get-one-free) and discounting are running almost constantly in a bid to win shoppers’ hearts and wallets. Danone Actimel has been particularly strong in these and that may account for some of the fall off in sales value. Supermarket own-label may also have eroded some of Actimel’s business.



Box 2: Danone’s explanation of probiotics and Actimel’s mechanism

What are probiotics?

• Probiotics are live microorganisms which, when ingested in adequate amounts, bring a health benefit to the host*.

Probiotics may: • have a positive effect on the intestinal tract resulting from an increase in bacteria • be considered as beneficial and a reduction of bacteria considered as harmful and/or • accelerate intestinal transit in subjects with slow transit • strengthen natural defences particularly at the intestinal level • act on different parameters of the immune system • increase the nutritional value • reduce the risk factors for some cancers

• The effects of each probiotic are specific and differ according to conditions of use from one product to another

• Health claims have to be validated product by product

*FAO definition (2002) officially adopted by the World Health Organisation (WHO)

Photo 5: Danone’s communications for Actimel’s function explain that the body has three lines of defence – the mucus wall, the intestinal flora and the immune system. These images are taken from Danone Actimel’s website.



Introduction

Danone delivers on its strategy

Chart 1: Danone’s blockbusters as the drivers of growth

These four Danone-owned brands all grew more than 15% in 2006.

Paris-based Groupe Danone is a well-run business, strongly focused on core brands. By investing heavily behind them it rolls them out across borders and makes strategic partnerships with smaller companies with high-growth potential, as well as astute acquisitions. Arguably, Danone is, with PepsiCo, one of the two biggest functional food companies in the world and one of the two most successful strategically. Danone is certainly the world’s most successful company in functional fresh dairy, dwarfing the efforts of Nestlé.

Just four nutritional dairy brands owned by Danone between them account for 29% of the company’s total sales and 50% of its entire fresh dairy business. How much of the total profit they account for we can only guess at, but it will be much higher than 29%.

Danone is so focused on health that it has become an all-pervasive force in nutritional markets

worldwide and it’s almost impossible to find any aspect of nutritional dairy, water or other beverages in which Danone does not have a hand.

This achievement is even greater than we could have imagined when we wrote in New Nutrition Business back in 2001 that “Few companies in the food and drink industries look better-run, more visionary or more single-minded in pursuit of a clear and well thought-out global strategy. Danone looks like a company better-placed than most to emerge as one of the winners in the global food and health marketplace.”

Our forecast could not have been more accurate.Danone’s sales were €14 billion ($18 billion) in 2006, 9.7% up on 2005 (8.1% on a like-for-like basis) and their operating profit was up 10.1% to €1.9 billion ($2.5 billion). That’s an impressive 13.6% operating margin – a level that would make most food companies green with envy. The

Source: Groupe Danone

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By Julian Mellentin

NOVEMBER 200742


PUBLICATIONS

CASE STUDIESKids’ Nutritional Dairy: 10 Key Case StudiesDairy is the most dynamic category in the business of kids’ nutrition worldwide. The three ingredients currently getting most attention from companies are calcium, probiotics, and omega-3. Underpinning these is the strong trend towards “natural”, “free from” and “organic” positionings. Using 10 case studies from Europe, the US and the Asia Pacific region, as well as one global brand, this report sets out the ingredient, marketing and branding strategies which are driving growth in kids’ nutritional dairy.

Functional and Health-Enhancing Juices: 7 Key TrendsUsing 15 detailed case studies this report analyses the functional and health-enhancing juice business. It explains that digestive health, behind superfruits, is the single most-promising trend for the juice industry – and demonstrates how two companies have quietly built digestive brands worth over $50 million in annual sales. It explores juices with added ingredients and it points out that the areas of beauty, energy and weight management all have the potential for profitable growth.

Danone: The World’s Biggest Functional Dairy CompanyDanone is, with PepsiCo, one of the two biggest and most successful functional food companies. This report sets out the lessons that can be found in the stories of Danone’s successes in digestive health, immunity, heart health and kids’ health, as well as beauty (Essensis yoghurt) and energy (Mizone functional water). Each section examines in detail the company’s branding, advertising, pricing and merchandising strategies, as well as the corporate strategy of Danone, which puts health at the heart of business.

Ten Key Trends in Food, Nutrition & Health 2007Our annual review, Ten Key Trends in Food, Nutrition & Health, is one of the most sought-after publications in the food industry. The report identifies the 10 mega-trends that will have the most impact on the food and beverage industries over the year ahead. It points companies towards some clear and practical strategies for their functional food and beverage developments, production and marketing.

Five Key Trends in Kids’ Nutrition 2007In a world in which health is becoming a standard for the entire food and beverage industry, one of the current challenges (and a fecund opportunity) lies in the kids’ nutrition market. The report identifies the five mega-trends that will have the most impact on the market for kids’ healthy food and beverages and provides detailed scrutiny of the links between kids’ food, nutrition, health and business.

Failures in Functional Foods: 10 Key Case Studies & 10 Key LessonsThe functional foods market is a highly complex one. Success with a new product or ingredient in this harsh and demanding market is very rare. In fact, failure is far more common than success and most products sell on a niche basis with very, very select few ever graduating into the mass market. The report analyses some of the more spectacular failures and offers strategies for reducing risk in the functional foods world.

PepsiCo: The World’s Biggest Functional Food Company10 Case Studies in its Strategies in Sports Drinks, Fruit Drinks, Snack Innovation and CerealsThis report focuses on well-known brands such as Tropicana, Naked, Gatorade, Propel, Quaker Oats and Frito-Lay. It analyses the marketing strategies and health communications used for each brand to reveal how PepsiCo transformed itself into the world’s biggest functional food company.

Naturally Healthy Kids’ Food: Snacks, Breakfast and Dinner: 15 Case StudiesFoods and beverages that are “as natural as possible” are leading the way in the fast-growing market for healthy kids’ foods and drinks. The report analyses 15 different healthy kids’ food brands from the US, UK, Europe and New Zealand, to develop a practical check-list of 15 factors which can help companies build successful kids’ nutritional brands.

Success and Failure in Functional Water: Eleven Case Studies from Europe, the US and AsiaWhat makes consumers choose functional waters? What are the critical success factors in marketing waters with added health benefits? Why is the category mass-market in Japan, but still only niche elsewhere in the world? Why have so few brands been successful? And why have most product launches failed? The report examines the marketing strategies of 11 different functional water brands and identifies the critical factors for bringing functional waters to market.

The Food & Health Marketing HandbookIn a competitive world how do you take your technology to market so that it’s your product that wins at the point of purchase? This handbook tells you how to get the best out of the science and the health benefits of your ingredients or products.

Health Benefit Platforms & Strategies in Breakfast CerealsBreakfast cereals were the first category in the supermarket where health became the “standard”. The opportunity today is to offer a breakfast cereal that has a health benefit which can create and sustain a point of difference. With 17 case studies covering ready-to-eat cereals, hot oat cereal and liquid breakfast, this report provides a comprehensive analysis of why some strategies have succeeded and others haven’t in one of the most fiercely competitive of categories.

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Danone Actimel: Innovation Builds a Probiotic Mega-BrandDanone’s Actimel probiotic drinking yoghurt is the world’s biggest immunity brand and one of the world’s biggest and most successful probiotic brands. In this report Actimel’s marketing communications, pricing, packaging, labeling, merchandising, advertising and consumer insights are analysed and explained in detail and illustrated with colour photographs, charts and images from advertisements to provide valuable lessons from which all food and beverage businesses can learn.

Innocent Drinks: What makes Europe’s fastest-growing smoothie brand so successful?For any company, large or small, looking to create a successful health proposition the story of the meteoric rise of smoothie makers Innocent Drinks shows what can be achieved in a tough, highly competitive category. Innocent’s strategies are not elusive, nor unachievable – they are instead steps that any company can easily take to propel its brands to new levels.

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Please invoice my company – Please supply a purchase order. THE INVOICE IS PAYABLE IN 10 DAYS.

Please send a pro forma invoice so that I can arrange for pre-payment, I understand that once the payment is received you will complete my order.

I will send payment directly to your bank – NatWest, Law Courts, Temple Bar, 217 The Strand, London WC2R 1ALAccount No: 16663357 Sort Code: 60-80-08 Swift Code: NWBKGB2L IBAN: GB62NWBK60800816663357

I enclose a cheque payable to The Centre For Food & Health Studies Ltd

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PLEASE NOTE THAT CREDIT CARDS WILL BE DEBITED BY WORLDPAY or PAYPAL, OUR FOREIGN CURRENCY PAYMENT AGENTS.Orders will be sent once full payment is received

PLEASE NOTE: ALL ORDERS PRE-PAID WILL BE SENT A FULL-PAID INVOICE

Please return the completed form by pressing the submit button. Alternatively, you can print the form and fax/post or email it.Fax back to : +44(0)20 7900 1937 or +44(0)87 1247 5832 Email to: [email protected].

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N EW N UTRITION BUSINESS · N EW N UTRITION BUSINESS ... Eugenio Perrier, director of marketing for ... pays off for Yakult 28-29 DIGESTIVE HEALTH: Sunsweet success

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