Considerations in Developing a Functional Food Product & Making it Good for a

Successful MarketStart

Dr. R. B. Smarta

Managing Director Interlink Marketing Consultancy Pvt. Ltd.

Honorary Secretary Health Foods & Dietary Supplements Association (HADSA)

11th April 2014

Successful MarketStart

So Far we have discussed

Inside-Out Approach!!!

Lets now appreciate the

Outside-In Approach!!!

OUTSIDE-IN APPROACH

Outside-In Approach

Trends

Needs

Problems

Platform

Source: Innovation in Healthy & Functional Foods, Market –Focused Innovation in Food & Nutrition

10 UPCOMING TRENDS

10 Upcoming Trends

1. Emerging Economies

2. Value of Science

3. Increase in health consciousness

4. Awareness of Functional Foods

5. Increasing disposable incomes

SOURCE: http://www.nutraceuticalsworld.com/issues/2014-01/view_editorials/10-trends-to-watch-in-2014/

6. Quality & Safety

7. New Rules & Regulations

8. Claims Enforcement

9. Sustainable Supply Chains

10. Personalized & Preventive Medicines

The Market for Health Promoting Ingredients

CONSUMER FOCUSED MARKET DRIVERS

Market Drivers focused on Consumers

Rising Incomes

Major Brands re-positioning towards more towards Health

Increasing incidence of Self-medication & Personal responsibility

Increasing Awareness of Medical Consumers & Healthcare professionals

MARKET TRENDS BASED ON CONSUMER NEEDS

Market Trends based on Consumer Needs

• Digestive Health

• Convenience Foods

• Benefit Foods

• Energy Yielding & Slow energy releasing

• Fruit & Super fruit

• Weight wellness & Gluten-free

CONSUMER DILEMMAS

Consumer Dilemmas

CONSUMER DILEMMAS

What is the price – value

equation?

How good is product

nutritionally?

Does the product call for longer cooking time?

How is the taste affected by nutrition?

Source: Innovation in Healthy & Functional Foods, Marketing, PR, Ad & Media for Brand building of innovative Foods & Nutritional Products

MARKET ENTRY BARRIERS & OTHER CHALLENGES

Market Entry Barriers faced by the companies

• Lack of adequate Marketing & Product development infrastructure

• Lack of adequate funding for R&D and overall Business

• Regulatory policies/procedures/processes

Other Market-related Challenges

1. Conversion of Science to Business

2. Value of Science a Regulatory mechanism

3. Consumer behaviour, Market mapping and Product development

4. Barriers in Development and Marketing

5. Viability and Commercialization

6. Funding and Financing

KEY CHALLENGES IN DEVELOPMENT

Key Challenges in Development

• Ensuring that Healthy choice is the Easy choice for consumers

• Assuring & Delivering Health, Safety & Quality

• Achieving Sustainable food production

• Managing the food chain

• Optimizing Communication, Training and Technology transfer.

Source: New Developments in Novel and Functional Foods, Lisbeth Munksgaard, SM, Danisco A/S

5 CRITICAL SUCCESS FACTORS

5 Critical Success Factors

1. Notice-ability

2. Superiority

3. Compatibility

4. Practicality

5. No Complexity

MARKETING & BUSINESS STRATEGY

Marketing Strategy

• Strategy for ‘Targeted Market Segment’

• Strategy ‘In Societal Context’

• Strategy ‘To Meet the Future Demands’

Targeted Market Segments based on Customer Needs

Sufferers

At Risk

Prevention

Mass Market

Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert

Strategy for Targeted Market Segment

Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert

Strategy In Societal Context

Factors to be considered: Legal systems Claims made on the label Politics Cultural norms and values Finances and other societal factors

Harmonized legal systems for food and medicines would

facilitate production and trade with these products.

Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert

Strategy to Meet Future Demands

Factors to be taken into considered:

Extend product lines by combining the portfolio of existing and new product forms with innovative new components.

Follow a strong trend, to identify emerging growth opportunities that can be accelerated into the mainstream market through competencies in marketing and distribution.

Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert

Business Strategy

Building a Brand

Clinical Studies

Proprietary ingredient/product

Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert

Business Model

Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert

COMMERCIALIZATION

Process of Commercialization

Creation & Commercializa

tion

Diffusion & Absorption

Shifting out to the global/local frontier of awareness, knowledge, exchange & performance

Moving toward the acceptance of innovators& early adopters of the market

Product Innovation

Product Innovation

Marketing Innovation

Commercial process Innovation

Better and cheaper products in global, national and local markets in response to consumer needs.

Source: Innovation in Healthy & Functional Foods, Market –Focused Innovation in Food & Nutrition

Manufacturing & Packaging Industry

Nutrient and Supplement Suppliers & Manufacturers

Confectionery, Beverage & Chocolate Manufacturers

Ingredient Manufacturers & Suppliers

Equipment Providers

Vegetables & Fruits Suppliers

Cereals and Grains Suppliers

Equipment Providers, Processing Industry

Stakeholders for Functional Foods Market

7 POINT CHECKLIST FOR SUCCESSFUL MARKETING OF FUNCTIONAL FOODS

Checklist for Successful Marketing of Functional Foods

1. Successful brands are expert brands

2. Offer a relevant benefit and be a credible brand

3. Aim for a benefit the consumers can feel

4. Remember - an ingredient is not a point of difference –

it must give Value Proposition

Source: http://www.nutraingredients.com/Industry/Learning-from-functional-foods-failures Learning from Functional Food Failure 11 June 2009

Checklist for Successful Marketing of Functional Foods

5. A future of niches – focus on value, not volume

6. Differentiate using packaging design

7. Open new categories & segments – don’t be me-too

Source: http://www.nutraingredients.com/Industry/Learning-from-functional-foods-failures Learning from Functional Food Failure 11 June 2009

Mantra For Marketing

‘Filter the Promise from the Challenge’

WHY PRODUCTS FAIL?

(Functional Foods line, Novartis)

CASE STUDY

WHY DO SOME PRODUCTS SUCCEED?

(Creamy yogurt containing Bifidus ActiRegularis1, Danone, France)

CASE STUDY

Your Wellness is in Your Hands!

Any Questions?

Interlink’s Offerings to Clients

1.Market Mapping

Location / Therapy-wise

Organ Specific

General Management

Disease Care

2. India Entry Strategy

Entry mode

Regulatory & Product Deve.

Communication & Health claims

Positioning & Pricing strategy

Partner search / alliances

Licensing-in

Interlink Marketing Consultancy Pvt. Ltd. 3A, Central Plaza, 166, C.S.T. Road, Kalina, Santacruz (E), Mumbai - 400098

Tel: (022) 2666 6611 / 44

info@interlinkconsultancy.com www.interlinkconsultancy.com

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