How to drive nutraceuticals?

The global health trend has resulted in double digit growth for nutraceuticals over the last years. Yet, this category has a promise to fulfil. Market research shows that key potential consumer groups are not targeted sufficiently and consumers distrust products' health claims. Overcoming these obstacles will be vital to continue strong growth in consumer uptake over the next five years.
Elsevier Food International, Vol.9, No.1, February 2006 Vincent Hentzepeter

Health is of vital importance to consumers of all ages, demographic groups and countries, so one would expect a strong demand for nutraceutical foods and beverages which provide specific health benefits. Consumption levels of functional foods are growing fast in Europe, but its commercial potential is far from fully exploited.

Common neutraceuticals with added vitamins or extra minerals are a success story. So are probiotic drinks, like Actimel and Yakult that have a positive effect on the immune system and intestinal flora. Massive marketing and communication campaigns have resulted in consumers increasingly adding such drinks to their daily diet.
Products, however, that may prevent or fight chronic diseases, promote vitality, solve obesity or help lower cholesterol levels, need more explanation.

This relatively new group of neutraceuticals is still a niche and requires specific promotion. A major problem is that most consumers in Europe do not understand the complex health mechanisms of the ingredients. For such new neutraceuticals, success depends upon gaining consumer trust by comprehensibly communicating health claims.

Symbol of health
Sales of functional products are rising fast across all food and drink categories, outstripping growth in the overall food and drinks market. European sales are about US$12 billion, while in the US the value is US$18.9 billion. This partly reflects the increasing tendency of Europeans to consume natural, unprocessed food. Where consumers in the US mainly purchase fortified foods and drinks with added vitamins and minerals, Europeans are more interested in holistic, more innovative solutions such as dairy-based products that contain probiotics.

This says Julian Mellentin, functional food expert and author of several books on this topic. “The best example of a successful functional food in Europe is Danone’s Actimel. The little bottles, first introduced by Yakult, made in ten years a category of €3 billion. The probiotic shots showed a growth rate of 50 per cent in 2004. Danone owns half the European market.” Not a single marketeer expected this development when the first Yakult-bottles were introduced in Europe back in 1994, states Mellentin, “Too weird and too Asian, is what you heard. So everybody hung back. So after the introduction of Yakult, only Danone followed and all other players launched me-too’s. That little bottle has become the symbol of health to the European consumer. That is exactly why Unilever launched Knorr Vie in this packaging format.”

Easy science?
This symbol of health for the consumer has become the symbol of profitability for the producer. Of course these products have to work in order to trigger sales, but science is not the main differentiator in this category, says Mellentin. “Scientists make me laugh. The packaging innovation is more important. The science behind these products is cheap and easy. Most of the ingredients are commodities.

Nowadays 16 companies supply cholesterol-lowering compounds, like sterols. Notice that ten years ago analysts predicted the future is ‘cholesterol lowering’. However, growth was really modest until 18 months ago. It changed when the Swiss company Emmi introduced an Emmi Benecol with stanols in little bottles, quickly copied by Danone and Unilever. Now this category has, according tot ACNielsen, grown from practically zero to €160 million. I’ve even heard a figure of €250 million from an industrial source.”

Paulus Verschuren, director external affairs at the Unilever Food & Health Research Centre disagrees with Mellentin’s remarks about easy science. Unilever is investing a fortune in the development of functional foods and in research into its existing products in order to meet the consumer demand for tasty, healthy and convenient products. Numerous scientific studies are conducted before a new functional food is launched on the market. “Flora pro-activ has been investigated in 40 studies,” he argues. “At this moment 75 per cent of our R&D is health related.”

Targeting seniors
Market research by Datamonitor shows that opportunities in the European neutraceutical market are not fully exploited. ‘Heavy users’ can be found among higher-income men and women and young people. Elderly consumers are less eager buyers. Currently, European seniors consume 16 per cent fewer nutraceuticals per capita than the average consumer, while Europe's young adults consume 36 per cent more nutraceuticals than the average consumer.
Bridging the age gap is a major challenge in the marketing of neutraceuticals. With an ageing population, the likelihood of specific, chronic health conditions such as osteoporosis and hypertension increases, and general perceptions of ‘welness’ are reduced. Moreover, the obesity pandemic is aggravating the incidence of welfare diseases.

Health figures demonstrate for instance that diabetes type II is becoming a widespread problem, with first symptoms occurring at earlier age. This should provide a crucial opportunity to address senior consumers' health concerns, for example with foodstuffs with a lower glycaemic index that help keep the carbohydrate intake in balance. Edeka spokesman Alexander Lüders comments: “Functional food consumption is influenced by the growing group of older citizens in Germany. Their interest can be expected to grow. Dairy products offer good potential. For example, products free of lactose or with additional digestive effect.”
Unilever is targeting the average consumers with products like Knorr Vie to stay fit and healthy but also focuses specifically on solutions for senior consumers.

“We specifically focus on sugar, saturated and trans fats, salt, because these ingredients are linked to the development of chronic diseases,” says Verschuren. “But also on the addition of bioactive compounds that reduce the risk of developing, for example, vascular and coronary diseases. Here the pro-activ range helps to lower the HDL-cholesterol or regulate (lower) blood pressure. We are also studying on ingredients extracted from tea that may help to promote the elasticity of the blood vessels. However, this has not resulted into a product yet.

Positive message
Mellentin believes that foods that offer balanced nutrition have the greatest potential for future growth in the neutraceutical field. He refers to a product like Fruit2day. This drink from Schwartau claims to provide the equivalent of two pieces of fruit within one bottle. The plastic packaging, a design of two pieces of fruit on top of each other, is more than a clever marketing tool. It creates a positive health message that has boosted sales. “It is the difference between life and death marketing. Most people are healthy and want to get positive signals.” This is why fibre-enriched foods that target ‘wellness’ may be the next big thing in the nutraceutical field. This in contrast to Omega-3 fortified foods. “Fibres sound natural, easy to understand. Omega-3 sounds like a chemistry set.” Explaining the complex mechanism behind Omega 3-claims, generally referred to as fish oil in health magazines, may be a bridge too far for the average consumer. Many of these types of neutraceuticals will always remain niche, expects Mellentin.

“So will, for example, blood pressure reducing foodstuffs that are even more niche than cholesterol-lowering drinks, spreads and margarines.” Therefore their market potential is limited, when compared to mainstream probiotics that target all health-conscious consumers.

Consumer trust
Convincing consumers that products with medical health claims are really good for them is a hard, if not impossible, job. Datamonitor states that about 45 per cent of the people in the Netherlands and France disbelieve the health claims of food and drink manufacturers. British and Swedish consumers are even more cynical. Fewer than 40 per cent of people are willing to believe claims from food and drink companies. How to gain consumer trust when consumers are so negative?

Verschuren: “Market science in the right way. Our health claims should for example not come as a surprise to the medical community. Of course you have to support your claims by sufficient scientific evidence. And when launching your product you have to know what’s in the minds of the consumers. Make it ‘digestible’ for them. Do not bother to explain exactly how anti-oxidants work in detail, but make consumers aware that there is a positive link between anti-oxidants and daily health. There are no easy solutions, but make sure you propose your solutions in an understandable way.”

 

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How to drive nutraceutical uptake?
• communicate effectively with consumers to gain their trust;
• focus tightly on specific health benefits;
• seek endorsements from reputable organisations;
• build trust in your company as well as your products;
• show a corporate commitment to health and wellness;
• extend brands that consumers already trust;
• create products that address the attitude-behaviour gap;
• use natural ingredients for taste and authenticity;
• draw attention to convenience benefits;
• create affordable products for lower-income groups;

Source: Datamonitor

 

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