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Smart Marketing 2006 Curative Foods Is the U.S. Immune to the Sales Opportunity?

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Presentation on theme: "Smart Marketing 2006 Curative Foods Is the U.S. Immune to the Sales Opportunity?"— Presentation transcript:

1 Smart Marketing 2006 Curative Foods Is the U.S. Immune to the Sales Opportunity?

2 Smart Marketing 2006 Curative Foods Does Food Cure Illness?

3 Smart Marketing 2006 Some Milk Micro Components Lactoperoxidase –Antimicrobial Calcium phosphopeptide (CPP) –Tooth remineralisation Conjugated linolieic acid (CLA) –Anti-cancer properties

4 Smart Marketing 2006 What are Nutraceuticals? Almost all foods and dietary supplements? “Natural” or “Organic” food products? “Functional” foods

5 Smart Marketing 2006 The Food/Pharma Continuum

6 Smart Marketing 2006 What are Nutraceuticals? The scientific fraternity considers nutraceuticals as: ‘Foods that deliver benefits that extend beyond basic nutrition’ The marketplace considers nutraceuticals as: ‘Food and beverages that contribute to the general health and wellness of consumers, and can contribute towards the prevention and management of illness and undesirable health conditions’

7 Smart Marketing 2006 The Food/Pharma Continuum

8 Smart Marketing 2006 Market Size Estimates MarketEstimated size (US$ bn) USA20.0 Europe (west)17.5 Japan12.5 Other Asia5.5 Australasia1.5 Others3.0 TOTAL60.0

9 Smart Marketing 2006 Market Size Estimates MarketEstimated size (US$ bn) USA20.0 Europe (west)17.5 Japan12.5 Other Asia5.5 Australasia1.5 Others3.0 TOTAL60.0

10 Smart Marketing 2006 Japan A large, well developed market Developed the FOSHU concept Probiotics form an important sector Prebiotics also important Tonic drinks = dietary supplements

11 Smart Marketing 2006 Japanese Tonic Drinks

12 Smart Marketing 2006 Japan A large, developed market Developed the FOSHU concept Probiotics form an important sector Prebiotics also important Tonic drinks = dietary supplements Increasing adoption of western foods

13 Smart Marketing 2006 Western Europe A confused market environment Some European companies lead global development Strong influence from Scandinavia Probiotic dairy dominates the market A strong trend in prebiotics

14 Smart Marketing 2006 The USA Nutraceuticals offer opportunities in an otherwise mature food market Why has this not happened earlier in line with the other markets? –Dietary supplements have taken the lead nutraceutical role Increasing understanding of the link between diet and health –Albeit, not to Asian levels (yet) Population and health management issues –Prevention is better than cure

15 Smart Marketing 2006 Landell Mills’ Recurring Themes 1.Nutraceuticals are a prospective growth opportunity 2.Clear, concise and targeted communication strategies are paramount to success 3.There is no universal magic bullet 4.Partnerships offer a natural entry strategy 5.Industry associations need to take responsibility for their role in this prospective market 6.Develop and astute and large target approach 7.There is no need to wholly re-invent the wheel 8.Ensure that the homework is done

16 Smart Marketing 2006 A Prospective Growth Opportunity Globally this sector offers the greatest growth potential –In an otherwise flat food market The US is a mature dairy market –Nutraceuticals opportunities may offer growth opportunities –They may also point towards strategies that can help to halt or slow sector decline

17 Smart Marketing 2006 A Prospective Growth Opportunity Large brands and categories have been developed in Japan and western Europe –Thus demonstrating the potential in this emerging sector Consumers, the market and the regulatory environment are markedly different in the US –This is no reason to do nothing!!

18 Smart Marketing 2006 Consumers are Different

19 Smart Marketing 2006 Consumers are Different

20 Smart Marketing 2006 Consumers are Different Are we selling bacteria, or better health?

21 Smart Marketing 2006 Communication Strategies Clear, concise and targeted communication strategies are paramount to success The market is evolving rapidly –But large pockets of confusion still exist “Health and Wellness” is a common trend –Few large companies are prepared to risk “mega-brands” by diverting from conventional position options

22 Smart Marketing 2006 Communication Strategies Clear, concise and targeted communication strategies are paramount to success Consumers are increasingly linking diet to health –In the US this often means avoiding the negatives Build a positive proposition into the communication strategy

23 Smart Marketing 2006 Communication Strategies Clear, concise and targeted communication strategies are paramount to success The US market has blurred distinctions between healthy/nutritious and nutraceutical food –Consumers will not bother to unravel the confusion Nutraceutical marketers need to articulate their offerings in a meaningful way

24 Smart Marketing 2006 Communication Strategies Clear, concise and targeted communication strategies are paramount to success Competition is hotting up –A fear has arisen of the “snake oil” salesman Dairy companies need to understand and communicate “the science” to raise credibility

25 Smart Marketing 2006 Communication Strategies Clear, concise and targeted communication strategies are paramount to success A veritable smorgasbord of nutraceuticals are being marketed to consumers –Some with “good” science, others without Pick a few winners, do and re-do the science and drip feed messages

26 Smart Marketing 2006 The Magic Bullet There is no universal magic bullet Product sectors and market drivers differ markedly –Global strategies will not work in this market The drug/food “hybrid” of supplements has evolved in the US –Dairy companies need to understand the US supplements market

27 Smart Marketing 2006 The Magic Bullet There is no universal magic bullet The profile of disease and morbidity in many developed countries is changing –Marketers need to keep abreast of market dynamics Markets need to be differentiated

28 Smart Marketing 2006 Partnerships

29 Smart Marketing 2006 Partnerships Partnerships offer a natural entry strategy Pharmaceutical companies are recognizing the threat –Many are taking a rear guard action through acquisition Dairy companies should develop partnerships with the pharmaceutical sector

30 Smart Marketing 2006 Partnerships Partnerships offer a natural entry strategy Compliance is based on evidence arising from clinical trials –Few companies have the resources to pursue clinical trials Look for synergistic partnering opportunities –To share the resource demand

31 Smart Marketing 2006 Industry Organisations Industry organisations need to take responsibility for their role in this market Legislative conditions are markedly different between countries –The term “nutraceutical” generally fails to receive acknowledgement Industry organisations need to step up and take responsibility for the good of the industry

32 Smart Marketing 2006 Industry Organisations Industry organisations need to take responsibility for their role in this market Scepticism abounds among consumers over health claims Industry organisations have a key role to play in building credibility

33 Smart Marketing 2006 Industry Organisations Industry organisations need to take responsibility for their role in this market Efficacy is all about the delivery of benefits via the micro-components of food –A small handful of components are widely acknowledged as having therapeutic powers Industry organisations have a role to test and communicate efficacy to consumers

34 Smart Marketing 2006 Industry Organisations Industry organisations need to take responsibility for their role in this market Some foods in their own right can be considered nutraceutical

35 Smart Marketing 2006 Eureka Could be Right Under Your Nose!! Cheese as a nutraceutical –High natural calcium content –Bioactive peptides from the ripening process –Protein precursors release further bioactive peptides –High natural CLA content –Starter cultures that have authentic probiotic qualities –The sphingolipids in cheese –Whey proteins

36 Smart Marketing 2006 Industry Organisations Industry organisations need to take responsibility for their role in this market Some foods in their own right can be considered nutraceutical Industry organisations have a role to play to highlight the intrinsic nutraceutical benefits –Review and determine the inherent nutraceutical benefits of consumer products

37 Smart Marketing 2006 Target Markets Develop and astute and large target approach There are a number of potential therapy fields to target –Key target fields in the US are obesity, cardiovascular disease and sports/performance foods Reassess the role dairy has to play in key target areas

38 Smart Marketing 2006 Reinvent the Wheel? There is no need to wholly reinvent the wheel Milk has long been regarded as the most complete food Nutraceutical strategies could be developed that build on an emerging or established awareness of milk and dairy foods

39 Smart Marketing 2006 Reinvent the Wheel? There is no need to wholly reinvent the wheel Milk and dairy foods are ready carriers and receptors for formulating with non-dairy components The US consumer is suspicious of attempts to redesign the “holy grail” –Develop strategies that do not compromise known and successful positioning options

40 Smart Marketing 2006 Reinvent the Wheel? There is no need to wholly reinvent the wheel Orthodox food consumption drivers remain –A trade-off is unlikely Nutraceutical qualities need to build on established consumer platforms and market drivers

41 Smart Marketing 2006 Do Your Homework Ensure that the homework is done The consumer is seeking healthier food product options –Marketers and designers see this as a challenge to reduce fat, sodium and/or carbohydrate content of food Undertake consumer research and trialling –Not only for product concepts but also for communication strategies

42 Smart Marketing 2006 Do Your Homework Ensure that the homework is done Public health concerns about obesity and cancer are reaching higher levels of awareness –The “old” diseases are largely relegated to history There are knowledge deficits that need to be addressed –Maintain pressure and momentum on R & D

43 Smart Marketing 2006 Do Your Homework Ensure that the homework is done Lifestyle choices are increasingly determining purchase behaviour –This increasingly applies to food consumption Consider fashionable issues like portability, convenience and so on

44 Smart Marketing 2006 Do Your Homework Ensure that the homework is done The large food marketers appear to offer the best opportunity to develop and market nutraceutical food products –But the big brand marketers will not associate their products and brands with “risky” nutraceutical products unless they are proven, re-proven and proven again Seek out companies with more flexibility and a “speed to market” mentality

45 Smart Marketing 2006 Summary Consumers are different The rules are different The market is different ….but that is no reason to do nothing!!

46 Smart Marketing 2006 Thank-you Ross Christieson Tel: +44 1373 831 219 E-mail: ross.christieson@landell-mills.com

47 Smart Marketing 2006 So….What to Do?

48 Smart Marketing 2006 Key Aspects for Success 1.Speak in a language that consumers know and trust 2.Ensure product safety 3.Prove efficacy 4.Educate consumers about the proposition 5.Get the science right, and the regulators on side 6.Get the market position right 7.Get the pricing right 8.Work on a health claim strategy


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