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A local view of the latest product innovations
Food for Thought, 3rd November 2010
David Jago, Mintel
2© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Who we are
Today’s presentation
What can companies learn from innovation in other markets?
What’s happening now in key consumer trends, and how is new product development responding?
How should companies be developing new products?
Which directions to take?
Which product attributes to focus on?
3© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
What’s happening in New Product Development?
Recession or no recession, NPD patterns have always been sporadic
NPD in drink appears to be shrinking – down to just 12% of all NPD in the current year
4© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
New product introductions, UK & Ireland
Source: Mintel GNPD
Product development and innovation
Innovation drives growth…
But the food and drink industry is conservative
Because the consumer is inherently conservative
Breakthrough innovation is sexy, but it is very rare
Commercial innovation can bring in the ££ or €€ just as effectively
A quick look back at just a few recent launches…
5© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
New in breakfast cereals
6© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Running counter-trend?
Kellogg’s Krave – new in a category where children, women
and health claims dominate
Running counter-trend?
Kellogg’s Krave – new in a category where children, women
and health claims dominate
Opting for balance?
Weetabix chocolate – indulgent, but half the sugar and low salt
Opting for balance?
Weetabix chocolate – indulgent, but half the sugar and low salt
New in chocolate
7© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
A little “better for you”?
Twix Fino – a lighter version with wafer, 94 calories per piece
A little “better for you”?
Twix Fino – a lighter version with wafer, 94 calories per piece
What’s premium nowadays?
Cocopia luxury artisan chocolates – from Tesco
What’s premium nowadays?
Cocopia luxury artisan chocolates – from Tesco
New in meal solutions
8© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Simple, quality, convenience
Birds Eye Simply Bake To Perfection – convenient, premium
quality proposition
Simple, quality, convenience
Birds Eye Simply Bake To Perfection – convenient, premium
quality proposition
Stretching values “safely”
Birds Eye Levi Roots Reggae Reggae Beef Burgers – bringing
fun and variety to a staple
Stretching values “safely”
Birds Eye Levi Roots Reggae Reggae Beef Burgers – bringing
fun and variety to a staple
A focus on key trends in food and drink
Staying close to home – looking at the UK and Irish markets
What motivates consumers?
Where is all the resource and effort being spent, developing and launching new products?
9© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
10© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Which food matters matter?
Importance of food related claims to UK consumers
Base: 1,000 Internet users aged 16+, December 2009
NB Respondents were limited to three choices.
Source: Toluna/Mintel
Health & wellness remains the single most important trend
But how consumers see health & wellness is changing
11
Health & wellness: shifting definitions
Low-in claims remain important, but “dieting” and “weight loss” are replaced by weight management and hunger management
Portion control is emerging in some markets as a key trend
Focus now is on “natural” nutrition:
Inherent goodness, fresh, wholesome, balanced nutrition…
Wholegrain, superfruits, natural antioxidants from fruit or cocoa…
“Natural” and “additive-free” become part of the consumer’s wellness vocabulary
12
Consumers avoid fat, and sugar, and additives…
13© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
UK consumers, 2009
40%36% 36%
26%
Source: TGI/Mintel
14
In NPD, traditional health claims are in long-term decline
New product introductions with selected claims, as % total introductions, food & drink, UK & Ireland
Source: Mintel GNPD
15
Convenience, ethical & environmental claims take over…
New product introductions with selected claims, as % total introductions, food & drink, UK & Ireland
Source: Mintel GNPD
16
But “natural” claims rule
New product introductions with selected claims, as % total introductions, food & drink, UK & Ireland
Source: Mintel GNPD
17© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
No additives: from niche to mainstream
Raw Health organic crispbreads, UK, made from raw ingredients, all
organic, gluten-free
Raw Health organic crispbreads, UK, made from raw ingredients, all
organic, gluten-free
Haagen-Dazs’ Five all natural ice cream, USA, made with just five ingredients listed front of pack
Sales of $21m in 1st year
Haagen-Dazs’ Five all natural ice cream, USA, made with just five ingredients listed front of pack
Sales of $21m in 1st year
18© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
No additives: promoting the positive
Organix range with “no junk promise”, UK
Organix range with “no junk promise”, UK Planet Lunch “100% natural”
kid’s range from Walkers, UK
Planet Lunch “100% natural” kid’s range from Walkers, UK
19© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
No additives: communication built on simplicity, tradition
Charlie Bigham’s range, UK:
packaging tells the story, ingredients
statement is “clean”
Charlie Bigham’s range, UK:
packaging tells the story, ingredients
statement is “clean”
20© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Organic
The market for organic food & drink has suffered in the economic recession
Market values are flat or in decline
NPD is in decline (in the UK)
Other premium food segments have not necessarily seen the same downturn…
So how can brands (re)capture that added value spend?
Is the answer in “more natural” rather than organic-certified products?
Or in greater differentiation? Emphasis of provenance and sustainability?
Or through “value with value”?
Hipp baby food, UK, “Great
Organic Value”
Hipp baby food, UK, “Great
Organic Value”
21© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Organic – a tough market for the next few years
UK retail sales of organic food, 2003-13
£1,883m in 2013£896m in 2003
22
Sustainability hasn’t faded with the recession
23
It’s become part of everyday business
Heightened consumer awareness and
expectation
Media coverage
Increased availability of massmarket products that
address sustainability
Financial benefits of being green for
Corporates
24
Packaging: focus on materials reduction
Kraft Foods’ Kenco instant coffee
200g refill pouch, UK, now with 97%
less packaging weight than a
regular jar
Bottle Green Squeezy Squash, UK, triple
concentrated, easy squeeze bottle
Coca-Cola Menos é Mais
Iced Tea Concentrate, Portugal, 1L
carton makes 7L drink
Coca-Cola Menos é Mais
Iced Tea Concentrate, Portugal, 1L
carton makes 7L drink
41%Of UK
consumers say they would buy
more environmentally friendly products if it saved them
money
25© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Carbon footprints
Nearly one in five UK consumers claims an interest in carbon footprint labelling…
Consumers seek clarity, any type of clarity, in a very complex issue
Quesos Forlasa cheese, Spain, in CO2=0 packageQuesos Forlasa cheese,
Spain, in CO2=0 packageCasino (PL) potato
dishes, France, with carbon index label
Casino (PL) potato dishes, France, with carbon index label
26© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Ravintoraisio’s Elovena oat flakes, Finland, packaging indicates total water footprint (101L) per 100g
cereal; also carries carbon footprint (80g per 100g)
What if… water footprints?
Water conservation looks set to become the next big issue
Major suppliers are addressing water usage
First “water footprints” appear on products
www.waterfootprint.org, a Unesco-run website, provides water calculator and shows water usage for diverse products
27© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Fairtrade
Coffee, tea and chocolate still dominate, but Fairtrade and Rainforest Alliance continue to expand to new categories
Mainstream brands enter the market, while private label remains strong – accounting for nearly a third of all NPD
Fairtrade new product introductions, by
category
28© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Fairtrade: new brands, new categories
Cadbury Dairy Milk chocolate, UK, claimed to be the first mass market
chocolate producer to gain certification from the Fairtrade
Foundation
Rude Health cereal with Fairtrade banana, UK; Bart Spices’ Black
Peppercorns, UK
29© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Animal welfare
RSPCA’s Freedom Food scheme is the best known programme for animal welfare
Focus on farming, transportation and slaughter
2,800 members, including farmers, processors, packers and hauliers
Covers over 530 million animals, more than 700 product lines
42% share of all UK duck production (Cherry Valley)
20% of pig production (all Coop Truly Irresistible pork products are from Freedom Food, Hampshire-bred pigs)
Sainsbury’s saw a 164% increase in Freedom Food sales in 2009
40% of UK consumers cite animal welfare as an important food claim
Yet less than 3% of new food products launched in the UK carry an animal welfare claim on-pack…
30© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Animal welfare
Little Dish chilled meals for kids, UK; “fresh, natural food” sourced
from “British farms where the animals are well cared for
Honeydrop flavoured waters, USA, with organic honey from “free bees” as a natural sweetener
31© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Traceability
Latte Lombardia’s Latte Milano milk, Italy, in a recyclable package and a Supply Chain Traceability logo, which allows the company to monitor the entire
production process from cow to consumer; Kwetters free range eggs, Netherlands, with a code printed on each egg that provides all details on the
provenance of that egg
32© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Traceability – or how multinationals can play at local
http://www.cokecorporateresponsibility.co.uk/journey-of-a-coke/trace-your-coke.aspx
33© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
“Local” in the wider market
Source: GB TGI, Q1 Kantar Media UK Ltd 2005-10 (Oct-Sep)/Mintel
“I buy goods produced in my country whenever I can”
34© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Local or regional in food & drink
Local has an important emotional tag…
It can also mean lower CO2 emissions
In the UK, three times as many consumers care about whether their food is locally sourced than whether it is organic
0
5
10
15
20
25
30
Locally sourced Fairtrade Organic
Source: Toluna/Mintel, December 2009
Important issues when buying food, UK consumers
%
35© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Supporting local or regional food: Continental approaches
Berger Regional Optimal meat products, Austria, using pork
sourced within a radius of 50km from production, while the pig fodder
comes from the Danube area of Austria, not from a South American
plantation
Berger Regional Optimal meat products, Austria, using pork
sourced within a radius of 50km from production, while the pig fodder
comes from the Danube area of Austria, not from a South American
plantation
Orlait’s J’Aime le Lait d’Ici, France, milk “from farms in our regions,
collected and packaged in France”
Orlait’s J’Aime le Lait d’Ici, France, milk “from farms in our regions,
collected and packaged in France”
36© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
8
8
12
15
20
26
27
35
36
48
0 10 20 30 40 50 60
None of these
The brand is more important than w herethe food comes from
I pay attention to the EU food origin labels
I look for the Red Tractor label w henbuying food
I’m w illing to pay a bit more for food w ithdetailed provenance information (eg
regional)
I don’t pay much attention to food origin
Price is more important than w here thefood comes from
Food origin labelling can sometimes bemisleading
I pay attention to food origin
It’s important to know w hich region/countrythe food comes from
%
Food origin important, but attention-worthy?
Attitudes towards food
origin, December 2009
Base: 1,000 Internet users aged 16+
Source: Toluna/Mintel
78,000 farmers
400 packers/mfrs
£10 bn p.a.
37© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Two in five buy British to support local business
Attitudes towards British food,
December 2009
Base: 1,000 Internet users aged 16+
Source: Toluna/Mintel 12
2
17
17
19
28
32
35
37
39
40
0 10 20 30 40 50
None of these
British food is not as good as otherimported food
British food is expensive for w hat it is
British produce tastes better
I’m w illing to pay a bit more for British food
There is not enough British food in my localsupermarket
British food has a good reputation
Food sourced from Britain has a low ercarbon footprint
I trust British food more than food fromoverseas
I expect British food to be cheaper
I buy British to support local businesses
%
Sainsbury’s bread made with British flour
Sainsbury’s bread made with British flour
38© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Half the nation want local food - effortlessly
Base: 1,000 Internet users aged 16+
Source: Toluna/Mintel 15
6
12
13
14
26
26
31
32
37
45
48
0 10 20 30 40 50 60
None of these
I prefer local food because it's different
I trust local food more than big brands
I seek out local food
I prefer local food because it's authentic
The availability of local food has improved
I w ould buy more local food if I could affordit
I buy local food to support local businesses
Local food is often over-priced
Local food is better for the environment
I’d like more local foods at my supermarket
I buy local food w hen possible
%
Attitudes towards local food, December
2009
39© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
One in six are food origin enthusiasts
Target groups, December 2009Base: 1,000 Internet users aged 16+
Source: Toluna/Mintel
Origin interested
35%
Origin committed
17%
Apathetic48%
One in six people are food origin enthusiasts
They pay attention to food origin
They are willing to pay more for British and traceable food
40© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
One in three are interested
Target groups, December 2009Base: 1,000 Internet users aged 16+
Source: Toluna/Mintel
Origin interested
35%
Origin committed
17%
Apathetic48% One in three stand out as above
average positive towards British and local food
But unwilling to pay higher prices in return
Brands need to leverage qualities to differentiate and justify price premium
41© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Leveraging the “local” message: simple formulations
Sharpham Park Organic Spelt Granola, made with pure British
wholegrain spelt milled in Somerset, 100% organic, ingredients travel “the
minimum number of food miles”
Sharpham Park Organic Spelt Granola, made with pure British
wholegrain spelt milled in Somerset, 100% organic, ingredients travel “the
minimum number of food miles”
Glenilen Farm yogurt, handmade on Alan and Valerie Kingston's family farm in West Cork. “Absolutely no
additives”, premium glass pot
Glenilen Farm yogurt, handmade on Alan and Valerie Kingston's family farm in West Cork. “Absolutely no
additives”, premium glass pot
42© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Leveraging the “local” message: more complex recipes
Tanfield Food’s Sharrow Bray gourmet food range, e.g. Country Mushroom Soup “made with the
whitest of button mushrooms combined with double cream from
cows grazed in Northumberland and Durham”
Tanfield Food’s Sharrow Bray gourmet food range, e.g. Country Mushroom Soup “made with the
whitest of button mushrooms combined with double cream from
cows grazed in Northumberland and Durham”
Country Crest From the Farm Shepherds Pie, a microwave
wholesome meal of minced Irish lamb and root vegetables topped
with creamy Irish potato
Country Crest From the Farm Shepherds Pie, a microwave
wholesome meal of minced Irish lamb and root vegetables topped
with creamy Irish potato
Local – the challenge of availability
All major supermarkets play an important role…Tesco claims to stock around 3,000 local lines
Tesco aims for $1 billion sales of local products by 2011
“Local” means produced in the county where sold, or in a neighbouring one
Farm shops and farmer’s markets grew fast in early 2000sGrowing interest in food, provenance, quality, transparency…
Especially favoured by more affluent consumers and over-35s
Recessionary pressures since, but note boost from “staycation” trend and trading up
Increase in online activityEspecially via portals of multiple suppliers e.g. localfoodadvisor.com, with its 20-mile radius search facility
But: Only 14% of consumers shop at farmers’ markets and farm shops, and just 13% seek out local food
Essential to take local food to where the mainstream shoppers are
44© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Future opportunities
Half the population consider it important to know where food comes from
But only one in three pay attention to food origin
Half the population say they buy local food where possible, but just one in seven seek it out
Huge opportunity to translate interest into action…Transformation of brands into experiences as a means of differentiation
Create stories, personality and engagement via brands
Local food concessions in supermarkets as retail theatre (e.g. Rowes pie and pasty concessions in Asda stores in Cornwall)
Regular (local) sampling stands in store
Supermarkets tying in with local farmers’ markets
45© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Future opportunities
Need to engage the young…Building engagement through high interest values such as animal welfare, ethics and the environment
Consider the role of “new” media
Tackle the price issue: build value with valuesValue for money works in both premium and economy
Convert the “origin interested”Leverage PR and face-to-face communications at the local and regional level
Focus on core brand values: transparency, authenticity, authority
46© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Thank you
tel: +44 20 7606 4533
email: [email protected]
Director of Insight & Innovation
David Jago