F&B manufacturers who are developing healthy products need to know which claims are the most attractive for shoppers. Understanding how consumers really purchase brands is crucial to grabbing their attention in store. We caught up with Amishi Takalkar, Co-Founder and Head of Research and Analytics at NAILBITER, to find out what F&B manufacturers who are developing healthy products need to do to differentiate themselves from the competition.
Why has there been such a surge in demand for healthy foods over the last few years? Is this growth expected to continue?
‘There is little doubt in my mind that millennials are driving the trend towards healthier foods. They are more likely to be concerned about the impact of their food on their bodies and on the environment. Millennials buy few grocery items but are less price sensitive if they perceive the product to be healthier. This has allowed smaller brands to make profitable products in smaller quantities further driving the trend. Call me an optimist, but not only do I see this trend continuing, I also see it being permanent.’
Is there a particular category within the health food sector that has seen more growth than others?
‘There are many categories that are being transformed by health trends. Carbonated beverages are the first one that comes to mind. Consumers are moving away from both sugary drinks and artificial drinks towards lightly flavored drinks and water. This has driven the market for all natural drinks based on juices and various tea leaves. The other area where health trends are transforming categories is salty snacks. Our first slice of Better-for-you report showed the emergence of popcorn as a key category and alternative to potato chips. We believe that other non-fried vegetable based salty snacks (from sweet potatoes to kale) are going to grow.’
The research NAILBITER has done looks into the impact of health claims on consumers. Which is the most common claim that companies use? And which is the most attractive for consumers?
‘Our data is based on quantitative video metrics from inside the grocery store so it reveals what shoppers actually use in-store. We found that the average shopper reads 1.6 claims ...the brand has a few seconds to get their attention.’
‘Based on our 2016 Better-for-you report (for the US market) we see the emergence of many claims that impact the shopper at the shelf. Some of the newer claims that consumers use are linked to Gluten, Organic, GMO, fiber, Whole Grain, Minimal Processing, Fewer Ingredients and Simple. Perhaps the most important thing we found is that Calories, Fat, Salt and Sugar are still near the top of the claims. We strongly urge our clients to not forget the basics as they are thinking of adding new claims. Most shoppers are not millennials and it's important to not alienate the core. Besides millennials also care about these claims. So if a brand is going to make 2 claims on the front of the pack - they should consider one traditional and one new. A significant portion of health food shoppers do read the back of the pack so the rest of the claims can be moved there.’
‘Our clients are eagerly awaiting results from our latest report which will be ready by the end of October and will include the European market.’
What are your top 3 tips for F&B manufacturers who are developing healthy products, to differentiate themselves from the competition?
‘We have already discussed claims so I will review 3 other very important areas where we find clients sometimes need to invest more time.
- Does your brand have permission to launch healthy products? Recently we have been tracking several new product launches that are not doing well on shelf, despite making some popular and unique claims. We see and hear consumers being sceptical in the 2 seconds they consider the new product on the shelf and then moving on.
- Is your packaging sending the right vibes? In the NAILBITER norms database across 800+ brands in the US, we find that pack appeal is just as important as claims for product success for healthy products. Certain consumers (e.g. Millennials) use packaging graphics as a shortcut to conclude if a product is good for them or not.
- Concept Test-the right way. Often brand managers will load the concept with good stuff (claims, benefits, ingredients). Online survey takers love these concepts. Who doesn't want an all natural, great tasting drink that's low sugar, locally sourced and the packaging is environmentally safe. But how is the brand going to communicate this in a few seconds in-store, on pack?’
Are there any other marketing claims that companies should be using, e.g. sustainably sourced, organic?
‘We are seeing our clients and the broader food industry starting to move up the value chain on claims. Almost all the leading claims over past 20 years revolved around the health of the consumer (from Low Fat to non-GMO). The next generation of claims appear to revolve around the health of society, humanity and the planet. We see the rise of 3 areas here;
- Claims linked to specific charities (often linked to the food category)
- Claims linked to sustainability (recycled packaging, sustainably farmed, etc.)
- Claims linked to locality (locally grown ingredients, locally manufactured, support local farmers and producers)’
‘These claims can be effective in driving trial as they make the consumer feel good (instantly). However these claims carry 2 significant dangers for brands; they are very specific and expensive. Post trial, there is little evidence that consumers will continue to pay a premium for the claims (versus the product performance itself).’
What are your predictions for the F&B industry in the next 3-5 years?
‘Hold onto your hats ... it's going to be a rollercoaster ride! Brands know this better than anyone - health trends are dramatically and permanently changing food and beverage. F&B needs to prepare to capitalize (or risk being left in the dust). Some key predictions:
- No more health stores or aisles - Increasingly retailers will merge “natural” or “organic” sections with the center of the store.
- Superfood era - Presence of ingredients such as chia seeds, goji berry, cacao powder, etc. to bolster health claims on everyday food and beverage items
- eCommerce - F&B has largely been out of the ecommerce arena driven by the unattractive margin/weight ratio and peris hability issues. Large companies with deep pockets such as Amazon, Walmart and Google see F&B as the next frontier to grab market share in eCommerce.’