"Back to basics" is a really interesting trend. As the world gets more and more advanced technologically, there still seem to be some opportunities to go the other way. I posted recently about the decline in gym membership, as people perhaps realise a better way to burn calories is to do some gardening or partake in other forms of physical activity. Then there's the return of traditional Delia Smith to the top of the best-selling cookery book list.
And now comes news that the once explosive growth in "functional foods" has fizzled out in the UK. According to Mintel, this sector grew just 3% in 2007, compared to an average annual growth of 15% between 2002 and 2006. The article suggests that consumers are starting to get fed up with paying a heavy premium price for claims they're unsure of. Mintel said "Consumer cynicism over health claims made and the price premiums charged by some manufacturers are the key obstacles that stymie the development of a wider purchasing repertoire of functional foods."
A few interesting learnings from this news:
1. Back to basics
Rather than paying a high price for a fancy new product with claims you're not sure about, it seems people are going back to simpler, easier to understand alternatives. The continued growth of innocent smoothies is an example of this. You can get your head around "2 of your 5 portions of fruit & veg" more easily than some fancy scientific ingredient. Also, people are looking for products that fit easily into their daily lives, instead of having to add a new habit. So, I can eat a bowl of porridge oats to help lower cholesterol, instead of having to add time, hassle and expense to drink a shot.
2. If you do go functional, get in early
The yoghurt drink market is one that has gone into decline, with the biggest casualty being Danone's Danacol that has been withdrawn. This product was perhaps just too late onto the over-crowded shelf of "shots" (those little tiny bottles). We already had Actimel, Flora Pro.Activ and Yakhult. There wasn't space for one more shot it seems
3. Have a clear benefit
The article suggests lower marketing spend is part of the reason for declining sales, saying that "Functional foods have traditionally benefited from hefty budgets due to the challenge of communicating product benefits". Perhaps the problem is not the lack of budget, but rather the lack of benefit?! Or at least the lack of a believable benefit.
4. Claims count a lot
One high profile casualty in the functional foods shake-out was Unilever's Adez brand of soya juice. This new brand had a hot ingredient, a nice tasting product and a pretty big launch budget. But the amount of soya per serving was not enough to make a really strong claim on the benefits of the brand, with the brand idea the rather vague "be strong".
Knorr Vie fruit & veg shots did best in markets like Holland where they could support a "2 of your 5 a day claim", and less well in places like the UK where this was not possible. And the growth of Flora/Becel ProActiv is supported by a massive and long term investment in scientific research and claims support.
Its probably not the end of the line for functional foods. But consumers are clearly wising up and starting to ask "where's the sausage?" They need clear, relevant and well supported health benefits if they are going to cough up extra cash.