Healthy Snacking 2011

Trends and
Strategies in
Healthy Snacking
15 key case studies
By Julian Mellentin
Published by
Report
Healthy snacking
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Healthy snacking
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Healthy snacking
Contents
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. Healthy snacking: a wealth of innovation opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1.1 Four factors for success in snacking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.2 Innovation without limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 The essential qualities needed for innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2. Key trends in healthy snacking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

2.1 Trend 1: Naturalness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.2 Trend 2: Fruit & vegetables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.3 Trend 3: Higher protein, slower carbs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3. Brand positioning in healthy snacking

3.1 Targeting the right consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.2 Distribution & routes to market: smart thinking finds smarter ways to take
health to market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.3 Marketing communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4. Seven strategies to increase your chances of success in healthy snacking . . . . . . . . . . . . . . . . 41
5. Case studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Innovation in format . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Case study 1: Popchips – new product format delivers healthier chip at premium price . . . . . . . . . . . . 48
Innovation in ingredients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Case study 2: Mars – exploring how to make cocoa the next ingredient success in snacks . . . . . . . . . . 53
Targeting the technology consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Case study 3: Probake 50 – new format brings a healthy dose of protein. . . . . . . . . . . . . . . . . . . . . . . . 58
Targeting the lifestyle consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Case study 4: Smaller, leaner, kinder: bars tap into women’s needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Case study 5: ThinkThin Bars’ wellness platform resonates with women . . . . . . . . . . . . . . . . . . . . . . . . 67
Targeting the mass market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Case study 6: Kraft Belvita Breakfast – giving people permission to have a sweet snack at breakfast . . 72
Case study 7: Fiber One – an expert brand in digestive health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
“Naturalness” – the biggest trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Case study 8: PepsiCo transforms the snack food aisle into the natural food aisle . . . . . . . . . . . . . . . . . 82
Case study 9: Wonderful Pistachios – making natural into a super-premium success . . . . . . . . . . . . . . 88
Case study 10: Nairns – product innovation, “natural energy” from expert brand in oat-based snacks . 94
Fruit & vegetables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Case study 11: Nature Addicts – Europe’s most successful new snack brand . . . . . . . . . . . . . . . . . . . 102
Case study 12: Castus fruit snacks – a hit with Danish children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Case study 13: Frito-Lay’s fruit and vegetable snack brand ambitions fall to earth . . . . . . . . . . . . . . . . 111
Case study 14: Ocean Spray – from bog fruit to big fruit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Case study 15: Berries – convenience, indulgence and “natural functionality” drive a
super-premium success story . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Healthy snacking
Charts
Chart 1: Percent of food & beverage new product Pacesetters offering health & wellness benefits vs
historical trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Chart 2: 2010 New product Pacesetters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Chart 3: Fruit & vegetable snack product launches 2009-2011 (YTD) . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Chart 4: Change in body weight during the Diogenes study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Chart 5: The nutritional product life cycle – how it works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Chart 6: Technology consumers, a key segment for health brands . . . . . . . . . . . . . . . . . . . . . . . 32
Chart 7: Lifestyle consumers, a key segment for health brands . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Chart 8: Mass market consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Chart 9: Mass-market sales of Luna Bar, the leader in the women’s nutrition bar segment . . . . . 64
Chart 10: Recession-proof digestive health – the rise and rise of Fiber One . . . . . . . . . . . . . . . . 79
Chart 11: The nutritional product life cycle – how trends evolve . . . . . . . . . . . . . . . . . . . . . . . . . 86
Chart 12: The irresistible rise of the Wonderful snack brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Chart 13: The decline and fall of Flat Earth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Chart 14: US sales of Ocean Spray Craisins 2004-2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Chart 15: Health and convenience enables the lowest volume product to command the
highest value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Chart 16: Berries – the super premium success story . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Tables
Table 1: Popchips and Flat Earth: a comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 2: Label messages for healthy snacks in our case studies . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-19
Table 3: Popchips – A comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Table 4: What’s in Probake50? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Table 5: Tasty organic pumpkin pie cereal bar nutrition facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Table 6: Nutrition and ingredients facts for ThinkThin protein bar (dark chocolate) . . . . . . . . . . . 69
Table 7: Fiber One Oat & Chocolate bar ingredients & nutrition facts . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Table 8: Lay’s “All-natural” potato chips ingredients & nutrition facts . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Table 9: Ingredients and nutrition facts for Castus fruit bars (strawberry) . . . . . . . . . . . . . . . . . . 108
Table 10: US and UK berry sales to May 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Boxes
Box 1: Portion control a “win win” strategy in snacking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Box 2: Naturalness is a key element in brand success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Box 3: Even Mars chooses ingredients with a health halo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Box 4: Slow release carbs message from Kraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Healthy snacking
Box 5: Simply Eight keeps it simple for consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Box 6: Applied Nutritional Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Box 7: Slow release energy a key part of Kraft Brand positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Box 8: Belvita TV advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Box 9: Natural foods are the new standard in the supermarket: Pepsico’s stated goal is to transform the
snack aisle into a natural food aisle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Box 10: Wonderful Pistachios’ quirky television advertising. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Box 11: Oats’ natural “slow release energy” advantage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Box 12: Creating a free-from advantage for oat snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Box 13: Televison advertising for N.A! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Box 14: Ocean Spray Craisins advert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Box 15: Good merchandising boosts Craisins sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Companies and brands in this report
Apure Foods Frito-Lay PepsiCo

Balance Bar General Mills Pom Wonderful
Be Fruity Good Natured Fruit Popchips
Belvita Goodness Knows Probake
Campbell’s V8 Iron Girl Energy Bar Quaker Oats
Castus Kind Healthy Snacks Red Bull
Clif Kraft Simply Eight
Coca-Cola Luna Solinest
CocoaPro Marathon Smart Stuff Snack a Jacks
CocoaVia Mars Sunsweet Ones
Danone Nairns Tasty
Driscolls Nature Addicts thinkThin
Eat.Think.Smile Nestlé Wonderful Pistachios
Fiber One Ocean Spray Craisins
Flat Earth Paramount Farms
Continents/Countries in this report

NORTH AMERICA EUROPE
USA France
Canada Scotland
Denmark
Belgium
Netherlands
UK
Healthy snacking
Executive summary
• Snacking is the over-arching trend in food and health: it is affecting every

category, every type of food and blurring boundaries between categories as consumers
evaluate multiple choices in the supermarket – including those not in the snacking aisle –
as potential convenient snacks.
• Demand for snack products is increasing: demand can only grow because longer
working hours, longer commutes, single-person households and an increase in the
numbers of women working are leading to the decline of traditional meal occasions.
Even in countries like Italy and France, more meals are being taken on-the-run.
• Success factors: for companies looking to create snack products, there are four factors
for success:
– Excellent taste.
– Extreme convenience.
– Single-serve.
– No limits on innovation in packaging, ingredients or product formats.
• Taste paramount: in snacks, taste still rules. No one will compromise taste for health.
Snacks often play a psychological role, providing comfort during a stressful or boring day
at the office, or on the road – and they have to taste good to make you feel better.
• No limits on innovation: given the convergence of innovation in processing

technologies and ingredients with consumer need, any company with an ambition in
healthy snacks should not rule out ideas because they are unfamiliar or “too innovative”.
Any material that can be dried, extruded, frozen, shaped, poured, pureed, or whatever, to
deliver a good-tasting, healthy food or beverage snack should be considered.
• Innovation in formats: in many segments of the snacking market it’s difficult to

create any meaningful point of difference. Using technology to create a new product
format is one way to achieve differentiation. Examples in this report include Popchips
(Case Study 1) and Nairns (Case Study 10).
• Build new concepts: a focus on building markets for new snack concepts rather than
following on with predictable products has led to some innovative snacking concepts,
such as: Popchips (Case Study 1); Probake 50 (Case Study 3); Fiber One (Case Study 7);
Nairns’ Oaty Bakes (Case Study 10) and Nature Addicts (Case Study 11).
• Innovation in marketing: probably the most important type of innovation. It is

difficult to create a sustainable point of difference in snacking, even with innovations
in formats, benefits or ingredients. The job of the marketer is to educate the consumer
about new benefits, ingredients or formats and to use these to create a strong and
differentiated brand.
1 www.new-nutrition.com
Healthy snacking
• Invest in marketing: on today’s crowded supermarket shelves it is difficult to stand

out. The most successful brands sell themselves before the consumer even sets foot in the
supermarket. Case Study 6 shows how Kraft Belvita Biscuits used marketing to achieve
the seemingly impossible, selling the idea of biscuits as part of a healthy breakfast in a
country in which biscuits are never consumed at breakfast.
• Transforming a snack commodity with marketing: Paramount Farms, the

company behind Wonderful Pistachios (Case Study 9), used marketing to transform
pistachios from a boring commodity into one of the most successful snacking stories of
the decade. Sales grew 26% in the year to June 2011, to over $153 million (€107 million)
and the brand has driven half the total sales increase in the US snack nuts market.
• Innovation in ingredients: marketers and formulators tend to be very focused on

what’s the “hit” ingredient to differentiate their product. In reality any ingredient can
be a success as long as it’s matched to the product format in a way that’s logical to the
consumer and delivers a benefit that’s attractive to the consumer. For example, Mars
(Case Study 2) is testing ways of bringing the “new health ingredient” of cocoa to market
in new snack formats that might make sense to the consumer, an acknowledgement that
consumers are willing to look at cocoa as a new health ingredient but they have yet to
find a differentiated and credible delivery vehicle for it.
• Snacking Trend 1 – naturalness: in most Western markets “natural” is becoming a

basic consumer requirement for any brand, even those without an overt health position.
What were once messages in the health food store have become mainstream in every
supermarket. Case Study 8, on PepsiCo, illustrates how mainstream this requirement
has become. In 2011 the world’s biggest snack-food company reformulated its products
so that half the snacks it sells in the US use only natural ingredients. So big is Frito-Lay
in the US market that this means “natural” products will have a 65% share of the $3.1
billion (€2.1 billion) snack food market.
• What is “Natural”? “Natural” has two meanings in snacking:
1. Natural = few ingredients, simple ingredients. “Natural” is not used in

a technical or regulatory sense – it is a consumer definition, meaning foods that
are “free-from” artificial colours, preservatives or additives. It can also be used to
encompass foods that are free-from other ingredients that your target consumers
object to – in the US, for example, objections by some consumers to high-fructose
corn syrup have lead to a “No HFCS” label appearing commonly on “natural”
products. Of our 15 case studies, nine mention that they are “free-from” one or more
of gluten, wheat, soy or another “undesirable ingredient” . “Natural” can also mean
“as few ingredients as possible”.
2. Natural = “natural functionality”. For many consumers a health benefit that is

intrinsic to the product – such as oats and heart health, blueberries and antioxidants
– is the only one they will accept. Such foods are seeing increasing use in snacks and
this trend can only strengthen. The Wonderful Pistachios brand illustrates how to
communicate “natural functionality” to consumers.
Healthy snacking
• Snacking Trend 2: fruit & vegetables enjoy a halo of health: more than any
other foods, fruits and vegetables have a halo of health that’s being made brighter by
a steady stream of news about their natural and intrinsic benefits. Fruit, in particular,
is benefiting from the “naturally functional” preference of consumers. To some extent
vegetables, too, are starting to benefit from the same trend as snack processing technology
improves. Case Studies that illustrate this trend are: Nature Addicts (Case Study 11);
Castus (Case Study 12); Ocean Spray Cranberries (Case Study 14) and Berries (Case
Study 15).
• Fruit at super-premium prices: what is striking is how much consumers are willing
to pay for fruit when it’s convenient, as shown in the case study of Nature Addicts (Case
Study 11), which has become the most successful new snack brand in Europe, despite
selling at super-premium prices against the backdrop of a weak economy.
• Snacking Trend 3: higher protein, slower carbs: still at an early stage is the
concept of “good carbs”, “slow carbs” or “low glycemic index (GI)”. However, the trend
is clear and a growing science base for these messages will see their use in healthy snacks
increase in the years ahead.
• Boost for protein: Protein’s image as a valuable part of a healthy diet got a major
boost following the publicity around the results of the world’s largest diet study. The
researchers found that high-protein, low-glycemic index (GI) diets were the most effective
for weight management. The quality and scale of the study has attracted significant
media attention and it is already having an impact on food marketing and product
design. It will accelerate the existing trend to use whole grains in product formulation.
• Slow carbs: Whole grains – “good carbs” – and low-GI also connect to slowly rising
consumer interest in the idea of “sustained energy”. The “slow release” energy message
is in fact in marketing terms quite an old message. It’s only recently that science has given
the message more weight. Several of the brands in our Case Studies use a “slow release
energy” or “sustained energy” message. Nairn’s (Case Study 10), an expert brand in oat
snacks, has made the slow energy release properties of oats a key message in its brand
marketing. Kraft Belvita Breakfast Biscuits (Case Study 6) has focused heavily on a “slow
release” message in its marketing. Thinking about whether and how to create products
that have “better carbs” will have to be on every company’s NPD agenda.
Healthy snacking
1. Healthy snacking: a wealth of innovation

opportunities
Snacking is the over-arching trend in food 2. & 3. Convenience and single-serve:
and health, affecting every category, every Products which you can grab for a morning
type of food and creating a blurring of or afternoon snack, which fit neatly in your
boundaries between categories as consumers pocket or bag and which don’t require a
evaluate multiple choices in the supermarket change in eating habits are the main growth
– including those not in the snacking aisle – as categories. Snacks need to be portable and
potential convenient snacks. single-serve, since snacking is most often
Demand for snack products is increasing a solitary activity. For instance, the biggest
and can only grow more because of the growth in nutritional products in recent years
gradual disappearance of traditional meal is in bars and single-serve beverages.
occasions. Longer working hours, longer Fruit in particular benefits from being
commutes, single-parent families, single- delivered in a more convenient form – a snack
person households and an increase in the or drink – than its natural form, something
numbers of women working are all leading marketers are beginning to flag up for
to the disappearance of traditional meal consumers.
occasions. Even in countries like Italy and
France, more meals and snacks are being 4. Innovation without limits. Consumers’
taken alone and/or on-the-run. growing interest in the healthfulness of what
Healthy snack products targeting breakfast, they eat couples with a wealth of innovations
for example, have promise because this is in ingredients, and processing is having a
one time of day when consumers want to eat massive impact on new product development
healthily – yet are under time pressure. in the area of snacking. Today, consumers
are increasingly presented with snack product
1.1 FOUR FACTORS FOR SUCCESS formats and ingredients that would have been
IN SNACKING unimaginable even as recently as five years
ago. It’s this concept of “innovation without
For companies looking to create snack limits” that we explore in the following
products, there are four factors for success: section.
1. Excellent taste. 1.2 INNOVATION WITHOUT LIMITS

2. Extreme convenience.
3. Single-serve. Given the convergence of innovation in
4. No limits on innovation in packaging, processing technologies and ingredients
ingredients or product formats. with consumer need, any company with an
ambition in healthy snacks should not rule
1. Taste. In snacks, taste still rules and no out NPD ideas because they are unfamiliar or
one is willing to compromise taste for health. “too innovative”.
In addition snacks often play a psychological A focus on building markets for new snack
role, providing comfort during a stressful or concepts rather than simply following on
boring day at the office, or on the road – and with predictable products has already led
they have to taste good to make you feel to the creation of some innovative snacking
better. concepts, such as:
Healthy snacking
• Probake 50 (Case Study 3) short-term success, followed by stagnation;

• Nature Addicts (Case Study 11) a host of product and flavour innovations
• Fiber One (Case Study 7) to create new consumer interest followed by
• Popchips (Case Study 1) years of patchy performance.
• Nairns’ Oaty Bakes (Case Study 10) For example, PepsiCo thought back in 2000
that its Snack a Jacks rice snack brand could
Almost any material that can be dried, become a $160 million/€115 million business
extruded, frozen, shaped, poured, pureed, or in the UK. In fact, by 2010 it had reached
whatever, to deliver a good-tasting, healthy only half that level. But getting even to that
food or beverage snack should be considered point has been a major achievement, driven
by product developers. by constant new product development, a
Just to make the challenge more female-focused brand positioning, wholegrain
complicated, consumer research is no longer credentials and heavyweight marketing
able to tell companies in advance exactly what expenditure. It’s an example that vividly
they should be delivering – the emphasis now illustrates how creating healthy snacks that
is on creating innovative propositions beyond satisfy consumers and keep their loyalty is one
consumers’ imaginations and then building of the toughest challenges.
consumer demand for them. Because it is difficult to create a sustainable
point of difference in healthy snacking,
Sustaining consumers’ interest: That innovation is key to success. Innovation can
consumers seem to need constant variety in take many forms, and we explore five of these
their snack choices, particularly solid food in the following section:
snacks, has a downside. Many snack brands 1. Innovation in formats
seem to go through cycles of growth and 2. Innovation in marketing
BOX 1: PORTION CONTROL A “WIN WIN” STRATEGY IN SNACKING
An important element in snacking strategy is recognizing that consumers are looking for help with
portion control. In the US hundreds of snacks sell as “100-calorie packs”, but many hundreds more do
not make the calorie count a major flag on the front of the label, but do deliver a low calorie count. In
Europe 100-calorie packs are also common but are not necessarily flagged up as such (see Case Study
ll, Nature’s Addict).
Professor Brian Wansink, a food psychologist and nutrition expert whom many credit with the idea for
100-calorie packs, told New Nutrition Business that: “It’s been a tremendous win-win for companies
and consumers. Companies sell these products to those who otherwise wouldn’t have bought their stuff.
And every study we’ve seen shows that consumers certainly eat less on a given usage occasion.”
For snack producers, controlled-calorie packs have three attractions:
• the serving-size packages bring them higher return-on-investment than regular varieties do
(100-calorie packages can be up to 20% more profitable than the equivalent amount of product
sold in a full-size pack)
• they draw new customers into brands and product lines
• and they provide a reasonable basis for companies to claim that they’re offering better-for-you
options for American consumers
Fielding lower calorie-count packages brings its share of challenges, particularly in product formulation.
Smaller sizes of the same products, for example, require different recipes and different baking times.
Healthy snacking
3. Innovation in packaging the snacking aisle and today it is in national

4. Innovation in benefits distribution in mainstream supermarkets in
5. Innovation in ingredients the UK, as well as in selected international
markets. Oaty Bakes, billed as “Naturally
1.2.1 INNOVATION IN FORMATS energising”, score high on health, with a fat
content of just 3.9g and only 99 calories per
In many segments of the snacking market it’s 23g serve – compared to 8.3g of fat per 25g
difficult to create any meaningful point of for a brand of mainstream potato chips. The
difference. Bars, for example, are a sector in products also score highly on flavour, and
which any new entrant can easily disappear flavours are changed periodically to maintain
from sight among the “wall of bars” in the consumer interest.
supermarket. Using technology to create a
new product format is one way to achieve 1.2.2 INNOVATION IN MARKETING
differentiation.
This is probably the most important type
Examples in this report include: of innovation. It is difficult to create a
sustainable point of difference in snacking,
Popchips (Case Study 1): the company even with innovations in formats, benefits
uses heat and pressure to “pop” potato chips, or ingredients. The job of the marketer is to
similar to popping corn or other starchy educate the consumer about the new benefits,
materials, instead of baking or frying them, ingredients or formats and to use these to
which are the standard ways of treating create a strong and differentiated brand.
potato chips. The technology allows Popchips At the same time marketing investment
to use less oil than standard chips, giving the has to be significant. On today’s crowded
finished product half the fat supermarket shelves it is difficult to stand out
of fried or even baked chips, and so the most successful brands are those
as well as fewer calories. The which make sure they sell themselves to the
popping also gives a different consumer before the consumer even sets
taste and texture which is a hit foot in the supermarket. Regrettably, there
with consumers. are still many food and beverage companies
who believe that you can market products
Nairns (Case Study 10): A with health benefits on a tight budget – you
company which is focused solely on marketing can, of course, but you will also not be very
snacks based on oats, Nairns decided to move successful. There are no success stories in
beyond the traditional formats of cookies health that were “made on a shoestring”.
and crackers and create a totally new format
– the oat-based chip. Development took Case studies in this report include:
two years. Called Oaty Bakes, these potato
chip-like products, but made with 100% oats Kraft Belvita (Case Study 6): Kraft
instead of potatoes, achieved the seemingly impossible with
are a true innovation. Belvita of selling the idea of
The product biscuits as part of a healthy
enabled Nairns to breakfast in a country – the
take its brand out UK – in which biscuits are
of the cookie and never consumed at breakfast.
cracker aisle of the This represented an attempt
supermarket into to create a new place in the
Healthy snacking
biscuit market for a new brand (Belvita had 1.2.3 INNOVATION IN PACKAGING
previously only been on sale in France and
Belgium) by creating a new consumption Packaging design can be used to change
occasion. This innovation in product consumers’ perceptions of a category, or even
positioning required a significant commitment create a new category. Packaging innovation is
to marketing to make it work and Kraft commonly used to achieve this in beverages,
invested £3 million ($4.8 million/€3.5 million) but in snacking true packaging innovation is
in the UK launch, with a TV campaign that rare.
features breakfast radio presenters, Johnny One of the very few examples is Sunsweet
Vaughan and Lisa Snowdon, in-studio and Ones – an example of how better packaging,
plays on the duo’s personalities and playful marketing and merchandising has helped a
breakfast show banter. The biscuits are traditional fruit break away from its lowly
unveiled as “a totally new way of having commodity status and earn much higher retail
some breakfast” and the advert ends with prices.
the tagline: “Belvita BREAKFAST – biscuits Back in 2007 Sunsweet, the world’s biggest
specially designed for breakfast”. The TV producer of prunes, launched a repackaging
campaign was accompanied by an eight-week and repositioning of its prunes as individually-
print campaign, and integrated with PR, an wrapped snacking treats in a bid to change
advertorial programme, retail promotions and the perceptions of consumers whose narrow
sampling as well as outdoor digital ads in high view of prunes was firmly encrusted in time
profile sites throughout London. The brand and tradition.
earned over £20 million ($33 million/€23 Steve Harris, Sunsweet’s vice president of
million) in retail sales in its first year. marketing, told New Nutrition Business at the
time that: “The key to our approach here is
Wonderful Pistachios (Case Study 9): getting people to appreciate prunes for their
Paramount Farms has used marketing to benefits other than digestive health, and they
transform pistachios from a boring snack truly realise this when you compare prunes
commodity into one of the most successful to other fruits. So we’re aiming not only for
snacking stories of the last decade. The more social acceptance of eating them but
company’s 2010 advertising budget was also making it more easy and convenient.”
$20 million (€14 million), compared to $15 The launch of Sunsweet
million (€10.5 million) the previous year. The Ones was intended to “put
company has invested in 2,000 airings of its prunes in a whole different
TV commercials, targeting women aged 30 light for consumers”.
to 50. It has recruited B-list and “naughty” Twenty individually
celebrities such as a star of wrapped Ones are
the hit TV series Jersey Shore packed in a 7oz canister.
to front its advertising. The “This makes a different
brand uses a consistent bright impression than finding
green imagery and focuses them in a big tub where
on delivering “a meaningful they’re all stuck together,”
health message without Harris explained to New
getting overly complicated” Nutrition Business at the time of the brand’s
with health messaging about launch.
pistachios as “the lowest-fat He continued: “Many consumers think of
nut” and the “lowest calorie candy when they see Ones in their individual
nut”. wrappings. And we use only our largest and
Healthy snacking
best fruit for this product: if someone is going that is currently only available to consumers
to eat one prune at a time, we want to make in a product format that is less convenient or
sure they get their fruit’s worth.” does not have good taste.
By 2010, within four years of the Examples of products focused strongly on
introduction of the packaging Sunsweet creating new benefit platforms are:
Ones had become a $15 million (€10.6
million) product in US supermarkets, mass Fiber One – fibre for digestive health
merchandisers and drug stores (not including (Case Study 7): While many bars and
Walmart stores) surveyed by SymphonyIRI, a snacks offer 20% of the RDA of fibre, very
Chicago-based firm that collects supermarket few are bold enough to go to 35% of the
scanning data. RDA – or higher – and make the benefits of
fibre the primary benefit of the brand. At
Premium price to prunes, competitive this dosage the fibre provides a benefit you
with snacks. Ones retail for around $2.99 can feel, a key success factor in marketing
(€2.32) for a cylindrical, 7oz (200g) canister many health products. And it has been very
of 20 individually paper-wrapped, top-grade successful for General Mills’ Fiber One
prunes, equivalent to $0.48/oz (€1.66 per bars. They are part of a larger brand which
100g). By comparison a 24oz (680g) canister incorporates breakfast cereals and yoghurts
of traditionally packed prunes retails for $4.49 in the range, but the snack bars still account
(€3.50), equivalent to $0.18/oz (€0.51/100g), for 60% of total brand sales of almost $300
putting the Ones at a 100% premium to million. As the case study shows, by setting
bulk prunes. The packaging and convenience itself up as the “expert brand” in fibre for
elements are what have enabled Ones to earn digestive health and
such a premium over “regular prunes”. being the first brand
to do so Fiber One
1.2.4 INNOVATION IN BENEFITS brought a new benefit
to consumers.
Too often product developers and marketers
start by thinking about what ingredients will ProBake 50 (Case
be interesting to consumers. While some Study 1): The ageing of the population
ingredients are interesting, the reason is of the Western countries is well-known, but
because consumers connect them with a many Asian countries, especially China, are
benefit in their own minds. The benefit need also witnessing a rapid growth in the numbers
not be specific, it can even be as generalised of over-50s. “Seniors” are a key target group
as “antioxidants”, which most consumers for every company with ambitions in health.
think of in broad terms as having benefits for A wealth of health issues crystallise for people
skin health or heart health. as they age, and one of the most significant
This is a key point – benefits are is sarcopenia – muscle wastage, a condition
consumers’ primary motivation for buying a that affects every person after the age of
product, once it has met the requirements of 60 and becomes a serious issue for 50% of
taste and convenience. over-70s. The body’s
Finding a consumer need for a benefit that ability to absorb protein
is not being met – or is under-served – is key declines with age, and
to helping create a point of difference for a wealth of companies
your product. It may even be possible to bring are researching how to
a completely new benefit to the market in a get more easy-to-absorb
snack, or to bring in a snack form a benefit dairy protein into seniors’
Healthy snacking
diets. Much of this has focused on beverages, about weight loss. The product marketing
however older people prefer formats that are material describes weight wellness as “an
more relevant to their lifestyle – and Probake optimal weight range at which our bodies
50 is an example of a product developed feel healthy and happy. This is not defined
to deliver a high dose of protein – around or dictated by aesthetic, shape, weight or
37.5g per 75g cookies. For senior consumers, tape measure.” Bars have no more than 200
a snack cookie that brings the benefit of calories, while portion-controlled Bites have
protein is a more valid solution to their health only 100 calories. To keep creating new
concern than other product types. consumer interest through innovation the
company is also working on snacks in the salty
Nature Addicts – a serving of fruit and savoury snack categories.
(Case Study 11): French confectionery giant
Solinest made its first-ever move into snacks 1.2.5 INNOVATION IN INGREDIENTS
with the creation of the Nature Addicts
brand. It represented a completely new In industry marketers and formulators tend to
benefit in the French market: a convenient be very focused on what’s the “hit” ingredient
100% fruit snack, with a clear all-natural to differentiate their product. However, in
position with “no added sugars, colourings, reality any ingredient can be a success as long
preservatives, flavours” and the message as it’s matched to the product format in a way
that the brand – which comes in bars and that’s logical to the consumer and delivers a
as 100-calorie pack bites – is 100% fruit benefit that’s attractive to the consumer.
and a great way to get the benefits of fruit The most marked ingredient trend is
when you don’t have any fresh fruit handy. for snacks marketed for their intrinsic
The company launched the brand with a healthfulness and perceived naturalness.
significant marketing effort and above all an Perceived health benefits from “naturally
excellent merchandising strategy, positioning healthy” ingredients is an easy concept
Nature Addicts products in impulse settings in for consumers to understand. Hence oats,
supermarkets, convenience stores and petrol almonds, cranberries, blueberries and many
stations. As the case study shows, other foods are seeing increasing use in snacks
despite premium pricing it has and this trend can only strengthen.
been a major success.
Mars (Case Study 2) – finding a
Think Thin (Case Study logical fit for chocolate: Mars wants
5) – weight management to market the intrinsic health benefits of
for women: With women cocoa but it also knows that it cannot market
accounting for 75% of the purchases in the chocolate confectionery for health benefits.
US nutrition bar market, it makes sense for “Healthy chocolate” runs strongly counter to
bars to focus more directly on benefits that
matter most to women. One of the few bars
to have done so is thinkThin, which blends an
all-natural and weight management message
in a way that resonates with women – high
protein, low/no-sugar and gluten-free are
core promises of the brand. ThinkThin bars
are positioned as
being about a healthy
lifestyle rather than
Healthy snacking
chocolate’s image of pleasure and indulgence, sweet image, is not a logical pairing with
as the company has already found in test- a salty snack product. PepsiCo decided to
marketing. focus on vegetables – which are a logical fit
Nor can it achieve the best point of – introducing new varieties and new package
difference for a new health ingredient simply designs which had “vegetables front and
by adding it to existing products formats, such centre”. It has since discontinued the brand.
as bars. On the other hand fruit is acceptable when
Instead Mars is testing ways of bringing the it stands alone – or even in combination
“new health ingredient” of cocoa to market with vegetables as long as the fruit taste is
in new formats that might make sense to dominant – with a promise that a fruit-based
the consumer. For more than a year Mars snack enables you to get one or more servings
has been test-marketing GoodnessKnows, of fruit, but in a convenient format. This
a line of snack squares that is a hybrid of message was an innovation several years ago
confection, nutrition bar and muesli bar. They but now is on track to become an everyday
include whole almonds, fruits, whole grains message in fruit snacks. Hence producers
and what Mars calls “deep chocolate”, with of fruit snacks are trying to differentiate
200mg of Mars’ patented cocoa flavanols in by pairing fruits with vegetables (see Trend
each four-square serving. 2), which also has the benefit of lowering
The idea behind the product is that calorific value.
consumers are willing to look at cocoa
flavanols as a new health ingredient but they Fruit, grain and nut snacks a logical fit
have yet to find a differentiated and credible with digestive health: Given that digestive
delivery vehicle for this new ingredient. health is one of the very biggest health
concerns, particularly for people over 40, and
Flat Earth (Case Study 13) – vegetables, has already given birth to a huge market for
not fruit, a logical fit: PepsiCo’s Flat probiotic dairy products, it isn’t surprising
Earth line of salty snacks, based on fruits and that marketers are looking to snacks high in
vegetables, also encountered the challenge fruit, grains and nuts as credible carriers for
of matching the ingredient and the format. high-fibre messages.
Introduced in early 2007 and targeted at It’s become easier in recent years to
health-conscious women who normally don’t formulate fibre into foods and beverages and
venture down the salty snack aisle of the as a result of advances in technology high-
supermarket, after an initial period of growth fibre foods taste better than ever before, with
sales flattened and then fell off by about 16%. none of the notes of cardboard that marked
The reason was that women weren’t buying out high-fibre foods in the past.
the fruit-based varieties of chips – and the As Case Study 7 on Fiber One shows,
company had to discontinue them. consumers are receptive to “expert” snack
Only the vegetable-based varieties caught brands that can deliver a high and effective
on with consumers. “Fruit crisps had a dose of fibre.
strong following, but it was
narrow,” said a company Probiotics not a good fit with shelf-
spokesperson. “Their appeal stable products: But while fibre is a
wasn’t as broad as with credible ingredient in a snack, probiotic
veggies, which were really bacteria are not. There are many in industry,
compelling. Women engaged particularly in the US, who believe that there
with them.” are opportunities for shelf-stable products
Fruit, in short, with its such as bars to deliver probiotics.
Healthy snacking
There are two problems with this sales are said to be static at less than $10
perspective. One is that the marketing of million (€7 million), five years after it was first
the dairy industry has been so effective; its launched.
products so good; and its connecting of To put this into some kind of context, total
probiotics with the consumer logic of “live US sales of Fiber One digestive health cereal
and active” bacteria in yoghurt and dairy bars in the year to May 2011 were over $150
drinks so thorough, that no other category has million (€92 million) – that’s more than four
been able to compete, not even other dairy times the combined sales of all the competing
categories such as cheese. probiotic bars.
In European probiotic cereals bars and Probiotics are not something that’s seen
many other food forms have already been as natural in solid foods – even when the
attempted – mostly in Germany, Europe’s technology allows it.
biggest and longest-established probiotic
market – and almost all have disappeared 1.3 THE ESSENTIAL QUALITIES
from the market or survive as very marginal NEEDED FOR INNOVATION
brands.
Interestingly, the same lesson is now being How do you measure the success of an
re-learnt in the US, where marketers have innovation? Part of the answer to that
long struggled to transfer lessons from other question depends on who is doing the
markets into an American context. One of measuring. How else, for example, could two
the biggest failures comes from Kraft Foods, companies launch innovative snack products
whose LiveActive probiotic brand has “turned that achieve similar levels of retail sales, yet
out to be a disappointment to us”. one company describes its brand as a success
Kraft executive Basil Maglaris confirmed and the basis for future growth while the
to New Nutrition Business that sales of the other sees it as a disappointment and decides
company’s probiotic bars were below to withdraw support from its brand?
expectations, producing less than $20 million The difference in perspective is, in this case,
(€14 million) in retail sales in its first year. Its accounted for by the fact that one of these
smaller competitor, Attune, is another brand companies is an entrepreneurial start-up and
that has failed to persuade consumers – retail
Attempts to create probiotic solid foods for digestive health – such as Kraft’s Live Active probiotic cereal bar and its smaller
competitor, Attune – have failed to persuade consumers. By comparison, sales of Fiber One digestive health cereal bars in the
year to May 2009 were over $130 million (€92 million) – that’s more than four times the combined sales of all the competing
probiotic bars.
Healthy snacking
the other an established corporate giant. Flat Earth, is the world’s biggest snack
As our case studies of Popchips (Case Study company) were targeting the same consumer
1) and PepsiCo’s Flat Earth (Case Study 13) need – the need for snacks that have good
show, both the entrepreneurs behind Popchips taste and are healthy, lower in calories,
and the corporate giant behind Flat Earth sodium and saturated fat, and interesting for
(PepsiCo’s Frito-Lay business, which launched restless consumers who are always on the
TABLE 1: POPCHIPS AND FLAT EARTH: A COMPARISON
POPCHIPS FLAT EARTH
Popchips’ proposition is
simple: using heat and Flat Earth chips
pressure to “pop” potato contain a half-
chips instead of bake or serving of fruits or
fry them cuts calories veggies per per 28g
and allows Popchips to (6oz) bag. Each 2g
PRODUCT
cram more chips into a serving has less
given volume than if they’re fried. than 5g of fat and
Popchips have less than half the fat about 130 calories. Rice or potato
of fried and even baked chips. Per -flake-based chips, which are
serving, Popchips provides 4g of fat and baked, not fried.
120 calories.
The suggested retail price is

$2.99 (€2.38) for a 6oz bag,
A premium price that typically is $1.29
PRICING a small premium over Fritos,
(€1.02) for a single-serving 1oz bag. PepsiCo’s market-leading potato
chip brand.
Placement and merchandising
decisions are especially crucial for
Popchips because it doesn’t have
national advertising campaigns.
Sampling is important and Popchips
targets venues ranging from local
Mainstream distribution in the
PROMOTION races to international events such as
snacking aisle.
the Sundance Film Festival. Popchips
also uses social media. In regular
supermarkets, Popchips takes pains to
be included in the natural foods aisle
set rather than the conventional salty-
snacks aisle.
After peaking at $26-$30 million
The company is on its way to $40
(€21-€24 million) in 2007, its
million (€32 million) in sales this year,
first year on the market, PepsiCo
after revenues of $19 million (€15
SALES seemed to lose interest and sales
million) in 2009, its second full year in
cratered to only about $5 million
operation.
(€4 million) for the 52 weeks
ended June 13 2010.
Healthy snacking
look-out for variety and something new in up large companies and which explain why
their snack choices. innovations in food and health usually come
Both used technological innovations – from small start-ups.
PepsiCo with ingredients such as vegetables Innovations, says Drucker, should be
and fruit which produce a very different chip capable of being started small and should
from conventional potato chips, and Popchips be aimed at “only a small limited market”.
with a processing technique which produces Taking an innovation to market, he adds,
a potato chip, but one that’s different from requires patience because you will need time
anything previously seen in the snack aisle. to make the adjustments and changes to your
As Table 1 shows, both innovations quickly product, because at first “innovations rarely
achieved very respectable levels of sales. The are more than almost right”. The necessary
difference in perspective is attributable to the changes can be made only if the scale is
very different innovation criteria of the two small.
companies. The other conditions Drucker says are
The late Professor Peter Drucker of essential for success are:
Harvard Business School was one of the
best-known writers on innovation of the 20th • Diligence
century and his book, Principles of Innovation, • Persistence
is a standard textbook. Among the criteria • Commitment
Drucker sets out for successful innovation are
some which, it seems, will almost always trip Popchips seems to perform well against
Eat.Think.Smile is one of the many innovative ways that major companies are trying to create new snack concepts. This brand is part of
Apure Foods, which is in turn part of the giant Hershey confectionery group, and its aim is to bring the health benefits of cocoa in snack
forms which are more acceptable to consumers as a healthy snack than traditional chocolate confectionery. It’s an example of innovation
in format, ingredients and marketing.
Healthy snacking
all of Drucker’s criteria. And while it’s true not created by a household-name company or
that with Flat Earth PepsiCo was seemingly a corporate giant but by an entrepreneurial
attempting to act like an entrepreneurial company, Red Bull, which was a 10-person
innovator (for example, making adjustments start-up back in the late 1980s.
and changes to the product soon after launch) Red Bull began by aiming at a limited
it’s nevertheless difficult, perhaps impossible, market – 18-25-year-olds in bars and night-
for a company of PepsiCo’s size to “start clubs – and slowly grew its popularity with
small” and then persist. diligence, patience and single-minded
That’s not because it lacks the skills – it’s commitment. Only much later – some 10
a company with an abundance of talented years after Red Bull debuted in the West –
and entrepreneurial individuals – but because did the big beverage groups enter the energy
top management in all large enterprises is market, by which time they were unable to
impatient for fast results. So investing to dislodge Red Bull from its established market
patiently building up a brand to $100 million leadership.
in sales over five or 10 years is, in the eyes Big beverage groups played no part in
of most CEOs, a failure. But for a start-up creating the energy drink market, nor did
company such a long road is usually built into they create the energy shot market (which
the business plan – and achieving even half was pioneered in the US by 5-Hour Energy, a
that number would be the proof of success. small entrepreneurial company which defined
The qualities of “persistence” and and still leads the category).
“commitment” hold no value the moment Combine corporates’ tendency to play
that your boss’s number one success criteria it safe with their expectations of rapid and
is “become a big success, fast”. And until the large returns and you have a recipe for
current generation of boards of directors disappointment.
grasps that the landscape of the food and Innovation is an essential part of how any
beverage industry has changed, that creating business, even the largest, must renew itself
a successful mass brand – as was a common if it’s not to end up losing its dominance.
and viable goal 20 years ago – is now the One thing that’s clear is that in most large
(near-unattainable) exception, and that a companies there needs to be a shift in attitude
landscape that is filled with a plethora of to risk and innovation – and a willingness
niche brands is the “new normal”, many to embrace “starting small”, coupled with
innovations will founder. Drucker’s virtues of diligence, persistence and
It seems that few large companies create commitment.
new categories or commercialise innovations
– the energy drink market, for example, was
RULES FOR SUCCESS IN HEALTHY SNACKING
• Use ingredients with a natural health halo and intrinsic health benefit.
• In snacks you are not just competing in your own category; in the mind of
consumers you are competing with every other category in the supermarket
that they could use as a snack. You cannot think in the “silo” of your own
category, because consumers don’t.
• Therefore innovating in packaging, merchandising, ingredients, formulation and
delivery system are all essential to success.
Healthy snacking
2. Key trends in healthy snacking
2.1 TREND 1: NATURALNESS In fact, says SymphonyIRI, the “vast majority

of new products don’t even reach $7.5 million
In most Western markets “natural” is becoming in sales during their first year”. In fact just 25%
almost a basic consumer requirement for the of new product launches manage to make it past
label of any brand, even those without an overt this modest target.
health position. What were once messages in the Of SymphonyIRI’s 10 biggest Pacesetter
health food store have become mainstream in brands – those which have achieved year-one
every supermarket. sales of more than $50 million (€34 million),
Case Study 8, on PepsiCo, illustrates how a group which it says account for just 2%
mainstream this requirement has become. In of all new products – several have a natural
February 2011 the world’s biggest snack-food positioning. As Chart 1 on page 17 shows, 30%
company announced that it was reformulating of its Pacesetter brands offer “Natural” benefits –
its products so that half the snacks it sells in the the single most-common benefit.
US will use only natural ingredients, a process it Chobani Greek Yogurt, for example, markets
intends to have completed by the end of 2011. itself as “nothing but good” and free-from
So big is Frito-Lay in the US market that this artificial. Nature’s Pride bread brand, fourth on
means “natural” products will have a 6% share Symphony IRI’s list, also relies on strong natural
of the $3.1 billion (€2.1 billion) snack food benefits (see illustration on page 17). As the
market and a 40% share of the $2.2 billion (€1.5 report observes, products like this are responding
billion) tortilla chip market. to “consumers’ passion for all-natural foods”.
All Frito-Lay products now carry a stamp
reading: 2.1.1 WHAT EXACTLY IS MEANT BY
Made with natural ingredients. No artificial flavours. “NATURAL”?
NO MSG. No preservatives.
“Natural” has many meanings in snacking – all
In support of its move Frito-Lay cited of them dictated by the consumer and none
consumer research that claimed that the health based on technical or regulatory definitions.
attribute “natural” is the second most-popular Here are the two broad categories – different, yet
with American female shoppers aged 20-50, with entirely complementary – of “naturalness”:
30% of Americans actively seeking snacks with a
“no preservatives” message. 1. Natural = few ingredients, simple
Market researchers Mintel agree, saying that ingredients
natural (in the sense of no artificial additives) is
important to 98% of frequent snackers and 62% “Natural” is not used in a technical or
of all snackers. regulatory sense – it is a consumer definition,
SymphonyIRI’s report New Product Pacesetters: meaning foods that are “free-from” artificial
carving out growth in a down economy, shows the colours, preservatives or additives. It can also be
extent to which the “natural” message has used to encompass foods that are free-from other
become mainstream. ingredients that your target consumers object
SymphonyIRI’s “Pacesetters” are brands to – in the US, for example, objections by some
which have passed more than $7.5 million (€5.2 consumers to high-fructose corn syrup have lead
million) in measured retail sales in their first full to a “No HFCS” label appearing commonly on
year. “natural” products.
Healthy snacking
Although there are some brands which make

“gluten-free” the cornerstone of their identity
and target the committed gluten-free consumer,
this message is another one which has become
very widely used in the context of the “natural”
and “free-from what’s bad” trend.
Of our 15 case studies, nine mention that they
are “free-from” one or more of gluten, wheat,
soy or another “undesirable ingredient” (see
table).
“Natural” can also mean “as few ingredients
as possible” – and only ingredients whose
description the consumer can easily understand
and which they’d expect to find in their pantry.
2. Natural = “Natural functionality”
The message that a food or food ingredient

has a natural and intrinsic health benefit is one
of the most persuasive in food marketing. For
many consumers a health benefit that is intrinsic
In most markets “natural” is becoming a basic consumer
to the product – such as oats and heart health, requirement.
blueberries and antioxidants – is the only one
they will accept without hesitation.
continued on page 20
The significance of Frito-Lay’s conversion isn’t confined to the US market. Going “natural and local” is a core element in the company’s
strategy in most markets around the world. Frito-Lay is emphasising local sourcing of potatoes and other ingredients in several markets.
Given that its snack brands have the number one market share in most countries (with its share as high as 70% in some markets, such
as Turkey) – the salty snack aisle of the supermarket is likely to be redefined as one in which “all-natural” and even “locally sourced
ingredients” is the category standard and no longer a point of difference.
Healthy snacking
BOX 2: NATURALNESS IS A KEY ELEMENT IN BRAND SUCCESS
Nature’s Pride and Chobani Greek Yoghurt are two of the brands that have become a top-10 success by
responding to what SymphonyIRI calls “consumers’ passion for all-natural foods”.
CHART 1: PERCENT OF FOOD & BEVERAGE NEW PRODUCT PACESETTERS OFFERING HEALTH &
WELLNESS BENEFITS VS HISTORICAL TREND
30%
Natural/Organic
16%
27%
Added Vitamins, Nutrition
19%
27%
High Fiber/Whole Grain
10%
25%
Reduced Calorie
17%
25%
Lower Fat/Fat Free
17%
12%
Energy/Protein
6% 2010
11% 1997-2010
Antioxidants
4%
10%
No Trans Fat
4%
6%
Low Salt/Sodium
1%
Source: SymphonyIRI New Product Profiler™, New Products Launched February 2009- January 2010
TABLE 2: LABEL MESSAGES FOR HEALTHY SNACKS IN OUR CASE STUDIES
Low/ Added
Source of Less fat/ Less/zero No preser- No artificial No artifical
Message High protein Gluten-free All-natural medium Wheat-free vitamins/ Energy No sugar Circulation
fibre/high fibre fat-free trans fats vatives flavours colours
GI minerals
Popchips X X X
Mars Cirku X X
Mars CocoaVia X
Mars Goodness X X
Knows
Probake 50 X X X X
ThinkThin Protein X X X
Bars
ThinkThin Bites X X X X
ThinkThin Crunch X X X X
Luna Protein Bar X X X X
18
Nestle Iron Girl X X
Energy Bar
Balance Bar Nimble X X X X X
Tasty Bars X
Kind Plus Bar X X X X X X
Kind Mini Bar X X X X X X
Healthy snacking
Belvita X X X
Fiber One X
Wonderful X X X
Pistachios
Nairn’s X X X X X X X X
Nature Addicts X X X X
Castus X X X X X
Frito-Lay Flat Earth X
chips
Ocean Spray X
Craisins
Total no. of 9 8 7 7 5 5 4 4 4 4 4 3 3 3 3
mentions
TABLE 2 continued:
Less
Source of Sustained Source of cholesterol/ No added Weight- 100% fruit/ Contain
Message Complex carbs Satiety Whole grain Dairy-free Less sugar Heart health
flavanols energy antioxidants cholesterol sugar loss high in fruit vegetables
free
Popchips X
Mars Cirku X
Mars CocoaVia X
Mars Goodness X
Knows
Probake 50 X
ThinkThin Protein
Bars
ThinkThin Bites
ThinkThin Crunch X
Luna Protein Bar X X
19
Nestle Iron Girl
Energy Bar
Balance Bar Nimble
Tasty Bars X X
Kind Plus Bar X X X
Healthy snacking
Kind Mini Bar X X

Belvita X X X X
Fiber One
Wonderful X X X
Pistachios
Nairn’s X X X X
Nature Addicts X X
Castus X
Frito-Lay Flat Earth X
chips
Ocean Spray X X
Craisins
Total no. of 3 3 3 3 3 3 2 2 2 2 2 2 1 1
mentions
Healthy snacking
continued from page 16
The attraction to consumers of foods whose pomegranate juice brand. The company
health benefits are an intrinsic feature and do has worked the same magic on pistachio
not result from added ingredients or special nuts as it did on pomegranates – taking an
processing is a magnetic one and it is a key factor underappreciated but healthy commodity and
in the dramatic reversal in the fortunes of oats. making it desirable. Wonderful Pistachio’s sales
Packs of Quaker Oats, for example, prominently grew 26% in the year to June 2011, to over $153
feature the “100% Natural” message. million (€107 million). The brand has driven
Case Study 10, on Nairns, shows how a half the total sales increase in the US snack nuts
traditional cracker brand which was focused on market.
oat products was able to connect to the growing With quirky marketing and a focus on
“naturally nutritious” image of oats and reinvent communicating the intrinsic health benefits of
itself as a healthy snacking brand. the nuts Wonderful Pistachios have flourished
Natural health benefits are also an idea that’s despite recession and a hefty price premium,
easy for the media to understand and easier with an 8oz (225g) bag retailing for a suggested
still for time-pressed journalists to explain. The $3.99 (€2.89) – in the neighbourhood of
media is always hungry for stories about foods cashews, macadamias and almonds rather than,
with an intrinsic health benefit – oats, almonds, say, cheaper peanuts.
cranberries and blueberries have all benefited Besides the lessons of Pom Wonderful, the
from media attention. company watched closely what almond growers
The most marked trend is for snacks marketed and brands had done with their commodity.
for their intrinsic healthfulness and perceived “They have a laser focus on getting people
naturalness, even if the snack is a processed to understand how healthy almonds are,” a
product. company spokesperson told New Nutrition Business.
Perceived health benefits from “naturally “We saw that as a model for replicating
p ga
healthy” ingredients is an easy concept for
both consumers and the media to understand.
Hence oats, almonds, cranberries, blueberries
and many other foods are seeing increasing
use in snacks and this trend can only
strengthen.
Fruit, in particular, is benefiting from
the “naturally functional” preference of
consumers. So important is the fast-developing
fruit and vegetable snacking trend that this is
addressed as a separate trend.
Chart 2 shows the top-10 brands identified
by Symphony IRI out of its “Pacesetters” for
2010. Of these, the most remarkable is the
Wonderful Pistachios brand (see Case Study 9).
If you are interested in how to communicate
“natural functionality” to consumers and
how to succeed in healthy snacking, this is the
brand to study.
The company behind the brand is
California’s Paramount Farms, the same
company which created the now iconic
and globally-recognized Pom Wonderful
Healthy snacking
BOX 3: EVEN MARS CHOOSES INGREDIENTS WITH A HEALTH HALO
Even a mass-market brand like Mars’ Marathon

Bars recognises the natural trend with its recent
introduction of Marathon Smart Stuff, billed as
“combining great taste with healthy ingredients” and
a “nutritious and delicious way to snack”.
As Mars acknowledges, “With increasing time

constraints imposed by work, school and personal life, leading an active lifestyle is not always compatible with
eating healthy.”
The new bars include “wholesome ingredients, like blueberries, cranberries and peanuts, and are made with
real chocolate for a taste everyone will love”. Each bar contains a blend of eight essential vitamins and minerals,
and is said to be an excellent source of calcium.
Containing 3 to 5 grams of fibre and 140 calories or less per serving, the new energy bar is naturally low in
sodium and provides 5 grams of whole grains, with no high fructose corn syrup, artificial flavours, colours or
sweeteners.
consistent health message over a long period of 2.2 TREND 2: FRUIT & VEGETABLES
time and getting it ingrained in people’s minds.”
Case Studies that illustrate this trend are: Fruit-based products will be the most important
Case Study 8: Pepsi “natural” repositioning drivers of the wellness trend and of the healthier
Case Study 9: Wonderful Pistachios diets that are now redefining the global food and
Case Study 10: Nairns reinventing a drink industry. Fruit, in many new and varied
traditional food with the health benefits of oats formats, is the future of food and health.
More than any other food, fruit has a halo of
health. It’s a halo that’s being made brighter all
the time as a steady stream of news about fruit’s
benefits makes its way into a media eager for
simple and positive stories about healthy eating.
The sweetness of fruits, their taste and texture
and their portability make them much more
appealing to consumers as an all-natural way to
eat more healthily than almost any other food.
And fruit is seen by consumers as one the few
things they can eat as an indulgence without
feeling guilt. Fruit scientists and celebrity
nutritionists support a wealth of “all-natural”
health benefits for fruit, which has become a
credible carrier of health messages.
However, people know they should eat more
fresh fruit but they don’t, because fresh fruit is
just not convenient enough.
Fruit drinks have stepped into the breach
to address this widespread problem and an
increasing number are positioned as delivering
one or more of the recommended five servings
The ‘natural’ message is a prominent message on Quaker Oats of fruit a day. Fruit drinks that carry a clear
packs.
Healthy snacking
CHART 2: 2010 NEW PRODUCT PACESETTERS

Top 10 Food & Beverage brands year-one dollar sales ($ Mil) across food, drug and mass (excluding Walmart)
1. POWERADE ION4
Shelf Stable Sports Drinks $190.5
2. Chobani Greek Yogurt
Yogurt $149.4
3. Wonderful Pistachios
Snack Nuts/Seeds/Corn Nuts $114.1
4. glacéau vitaminwater zero $110.3
Bottled Water
5. Nature’s Pride $80.8
Fresh Bread & Rolls
6. Trop50 $74.4
Rfg Juices/Drinks
7. Thomas’ Better Start $74.2
English Muffins
8. Green Mountain Coffee K-Cups $62.1
Coffee
9. Budweiser Select 55 $59.9
Beer/Ale/Alcoholic Cider
10. Trident Layers $53.9
Gum
Source: SymphonyIRI New Product Profiler™, New Products Launched February 2009- January 2010
message that they deliver one or two of your the fresh fruit industry should be capturing is
recommended five-a-day provide, as far as being stolen by consumer goods companies. In
consumers are concerned, all the benefits what form do you think people under 35 will eat
and taste of fruit with none of the mess and fruit and vegetables? More than half – maybe
inconvenience. In other words, in drinks fruit much more – will be in processed formats.”
comes in a convenient, portable form. The central importance of convenience to
Fruit snacks are increasingly favoured by consumers means that fruit in convenient forms
consumers over fresh fruit for simple reasons (processed) will see growth, while most fruits sold
of convenience. As Elizabeth Pivonka, former in fresh forms will continue to see only slight
president of the US Produce for Better Health sales increases – or none at all.
Foundation, which runs the 5-a-day consumer What is particularly striking is how much
education campaign, put it: “The overall trend in consumers are willing to pay for fruit when it’s
consumption isn’t going to continue to increase convenient, as the case studies of Nature Addicts
because one of the main reasons consumers (Case Study 11) and Castus (Case Study 12)
don’t eat more fruit is that they say they’re not illustrate.
convenient.” Berries (and specifically blueberries) are the
“Fresh products are not in the formats exception to this rule, as Case Study 15 shows.
that meet people’s lifestyle needs,” adds fruit In some markets fresh berries are showing
marketing guru Professor David Hughes, 20%-30% per annum growth in sales and have
Emeritus Professor of Food Marketing at overtaken other fruits as the single most valuable
Imperial College London and director of berry segment of the fruit and vegetable market.
company BerryFarms, one of Europe’s largest The reason is that in addition to their strong
berry fruit company. “As a result, the value that health image berries are convenient. These small
Healthy snacking
fruit need no peeling and are easy to eat from The idea of fruit-plus-
the hand. If other fruits can achieve the same vegetable combinations
level of convenience then they too might enjoy is now transferring
more popularity with time-starved but health- rapidly over to snacking
conscious consumers. as Chart 3 shows. These
Traditionally, vegetables, by comparison, combinations are still
have had a distinct image problem. They are in the most embryonic
perceived as inconvenient, not at all portable, stage, but growth is rapid
difficult to prepare and as not tasting good. and snack technology
However, the fruit drinks industry is already makes them
showing how fruit juices in combination with straightforward to produce
vegetable juices can create an excellent flavour – the challenge lies not in
combinations as well as successful brands: technology or formats, but
in marketing and creating
Campbell’s V8 V-Fusion: Stagnant consumer acceptance.
sales of its V8 vegetable juice brand prompted However the success of fruit-plus-vegetable
Campbell’s to launch drinks shows what is possible.
V8 Fusion – blends There are also opportunities with fruit and
of vegetable and fruit vegetables to create products that have novelty
juices that each contain – or, to express it another way, “newness to the
a full combined serving consumer” – a concept that can have multiple
of fruits and vegetables, interpretations.
but taste only of fruit. The forms that novelty can take include:
Introduced in 2006,
sales have passed the • New fruit: This is the most obvious type
$170 million (€120 of novelty and is in fact what most
million) mark. V-Fusion people mean when they use the term in
has become “far and connection with superfruit. This doesn’t
away our growth mean in practice that the fruit is novel,
driver” according to just that it is new in the market you are
Campbell’s: “You can introducing it to. Cranberry, for example,
get vegetables through is long-established in the US, but when
a product that doesn’t it appeared in Australia and in France it
taste like vegetables. That’s why V-Fusion is on was a new and unfamiliar fruit in both of
fire.” those countries.
Ocean Spray 100% Juice Fruit & • New colours, tastes, aromas:
Veggie: Launched in 2010, each serving of Familiar fruit can acquire the aura of
this innovative new product contains two full novelty if varieties are bred or marketed
servings of fruits and vegetables. One variety which provide new and unfamiliar
includes grape, apple, carrot, cranberry, sweet characteristics. For example, consumers
potato, strawberry, beetroot and banana juices. expect apples to have pale flesh – but if
“Consumers were looking for products that they were to cut into an apple and find
would help them with different dimensions of that the flesh was dark red all the way
health,” the company explained. “And they are through, that would clearly be novel (see
looking for more ways to get vegetables.” illustration on page 24).
Healthy snacking
• Fruit can also be a carrier for

benefits. In many countries some fruit
and vegetables have the advantage of
being associated in a natural and credible
way with the digestive health message.
Fruit such as fig, pear, prune, plum,
kiwi and rhubarb have a traditional
association with digestive health in many
countries and in Russia beetroot has that
association.
Case Studies that illustrate this trend:

Case Study 11: Nature Addicts
Case Study 12: Castus
Case Study 14: Ocean Spray Cranberries Familiar fruit with unfamiliar characteristics – such as this apple
with dark red flesh all the way through – have an aura of novelty.
Case Study 15: Blueberries
CHART 3: FRUIT & VEGETABLE SNACK PRODUCT LAUNCHES 2009-2011 (YTD)
A “new category”, it has come to life in 2011. It is an embryonic category but there has been a surge of
launches of snack products which combine fruits and vegetables.
Source: Mintel GNPD
Healthy snacking
2.3 TREND 3: HIGHER PROTEIN, of satiety so that the consumer gets a more
SLOWER CARBS satisfying snack and wants to eat less.
Still at an early stage is the concept of
Having “energy” to get through the day and “good carbs”, “slow carbs” or “low glycemic
also wanting to maintain a healthy weight index (GI)”. However, the trend is clear and a
are two top consumer concerns. According stronger science base for these messages will
to research in 32 countries by Health Focus see their use in healthy snacks increase in the
International – the most-respected researchers years ahead.
into consumer health motivations – these two
have ranked consistently in consumers’ list of 2.3.1 HIGHER PROTEIN, LOWER GI GETS
top-five concerns over the last 10 years, across FIRM FOUNDATION IN SCIENCE
all markets. Protein’s image as a valuable part of a
As the Case Studies show, weight healthy diet got a major boost in November
management is an area in which snack 2010, following the publicity surrounding
companies have been very active, with the publication in the New England Journal of
offerings ranging from controlled calorie Medicine of the results of the world’s largest
portions (such as 100-calorie portions) diet study.
through to bars. For example, nine of our The large-scale randomised study, called
15 case studies communicate that they are Diogenes, investigated the optimum diet
high in protein and fibre to provide a sense composition for preventing and treating
CHART 4: CHANGE IN BODY WEIGHT DURING THE DIOGENES STUDY
As the chart shows, the high protein-low GI diet produced the best weight-loss results.
Source: Diogenes study
Healthy snacking
obesity. The researchers favour diets with 25% of

The study was conducted by eight calories from high-quality, low-fat protein
European research centres and headed by sources and comment that “current dietary
Thomas Meinert Larsen, PhD, and Professor recommendations are not optimal for
Arne Astrup, Head of Department at the preventing weight gain”.
Faculty of Life Sciences (LIFE), University Their recommendation is a higher intake of
of Copenhagen, and it was funded by an EU (high quality) protein than current guidelines
grant of €14.5 million ($11 million). recommend; eating this way, they say, means
The researchers found that high-protein, you can also eat until you are full without
low-glycemic index (GI) diets were the most counting calories and without gaining weight.
effective for weight management (see Chart Because of the quality and scale of the
4). It’s a significant study, not only because study it is already having an impact on
it challenges many strongly-held beliefs the world of nutrition. It’s good news for
(including the widely held negative view of anyone making foods with a high content
GI in the US) but because Professor Astrup of wholegrain (such as dark breads, oats,
was previously not a fan of high protein and breakfast cereals), producers of vegetables
low GI – but the results of good science have and some (but not all) fruits as well as protein
made him change his view. companies.
Healthy snacking
2.3.2 PRODUCT DESIGN TO SHIFT TO GOOD In the light of the scientific validity of the
CARBS Diogenes study and its growing impact, more
and more product developers will be looking
The quality and scale of the Diogenes study at how they can ensure that their snacks
has attracted a significant amount of media have a low-GI value. That will accelerate the
attention and it is already having an impact existing trend to use whole grains in product
on food marketing. formulation.
Kellogg’s Special K breakfast cereal for Whole grains – “good carbs” – and low-
example, today the world’s most successful GI also connect to slowly rising consumer
weight management brand, now flags up on interest in the idea of “sustained energy”.
its label in Australia – with more countries As explained above, “energy” is one of
likely to use the same message – that it “gives consumers’ highest-ranking needs, but
you a Low GI (Glycemic Index) value of 53, this need not be the caffeine-fuelled kick
plus it is High in Protein (5.9 grams per serve) characteristic of energy drinks like Red Bull.
and still 99% fat free”. Many people, it seems, prefer a product
The brand’s website reinforces the message, that “keeps them going” – and reduces
with a section dedicated to explaining the their desire to snack, an overlap with the
Diogenes study. consumer interest in weight management.
Special K matters because it is both the Underlying this is a concept of a product that
leading weight management brand, setting the “releases” its energy slowly – so you avoid
bar for other weight management products, the blood-sugar spike that’s associated with
and one of the world’s biggest healthy carbohydrates.
snacking brands. In the US, for example, The “slow release” energy message is in
Special K is an $850 million (€616 million) fact in marketing terms quite an old message
brand and its fastest-growing products are and it has been used on several products for
Special K snack bars. Their sales jumped 10-15 years. However, it’s only recently that
an impressive 22% to $223 million (€161 science has given the message more weight
million) in 2010, according to Symphony IRI and only recently that the consumer media
supermarket scanning data, which does not has discussed it more in columns by dietitians
include Walmart sales, driving 9% growth in and other health writers – and hence there
total brand sales. has been a revival in its usage.
Several of the brands in our Case Studies
use a “slow release energy” or “sustained
energy” message:
Nairn’s (Case Study 10), an expert
brand in oat snacks, has made the slow energy
release properties of oats a key message in its
brand marketing:
Nairn’s is naturally energising and keeps you going

throughout the day.
Kraft Belvita Breakfast Biscuits

(Case Study 6) has focused heavily on
a “slow release” message in its marketing.
Nairns, an expert brand in oat snacks (see Case Study 10), Packaging carries a graphic on the front and
has made the slow energy release properties of oats a key
message in its brand marketing. the side panel that is intended to convey the
Healthy snacking
idea of slow release of energy, with text that This has been proven in several clinical studies.
reads:
Thinking about whether and how to create
They are carefully made and gently baked so that, products that have “better carbs” will have to
as part of a balanced breakfast, the carbohydrates are be on every company’s NPD agenda.
regularly released over 4 hours to keep you going all
morning.
BOX 4: SLOW RELEASE CARBS MESSAGE FROM KRAFT
Healthy snacking
BOX 5: SIMPLY EIGHT KEEPS IT SIMPLE FOR CONSUMERS
Breakfast and snack-food maker Simply Eight is “responding to consumers turning back to times when food
was made at home with simple pantry ingredients that we know and trust,” according to founder Ernie Pang.
It has launched a new line of cookies and chewy granola bars contain just eight or less all-natural
ingredients.
“Consumers are getting back to nature with simple, less processed packaged foods,” says Pang.
Simply Eight is starting its product line with four breakfast and snack food products: Real Chocolate Chip
Chewy Granola Bars, Real Peanut Butter Chocolate Chip Chewy Granola Bars, Real Chocolate Chip Cookies,
and Real Peanut Butter Chocolate Chip Cookies.
Each contains only eight or fewer of the following ingredients: whole wheat flour, whole oats, brown sugar,
honey, rice crisps, chocolate chips, canola oil, vanilla extract, peanut butter, vegetable shortening, baking
powder, eggs, baking powder, and salt.
Simply Eight intentionally avoided trans fats, HFCS, hydrogenated oils, artificial flavors, artificial colors,
artificial preservatives or GMOs.
To align with food regulations, the company is required to use sub-ingredients in the nutrition label. However,
Simply Eight ensures those sub-ingredients are familiar and can be pronounced.
Healthy snacking
3. Brand positioning in healthy snacking
The motivation behind writing this report one – and in fact most never make it to
was to take everything we have learned the mass market, instead finding that their
about healthy snacking trends and strategy business is driven by small but loyal groups
and condense it into a simple form that any of consumers, with high repeat purchase
one can quickly read and apply to their own rates (80% as compared to the 35%-40%
business plan. In support of this we have that’s conventional for most successful food
provided 15 case studies of snacking brands and beverage brands). It’s important that you
so that you can see strategy in action. All the base your strategy on understanding the key
case studies are based on interviews with the motivations of the different consumer groups
companies themselves, and from these you get in different areas of the market.
a first-hand account of what works, and what You may already be familiar with the
doesn’t work. Technology Adoption Life Cycle model, first
We hope these insights, together with the developed in the late 1950s when it grew out
trends and strategies sections, will enable you of social research to describe how consumer
to lower your risk of failure and maximize groups respond to innovations and new
your chances of success by: benefits. It divides consumers into five groups:
a. Making a realistic appraisal of what your Innovators, Early Adopters, Early Majority,
potential market is likely to be; Late Majority and Laggards, as defined by
b. Getting a realistic view of how long their readiness to accept new technologies and
it will take you to go from start-up to products.
success; The Food and Health Life-cycle Model
c. Getting a clear view about how best to (Food & Health Marketing Handbook, Mellentin
identify and target the right consumer and Wennstrom, 2002) is an adaptation of
group for your product; this model. It divides consumers into three
d. Learning something about appropriate main groups:
marketing guerilla tactics and best
practices that you can use in your own Technology consumers – motivated by
start-up; technology, this group puts functional before
e. Using all this information to work out food and will see the product in a medical
how much capital you will need to fulfill context.
your ambition.
Lifestyle consumers – first to try out new
3.1 TARGETING THE RIGHT benefits, this group will accept the concept
CONSUMERS of functional foods and health-enhancing
foods of all types, provided that they work in
Most companies believe that they should aim the context of their lives and support their
squarely at the high-volume mass market identity of being a front-runner.
and that niches should have no place in their
strategy. That’s an understandable point of The mass-market consumer – only
view, but one of the key lessons from the motivated by food benefits, they will wait
business of food and health over the last until functional food is clearly established in
15 years is that very few brands are able to a normal food context. The health aspect is
make a success in the mass market on day firmly secondary to the food (and the price).
Healthy snacking
These consumer categories are described in accounting for 5%-10% of the consumer
detail as follows: market (depending on the country) but as
populations age their numbers are growing.
3.1.1 TECHNOLOGY CONSUMERS US consumer research company
HealthFocus describes these technology
These are the people who have serious stakeholders as “Healers” who are strongly
problems to which they are seeking a solution. “need-driven”, saying: “Need-driven shoppers
They are willing to pay premium prices for are those personally affected by a health
something that delivers the specific benefit problem and/or have extreme concerns
that they need and, once they have found a about a health problem. Their attitudes and
product that works for them, they are loyal behaviors are significantly different from other
consumers. They are an early adopter shoppers based on their need to manage
market. their health condition or address their health
Technology consumers are a niche, concern.”
CHART 5: THE NUTRITIONAL PRODUCT LIFE CYCLE – HOW IT WORKS

The key to the Model is as follows:
• The vertical axis shows sales
• The horizontal axis is time
• The blue line plots the volume growth of the market over time
• The broken grey line plots the unit price curve (the price per kilo or price per litre) over time,
reflecting how price is high at the beginning of a market when there are few consumers and raw
material costs may be high and tends to decline as volume grows, scale economies develop and
competition pushes down the price.
Many products start out on the left, selling in low volumes at premium prices. Over time their appeal increases
and they move down the price curve to the right, eventually becoming mass-market products. The stages of
the life cycle are:
Technology consumers – Early adopters, people who have a near-medical need for a product. They will pay a
substantial premium for something that addresses their condition.
Lifestyle consumers – Interested in maintaining their wellness, not fighting illness. They will adopt new brands
and will pay a premium if it supports their lifestyle.
Mass-market consumers – Motivated when a benefit becomes a standard and is available in products with low
or no premiums, ideally from well-known and trusted brands.
Technology Lifestyle Mass-market Solid line = sales

Consumers Consumers Consumers volumes
Sales
Broken line = unit selling price
TIME
Source: Mellentin & Wennström, The Food & Health Marketing Handbook
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CHART 6: TECHNOLOGY CONSUMERS, A KEY SEGMENT FOR HEALTH BRANDS
The Technology Consumers segment includes people who:
a) Have a serious medical issue, such as elevated blood pressure or elevated cholesterol or
irritable bowel syndrome or suffering from sarcopenia, and are looking for a food product
that is clinically proven to address these conditions so that they can include it in their dietary
regime.
b) Have an allergy, such as lactose or gluten-intolerance, and need to be able to buy products
that have no risk of activating their allergy.
c) People such as elite athletes, who need a product that is guaranteed to enable them to
perform at their best.
They account for around 5%-12% of the population in most countries (9% in the US according
to consumer researchers Health Focus) and they are motivated to pay super-premium prices for
products that are guaranteed to give them the benefits they need.
Probake 50 (Case Study 3) is an example of a science-based product which tackles specific

conditions.

Sales
TIME
MEDICAL ----- EARLY ADOPTERS ----- EARLY MAJORITY ----- LATE MAJORITY ----- LAGGARDS
HEALERS DISCIPLES INVESTORS MANAGERS STRUGGLERS UNMOTIVATEDS
9% 9% 19% 44% 12% 6%

Health Focus consumer segmentations and percentage of consumers in each segment
Health Focus research is a respected source of insight into consumers. Its segmentation also finds an
important group of early adopters, accounting for 27% of the population, called Disciples and Investors.
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Technology consumers include, for very targeted marketing, they are willing to
example: pay a premium for your product if it actually
• Someone who has had a heart attack delivers the benefit they are looking for, and
or has been found to have elevated they are very loyal – cholesterol-lowering
cholesterol and who is using a brands, for example, often have repeat
cholesterol-lowering food, perhaps in purchase rates of 80% and above, compared
conjunction with a statin drug prescribed to 30%-35% for regular grocery brands.
by a physician. Targeting the technology consumers enable
you to start with a niche – a niche which
• The medically lactose-intolerant, who may be too small for big companies even to
account for about 5% of the population consider – and then dominate it.
in most countries. Because of the need for an effective,
science-based product, the technology
Any of us can become a technology consumer niche is the perfect target for
consumer if we develop a strong-enough companies based in science. Case Study 3 on
need-state. For example, if you become a Probake 50 shows a science start-up that’s
committed athlete or marathon-runner, you explicitly making the technology consumer its
will want to find sport nutrition products point of entry into the market.
that have technology that is guaranteed to
give you the maximum benefit and support 3.1.2 LIFESTYLE CONSUMERS
your performance. Equally, most of us may
become technology consumers in later life as Also an early adopter market, these people
a natural result of the ageing process. have no specific medical need but they aim
Technology consumers are “the experts” to have a lifestyle of health and wellness.
– they will know all the details of yours and This group has a strong skew towards more
every other competing product, they’ve read affluent, better-educated, 40+ consumers.
the magazine articles and the leaflets in the They often have high disposable income and
health food store, they’ve sent off for the they are a worthwhile market to develop.
manufacturer’s information pack, they’ve Driven by choice rather than need, they are
visited the websites and they are in possession willing to pay a premium for any brand that
of all the facts. supports their wellness lifestyle. They buy
Ideally this group will react positively to soy milk, blueberries, pomegranate juice,
the health benefit of your food, support the probiotic yoghurt – and in fact they are the
technology and find it effective for dealing key driver of the business of food and health
with their problem. They will reject any and account for 20%-25% of the population
technology that doesn’t deliver the benefit in in most countries.
the optimal way. They are not afraid to experiment and take
The benefit of having a strong appeal to the risk of trying out new products – they
this group has been shown in the recession. may even be strongly motivated in terms of
While some brands with “soft” health benefits their self-identity by “being first” with the new
saw sales stagnate or fall, cholesterol-lowering trends. In fact of our 15 case studies, 10 are
brands such as Benecol and Danacol saw sales clearly positioned towards these consumers.
grow by as much as 20% per annum, despite It is also the case that – for a variety of
selling at super-premium prices. reasons including lack of scale, cost of the
For start-ups, technology consumers are an effective health ingredients and others – most
excellent launch-pad into the market – they of the companies in the case studies sell their
are few in number, can be reached through products at a premium price. The lifestyle
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CHART 7: LIFESTYLE CONSUMERS, A KEY SEGMENT FOR HEALTH BRANDS
Lifestyle consumers are a key consumer group, accounting for 25%-30% of the population in most
markets. It is a low-volume, high-value segment of the market. Most health brands start out targeting
this group – a few use it as a beach-head from which to evolve into the mass market. But for many
brands it is better to stay in this segment, which has the benefit of loyal consumers with high repeat
purchase rates (80% or better) and high margins.
Also an early adopter market, these people have no specific medical need but they aim to have a lifestyle
of health and wellness. They are not afraid to experiment and take the risk of trying out new products.
This part of the market is the perfect starting point for most healthy food and beverage start-ups. Of our
15 case studies, 10 are clearly positioned towards these consumers.

Sales
TIME
9% 9% 19% 44% 12% 6%

Healthy snacking
consumer, with their willingness to pay a in a quest for more volume only to find that
premium, is the perfect target consumer for when recession arrived its sales plunged 30%
companies who have no choice but to charge as the price-conscious mass-market consumers
a premium. turned away.
They are a particularly powerful group, Most health brands in most categories
who, like technology consumers, have high choose to remain in the higher-margin
rates of repeat purchase, and small groups of lifestyle consumer segment, where they can
people can have a disproportionate effect on focus on meeting the needs of a small group
the success of health brands. of very loyal customers. Marketing used to be
A good example of the power of early about maximizing your penetration – but in
adopters can be found in the success of health low penetration matters less than high
Danone Activia digestive health yogurt in the rates of repeat purchase.
US. Activia has delivered a recession-defying
performance, growing consistently to over 3.1.3 MASS MARKET CONSUMERS
$412 million (€309 million) in retail sales,
but, says Danone, “It doesn’t have broad Mass market consumers are pragmatic and
penetration among consumers but rather conservative. They do not want to take risks
dedicated usage among a narrow slice of on how they spend their hard-earned money.
consumers – sales are driven by about 5% of Small and new entrepreneurial brands may
consumers.” appeal to lifestyle consumers, but to the
In many parts of Europe Activia, after mass market consumer what matters is the
more than a decade on the market, has appeal of brands they know and trust. Mass
evolved into the mainstream, but everywhere market consumers are unwilling to take risks
it began as a niche proposition. with benefits, ingredients and brands they
In fact, in most categories in the haven’t heard of. They are price-sensitive.
supermarket, successful health brands begin If you go into the mass-market, you need to
by targeting the lifestyle consumers and create be motivated more by volume than by profit
a strong and loyal following, often using them margin.
as a beachhead from which to eventually If a start-up begins by targeting the mass
expand into the mass-market. market it will be in competition with all the
However, you are not compelled to move mass-market players, as well as retailer own-
into the mass market. To go there means label, with all their massive mass-marketing
to accept lower profit margins in exchange muscle, fighting for the attention of price-
for higher volumes. The net effect may be sensitive consumers. It will be difficult to get
that your brand generates no more actual the attention of the consumer – and price
profit – and if you compete on price you may be the only way to do so, making it
may find yourself making less profit than difficult to generate enough margin to cover
when you were in the lifestyle segment. In your start-up costs.
fact some lifestyle brands that have tried to Again and again, food and beverage
move into the mass market – using money- executives convince themselves that they must
off deals for example to create trial – found – to satisfy their need for volume, to meet the
that they acquired new users who turned out expectations of shareholders or to meet their
to be very price-driven and had low loyalty, own preconceptions about how the market
and in the recession that began in 2008 this should work – target the mass market.
was disastrous. One of the best examples is This point of view is mistaken more often
European smoothie giant Innocent, a super- than it is right. One of the key lessons of the
premium brand that entered the mass market last 15 years is that companies who try to
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CHART 8: MASS MARKET CONSUMERS
Mass market consumers are pragmatic and conservative. They do not want to take risks on how
they spend their hard-earned money. Small and new entrepreneurial brands may appeal to lifestyle
consumers, but to the mass market consumer what matters is the appeal of brands they know and trust.
Mass market consumers are unwilling to take risks with benefits, ingredients and brands they haven’t
heard of. They are price-sensitive. If you go into the mass-market, you need to be motivated more by
volume than by profit margin.
If a start-up begins by targeting the mass market it will be in competition with all the mass-market
players, as well as retailer own-label, with all their massive mass-marketing muscle, fighting for the
attention of price-sensitive consumers. It will be difficult to get the attention of the consumer – and price
may be the only way to do so, making it difficult to generate enough margin to cover your start-up costs.
The mass market was reluctant to pay high price premiums for health, even in economic good times,
and is more price-sensitive than ever now, while the cost of effective health ingredients means that it is
difficult to deliver an effective product at low prices.

Sales
TIME
9% 9% 19% 44% 12% 6%

Healthy snacking
jump straight into the mass market usually 3.2 DISTRIBUTION & ROUTES TO
wind up with an expensive failure, or at best
a brand that performs short of expectations.
MARKET: SMART THINKING FINDS
The past decade is littered with failures SMARTER WAYS TO TAKE HEALTH
(see our report Failures in Functional Foods & TO MARKET
Beverages for examples).
The mass market was reluctant to pay high The challenges of how to take new products
price premiums for health, even in economic to market in ways that enable companies
good times, and is more price-sensitive than to earn better margins, to build better
ever now, while the cost of effective health relationships with consumers and give new
ingredients means that it is difficult to deliver ideas a chance to grow – and escape the
an effective product at low prices. stranglehold of supermarket chains with their
In short, the past 15 years have shown that short-term thinking and limited shelf-space –
by targeting the mass market from day one are what forward-thinking companies are now
you are almost guaranteed to fail, unless your wrestling with. If some of the ideas being
offer is specifically geared to the mass market, tried out come to fruition, the decades ahead
and you are already a mass-market company, will see a transformation in the way that
such as Kraft Belvita, Case Study 6. healthy products go to market.
Distribution – getting your product where
3.1.4 EARLY-ADOPTERS KEY TO SUCCESS the consumer can buy it – is key to the success
of all healthy food and beverage products. In
In summary, there are many very compelling fact your ability to get and keep distribution,
reasons to start with early adopters: to merchandise the product well, to get it on
“the right shelf ”, are often more important
• If a trend is already in the mass market, determinants of whether your healthy
it’s not a trend, it’s a done deal, and the product succeeds or fails than branding
sales growth and margin potential will and advertising. But for many companies
be limited. Hence it’s only in the early “distribution” means the supermarket channel
adopter market where you will find – a channel whose constraints are such that
high-growth opportunities – the place many innovations never see the light of day.
where future mass brands have their Supermarket chains’ margin targets, their
beginnings. control over pricing, their desire for products
to be successful within eight weeks or they
• These are the only consumers willing are kicked off the shelf, the fact that retailers
to be experimental and accept new aren’t willing to give more shelf space to
ingredients, new benefits, new brands existing categories and that for a new product
and entirely new types of products. By to go on the shelf another one usually has to
definition – and by the experience of the come out – these are just a few of the factors
last 15 years – the mass consumer will in supermarket retailing that mean that many
reject all of these. innovations never make it out of the ideation
stage, and many that do don’t last long in the
• It’s where the premium prices are – it’s warzone of the supermarket.
the less price-sensitive, high-value, low- In large part the problem is because in
volume, fast-growth part of the market. many countries – perhaps most – there is an
And who wouldn’t want a business with ever-greater concentration of power among
both high value per unit of sales and a shrinking number of grocery retailers. It’s
high growth? a trend that’s well-advanced in most markets
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and in some has already reached its logical touchy supermarket buyers.
conclusion – in Australia, for example, 90% Home delivery can seem like a novel idea to
of the grocery market is controlled by just two many food industry executives, but in major
supermarket chains. metropolitan areas there’s nothing novel
As a start-up company you have two about it. In New York City you can even
choices. You can either accept the status have breakfast delivered: Energy Kitchen is
quo and live with the stranglehold of the one of tens of companies offering a healthy
supermarket chains – who may not give you breakfast, home delivered, within New York
any space at all and if they do will be looking City.
for you to be as successful as a mass-market Home delivery is a business which is best
brand in a matter of weeks – or you can think suited to major metropolitan areas with
how to get round it. high density populations – but these are
also the places where you find the greatest
Wonderful Pistachios: cut out concentration of health-conscious consumers
the middlemen and dispatches its own and people with high disposable incomes.
merchandisers to its major retailer customers Such cities, sometimes referred to as “world
around the country, arriving in Toyota Priuses cities” – estimated to number around 70, their
emblazoned with green brand signage. Such numbers including Madrid, Barcelona, New
top-to-bottom control of its supply chain also York, London and Singapore – are just the
has enabled Wonderful Pistachios to penetrate tip of the iceberg of opportunity. Already 640
unlikely new outlets such as the upscale million people live in the world’s 300 largest
Nordstrom’s department stores. cities and the world is urbanising more every
day.
ThinkThin: is working to expand further Indeed there is a very strong argument that
into its established sales channel – grocery, start-ups would do best by initially targeting
drug and natural. ThinkThin will also put only dense, metropolitan areas filled with
a new focus on specialty channels, such these optimum health-conscious up-income
as gyms, spas, hotels and airlines. “We do consumers.
very well anywhere that people need quick, In the US market the so-called natural
portable food, so we are targeting core products stores are the perfect place for new
areas where there is emphasis on food to go, start-ups to begin. Providing an alternative
such as airports, coffee shops and smoothie channel to mainstream supermarkets, they
bars. Really, it is any place someone might serve the needs of the lifestyle consumers and
buy candy,” CEO Falsetto explained. The are both forgiving of the slow growth of new
company is also targeting corporations brands – and willing to embrace new product
that have a health and wellness agenda or concepts.
programme, such as hospitals and progressive While few countries are as lucky as the US
companies, like Google and Patagonia, for in having a specific retail channel that’s suited
their onsite cafeterias and gift shops. to start-ups, most do have something similar –
or at least one supermarket chain that is more
You don’t need to be a global corporate experimetal and more-oriented to the health-
giant to think about innovative ways to reach conscious and premium consumer.
the consumer – in fact it can be to your In the UK market, for example, that retailer
advantage not to be constrained by existing is the Waitrose chain, a 250-store national
“special partnerships” (as retailers always call chain, which targets only high income areas.
them just before demanding a massive price With a 5% market share it focuses on quality
cut from you) and the fear of giving offence to (and its sales grew despite the recession
Healthy snacking
thanks to its credentials in health and quality away people’s reservations about spending
products). their hard-earned money in a new product
Being stocked by a supermarket is not from an unknown company in case they don’t
the end of the distribution rainbow – to be like the taste.
stocked in the wrong place can also produce Sampling is central to Popchips, with
failure. Where a brand is merchandised in the its unusual snack product. The company
supermarket may be even more important targets dozens of venues a year, from
to its success or failure. Hence the Popchips local races to international events such
brand (Case Study 1) takes pains to be as the Sundance Film Festival each year.
included in the natural-foods aisle rather than Popchips also produces a colourful booklet
the conventional salty-snacks aisle, founder that it calls “Principles of Pop”, and calls
Keith Belling said. “As they’ve developed its sampling staff “poptimists”. Overall, the
these natural sets better in some chains, that’s company is putting additional promotional
where we’re interested in going.” resources and energy behind marketing and
Placement and merchandising decisions sampling pushes in key urban markets this
are especially crucial for Popchips because year including Boston, Chicago and Miami.
Belling continues to eschew national Other brands which make heavy use of
advertising campaigns that might elevate sampling are:
consumer awareness of Popchips in a major
way. • Belvita
• Nature Addicts
3.3 MARKETING COMMUNICATIONS
3.3.3 SOCIAL MEDIA
3.3.1 PUBLIC RELATIONS
Social media with its low cost compared to
In terms of cost-effectiveness, PR is one traditional advertising is seen as a perfect
of the most favoured tools for start-up tool for small start-up companies. However,
companies. Among the brands in this report although it doesn’t require much money,
which use PR extensively are: it does require just as much dedication of
human resources as traditional media and
• Wonderful Pistachios perhaps more dedication of time and effiort.
• Belvita Despite a great deal of hype, there is limited
• Nature Addicts evidence that it makes a big difference to the
sales of start-up brands, other than those
3.3.2 SAMPLING which invest very, very heavily in it. One of
the best examples is Popchips. It is not a
There’s a well established saying in marketing cash-starved business but a well-funded one
that “advertising creates awareness, but able to put the sort of funds into social media
sampling creates purchase” and in our that might once have gone into traditional
15 years experience of the healthy foods advertising. “We really want to find ways to
and beverages market one of the strongest connect with consumers and engage them
messages that comes from companies is that if in a conversation around Popchips,” said
a product tastes good, once people have tasted founder Keith Belling. “And then we want
it then sales increase – with some companies those conversations to excite them to talk with
asserting that sampling is the most effective their friends.”
way of driving sales increase. For example, in June 2010, Popchips
One of the reasons for sampling is to take announced that it had named American
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celebrity and actor Ashton Kutcher as its of its “100 Most Influential People in the
“President of Pop Culture”. In doing so, World”.
Belling reached for someone whose influence “We are excited to let [Kutcher] loose
in brand-building has stretched far beyond his with a bag of Popchips and full access to our
relatively modest credentials as a Hollywood social media,” Belling said. Belling believes in
actor. Kutcher, in fact, has achieved a status access for Popchips customers to the extent
in the social-media sphere far disproportional that he personally answers all of the e-mail
to his success as an actor. He has more than messages that come into the brand, although
five million followers on his Twitter account consumers don’t know it’s him because the
and more than three million Facebook fans. e-mail address begins “Snackers.” Belling said
He also founded a social-media startup called that staying in touch with customers in that
Catalyst. In recognition of all of this, Time way teaches him a lot about how the brand is
magazine this year named Kutcher as one being perceived.
In 2011 Diane Mizota, an actress who starred in Austen Powers, succeeds Ashton Kutcher as President of Pop Culture for Popchips,
following an election on Facebook.
Healthy snacking
4. Seven strategies to increase your chances of

success in healthy snacking
Fifteen years of analysis by New Nutrition Business wings”; Kellogg’s Special K helps you “drop a
of the successes and the significant failures has jeans size”.
led us to draw up a list of seven “golden rules”. These brands remain strong in their markets
Our golden rules aren’t a set of rigid must-dos, because they are dominant in consumers’
rather they are designed as a helpful check-list, minds – a status achieved with a simple,
and they are based on our observation that the uncompromising and consistent positioning,
most successful brands are those which – in supported by marketing and consumer
addition to meeting the basic requirements of education.
good taste and convenience – score best on the
following criteria: OTHER EXPERT BRANDS COVERED IN THIS
1. Be an expert brand REPORT INCLUDE:
2. Focus on a relevant benefit, a credible • Case Study 6: Belvita: expert brand at
brand breakfast
3. Offer the power of a benefit the consumer • Case Study 9: Wonderful Pistachios,
can feel the expert in pistachios
4. Remember that an ingredient is not a • Case Study 4: Luna Bar, the expert
point of difference brand for women
5. Begin by focusing on niches of loyal • Case Study 10: Nairns, the expert
consumers and command a premium brand in oat-based snacks
price
6. Differentiate your product through RULE 2: FOCUS ON A RELEVANT BENEFIT, A
packaging design CREDIBLE BRAND
7. Open new categories and segments –
don’t be a me-too Failure to see a product and its benefits through
the eyes of the target consumer is one of the
RULE 1: BE AN EXPERT BRAND most common causes of brand failure.
The benefit needs to be relevant to the
The past 15 years of functional foods have target consumers, easy to understand and
shown very clearly that the best way to get well communicated. With the thousands of
consumers’ loyalty and generate repeat messages people get every day from advertising
business is to be “the expert brand”, the brand and labels in the supermarket, the more
that’s perceived by the consumer as the most question-marks your product raises, the more
credible source of the health benefit that they people have to think about what your product
are looking for. is offering, the longer it takes them to decide to
Marketing is not a battle of products; it’s a purchase it and so it becomes easier for them
battle of perceptions. This means that once a to stick with something they know rather than
brand has captured and reinforced its position trying to understand something new. You are,
in consumers’ minds, then it’s very difficult to after all, not selling your product in a library
change those minds. but in a war zone – the supermarket.
The most successful functional brands are Your product and your brand must both be
the ones that find a clear expert position and credible carriers of the benefit that is being
stick to it. Red Bull, for example, “gives you offered and there must be a logic to the whole
Healthy snacking
that the consumer can accept. The idea The best examples of the power of “feel
of chicken fortified with fibre or omega-3 the benefit” include the energy drink market
will seem illogical to most readers, but these and the market for products for digestive
concepts have both been tried in real life (with health, which are the two largest segments of
results you can imagine). Dairy fortified with the functional food and beverage markets in
marine omega-3 is almost as illogical – what, Europe and the US:
the consumer rightly asks, is fish oil doing in
yoghurt? That, they will decide, is not natural. • Energy drinks deliver a health benefit
And so they have, which is why most omega-3 – an energy shot – that is immediately
fortified dairy products have failed or languish effective and detectable. If the 24-year-
in extreme niches. Omega-3 oil from fish olds who want to party all night long can
product, on the other hand, is logical and feel that benefit they become – as they
credible – and gets better sales results. have done for Red Bull and other energy
The importance of having a relevant benefit brands – loyal consumers.
in a credible brand posed important challenges
for several of the brands in our Case Studies: • Products for digestive health have the
same advantage. With digestive health
MATCHING-BENEFIT-WITH-BRAND CASE you can very quickly find out if a product
STUDIES INCLUDE: is effective or not and if it gives you the
benefit of better digestive health.
• Case Study 3: Probake 50 – matching
the benefit to the consumer’ preferred Thus far this strategy hasn’t been widely
consumption occasion used in snacking but one of the few exceptions
• Case Study 5: ThinkThin – a healthy is Case Study 7, Fiber One.
weight for women
RULE 4: AN INGREDIENT IS NOT A POINT OF
• Case Study 13: Frito-Lay DIFFERENCE
RULE 3: AIM FOR A BENEFIT THE CONSUMER It’s very easy to get carried away at the
CAN FEEL product development stage with the potential
of differentiating your product with a new
One of the biggest marketing advantages a ingredient, but consumers do not buy products
product can have – and the surest way to create because of their ingredients (unless they are
loyalty for a brand – is to deliver a benefit that consumers for natural or organic products
the consumer can quickly see or feel. or “gluten-free” or some other free-from
Having a benefit that consumers can feel is proposition).
already the underpinning of many successful Consumers buy products for benefits that
brands and it will become even more important are relevant to them (see Rule 2). Just because
in an economic environment in which people consumer awareness of an ingredient is high,
are becoming more careful about how they that doesn’t mean that awareness will translate
spend their money. into sales.
When people can feel the benefit that is Omega-3, for example, is claimed to have
being offered to them, they can see that 50% or 60% consumer awareness in many
they are getting value-for-money. If they can countries, but in reality people will only buy
quickly feel the benefit they can immediately a product if the benefit – either adult heart
understand why they should buy the product health or brain development for children – is
again – and again and again. relevant to them.
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Even if a brand gets every other aspect RULE 5: A FUTURE OF NICHES – TO CREATE
of its design right, using an ingredient that’s MASS MARKET SUCCESS, FIRST START WITH
unfamiliar to consumers can be a killer concern. A NICHE
Even innovative Swiss dairy group Emmi –
a company notable for its many functional Again and again, food and beverage executives
food successes – decided to withdraw from convince themselves that they must – to satisfy
the market its LactoTab brand, Europe’s first their need for volume, to meet the expectations
chilled dairy beverage based on the ingredient of senior management or shareholders or to
Coenzyme Q10 (CoQ10), citing consumer meet their own preconceptions about how the
unfamiliarity with the ingredient as one of the market should work – target the mass market.
main reasons for the product’s failure. This point of view is mistaken more often
You can invest as much as you like in than it is right. One of the key lessons of the
technology and scientific substantiation, last 15 years is that companies who try to
explains brand strategist Peter Wennström, “but jump straight into the mass market usually
if the consumer doesn’t accept your ingredient wind up with an expensive failure, or at best
and doesn’t believe that it is necessary for their a brand that performs short of expectations.
lifestyle then your technology is of no use. The past decade is littered with failures (see
You must be willing to spend time to educate our report Failures in Functional Foods & Beverages
them about it – or use another ingredient that for examples).
they do accept”. It’s on such a simple rule The mass market is always reluctant to
of consumer logic that the future of many pay high price premiums for health, even
functional foods and beverages depends. As in economic good times, and is more price-
Case Study 2 about Mars’ efforts to bring sensitive than ever now, while the cost of
cocoa into snacking shows, a new ingredient effective health ingredients means that it is
with strong health benefits is not by itself difficult to deliver an effective product at low
enough to make a success and hence Mars is prices.
also innovating with formats and consumer Better than aiming a less-than-precise
targeting. “wellness” message at the mass market, look
instead for people for whom health is part of
BRANDS THAT ARE STARTING IN NICHES their lifestyle. These people are, at best, only
INCLUDE: 20%-25% of the population in most countries
and tend to be older, 40 or 50-plus – the age
• Case Study 1: Popchips when people start to notice the changes that
life brings to how they look or feel and also the
• Case Study 2: Mars
age when people have not only the motivation
• Case Study 3: Probake 50 but sufficient disposable income to spend on
maintaining their health.
• Case Study 4: Women’s bars
Health-conscious niches are the key driver
• Case Study 5: ThinkThin of health brands – in almost every case in
every country.
• Case Study 9: Wonderful Pistachios The following case studies are brands that
• Case Study 10: Nairns are firmly targeting niches and some are using
these as a foundation to grow towards the
• Case Study 11: Nature Addicts mass-market.
• Case Study 12: Castus
• Case Study 15: Blueberries
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RULE 6: DIFFERENTIATE USING PACKAGING for a health brand that wants to earn a premium
DESIGN price. The successful premium brands almost
all sell as single-serve products.
Good packaging, particularly innovative All the case studies cover brands that are
packaging, is crucial to creating successful single-serve products. Case studies 4 and 5
health propositions in increasingly over- show brands that have thought carefully about
crowded markets. At its best, packaging how to optimise their packaging to appeal to
supports the brand in asserting its difference women.
from the competition. It’s the best way to catch
the consumer’s eye and earn premium prices RULE 7: OPEN NEW CATEGORIES AND
and better-than-average profit margins. SEGMENTS – DON’T BE A ME-TOO
Innovative packaging performs several
Whether your company is large or small, it
important functions:
faces the challenge of how to use nutritional
benefits to carve out a space in what is almost
• It signals to consumers that “this is
always a well-served and usually fiercely-
something very different”.
guarded category.
An article in the Harvard Business Review
• It conceals a price premium – it is a
of May 1, 2007, titled “Strategies to Crack
good way of achieving high margins
Well-Guarded Markets”, provides some useful
since consumers have no similar existing
insights for food and beverage companies faced
products to function as a comparison.
with this challenge.
Using packaging, companies can create
Red Bull, the authors point out, entered the
new price points and achieve much
US with a niche product, in innovative and
higher selling prices for their products. In
entirely new packaging, priced at twice the
particular selling in single-serve packages
price of any regular soft drink and distributed
makes it very difficult for consumers to
(at first) only through bars and convenience
easily compare prices. Putting your new
stores. The company did not use advertising
product in a standard 1-litre gable-top
blitzes, instead relying on sampling. The reward
carton, on the other hand, makes your
for this unconventional approach was that Red
product look like every other brand on
Bull was able to create a loyal following and a
the shelf and enables consumers to easily
bridgehead from which to build a brand with
compare prices between your product and
over $700 million (€520 million) in US retail
regular products.
sales – a 65% market share of the energy drink
category.
• If you use packaging innovation to create
It’s an unfortunate fact that very often brands
a new category then you are defining
do not bring anything new to their category
the direction in which many of your
except the brand’s health benefit. And worse,
competitors must go and you are defining
in most cases the health benefit wasn’t truly
the packaging format they must adopt. You
a point of difference and could be already
are in effect establishing your credentials
obtained just as easily, and sometimes more
as a market leader and innovator.
cheaply, from other foods or from dietary
supplements. They are “me-too” products.
In the era of “Individualised Nutrition” single-
serve packages have more appeal to the many
New category creation
niches of consumers than family packages.
Though health matters, convenience matters
Creating a new category based around an
more, and delivering convenience is essential
innovative product is very rare in the food
Healthy snacking
industry but it is one of the most successful and it creates a totally new proposition and then
well-proven strategies in the global market for educates consumers about it. As a result,
functional foods. new demand arises among consumers for
New category creation depends on the something they didn’t know they needed. This
development of a new type of food or drink has been the basis for some of the world’s most
and a new type of consumption occasion. successful brands.
The new product and the new consumption
occasion should contribute to the identification IN THIS REPORT THE FOLLOWING CASE
and fostering of a new type of consumer need STUDIES LOOK AT BRANDS WHICH HAVE
– one that has not been properly addressed CREATED – OR ATTEMPTED TO CREATE –
NEW CATEGORIES:
before.
Marketers lean heavily on consumer research
Case Study 6: Belvita
to tell them what consumers want and then try Case Study 2: Mars Goodness Knows
to match brands to those wants. But market Case Study 3: Probake 50
research only tells you what people already Case Study 7: Fiber One
know – it won’t tell you what consumers Case Study 9: Wonderful Pistachios
don’t yet know they want. New category Case Study 10: Nairns
creation does something quite different from Case Study 11: Nature Addicts
this consumer research-dominated thinking:
Healthy snacking
5. Case studies
Innovation in format
Case study 1: Pop Chips – new product format delivers healthier chip at premium price
Innovation in ingredients
Case study 2: Mars – exploring how to make cocoa the next ingredient success in snacks
Targeting the technology consumer

Case study 3: Probake 50 – new format brings a healthy dose of protein
Targeting the lifestyle consumer

Case study 4: Smaller, leaner, kinder: bars tap into women’s needs
Case study 5: ThinkThin Bars’ wellness platform resonates with women
Targeting the mass market

Case study 6: Kraft Belvita Breakfast – giving people permission to have a sweet snack at
breakfast
Case study 7: Fiber One – an expert brand in digestive health
“Naturalness” – the biggest trend

Case study 8: PepsiCo transforms the snack food aisle into the natural food aisle
Case study 9: Wonderful Pistachios – making natural into a super-premium success
Case study 10: Nairns – product innovation, “natural energy” from expert brand in oat-based
snacks
Fruit & vegetables

Case study 11: Nature Addicts – Europe’s most successful new snack brand
Case study 12: Castus fruit snacks – a hit with Danish children
Case study 13: Frito-Lay’s fruit and vegetable snack brand ambitions fall to earth
Case study 14: Ocean Spray – from bog fruit to big fruit
Case study 15: Berries – convenience, indulgence and “natural functionality” drive a super-
premium success story
Healthy snacking
Case Study 1:
Innovation in
format
Healthy snacking
Case Study 1: Pop Chips – new product format

delivers healthier chip at a premium price
Keith Belling is a better-for-you entrepreneur casualties, even among huge companies that
with an ambitious goal for his company, should know what they’re doing.
Popchips: to become “the Vitaminwater of Part of the problem clearly is the premium
the snack aisle,” said the 52-year-old CEO of prices they demand during an extended and
the San Francisco-based natural-chip startup. perhaps transformative time of consumer
Popchips’ proposition is simple. Using heat concerns about food prices; but also, they may
and pressure to “pop” potato chips instead simply have overestimated the market for non-
of baking or frying them cuts calories, boosts fried, non-traditional salty snacks.
taste and allows Popchips to cram more chips Stunning exhibit No. 1 is Flat Earth, the
into a given volume than if they’re fried. Frito-Lay brand of healthy vegetable chips,
Charging a premium price that typically whose sales cratered to only about $5 million
is $1.29 (€0.99) for a single-serving bag, the (€3.85 million) for the 52 weeks ended June
company achieved $40 million (€31 million) 13 since a strong introductory year of 2007,
in sales in 2010, Belling said, after revenues when sales peaked at $26 million (€20 million)
of $19 million (€14.6 million) last year – and in US supermarkets, drug stores and mass
more than triple Popchips’ revenues in 2008, merchants measured by Symphony/IRI (a
its first full year in operation. Chicago-based tracker of sales data previously
“We want to do in the snack aisle what known as Information Resources Inc), not
Vitaminwater did in the beverage aisle,” including Walmart stores.
Belling told New Nutrition Business. “I’d be Likewise, sales of Terra Chips, a 20-year-
thrilled with $1 billion in revenues.” But old maker of vegetable chips now owned by
mindful of Vitaminwater’s recent woes, Hain-Celestial, have lost momentum over the
since its acquisition by Coca-Cola, Belling years. Sales of the main Terra product line
noted that he didn’t want Popchips to follow grew only 5% for the 52 weeks ended June
Vitaminwater’s arc completely. 13, to about $18 million (€13.85 million),
And that underscores perhaps the biggest according to Symphony/IRI.
problem for Popchips as it remains in the Belling is a serial entrepreneur who hopes
throes of an initial spurt of growth: the that Popchips will become his signature
healthy-chip category has created its share of company creation. As a kid, he and his
Healthy snacking
brother would refurbish garage-sale findings constantly looking for innovation.”

and sell them for a profit at flea markets. The Popchips – which do include some oil – still
former lawyer, restaurant owner and coffee- have less than half the fat of fried chips and
store executive launched a small-business even baked chips. Per serving, for instance,
online portal called Allbusiness.com in the Popchips provides 4g of fat compared with
late Nineties, selling it to NBC Interactive for 10g per serving of Lay’s Potato Chips, 7g in
$250 million (€193 million) in 2000 – right Terra Sea Salt potato chips, and even 6g of
before the dot-com bubble burst. fat per serving of Frito-Lay’s baked Sunchips
After that sale, Belling took a year off to Original flavour.
travel and relish his well-timed exit from Similarly, Popchips carries just 120 calories
Allbusiness.com. While in Chile fly-fishing, he per serving versus 150 calories for Lay’s, and
heard about an opportunity that lured him 140 calories each per serving for Terra Sea
back into business a few months earlier than Salt and Sunchips Original.
he had planned. A friend brought him into An important benefit of Popchips’
then-troubled Restoration Hardware to help preparation method is that they are light
raise money and to try to turn the company compared to their main competitors: 20 or
around. more chips in a 1oz. serving of Popchips
By 2005, however, Belling was scratching compared with 15 in a traditional bag of
his entrepreneurial itch again, sniffing around potato chips. That is largely because of the
for opportunities in the healthy-food market. difference in oil content, Belling said.
Influencing him during that time, Belling Popchips have a chewy-crispy consistency
maintained, was his personal status as “a of a hybrid of a rice cake and a potato chip.
passionate snacker” in search of better-for-you They come in six flavours, each of them a
opportunities to indulge his own habit. Then classic of the savoury snack aisle in American
Belling and eventual Popchips co-founder grocery stores: Original, Barbeque, Salt &
Patrick Turpin found a manufacturing firm Pepper, Sea Salt & Vinegar, Sour Cream &
that made rice cakes and other snacks. Onion, and Cheddar.
Soon, the duo discovered that, with the
right amount of heat and pressure, they MARKETING MIX OF CONVENTIONAL
could pop other types of starchy food – such AND NEW APPROACHES
as potatoes. “It took a lot of research and a
lot of snacking to get to that point,” Belling In distribution, too, Belling has forged a
said. “But when we did, it was truly an ‘a-ha!’ strategy that combines natural-foods and
moment.” traditional outlets. So, major retailers include
Whole Foods but also Kroger and Safeway
CRACKING THE TASTE CHALLENGE conventional supermarket chains and club-
store giant Costco, mass merchandiser Target
Key to the pair’s epiphany, Belling said, was and drug-store chain Duane Reade. Popchips
the recognition that popping would help a also is merchandised and sold in Jamba Juice
healthy maker of savoury snacks overcome stores, as the better-for-you foodservice chain
the single biggest obstacle to the success that expands its menu lately.
most brands and products have had in the “We keep our head down and have
segment: tastelessness. developed a nice footprint at a natural pace
“Before, there just wasn’t an option that this way,” Belling said. “The challenge is to be
delivered on nutrition and actually tasted intriguing and innovative so we stand out in a
good,” Belling said. “And it’s all about taste. crowded snack aisle.”
Yet it’s a category where consumers are That’s why, in regular supermarkets,
Healthy snacking
Popchips takes pains to be included in the vehicle. “We really want to find ways to
natural-foods set rather than the conventional connect with consumers and engage them in
salty-snacks aisle, Belling said. “As they’ve a conversation around Popchips,” Belling said.
developed these natural sets better in some “And then we want those conversations to
chains, that’s where we’re interested in going,” excite them to talk with their friends.”
Belling said. For example, in June last year, Popchips
Placement and merchandising decisions announced that it had named American
are especially crucial for Popchips because celebrity and actor Ashton Kutcher as its
Belling continues to eschew national “President of Pop Culture” (this year’s
advertising campaigns that might elevate president is Austin Powers actress Diane
consumer awareness of Popchips in a major Mizota, who was elected through a Facebook
way. Belling does like clever tag lines, such as, campaign). In doing so, Belling reached for
“Love. Without the handles.” someone whose influence in brand-building
With that strategy – and the uniqueness has stretched far beyond his relatively modest
of the product – sampling also becomes credentials as a Hollywood actor.
important, and Popchips targets dozens of Kutcher, in fact, has achieved a status in
venues a year, from local races to international the social-media sphere far disproportional
events such as the Sundance Film Festival to his success as an actor. He has more than
each year. Popchips also produces a colourful five million followers on his Twitter account
booklet that it calls “Principles of Pop”, and and more than three million Facebook fans.
calls its sampling staff “poptimists”. He also founded a social-media startup called
Overall, the company is putting additional Catalyst. In recognition of all of this, Time
promotional resources and energy behind magazine this year named Kutcher as one
marketing and sampling pushes in key urban of its “100 Most Influential People in the
markets this year including Boston, Chicago World”.
and Miami. “We are excited to let [Kutcher] loose with
a bag of Popchips and full access to our social
EMBRACING SOCIAL MEDIA media,” Belling said at the time.
Belling believes in access for Popchips
Not surprisingly, Popchips also has embraced customers to the extent that he personally
online social media as a major marketing answers all of the e-mail messages that come
TABLE 3: POPCHIPS – A COMPARISON

kettle brand
popchips™ lay’s classic terra kettles stacy’s chips sunchips
chips lightly
original potato chips sea salt simply naked original
salted
chips per serving 23 15 13 15 14 16
calories per serving 120 150 150 140 130 140
total fat per serving

4 10 9 7 7.5 6
(grams)
calories from fat per
35 90 80 60 45 50
serving
saturated fat per
0 1.0 1.0 1.0 0.5 1.0
serving (grams)
* Datamonitor (Foodnavigator.com, February 6, 2008)

** 1 ounce serving comparison
***sour cream & onion and cheddar popchips have 0.5g of saturated fat.
Source: Popchips
Healthy snacking
into the brand, although consumers don’t yet. Among the things that Glaceau’s
know it’s him because the e-mail address Vitaminwater brand does is use “crowd
begins “Snackers.” Belling said that staying in sourcing” in its social-media marketing; for
touch with customers in that way teaches him example, enlisting online fans to help create
a lot about how the brand is being perceived. new flavours. “Down the road,” Belling said,
Popchips isn’t quite Vitaminwater, “we might do that too.”
Popchips marketing is all about fun and pleasure as well as health. The snackers’ credo is a list of “truths we hold to be self-evident”.
You can see the credo for yourself at: http://www.popchips.com/snackers-credo/
Healthy snacking
Case Study 2:
Innovation in
ingredients
Healthy snacking
Case study 2: Mars – exploring how to make

cocoa the next ingredient success in snacks
Mars’ quest to find a way to translate its representation of educated, upper income
command of cocoa-flavanol technology into people willing to experiment with new brands
product forms that will find sweet spots with and new foods that promise “wellness”.
the consumer continues, with the now year- As Mars said back in 2010 at the launch:
long test-marketing of a new snack product, “This area is world-famous for its emphasis
called GoodnessKnows. on — and appreciation of — healthy living.
GoodnessKnows is a line of “snack If we can get a stamp of approval from
squares” that are a hybrid of chocolate Colorado’s discerning, health-conscious
confection, nutrition bar and granola square. consumers, then consumers everywhere
They include whole almonds, fruits, whole should embrace this new snack!”
grains and what Mars calls “deep” chocolate
– and 200mg of Mars’ patented cocoa MARS TESTS SNACK SQUARE AS
flavanols in each four-square serving. They
retail for a suggested price of $1.59 (€1.15)
VEHICLE FOR “DEEP CHOCOLATE”
per 36g four-square single serving and $5.39
The idea behind GoodnessKnows seems to
(€3.92) per five-serving multi-pack carton.
be a recognition that American consumers
So far, Mars has only test-marketed
are willing to look at cocoa flavanols as a
GoodnessKnows in the adjacent cities of
healthful substance – largely because of the
Denver and Boulder, in Colorado, at the foot
better-for-you image that the media has given
of the Rocky Mountains. The area has been a
to dark chocolate in recent years – but that
hot-bed of healthy food innovation since the
they have yet to find the best delivery vehicle
1970s: for example, it’s where America’s soy
for those phytonutrients.
milk industry was born and where Wild Oats,
The debut of GoodnessKnows in the test
the natural foods supermarket chain which
market followed the demise of the original
is now part of Whole Earth, opened its first
forms of CocoaVia: a chocolate bar, and a
store. The local consumer market has a strong
candy chew. One lesson Mars has learned
from the CocoaVia experience is that
consumers weren’t willing to participate in a
regimen whose nutritional benefits required
consumption of two chocolate bars a day.
GoodnessKnows would seem to lend itself
much better to everyday consumption, though
Mars’ marketing and online content about the
product line doesn’t explicitly call for that.
The inclusion of fruits, nuts and grains
makes for a snack that naturally would seem
more wholesome and nutritious than a
chocolate bar to most consumers.
GoodnessKnows comes in three flavours:
Very Cranberry; Almonds & Berries; and
Roasted Nuts & Grains. Each four-square
serving provides 150 calories, two to three
Healthy snacking
grams of fibre, 3g of protein, and 20-35mg of SWITCH FROM BAR TO

sodium, in addition to the 200mg of flavanols.
For Mars, its moves with CocoaVia and its
SUPPLEMENT
testing of GoodnessKnows help make it clear
Mars also is trying to revive its CocoaVia brand,
that the driving force behind these products
this time as a dietary supplement in the form of
is the company’s desire to get retailers and
a powder to add to water, after withdrawing the
consumers alike to appreciate the unique
original CocoaVia dark chocolate nutrition bar
potency of cocoa flavanols, first of all, and of
line nearly two years ago.
the particular flavanols Mars produces using
“We leveraged the technology of what we do
its Cocoapro process.
well, the development of the [flavanol] extract,
“While flavanols can be found in some
and are giving it to consumers in a new form,”
commonly consumed foods and beverages,
Catherine Kwik-Uribe, Mars’ global cocoa-
there is a unique mixture of flavanols in
flavanol research manager, told New Nutrition
cocoa, the exact combination of which can
Business.
be found in no other foods in nature,” says
Mars has switched the positioning of these
Mars’ product literature. “While phrases such
new products from a promise of “heart health”
as ‘dark chocolate’ or ‘70 percent cacao’ are
for the original CocoaVia products to a new
used to describe the type of chocolate in a
emphasis on “circulatory” benefits. The Cocoa
product, they cannot tell someone how many
Via website (www.cocoavia.com) states:
cocoa flavanols are in a product.
Healthy circulation plays a role in: heart health, exercise
“Our deep chocolate uses cocoa beans
endurance, cognition, alertness and eye health.
specially selected and handled to retain
The addition of a fruit-flavoured form of
flavanols.
flavanol delivery, the change in the CocoaVia
“While there are many products on the
product form from chocolate bars and chews
market that are made with chocolate or
to powder packets, and the new functional
natural cocoa, few of these products can
emphasis are only three of Mars’ significant
guarantee the level of bio-active cocoa
alterations.
flavanols found in GoodnessKnows.”
The company also decided to drop cholesterol-
lowering sterols out of the product line. And
CocoaVia now is available only online, a return
to the brand’s origins after Mars attempted
to gain traction for the original products with
distribution in mainstream retail outlets.
“The market changed and consumers
evolved,” explained Fiona Posell, acting head
of sales and marketing for CocoaVia, which
is managed by the Mars Botanical division of
Mars. “To deliver the benefits of flavanols on a
daily basis, we had to look beyond what we were
doing.”
Mars has spent more than 20 years intensely
researching the properties of flavanols in
cocoa – “the characterization and chemistry
of flavanols as well as what they do within the
body,” as Kwik-Uribe put it. Mars came up with
the original CocoaVia chocolate-based products
54
Healthy snacking
under a patented and proprietary system for nationwide in 2006. Sales for 2007 came in
processing that allowed the heart-healthy at a total of about $11 million (€8 million)
flavanols to “remain active” in foods. in US supermarkets, drug stores and mass
merchandisers tracked by SymphonyIRI, the
STRONG START TO SALES LOSES Chicago-based market-research firm, which
MOMENTUM doesn’t track sales in Walmarts.
CocoaVia played to Americans’ growing
The CocoaVia brand was launched with much consumption of dark chocolate in general. Not
fanfare eight years ago. After initial internet only has dark chocolate become a significant
sales beginning two years earlier, in 2005 alternative to Americans’ traditional favourite,
Mars tested four flavours of dark-chocolate milk chocolate, but more and more mainstream
CocoaVia bars and two flavours of individually confectionary brands are offering choices in
wrapped CocoaVia chews. Each 23g bar dark chocolate. Some consumers understand
contained 100mg of cocoa flavanols and 1.5g in particular that cocoa flavanols are healthy,
of plant sterols in a formula squarely targeted at while many more Americans simply have picked
cholesterol reduction. up on the vague notion that dark chocolate is
Mars encouraged retailers to merchandise “better for you” than milk chocolate and so have
CocoaVia with “healthy snacking” products such switched their candy purchases in favour of dark
as nutrition bars and granola bars. CocoaVia chocolate.
retailed at a suggested price of about $1 (€0.73) US sales of dark chocolate peaked in 2007 at
a bar, not far out of line with the typical price of $829 million (€605 million), a 35% jump from
many candy bars and nutrition bars. the previous year, according to the National
Initial sales results were so encouraging that Confectioners Association. Then recession hit,
Mars expanded distribution of CocoaVia and the pace of dark chocolate sales growth
In a change of strategy CocoaVia dietary supplements will only be available online
Healthy snacking
slowed to a still impressive 12% in 2008. each day.

After more deceleration in early 2009, by the “Consumers will always love chocolate but
end of the year, momentum had returned to they know that chocolate is a treat, an occasional
dark chocolate sales, and they finished the year indulgence,” Posell said. “While it can be
with an overall 9% gain. No data are available enjoyed in moderation as part of a healthy
yet for the 2010 sales trend. diet, chocolate is certainly not a superfood or
Yet Mars was unable to establish CocoaVia as superfruit recommended for daily consumption
an attractive, differentiated brand. By 2008, sales for its flavanol content.” And, she said, “Most
of CocoaVia had plunged by 35% from the year chocolate, even dark chocolate with a high
before, and then just kept declining until Mars percent of cacao, is not a consistent source of
finally pulled the plug in mid-2009. cocoa flavanols.”
Mars executives said that American consumers Added Kwik-Uribe: “[Consumers] were
decided they didn’t want to think of chocolate telling us that chocolate is a great occasional treat
as a daily medicinal or supplement – and getting but for every day we had to find food forms that
the heart-health benefit from CocoaVia required were more convenient.”
consumers to eat at least two serves of CocoaVia
No company has done more than Mars to fins innovative ways to bring the benefits of cocoa flavanols to consumers in the form of
snacks. Currently the company is test-marketing its GoodnessKnows brand of “snack squares”. They include almonds, fruits, whole grains
and what Mars calls “deep chocolate” – delivering 200mg of Mars patented cocoa flavanols in each 36g serving.
Healthy snacking
Case Study 3:
Targeting the
technology
consumer
Healthy snacking
Case study 3. Probake 50 – new format brings a

healthy dose of protein
Having cracked the sports nutrition market, of dietary protein. “Elderly people have a
Mathew Richardson of UK-based Applied much higher need for protein because they’re
Nutritional Research has turned his attention getting increased muscle wastage, so it’s
to the growing problem of sarcopenia in the important for them to eat more protein as a
elderly. result,” says Richardson.
Richardson built up a successful nutrition
bar and beverage business called Pro-Fibe NON-MEAT PROTEIN IS KEY
Nutrition before selling it to Irish dairy giant
Glanbia in 2005. Now this entrepreneur However, he says, lifestyle and health issues
with a chemistry PhD has developed a 50% can make achieving high levels of protein
protein soft cookie called Probake50 which in the diet difficult. “Part of the problem is
he says will appeal to elderly consumers who that many elderly people don’t like eating lots
don’t like protein shakes and snack bars. of meat because it gets stuck in their teeth
Sarcopenia – or muscle wastage – is a and they have problems digesting it. But
condition that affects everybody to a greater even if they do like meat, they have difficulty
or lesser extent as they age. It’s a worry assimilating the protein in it. Your ability to
because it impacts on a person’s strength, assimilate protein shrinks after the age of 50.
which can put someone at a greater risk “Someone in their 20s, if they eat whey
of having a fall and breaking a bone. With protein or beef protein, will get as much
people increasingly living for longer in benefit from either. Someone in their 60s will
developed countries it is a health problem that get almost 100% of the protein from whey
threatens to reach epidemic proportions. protein, because it’s easily absorbed. But
Although it is a condition caused by several they’ll probably get only about 60% of the
factors, including a lack of exercise, there benefit of eating the protein from the beef.”
is general agreement among experts that Protein supplements would, therefore,
sarcopenia can be aggravated by a low intake appear to be the answer. But, says
Healthy snacking
Richardson, the kinds of products currently STARTING WITH SPORTS

on the market don’t appeal to older NUTRITION
consumers. “Elderly people don’t like
drinking milkshakes or eating chewy Mars The Probake50 cookie is actually already on
Bar-type things. They just don’t eat them. sale in the sports nutrition market, in White
But they’ll always have a biscuit with a cup of Chocolate Almond and Double Chocolate
tea.” Chip flavours. “I’m only doing that because
Data from market analyst Kantar it’s immediate business,” says Richardson.
Worldpanel supports Richardson’s assertion “That pays for the staff, the bills and makes a
that the elderly are heavy consumers of small profit.”
biscuits. Its research shows that housewives But the longer-term aim for Richardson
aged over 65 buy biscuits an average of 48 is to sell the concept into healthcare retail
times a year; for housewives aged 28-35 the channels where they will reach elderly
frequency of purchase is 34 times a year consumers. To that end, Probake50 is
(figures for the year to September 2010). currently undergoing trials at the Institute of
Consequently Richardson has developed a Ageing in Newcastle, just a few miles from
soft cookie concept containing 50% protein Applied Nutritional Research’s headquarters.
– a level he claims is the highest to be found There, post-graduate researchers have
in a biscuit product anywhere in the world. been looking at acceptance of the cookie by
The source of protein is listed only as “milk elderly consumers. Richardson was confident
protein” and “soy protein” on the label. acceptance levels would be high. “I’ve used
Richardson will not elaborate on this, stating my own grandparents as guinea pigs and they
that the precise formulation is “sensitive like them,” he says.
information”, though he does reveal that After that, the researchers will turn
the proteins used are designed to be easily their attention to the serious business of
absorbed by the body. establishing how effective the cookie concept
is at addressing sarcopenia and malnutrition
in the elderly.
Probake50 is, essentially, ready for the
sarcopenia market, although Richardson says
he will most likely halve the size of the cookie
TABLE 4: WHAT’S IN PROBAKE50?
Ingredients:
Milk protein, hydrolysed gelatine, glycerine,
vegetable oil, chocolate chips (9%), soy protein,
oatflour, sugar, dietary fibre: gum acacia, baking
powder, flavouring, salt, sweetener: sucralose.
Nutrition per 75g serve:

Energy 320kcal
Protein 37.5g
Carbohydrates 20.1g (of which sugars 7.4g)
Fat 10g (of which saturates 3.9g)
Dietary fibre 1.1g
Sodium 0.27g
Healthy snacking
from the 75g manufactured for the sports Research is now looking for other companies
nutrition market in order to appeal to elderly to help it to develop the Probake50 concept
consumers. “That [75g] would be too big for in the healthcare channel. “We’re developers,
that market,” he says. “If you eat one, you’re not marketers,” he says. “Ultimately I am
full – it’s like a meal – and that would be too looking to work with partners to bring this
much.” product to market. Our aim is to go into the
Running in tandem with the research at healthcare channel over the next few years.”
the Institute of Ageing, Applied Nutritional
BOX 6: APPLIED NUTRITIONAL RESEARCH
After selling Pro-Fibe Nutrition to Glanbia in 2006 Mathew Richardson spent two years as technical
director of Glanbia Nutritionals UK (which was the new name Glanbia gave to Pro-Fibe following the
acquisition).
When his contract expired in March 2008, Richardson established Applied Nutritional Research as a
vehicle for developing new concepts in food and nutrition.
As well as Probake50, Applied Nutritional Research has developed a new nutrition bar concept that
is highly competitive to produce because it doesn’t require baking. The company has its own factory,
which means it is able to produce cookies and bars for other companies to sell under their own
brands.
The company’s website explains its mission:
“At Applied Nutritional Research we take everyday foods you enjoy that are ‘unhealthy’ and give them a
nutritional makeover whilst preserving the taste! We reduce the fats, sugars and simple carbohydrates,
and replace them with protein, complex carbs and more nutritious grains, creating macronutrient super
foods.
In all our formulations we reduce the levels of fat (particularly saturated fat), sugar and salt, as we feel
that ethically it is wrong to have a food enriched with essential fats, fibre, protein etc and then have a
high fat or sugar content.
We attempt to create Healthy Junk Foods, where the nutritional balance has been adjusted without
compromising flavour and texture.
In order to do this we undertake in depth research into as many forms of Protein, Fibre, Carbohydrate,
Nutritional Fats, Grains and Supplements as possible. The research incorporates the nutritional
benefits of each ingredient, functionality within the food, stability to food processes and food
conditions, and interactions with other ingredients present.
We have developed our brand of high protein soft baked cookies. Each 75g cookie contains 37.5g of
protein from a blend of protein sources and has a drastically reduced sugar and fat content compared
to standard cookies. We believe that high protein cookies make a nice refreshing change to all the
same old boring protein bars and actually taste nicer too!”
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Case Studies 4 & 5:
Targeting the
lifestyle consumer
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Case study 4: Smaller, leaner, kinder: bars

tap into women’s needs
With the proliferation of nutrition-bar choices the overall features of the products rather
in the US market over the last decade, one than a specific line or sub-line aimed at
truth seemed to have been lost on many of women. (That includes ThinkThin bars, Case
the brands, whether mainstream or niche Study 5). Kind Healthy Snacks, for instance,
better-for-you labels: Women make most of uses transparent packaging for its entire line
the purchases in this segment, just as they do of nutrition bars because “women like to be
in nearly every other CPG segment. And few able to see what they’re getting; they don’t
bars appealed directly and explicitly to the like surprises,” said Erica Bliss Pattni, vice
perceived needs and wants of women. president of marketing for the New York-
But lately, a handful of nutrition-bar based company.
brands, ranging from old-guard and In any event, these brands try to stay away
mainstream players such as Balance Bar to from what can be the trap of considering
new entrants such as Tasty, are refining their female customers as some kind of generic
appeal to women shoppers with new products block, and that makes the proposition of
that address their perceived gender-based catering to women more challenging. “We try
needs. to think about different kinds of women, not
“We saw a growing desire by women to just one type – the mom driving an SUV in
have their own products,” Michael Sands, Cleveland is different from a college student
president and CEO of Valhalla, NY-based in Seattle,” Pattni said.
Balance Bar, told New Nutrition Business. Here’s a look at how a handful of nutrition-
“Females make up 50% of usage occasions bar brands from across the industry spectrum
in the segment but 75% of the purchase deal with the women’s market:
occasions. The needs of a female are a lot Balance Bar. A private-equity firm
different from those of a man, and from kids bought the brand from Kraft two years ago
– so couldn’t we design something specific with the conviction that “with the previous
for them?” And, in fact, Balance Bar’s new ownership, it wasn’t a priority to bring a
Nimble brand is meant to be exactly that. bunch of innovation” to the category, as
Sands put it. The goal of the new owner,
DIFFERENT KINDS OF WOMEN Greenwich, Conn.-based Brynwood Partners,
he said, is “to bring a ton of innovation” to
Other brands are taking a more oblique nutrition bars.
approach to the women’s market, leveraging Aiming at the start to hone its product line
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more for women, Balance Bar has introduced nutrition bar and stopped right there and
new female-oriented flavours such as lemon said, ‘This is the best all-in-one bar on the
meringue. But such minor gambits have market’,” Sands said. “But we wanted to
remained under Balance Bar’s signature take it a step further and be more innovative
positioning, its “40-30-30” nutrition principle: because the category isn’t that innovative.
40% of the bar’s calories from carbohydrates, And we wanted to bring an incremental piece
30% from quality protein, and 30% from of business when we came to market.”
dietary fat, the aim of which is to create long-
lasting energy. DAILY CONSUMPTION RULES OUT
Nimble is one of the first fully gestated, SOY PROTEIN
major sub-brand initiatives that Sands has
introduced. It is available for a suggested So Balance Bar surveyed women about what
retail price of $8.99 (€6.35) for a box of 12 they might want in such a bar and found, of
bars or $1.29 (€0.91) per bar, a premium to course, that “it’s got to taste great,” Sands
Balance Bar’s Gold line. Nimble comes in said. “They also told us it’s got to have no
Dark Chocolate Strawberry, Peanut Butter, more than 120 calories” compared with 200
Yogurt Berry and Chocolate Chip flavours. calories in the typical Balance Bar. At only
Nimble represents an attempt to create a 32g apiece, the bars also are “small and tiny”,
female-tuned “all-in-one” nutrition bar and as Sands put it – thus the name Nimble.
fuse it with a “beauty-from-within” message Protein was also essential, Sands said. And
with the addition of some other specific while Balance Bars rely on soy protein, the
nutrients. “We could have done just another company took a different approach with
Luna has led the female-specific nutrition-bar segment since 1999; the company’s latest bar, Luna Protein, taps into what women
want: “The protein trend is hot for women right now,” said Luna’s brand director Paula Connelly.
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Nimble, in part because Sands wanted to be lutein should start to demonstrate its benefits.”
able to position the new sub-brand as a daily- Yet, Sands stressed, Balance Bar isn’t
regimen product rather than one aimed at marketing Nimble as the provider of “beauty
only occasional consumption. from within” because that specific positioning
“We asked women to tell us what they isn’t credible to women. “Anyone who has
wanted and we would make that, and so we done beauty positioning before [with a bar]
made it all whey protein in Nimble and no has put it on the merits of beauty, and that
soy protein,” he said. “Soy is good, but if was a mistake,” he said. Nimble, he explained,
you’re going to be eating something like this “isn’t a beauty-from-within bar. It’s an all-in-
every day, you’d like to not worry about how one nutrition bar with a beauty bonus. It has
much soy you’re getting.” a beauty benefit, but if the beauty doesn’t
Nimble also was formulated as an excellent work, you’re getting the best nutrition bar on
source of other nutrients that women said the market.
were important to them, including fibre, “Consumers easily believe if you put cream
calcium, iron and vitamins D and B6. Nimble on your skin, you’ll get immediate [beauty]
is also the first bar to be sweetened with results. They’re a little more hesitant if
Truvia, the stevia brand from Cargill. it’s something you need to consume. This
The idea for making Nimble consumption bar needs to stand on its own merits. This
a “daily regimen” is tied to what Sands called positioning is a lot more believable.”
the “beauty bonus” in the bar – lutein and Nestlé. This spring, Nestlé Performance
carotene. “Lutein is known to help with eyes Nutrition and its PowerBar brand launched
and proven to help with skin hydration, as is a co-branded women’s energy bar with the
carotene and vitamins A and E,” he said. “If Iron Girl Event series. Iron Girl consists of 13
you eat a Nimble a day for two weeks, the events nationwide, including half-marathon
CHART 9: MASS-MARKET SALES OF LUNA BAR, THE LEADER IN THE WOMEN’S NUTRITION BAR
SEGMENT
Sales shown are in supermarkets, drugstores and mass merchandise outlets, excluding Walmart and
sales in C-stores and natural product stores. Adding these back, total sales of Luna Bars are estimated
to be about 50% higher than those shown here.
70
$64.126
$60.238 $3.375
60 $2.108 $3.592
$3.527
50 $45.190
$43.764 $44.161
$ $4.877
millions 40 $4.710 $4.141 $57.155
$54.597
30
$39.865 $39.603
20 $38.706
10
0
2007 2008 2009 2010 52 Weeks
Ending
Source: Infoscan Reviews, SymphonyIRI Group 15th May, 2011
Clif Luna Bars Clif Luna Sunrise bars Clif Luna Protein bars
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races and triathlons. cravings.”

The Iron Girl Energy Bar for Women Thus, Luna’s most recent offering, Luna
“supports the active lifestyle of adult women, Protein, offers what Connelly called “a unique
whether training for an event or getting blend of protein and fiber [to] satiate your
through a busy daily routine,” said Neel hunger.” Luna Protein also is gluten-free.
Premkumar, brand development manager “The protein trend is hot for women right
for Power Bar. It includes calcium, iron now,” she said.
and B vitamins. Available in Strawberry & Available in five flavours – Chocolate,
Cranberry and Cocoa Crunch flavours, Iron Chocolate Peanut Butter, Chocolate Cherry
Girl bars are priced at a suggested $0.99 Almond, Cookie Dough and Mint Chocolate
(€0.70) each, far less than many other bars Chip – Luna Protein includes both soy and
with a female market orientation. whey protein, for instance, and each bar
Luna. Clif Bar launched this women- comes in at under 200 calories.
specific brand in 1999 and, in many ways, Kind. Retail sales of Kind bars were
Luna has led the female-specific nutrition- projected to be about $70 million (€49
bar segment since then. “Success brings million) last year. The suggested retail price of
competition, and now there are many bars the regular, 200-calorie bars is $1.99 (€1.40),
that appeal to women,” acknowledged Paula in 11 flavours of the Fruit & Nut variety
Connelly, Luna brand director. and in eight flavours of Kind Plus, “with an
But she noted that many competitors additional nutritional boost.” Five-pack boxes
are diet or weight-management bars. “We at the suggested price of $5.99 (€4.23) are
believe that diets do not work,” Connelly said. available in four flavours. Kind Minis – in
“They are all about deprivation and denying smaller portions – are available in selected
your cravings, and we all know deprivation flavours.
backfires. We believe in honouring your The brand’s overall positioning is
TABLE 5: TASTY ORGANIC PUMPKIN PIE CEREAL BAR NUTRITION FACTS

Nutrition Facts
Seving Size 1 bar (35g)
Servings per container 5
Amount Per Serving
Calories 120 Calories from Fat 20
Total Fat 2.5g
Saturated Fat 0g
Trans Fat 0g
Cholesterol 0mg
Sodium 85mg
Total Carbohydrate 25g
Dietary Fiber 3g
Sugars 15g
Protein 2g
% Daily Value Children (1-4) Ages 5 & up
Protein 4% 4%
Vitamin A 2% 2%
Vitamin C 0% 0%
Calcium 2% 2%
Iron 6% 4%
Thiamin 20% 10%
Riboflavin 20% 10%
Niacin 25% 10%
Vitamin B6 30% 10%
Folic Acid 20% 10%
Vitamin B12 70% 35%
Selenium 100% 30%
Sugar is lower in Tasty bars than most other cereal bars, and fibre is higher, from whole grains – those things are of more
concern to women shoppers, according to the company.
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do-goodism, which the company believes programmes featuring women, including

particularly appeals to women. The startup Rachael Ray. “Women are more often looking
began with promises to fund liberal causes for a healthy snack whereas men are just
out of its proceeds from selling Kind Fruit more likely to find something at retail and just
and Nut and Kind Plus nutrition bars with pick it up,” Pattni explained. “Our strategy is
the slogan, “Be Kind to your body, your taste to be recommended by influencers, including
buds and the world”. chefs and celebrities – people women look to
“We’re a brand about kindness; our goal is for advice.”
to make the world a little bit kinder, and we Tasty. Liane Weintraub launched her
wrap that into products and our marketing Calabasas, Calif.-based company as a
initiatives,” said Pattni. “Women really purveyor of frozen organic baby foods. But as
cling to that rather than men. They tend to the enterprise has grown, Tasty has branched
appreciate brands that have human values out to introduce organic cereal bars as well,
more. And we hear more often from women aimed largely at the moms who already were
that they love what we’re doing with our buying Tasty baby food.
social mission.” “A regular cereal bar is really a glorified
How does that translate into tailoring Kind cookie, so we set out to build a better bar with
bars toward women? “By look and branding fillings that include vegetables as well as fruit,”
it’s important to us not to alienate men,” Weintraub explained. “We started out with
Pattni said. “But we know more often than pumpkin pie and carrot cake flavours, and we
not our buyers are women, and that’s very also have sweet potatoes and dates baked into
important.” the crust. They have higher fibre than most
So, for example, Kind created Minis, bars.”
“which allows women to eat them a few times Typically, she said, “The bars originate as
a day throughout the day and not feel bad a purchase for the whole family, but they’re
about it”. Also, Kind Plus varieties largely eaten mostly by the female and the kids.
are aimed at the specific nutritional needs Calories are low, and of course stereotypically
and perceptions of women. One variety, for that is the line on the nutrition panel that is
example, is Cranberry Almond, with added most often read by women. Sugar is lower
antioxidants; another is Almond Walnut & than most other cereal bars, and fibre is
Macadamia, with extra protein; and Mango higher, from whole grains – those things are
Macadamia has added calcium. of more concern to women shoppers also.”
And Kind’s marketing is skewed hugely Each box of Tasty bars contains five 1.23oz
toward women, relying on media coverage (35g) bars and retails for a suggested price
in women’s magazines, influencing of around $1 (€0.71) a bar, which Weintraub
nutritionists who tend to be women, and said “is really competitive for an organic bar”.
making placement appearances on cable-TV
Kind created Minis to allow women to eat them a few times a day throughout the day and not feel bad about it, while Kind Plus
varieties largely are aimed at the specific nutritional needs and perceptions of women.
66
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Case study 5: ThinkThin Bars’ wellness

platform resonates with women
The recipe is simple. Combine almonds, The company also benefited from recent
peanuts and honey in a bar. Leave out the unsolicited endorsements from celebrities,
gluten and use as little sugar as possible. such as Gwyneth Paltrow and Courtney Cox.
Add proprietary protein blend and put in But the range didn’t start with a grand
a package to go. The finished product is vision to remake any category. For Falsetto,
California-based Think Product’s best-selling formulating products with high protein,
thinkThin nutritional snacks and protein low- to no-sugar and gluten-free just made
bars. Enjoying several high-profile celebrity sense personally. She began by making snacks
endorsements and more than 50% growth, to suit her active lifestyle, first as a student
the brand looks to be a driving force in athlete, then as a professional model and
the nutrition category this year. The secret finally as a mother juggling pressures of
ingredient may be its single-platform message work and family. She eventually used that
about eating right for good health and to be nutritional background to launch Think
your best, which nicely blends a natural and Products.
weight management position in a way that Starting the company 12 years ago, Falsetto
resonates with consumers, especially women. didn’t have an inside line that weight issues,
The concept is gaining steam. According sugar and gluten would be the hot buttons
to SPINSscan Research, thinkThin is the they are today. “I just didn’t feel good when
number one-ranked weight management I ate foods with gluten and sugar, and I knew
bar in the natural energy bar category and I needed protein. So I made products that
posted a 72% gain in market share in the worked for me.” Other than keeping an eye
third quarter of 2010; 2010 revenues were out for new technical and flavoring options,
$32 million (€23 million). “We haven’t done which she noted are increasing every day,
one retail presentation, including those for Falsetto said she believes the products taste
Whole Foods Market’s national and Trader good and work well for sports performance
Joe’s, where the buyers haven’t said we are and weight management. But, she noted, she
a driving force in the nutrition category,” is always looking for new components that
said CEO and founder Lisanne Falsetto. could enhance the texture,, flavour and taste
New reduced calorie Bites come in four flavours – chocolate toffee nut, cookies and cream, white chocolate raspberry and dark
chocolate – and contain 0g sugar and 5g of protein.
Healthy snacking
of the bars. down nutritional profile to the simple white

The company currently offers 10 different packaging, is designed to communicate that
protein bars, with 10 flavours including message and help change the way people
chunky peanut butter, chocolate espresso think about diet and weight. “This is really
and tangerine cremesicle. The nutrition about lifestyle. We put good food in a package
statement touts 15-20 grams of protein, zero to go. And people are striving for that. They
sugar (sweetened with maltilol), and the bars need more time, and they want fresh and
are gluten free and range from 200 to 240 easy,” Falsetto said.
calories. The product marketing material describes
Newer additions to the line include the weight wellness as “an optimal weight
200 calorie thinkThin crunch bars, with 10 range at which our bodies feel healthy and
grams protein and 3-4 grams of sugar, and happy. This is not defined or dictated by
thinkThin bites, a 100-calorie version of the aesthetic, shape, weight or tape measure – it
protein bar, with 5-8 grams of protein. The is the emotional outcome of feeling good,
Crunch bars feature mixed nuts that are energized, funny, confident, sexy and living
either plain or with chocolate, white chocolate a life filled with joy and laughter.” The
or caramel chocolate, and claims 70% less company’s website sticks to basic product
sugar and 80% more protein than the average information, but also engages customers
fruit and nut bar. Reduced calorie Bites come to submit their success stories to get free
in four flavours: chocolate toffee nut, cookies product. In keeping with this lifestyle rather
and cream, white chocolate raspberry and than weight-loss approach, the site now also
dark chocolate. features gluten-free recipes, such as a brown
rice tabouli and an orange and banana fruit
A LIFESTYLE FOCUS smoothie.
Women respond to the thinkThin bars PACK, BRAND STORY APPEALING

because they are about weight wellness and TO WOMEN
lifestyle rather than weight loss, Falsetto said.
Again, this mirrors her personal philosophy. ThinkThin bars, which are, incidentally, one
She believes in eating good, pure food, which of the few protein bars that has successfully
contributes to vitality and a healthier life. “We tapped into the female market, uses a white
don’t believe that women should feel guilty package featuring the logo and tag line
about who and what they are.” “deliciously natural nutrition” along with the
Everything about the line, from its stripped- statement about protein, sugar and gluten.
Billed as “a major breakthrough in the healthy nut bar category”, thinkThin’s new Crunch claims to have 70% less sugar and 80%
more protein than fruit and nut bars. Crunch has 10 grams of protein.
Healthy snacking
The approach is a departure from typical a gluten free-diet,” she said in a prepared
protein products, which often use male weight statement about the event.
lifters in advertising and on packaging. The
minimalist design and advertising is just as SPECIALTY CHANNELS NEXT ON
powerful for what it doesn’t say as for what THE AGENDA
it does, according to Falsetto. “It’s true that
protein has always been thought of as a To capitalize on all this recent momentum,
component for a male attribute, but we are the company is working to expand further
trying to communicate that women, especially into its established sales channel – grocery,
as they get older, need protein in their system drug and natural. ThinkThin will also put
for many reasons.” a new focus on specialty channels, such
Beyond the nutritional appeal, the brand as gyms, spas, hotels and airlines. “We do
also resonates with women, because they very well anywhere that people need quick,
increasingly identify with Falsetto, a business portable food, so we are targeting core areas
entrepreneur and single mother of two, who where there is emphasis on food to go, such
is becoming a more prevalent face for the as airports, coffee shops and smoothie bars.
range. Her public personae expanded recently Really, it is any place someone might buy
with the diagnosis of her daughter’s allergy to candy,” Falsetto explained.
gluten. The company is also targeting corporations
Though Falsetto has long been an advocate that have a health and wellness agenda or
of gluten free, she is now even more actively programme, such as hospitals and progressive
engaged in raising awareness of Celiac companies, like Google and Patagonia, for
Disease. The company recently sponsored their onsite cafeterias and gift shops.
the first annual thinkThin Los Angeles Though Falsetto is still trying to quantify the
area Celiac Disease, Gluten-Free walk in brand’s growth so far this year, she expects it
conjunction with Natural Products Expo to be on par or higher than in 2010 with the
West. “As a mother who has overcome the new sales channels. She added that the range
challenge of not knowing that my daughter is doing very well in natural, mass grocery and
had allergens to gluten, I look forward to drug stores as a part of their natural foods
joining other families to raise awareness of aisles. “As a wellness and lifestyle brand that is
Celiac Disease and share the benefits of where we fit best,” she said.
TABLE 6: NUTRITION AND INGREDIENTS FACTS FOR THINK THIN PROTEIN BAR (DARK CHOCOLATE)
69
Healthy snacking
PREMIUM SPOT IN THE PANTRY Think’s strategy is to always stay in the

premium price range. The single bars retail
Falsetto notes that these aisles are also where at $1.99 (€1.34), but drops to $1.69 (€1.14)
sales are dominated by full boxes rather than per bar for a box of 10 bars and $1.59
single bars. “We know we are now a pantry (€1.07) per bar for higher quantities. Typical
item because people are buying the full box competitors, like Clif, Lara and Balance,
of bars to have on hand as snacks for the range anywhere from $1.09 (€0.73) to $1.99
family.” (€1.34) per bar but average at $1.25 (€0.84)
This fact makes thinkThin different from per bar if purchased in a box.
major bar competitors, such as Clif Bar, As to the future, Falsetto is close-lipped as
Lara Bar and Balance Bar, which tend to to upcoming product launches, but will say
sell as single bars at lower price points, she they are working to reproduce their winning
explained. Acknowledging those companies formula in the salty, savoury snack category.
for building the category, Falsetto said “we “Our goal is to come out with foods that you
would certainly not be here if not for those can find in all the aisles of the supermarket.
products, but the category is now very We want to be a household brand name, like
competitive and price sensitive. They may be Kashi, bringing people better bars, better
scanning more bars with special prices, like cereals, better frozen food. We can definitely
a 10 for 10 sale, but we are driving growth follow that dynamic.”
because we don’t lower our margin for sales.”
70
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Case Study 6:
Targeting the
mass market
Healthy snacking
Case study 6: Kraft Belvita Breakfast –

giving people permission to have a sweet
snack at breakfast
Kraft has done the seemingly impossible, consuming biscuits for breakfast – unlike
launching a new brand which has successfully France, Belgium and the Netherlands where
created a new, super-premium, health- the Belvita brand is popular and long-
oriented but yet also mass-market segment of established – but that did not stop Kraft
the sweet biscuit market. from launching Belvita in the UK in late
UK consumers have always enjoyed a 2010. In a crowded and static UK biscuit
biscuit with their mid-morning or afternoon market, creating a new consumption occasion
cup of tea, but the concept of a biscuit for was a way to get a new brand into the
breakfast is a new one to them. But despite market without competing head-on with the
its novelty, a new biscuit brand from Kraft established brands.
billed as “a totally new way of having some It’s a strategy that appears to have
breakfast” has quickly become a success – succeeded. Belvita Breakfast – which carries
even priced at a more than 400% premium the Kraft-owned Nabisco brand - has had
over a standard biscuit. an excellent first year, earning retail sales of
The UK does not have a culture of £20.7m ($34 million/€24 million) in the 52
weeks ending 18th June 2011, according to
Neilsen data. The success came on the back
of a £3 million ($4.8 million/€3.5 million)
marketing spend in the first year, which Kraft
says will be increased to £4 million ($6.5
million/€4.5 million) in the second year.
Belvita Breakfast biscuits are described as
“delicious, crunchy biscuits specially designed
for breakfast”, touted as “a tasty, convenient
and portion-controlled alternative to current
breakfast options – whether at home, on the
go, or at work”.
Available in two variants – Fruit & Fibre
and Milk & Cereals – the 12.5g biscuits are
thin and light and the signature ingredients
used – fruit, milk, cereals – all have a
“naturally healthy” aura. In January 2011
Kraft built on its rapid success by extending
the Belvita range with two new variants – a
Honey & Nuts and a Crunchy Oats format.
In July 2011 it added to the range Belvita
Breakfast Yogurt Crunch – described as
a sandwich of “live yoghurt between two
wholegrain biscuits”.
The brand is described as free-from
artificial flavours and colours. The
Healthy snacking
BOX 7: SLOW RELEASE ENERGY A KEY PART OF KRAFT BRAND POSITIONING
Kraft Belvita Breakfast Biscuits has focused heavily on a “slow release” message in its marketing. Packaging
carries a graphic on the front and the side panel that is intended to convey the idea of slow release of energy.
Healthy snacking
recommended serving of 4 biscuits delivers The positioning of the brand is very skillful
216 calories, 12.4g of sugars and 8g of total and is key to the product’s success. The aim is
fat, of which 2g is saturates. Each serving also clearly to enable women who would like to eat
delivers 16% of the RDA of vitamin B1 and healthily – or at least tell themselves that they
8g of wholegrain per 50g serving. do – to make Belvita their breakfast choice
The product is available in a 300g box without any feelings of guilt.
containing six sachets of four biscuits and a Marketing and labeling communicates
50g single-serve 4-pack. The 300g box retails clearly that:
at around £2.19 ($3.60/€2.50) – equivalent
to £7.30 ($12.00/€8.35) per kilo. On a price A pack of 4 Belvita Breakfast biscuits is a new
per kilo basis that’s a massive 414% premium and delicious way to start your day!
over McVities Digestive biscuits – the biggest
brand by far in the UK sweet biscuit market BALANCED BREAKFAST =
– which retail for an equivalent of £1.42 PERMISSION TO EAT BISCUITS FOR
($1.64/€1.62) per kilo.
BREAKFAST
This pricing makes the brand’s success,
against the backdrop of a flat-lining economy,
There are two steps to the Belvita message.
all the more remarkable.
The first is messaging on the pack and in
Key to Belvita’s initial success has been that
advertising which tells people that biscuits can
it has given mass-market consumers who may
be part of a healthy breakfast:
wish to eat healthily at breakfast but do not
do so – instead grabbing a muffin or a pastry
What is a balanced breakfast?
at Starbucks or a similar outlet on the way to
4 Belvita Breakfast Biscuits
work – the permission to choose sweet biscuits
+ 1 serving of dairy
for their first meal of the day.
+ 1 portion of fruit
Healthy snacking
On the product label the “balanced survey, commissioned by Kraft, which

breakfast” message appears in three different investigated comparative breakfast habits.
ways. Kraft says that the UK tops Europe’s
breakfast skipping table with 34% of UK
SLOW-RELEASE CARBS adults missing the most important meal of the
day, compared to only 17% in France, 18% in
The second part of the message that reassures Italy and only 13% in Spain.
people that they can eat sweet biscuits for The study also showed that:
breakfast and still feel virtuous is the emphasis • nearly one in ten Britons (8%) never eat
on slow energy-release carbohydrates. breakfast, with men (38%) and people
A graphic on the side of the package in their twenties (55%) most likely to
(see illustration on page 73) reinforces the skip
balanced breakfast message and adds:
They are carefully made and gently baked so that, • 37% of people say that they skip
as part of a balanced breakfast, the carbohydrates are breakfast because they have no time
regularly released over 4 hours to keep you going all and have too many other things to do
morning. in the morning, which, alongside not
This has been proven in several clinical studies. being able to face food at that time
of day or not being hungry (38%), is
BRITS EUROPE’S TOP BREAKFAST the biggest reason people give for not
SKIPPERS having breakfast
Belvita targets young professional women, • one third of skippers choose to stay
aged 25-35, living in urban areas, particularly in bed longer (29%) and a quarter is
those who have to commute to work. Many of spending time on their appearance
these people already skip a breakfast at home, each morning instead of having
according to a pan-European consumer breakfast
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MARKETING Messages on the digital ads were targeted at

actual individuals on the station.
The UK launch was supported by a major
promotional campaign, worth £3 million A GOOD START FOR A NEW BRAND
($4.8 million/€3.5 million) which appears
to have been focused on the London There has been some criticism in consumer
metropolitan area – where the target blogs and online forums of the benefit
consumer, breakfast-skippers who face long promised by Belvita Breakfast, particularly
train journeys to work each day, might be the high sugar content, with some bloggers
expected to be concentrated. comparing the sugar content unfavourably to
The launch TV campaign featured that found in cupcakes.
breakfast radio presenters, Johnny Vaughan Nevertheless, blogs may be less influential
and Lisa Snowdon, whose morning radio than many bloggers and marketers like to
show is broadcast only in the London think and negative comments have been no
area. The ad aired for four weeks and ran restraint on Belvita’s success.
across the core target’s most highly-viewed Belvita Breakfast has had a good first nine
programming on terrestrial and satellite months, with Neilsen data showing a retail
channels. sales value of more than £10.7 million ($17.6
The TV campaign was accompanied by million/€12 million). Pro rata this success to
an 8-week print campaign, and integrated a much larger market, such as the US, and
with PR, an advertorial programme, retail Belvita would be equivalent to an $80 million
promotions and sampling. brand.
Advertising agency Euro RSCG created Belvita are already ranked third in the UK’s
a series of outdoor ads to promote Belvita sweet Healthy Biscuit category, and were the
Breakfast. The “dynamic digital ads” included number one Healthy Biscuits innovation in
daily and hourly updates and have been 2010, according to Neilsen data. The UK’s
running in high profile sites throughout the £2.2 billion ($3.4 billion/ €2.5 billion) biscuit
capital. category grew by 2.9% over the same period.
With over 30 sites across top spots in If anyone wants to see how to successfully
the London Underground, National Rail create a new segment of an indulgence
stations and key roadside sites the ads talk market by skillfully delivering a health
directly to the busy commuter empathising message that the mass-market consumer
with their hectic schedule and suggesting the wants to hear, Belvita Breakfast is the brand
ideal breakfast solution for their busy lives. to study.
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BOX 8: BELVITA TV ADVERTISING
UK radio personality Johnny

Vaughan sees his colleague Lisa
Snowdon eating a biscuit (he is
unwrapping a greasy egg-filled
bread roll):
Johnny Vaughan: “Hang about, Lise

- this is a breakfast show, not an
elevenses show!”
Lisa Snowdon: “No, Johnny - this

happens to be a delicious new
Belvita, a totally new way of having
breakfast.”
Johnny Vaughan: “Biscuits

for breakfast, whatever next,
marmalade for lunch?”
Lisa Snowdon (reading from pack):

“New Belvita Breakfast biscuits
are made from wholegrain and are
specially designed for breakfast.
They will regularly release
carbohydrates over four hours as
part of a balanced breakfast”.
Johnny Vaughan: “Does this mean

you’re going to talk more than
you normally do? Aaargh!” (as the
tomato sauce he is squeezing onto
his bun explodes all over it).
Voiceover: Belvita Breakfast.

Biscuits specially designed for
breakfast.
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Case study 7: Fiber One – an expert

brand in digestive health
The world’s biggest digestive health brand success. In terms of target consumers, fibre is
– outside the yoghurt category – is General often described as having mass-market appeal
Mills’ Fiber One. Thanks to a focus on the and potentially appealing to every type of
core benefit of providing a healthy and consumer. And while it’s true that there are
effective dose of fibre in a good-tasting many groups of consumers who are interested
and convenient way, Fiber One’s sales have in digestive health, the core buyers of such
rocketed since 2006, when the current products, the only two groups who it will
strategy was put in place. The key driver really be worth targeting with your marketing
of the brand’s growth has been snack bars, communications, are:
which account for over 60% of total brand
sales. 1. Women.
Worldwide, the value to consumers of 2. Over-40s (and particularly over-60s).
products that can help them maintain good
digestive health is reflected in the outstanding Fibre technologies have experienced
performance of many probiotic digestive significant new developments in recent years
health brands even while the global economy that have provided many new opportunities
was in recession. In the US, for example, for product development. Furthermore,
Danone Activia probiotic yoghurt for digestive the development of fibres with differing
health grew its sales by 20% in the year textural effects, and the understanding of
to March 2010 – well above the category their innovative utilization in a wide range
growth rate of 3% and despite adverse of foods and beverages, has also increased
media reporting of a legal threat to Activia’s dramatically. An ever-increasing number
claims – to a total of over $412 million (€338 of ingredient producers are refining and
million). introducing dietary fibres that, alone or in
combination, produce familiar digestive
WHY FIBER MATTERS benefits.
As a result of the confluence of
In its survey of consumers and their technological improvement with consumer
perspectives on health in 32 countries around need, products that make a virtue of their
the world, research group Health Focus has
found that digestive health ranks among
consumers’ top-4 health concerns that affect
them personally. The most common gut
health issue worldwide – and one that fibre
plays a key role in alleviating – is constipation,
which affects up to 35% of the population,
and as much as 80% of some groups of
elderly people.
Understanding which consumers have the
highest motivation to purchase a fibre-fortified
product for digestive health – and creating
a brand which is able to establish credibility
in the minds of these consumers – is key to
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fibre content are being launched in ever- this is illustrated best by General Mills’ Fiber
increasing numbers. One. Originally launched in the US in the
However, the most commonly-adopted mid-1980s, from 2005 it was given new life,
strategy with fibre (perhaps 95% of all expanded to 20 products in six categories
products launched) has been along the lines (including bars, each of which delivers a
of the “fibre make-over”. It’s a low-risk but dose of 35% of the RDV of fibre), and
also low-return strategy – and one that does communicated with the very strong tagline
little in terms of either increasing volumes “Cardboard no. Delicious yes”. Consider that
of existing products or getting better profit despite a recession, Fiber One grew by 20%
margins. You can get much better sales and in 2010, to total sales of over $261 million
profits by creating an “expert brand” and (€200 million), according to supermarket
CHART 10: RECESSION-PROOF DIGESTIVE HEALTH – THE RISE AND RISE OF FIBER ONE
Sales are in US supermarkets (excl. Walmart)
300
$281.00
280 $11.00
$261.00
260 $11.00 $41.00
240 $41.00 All other products
220 Yoghurt
200 $200.95 $76.00
$57.00 RTE cereal
$7.19
180 Cereal bars
$40.93
160
140
$40.93
120
$104.06
100
$40.32 $152.00 $153.00
80
$112.50
60
40 $36.71 $63.74
20 $36.71
0
2006 2007 2008 2009 2011
(year to June 12)
Source: Infoscan Reviews, Information Resources, Inc. (IRI)
General Mills’ Fiber One has become the first “expert brand” in the benefits of fibre. Its extraordinary
growth, despite a recession, shows the value to consumers of a digestive health brand that enables you to
“feel the difference”.
Healthy snacking
scanning by Symphony/IRI, which doesn’t products of all kinds – and backed by heavy
include Walmart (add back likely Walmart investment it is unmatched by any other
sales and it’s a $300 million/€230 million brand.
brand). General Mills spokesperson Kim Harbinson
What makes the achievement all the more told New Nutrition Business that Fiber One
impressive is that Fiber One products grew “stands apart [because] we not only deliver
between four times and 10 times the rate of convenient food options that are packed with
growth of most of the categories in which the fiber, but our products taste good.” In fact,
brand competes. Harbinson said, “the flavour and texture of
The overall growth of the Fiber One brand our Fiber One branded items must meet a
isn’t just a matter of General Mills extending high standard in likeness tests” to non-Fiber
the brand into new categories. Even the oldest One products in the company’s lineup. In
parts of the lineup are achieving vibrant fact, reassuring consumers about the taste
sales growth. As the first mainstream expert of Fiber One is a core part of the brand’s
brand in fibre, Fiber One was first to market communications.
– itself an important success factor for health
TABLE 7: FIBER ONE OAT & CHOCOLATE BAR INGREDIENTS & NUTRITION FACTS
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Case Studies 8, 9 & 10:
“Naturalness” – the
biggest trend
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Case study 8: PepsiCo transforms the snack

food aisle into the natural food aisle
In a bold move, described by Frito-Lay Chief a process which it aims to have completed by the
Marketing Officer Ann Mukherjee in an end of 2011. The company is communicating
interview with the CBS News programme as the new benefit with one of its biggest-ever
“probably one of the most evolutionary things marketing campaigns.
we have ever done at Frito-Lay”, the world’s The move, Frito-Lay recently told investors, is
biggest snack-food company is reformulating its aimed at “transforming the snack food aisle into
products so that approximately half the snacks it the natural food aisle”. John Compton, CEO
sells in the US will use only natural ingredients, PepsiCo Americas Foods, described the switch to
“all natural” as one of the company’s four points
of “laser focus” for 2011.
PepsiCo-owned Frito-Lay’s strategy is symbolic
of how the message that a product is “natural”
has evolved from one that offers differentiation
and growth to a basic requirement that every
brand must meet in order to compete in the
mass market.
Such is the market power of Frito-Lay, the
biggest marketer of salty snacks in America and
in the world, that by the end of 2011:
• all-natural products’ share of America’s $3.1

billion (€2.2 billion) potato chip market will
jump to 65%
• 40% of the $2.2 billion (€1.6 billion) tortilla
chip market will be all-natural (and if Frito-
Lay later converts its Doritos brand, which is
not included in this year’s plan, to all natural,
then the market will be at least 80% all-
natural
Around 60 products have been reformulated, a

major effort that will have added to Frito-Lay’s
product costs. The products all carry the stamp
“Made with natural ingredients. No artificial
flavours. No MSG. No preservatives”. The
market-leading Lay’s potato chip brand, which
has annual retail sales in excess of $1 billion
(€711 million) now promises that it is:
• 0g trans fat
America’s biggest potato chip brand, with more than $1 billion
in annual retail sales, now makes all-natural and “free-from” • Gluten-free
everything of concern to health-conscious consumers a core part • Additive-free
of its brand promise.
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BOX 9: NATURAL FOODS ARE THE NEW STANDARD IN THE SUPERMARKET: PEPSICO’S STATED GOAL
IS TO TRANSFORM THE SNACK AISLE INTO A NATURAL FOOD AISLE
Source: PepsiCo
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• Casein-free tests, Frito-Lay says, “all-natural” performed well,

• Lactose-free with “all-natural” performing as the number one
• MSG free claim and scoring the highest purchase intent.
• Onion Free The switchover to natural ingredients is
• Porcine-free an element in PepsiCo’s push into healthier
• Soy-free products. Chairman and CEO Indra K. Nooyi
wants to build its healthy brands into a $30
In support of its move Frito-Lay cites IRI billion (€21.3 billion) business by 2020 – more
research claiming that the health attribute than double sales of its healthier products today.
“natural” is the second-most popular with In recent years, Frito-Lay has eliminated trans
American female shoppers aged 20-50, with fats and reduced saturated fats in its snacks.
30% of American consumers actively seeking The switch to “all-natural” goes hand-in-
snacks with a “no preservatives” message. hand with a 25% reduction in sodium across
In 56 of its own consumer studies and taste its snacks portfolio – although this is not
Healthy snacking
being communicated to consumers. Typically, what is described as the company’s largest-ever

consumers associate reductions on sodium with marketing campaign. Elements include:
poorer taste and many companies have learnt Television and print advertising:
the hard way that as a health benefit it’s a Focused on the actual Frito-Lay employees
double-edged sword. behind the products made with natural
For now, Frito-Lay is holding off on converting ingredients, from the people who buy the
its billion-dollar Doritos brand and its half- ingredients, to company chefs who create new
billion dollar Cheetos brand to all-natural products. Frito-Lay is highlighting their “seed to
ingredients. Those products, with bold flavours, shelf story”. The “all-natural” communication
are more challenging to reformulate and their builds on a discovery Frito-Lay made that many
core consumers are teens and younger male Americans didn’t believe there were actual
consumers who might actually be turned off if potatoes in Frito-Lay chips. In response in 2009
they were told that their favourite brand was “all it launched an advertising campaign featuring
natural”. local potato farmers who supply Frito-Lay and
has continued to build on this with advertising
MARKETING TO TRUMPET “ALL that commuicates the “simple ingredients”
NATURAL” message.
All the advertising can be viewed at http://
Frito-Lay is slapping “all natural” stamps on www.youtube.com/user/OfficialFritoLay
its packaging as it rolls out the reformulated In-store promotions: In-store
snacks and it is supporting the change with communications will focus on the easily
TABLE 8: LAY’S “ALL-NATURAL” POTATO CHIPS INGREDIENTS & NUTRITION FACTS
Healthy snacking
identifiable stamp on the package stating it was which produced 8% sales growth – stronger
made with all-natural ingredients and will be sales growth can be achieved across the entire
backed by a heavy investment in merchandising portfolio.
throughout the store (see box). Certainly the new message and marketing will
produce an uplift in sales – but the experience
COMMENT of making “natural” a standard message in any
category is that it’s a one-time lift. Frito-Lay’s
Frito-Lay’s motivation is of course to boost sales projected 8% growth across such a vast portfolio
of its chips. Frito-Lay North America’s sales grew of brands is likely to be on the optimistic side,
just 1% in 2010. The company believes that since it would require either, or both, a significant
the all-natural message is “very motivating” to increase in consumption by existing consumers
consumers and that – based on test marketing of and new consumers entering the category. And
selected products with an “all natural” message to do so on a scale sufficient to have a significant
CHART 11: THE NUTRITIONAL PRODUCT LIFE CYCLE – HOW TRENDS EVOLVE
Pepsi has test-marketed several “all-natural” brands targeting the lifestyle consumers, such as Flat Earth.
Pepsi’s decision to make its
mass market brands “all-natural” shows how this trend has evolved to be a “standard” in the mass market. The
stages of the life cycle are:
Technology consumers – Early adopters, people who have a near-medical need for a product. They will pay a
substantial premium for something that addresses their condition.
Lifestyle consumers – Interested in maintaining their wellness, not fighting illness. They will adopt new brands
and will pay a premium if it supports their lifestyle.
Mass-market consumers – Motivated when a benefit becomes a standard and is available in products with low
or no premiums, ideally from well-known and trusted brands.
Technology Consumers Lifestyle Consumers Mass-market Consumers
Solid line = sales volumes

A growing trend
“Natural” – established in
the mass market, there is no
Sales ggrowth
grrowth opportunity.
wth
6% - 8% of consumers 20% - 25% of consumers 67% - 74% of consumers
TIME
Healthy snacking
effect on brands whose sales are already slowly and patiently grow small brands and the
measured in the billions of dollars is a stretch – false urgency to make everything a $100 million
especially as the people most motivated by the success overnight – a strategic goal which was
all-natural message are already well-served by achievable in food and beverage 20 years ago
many existing all-natural brands. when todays’ CEOs were at the start of their
Over the years, Frito-Lay has already made careers, but now is rarely achieved.
several forays into the all-natural area in snacks, Although Frito-Lay may not get the degree
some of them successful, most of them not. A of sales increase it is hoping for, its strategy is an
few years ago it created a natural version of important one and a sign of how “natural” – in
most of its mainstream snack brands, only to the sense of free-from artificial preservatives,
discover, as so many companies have, that being colours and flavours – has ceased to be a point
natural doesn’t work as a line extension. It also of difference and is now is a core consumer
tried to create several new snack brands with requirement across all categories.
natural credentials, such as Flat Earth and True “Natural” is no longer a trend that you can
North. These brands were not failures, rather follow to deliver growth for your business – it’s
they fell foul of a large company’s inability to simply a basic requirement of being in business.
Healthy snacking
Case study 9: Wonderful Pistachios – making

natural into a super-premium success
It’s ten years since the FDA approved a heart of 2010 to bring Wonderful to about $200
health claim for nuts and in that time only million (€145 million) in revenues for the full
almond growers have successfully exploited year, a level of sales that already is challenging
the value of the claim. Now pistachios have that for Pom Wonderful, which has been in
also become a success – with a strategy the market for much longer.
that reflects how good marketing is more And as the only nationally established
important than a health claim in creating brand of pistachios, Wonderful already
success. accounts for about 70% of the overall
In ratcheting Wonderful Pistachios up to domestic sales of a commodity whose strong
a $200 million (€145 million) healthy-eating growth in the US it almost solely has driven.
success story within two years, Paramount Paramount Farms cleans, roasts and packages
Farms has applied several pages from the about 30% of the pistachios in the entire
playbook of its other major brand, Pom world.
Wonderful pomegranates. This success shouldn’t be all that surprising.
Both brands employ edgy advertising Paramount’s Los Angeles-based owners,
that creates curiosity among consumers and Lynda and Stewart Resnick, pulled off the
buzz among the media cognoscenti. Both same sort of thing with Pom Wonderful:
Wonderful Pistachios and Pom Wonderful identifying an under-appreciated but healthful
juice rely mostly on the intrinsic health commodity crop that lent itself to California
benefits of their basic commodity rather weather, buying enough land and planting
than too much enhancement with other enough trees to become the dominant
ingredients. Both have placed big bets on domestic grower, strategically securing ample
supply expansion. water supplies, and then turning the product
And both the pomegranate-juice and into a marketing phenomenon.
pistachio businesses have bet there’s magic in Pom Wonderful has run into some trouble
the word “Wonderful.” over the last few years from its own temporary
“We’ve had this historical success with Pom supply constraints, competition from big
Wonderful and we were looking for a brand beverage companies that have come out with
that we could build over time that would tie in their own pomegranate-juice drinks, and most
nicely with communicating the health benefits
of pistachios,” Marc Seguin, Paramount
Farms brand manager, told New Nutrition
Business.
Wonderful Pistachios certainly has become
that. Last year, thanks to the initiation of
the brand’s fun, celebrity-laden marketing
campaign in the fourth quarter, sales ended
up about 65% higher for the full year than for
2008, which was Wonderful’s first year in the
market.
Seguin expected another strong double-
digit surge in sales during the fourth quarter
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recently a lawsuit by the federal government have antioxidants and that sort of thing, we
that alleges Pom Wonderful has been too vivid feel like in general – relative to snacks like
in marketing health claims for its products. chips and pretzels – we’re in a much better
Wonderful Pistachios has managed to position.”
avoid similar such problems so far even as it Pistachios specifically enjoy the distinction
has borrowed heavily from Pom Wonderful’s of their light green colour and the fact that
strategy in the marketplace. Just as with after processing they tend to barely peek
pomegranates, Wonderful Pistachios’ from behind their slightly opened shell. “It’s a
advantages start with its unparalleled scale in product that everyone loves to eat, and they’re
the pomegranate business – such a powerful fun to eat,” Seguin noted. “That allows us
standing that the Resnicks were able to break to get people into the health benefits of
up a farmers’ cooperative in California that pistachios by using what they already know
until three years ago governed how nearly all about them: that they’re fun and taste good.”
of the state’s pistachio growers went about
their business. FOLLOWING ALMONDS’ EXAMPLE
As a commodity, pistachios enjoy a
number of advantages. For one thing, they Besides the lessons of Pom Wonderful, the
benefit greatly from Americans’ ever-rising company also watched closely what almond
appreciation of tree nuts as nutritionally growers and brands have done with their
beneficial. Despite their high fat content commodity (Paramount Farms also grows
and the fact that most consumers like them and sells almonds). “They have a laser focus
salted, “There’s an overarching kind of health on getting people to understand how healthy
awareness about nuts,” Seguin said. almonds are,” Seguin said. “We saw that as
“When you layer in the fact that we’re a a model for replicating a consistent health
good source of fiber, and pistachios especially message over a long period of time and
Wonderful Pistachio’s fun marketing extends to this free app which challenges users to crack as many pistachios as they can.
Healthy snacking
BOX 10: WONDERFUL PISTACHIOS’ QUIRKY TELEVISION ADVERTISING
Wonderful Pistachios recruited quirky B-list and “naughty” celebrities for its adverts, including TV star
Nicole “Snooki” Polizzi (top), footballer Chad Ocho Cinco (centre), and Lewis Black (bottom) known for
his “angry rant” comedy style.
You can view these ads at:

http://getcrackin.com/?vidid=1527#sidebar_video_thumb_1527
Healthy snacking
getting it ingrained in people’s minds.” that we do so that the message is very

Paramount launched the Wonderful consistent and carries a brand impression,”
Pistachios brand about three years ago, just Seguin said.
as America was entering the recession. That The brand also cut out the middlemen
would seem to have been a problem for a and dispatches its own merchandisers to its
premium-priced nut that retails in an 8oz (225 major retailer customers around the country,
g) bag for a suggested $3.99 (€2.89 ) – in the arriving in Toyota Priuses emblazoned with
neighbourhood of cashews, macadamias and green brand signage. Such top-to-bottom
almonds rather than, say, cheaper peanuts control of its supply chain also has enabled
and sunflower seeds. Wonderful Pistachios to penetrate unlikely
But Wonderful Pistachios began proving last new outlets such as the upscale Nordstrom’s
year that control of the majority of the crop, department stores.
along with clever marketing, can elevate savvy
brands above concerns about price elasticity. FUN AND ‘NAUGHTY’ ADS CREATE
Wonderful garbs its nuts in snappy green and BUZZ
black packaging, for instance.
“Green represents the inside of the And Wonderful borrows freely from the
pistachio, as well as healthy goodness, and we resources of Hollywood just down the road.
wanted to carry that forward with everything In the initial version of its “Get Crackin’”
CHART 12: THE IRRESISTIBLE RISE OF THE WONDERFUL SNACK BRAND
US retail sales in $ millions in supermarkets, drugstores and mass merchandise outlets (excluding
Walmart) – a further $80 million (€58 million) of sales is in other channels. Since its launch in 2007, the
US snack nut market has grown by 20% – and almost half of the total market growth has been driven by the
Wonderful Pistachio brand.
165 $153
(€105.44)
150
135 $122.777
(€88.774)
120
105
90
$ $71.122
75 (€51.425)
millions
60
45 $33.613
(€24.302)
30
$9.084
15 (€6.567)
0
2007 2008 2009 2010 52 Weeks
Ending
Source: Infoscan Reviews, SymphonyIRI Group June 12, 2011
Healthy snacking
advertising campaign in 2009, Wonderful message without getting overly complicated.

recruited B-list and some “naughty” There really hadn’t been any communication
celebrities such as a star of the hit TV series on a broad basis about pistachios, so we
Jersey Shore; an American Olympic swimmer wanted to start with what people might know
distinguished by her accomplishments even about pistachios.”
in middle age; and the infamous former Sales rose as much as 80% each week
boyfriend of politician Sarah Palin’s daughter. during November and December 2009
“These are people who aren’t necessarily compared with the year earlier, Seguin said,
known that widely but could create some buzz pushing Wonderful’s overall sales about 65%
and who have audiences that create a strong higher for the year – “in an economy,” as he
mosaic of consumers,” Seguin explained. noted, “that overall wasn’t showing much
With an eye toward prime nut-consumption growth.”
occasions including the winter holidays and In fact, after the marketing campaign was
snacking at Super Bowl-watching parties in over, sales into 2010 continued at such a
early February, the ads focused on how people robust pace that Paramount Farms almost
open pistachio nuts differently, liberally using ran out of pistachios. Pom Wonderful
Wonderful’s signature bright green, but also experienced a huge drag on sales a few years
were heavy on health messaging such as ago when newly planted trees weren’t yet
“lowest-fat nut” and “lowest-calorie nut.” mature enough to supply crop expansion to
“We needed to be able to capture people’s meet fast-growing sales demand. But Seguin
attention visually,” Seguin said. “When you insisted Wonderful Pistachios will avoid such a
have that, you can deliver a meaningful health problem.
Following the lead of almond growers and brands – with their “laser focus” on communicating the health benefits of almonds – Wonderful
Pistachios intend to “ingrain” the pistachio health message in consumers’ minds.
Healthy snacking
“It takes about seven years for a newly launched another advertising campaign in the
planted tree to produce pistachios,” he said. spring, although on a smaller scale. “No one
“But we have a number of new trees that has ever tried to market pistachios in [that]
have been in the ground now for five and six half of the year,” Seguin said.
years and so we’ll be able to grow our crop
size overall by 20%-30% over the next few ADDING FLAVOUR – AND VALUE
years. That’s plenty of supply.”
So Wonderful Pistachios didn’t let up in its Wonderful Pistachios come in a variety of
efforts to boost sales, launching Round Two package sizes and a variety of retail outlets,
of its “Get Crackin’” campaign in the fourth but the brand does almost nothing to alter
quarter of 2010. The celebrities in the new its basic product or to boost its appeal with
campaign included Nicole “Snooki” Polizzi seasonings or other enhancements.
– a star of MTV’s reality-TV series Jersey Paramount Farms has left that chore to a
Shore – as well as Rod Blagojevich, the former smaller brand called Everybody’s Nuts. These
governor of Illinois, who was convicted pistachio products are available in flavours
in the summer of 2010 of lying to federal such as Salt and Pepper, Chili and Lime, and
investigators. Roasted Onion.
Overall advertising spending was expected “If there’s one sub-segment of snack nuts
to be $20 million (€14.5 million) for this effort that has been growing strongly outside of
compared with $15 million (€11 million) a one-nut product lines such as pistachios and
year earlier. “We’ve got 2,000-plus airings almonds, it’s flavoured nuts,” Seguin said.
of our commercials scheduled for airing on Such products currently account for about
many, many TV networks, reaching our target 20% of the overall snack-nut business – but
consumers” – focused on 30- to 50-year-old for about 50% of growth.
women – “each 10-plus times,” Seguin said. “A lot of new SKUs are being introduced,”
Fueled by its quick success in expanding Seguin said, “and they are especially
the pistachios market, Wonderful Pistachios attracting more moms with young kids.”
Healthy snacking
Case study 10: Nairns – product innovation,

“natural energy” from an expert brand in
oat-based snacks
When the management team at Nairns consumer research and we were shocked
bought their business out from United Biscuits to find that the people under the age of
in 1996 their first challenge was how to about forty who we thought were buying our
breathe new life into the 108-year-old Nairns products in fact thought not only that Nairns
oatcake brand. was not for them but it was a brand for their
An oatcake is a flat disc of oats, what grannies – too traditional even for their
Americans would call a cracker, made without parents!”
sugar and usually eaten as an accompaniment “We had always thought that we had a too-
to cheese. It’s a very traditional food in traditional feel,” he adds, “but hadn’t realised
Scotland, where it has been part of the diet that it was seen as quite as old-fashioned as it
for hundreds of years. Nairns, a maker of was.”
crackers and cookies based in Edinburgh, the
capital city of Scotland, was – and still is – NEW PACKS, NEW MESSAGES
the market leader in the oatcake niche. But BRING NEW INTEREST
in the late 1990s it was looking like a niche
without much of a future. To Nairns’ management it was clear that the
As the illustration below shows, back in oatcake was just as suitable for young people
1996 the Nairns oatcake brand conveyed as for old, so the findings from consumer
strongly both its history and its Scottish research acted as a spur to a new strategy.
heritage. “We wanted to take the opportunity to get
“Repositioning and updating Nairns was the nutritional benefits across – which a few
our first challenge,” recalls John Holroyd, years ago, it should be remembered, not many
Nairns’ marketing director. “We conducted
Before –1996 After – 2002

Reinventing an old brand
Healthy snacking
companies were doing – and focus on our big according to Nielsen data, sales of all oat
point of difference, which is oats.” products, including Nairns, jumped by 30%.
Step one was to bring the pack design up “It was the year of low glycemic index,”
to date. This required a complete break with explains Holroyd. “Thanks to good advice
the then-design: “A revolution after years of we were already aware of the whole GI issue.
evolution,” Holroyd describes it. We had known about it for a while but we
“The new pack design didn’t seem to be didn’t want to be too early, but we made our
working well initially – we lost some of the decision to get the GI message on the pack
existing customers who didn’t recognize the just at the moment when GI hit the public
packs. Sales actually dipped for a while and consciousness and we got the timing bang
people began to say things to me like ‘that on.”
was a brave redesign’. It was an anxious Interestingly, after the 2005 surge of interest
six months, until we began to find the new in GI sales of oat products did not fall, but
customers.” settled to a steady 5% annual increase.
The other big step was to add the message Nairns didn’t neglect to improve what goes
“wheat free” prominently on the front of inside the package, reformulating its oat cakes
the pack. The then-embryonic consumer to reduce salt levels down by 10% three years
interest in a product being “wheat free” was in a row until the salt content was at the
something that the company had picked lowest possible level.
up from talking face-to-face with people at The oatcakes use palm oil, as a way of
consumer food shows. “We did very well with ensuring that the products have a shelf-life
that message because no-one was doing it that retailers and consumers expect and
then,” Holroyd recalls. are also free of hydrogenated fat. However,
The over-arching positioning of the Nairns environmental issues are high on the agenda
brand has consistently been a “naturally for Nairns management and the company
nutritious” message – a tagline that appears sources its palm oil from a supplier who is a
prominently on all Nairns packages and founder-member of an industry organization
advertising and which is expanded with called the Roundtable on Sustainable Palm
messages such as “no artificial colours, Oil, which is developing a scheme that
flavours, preservatives or hydrogenated fats”. defines, controls and rewards the growing of
A secondary message used on all packs palm oil on a sustainable basis and which is
relates to oats as “Naturally energising” (see due to be operational from the end of this
box). year. Closer to home, Nairns sources its oats
Nairns also emphasises taste and from within Scotland – where much of the
enjoyment. “There’s quite a proportion of production is in the same region as Nairns’
people who think oats are boring and if factory – and only uses oats produced under
you go on too much about how healthy the Scotland’s Rural Stewardship Scheme, which
products are people think they may not be means that the oats are grown without the
enjoyable to eat,” explains Holroyd. use of insecticides and the farmers meet
environmental standards in relation to wildlife
CATCHING THE LOW GI WAVE and natural habitat that are independently
audited.
The UK’s oats market advanced consistently
but unexcitingly, with the Nairns brand BISCUITS A SWEET SUCCESS
growing faster than the total market, until
2005, when UK consumers’ awareness of oats The third big development in Nairns’ strategy
suddenly increased and in that single year, was the launch of a sweet oat biscuit in 2003
Healthy snacking
BOX 11: OATS’ NATURAL “SLOW RELEASE ENERGY” ADVANTAGE
Nairns, the expert brand in oat

snacks, has made the slow energy
release properties of oats a key
message in its brand’s marketing
- a good example of “natural
functionality” communications.
Healthy snacking
– the first time the company had launched

such a product. These have been a success,
driving growth in the total oat biscuit market,
and today account for 25% of the total sales
of the Nairns brand.
“It was a significant technical breakthrough
to make a good-tasting sweet biscuit using
only oats,” explains Holroyd. “The only
things on the market at the time and now
were gluten-free which were expensive and
poor eating quality.
“Making a sweet biscuit that uses oats
and no wheat and tastes good enough for a
mainstream consumer to want to eat it is a
significant technical challenge. That we have
been able to do what no-one else had is a
testament to our in-house production and
technical skills and our ability to partner with
people outside the company who bring extra
know-how.”
The development of the sweet oat
biscuits was the result of a two-year-long people avoiding wheat. They appeal to people
“knowledge transfer partnership” with who recognize the benefits of oats and to
Queen Margaret’s College – a university people who just like a good biscuit,” explains
with a focus on food technology, located in Holroyd.
Edinburgh. The partnership was supported The sweet oat biscuits have won both gold
with co-funding by Scottish Enterprise (SE), and silver at the UK’s Great Taste Awards –
a Scottish government body. SE funds a an important accolade as the competition’s
Health-enhancing Foods initiative which helps judges are chefs, food reviewers and
Scottish companies reinvent themselves for restaurateurs and the sole feature on which
the age of health. they judge a product is taste – not health.
The initiative has run in Scotland for There’s no doubt that with its pure-oat
seven years and has become one of the most sweet biscuits Nairns has created a new
successful of its kind in the world. segment of the biscuit market, increasing
“What we got at the end of the household penetration from just 1% to over
development was a product that people who 8% during the year to March 2008, according
are avoiding wheat will buy and actually to data from Dunhumby, which is derived
enjoy,” Holroyd adds. from sales of major retailers such as Tesco.
Since then customer feedback has shown Dunhumby also shows volume in the oat
that the sweet biscuits are in fact being bought biscuit segment growing over 100% and value
by many people who aren’t interested in the growing 75% in the same period.
wheat-free message. As a result the company
has changed the emphasis in positioning the GIVING CONSUMERS CONVENIENCE
product from “wheat-free” biscuits to “oat
biscuits”. Positioning its oat products as a healthy
“This has been successful because they have snacking option has been another pillar of
attracted a wider group than simply those Nairns’ strategy. Not only does the company
Healthy snacking
provide a wealth of snack serving suggestions communicate to the consumer,” explains

for its traditional oat cakes, it has also moved Holroyd, “and it takes time to build the
them into new and more convenient forms, awareness of a new product such as this.”
such as Mini Oat Cakes. Designed for use The company has learnt enough, he says, to
with dips or canapés, each oat mini weighs have already made improvements to two of
just 4g. the recipes, enhancing the eating quality, and
The focus on snacking has led Nairns to introducing a new sweet chilli flavour.
its most recent innovation – Oaty Bakes. A Getting the new snack product
potato-chip-like product, but made with oats merchandised in the place where it will most
instead of potato, the product was based on help sales has been a learning experience,
an original concept by a professional product with one chain putting the Oaty Bakes with
developer called Liz Ashworth, who was the crackers near other brands with health
introduced to Nairns as a result of Scottish credentials – the place where Nairns would
Enterprise’s Health-Enhancing Food initiative. like to be and the place that produces the
For Nairns to get the product from concept best sales – while another has put them
to market was a two-year process, followed in its healthy eating aisle. “A less-desirable
by a full year of test-marketing. “We could of location,” comments Holroyd.
course have done it more quickly,” explains
Holroyd, “but the key for us is always first and TAKING OATS TO A WIDER MARKET
foremost to get a product that tastes good and
that’s not something you can cut corners to Unusually for a small company, Nairns is
achieve, particularly with a raw material like boldly taking its brand into international
oats and particularly when we’re taking them markets. The “wheat-free” message was
into a new area of snacking.” particularly well-received in the US, where
The products are in full distribution in the Nairns is stocked coast-to-coast by natural
UK with Tesco, the UK’s biggest grocery product retailers such as Whole Foods Market
retailer, and other chains such as Waitrose, and is establishing a niche position as a
Sainsburys and Morrisons. premium brand. Nairns can also be found on
“It’s a more challenging concept to sale in Australia – where the brand is going
The “naturally nutritious” brand position is consistently reinforced in advertising and carried on the side panel of all Nairns
products, along with a secondary message that links laterally to satiety and weight management – that oats “help you feel fuller for
longer so you don’t feel hungry again so soon”.
Healthy snacking
into mainstream supermarket distribution – difference – oats – and focus on making the
New Zealand, Canada and elsewhere. most of its technical skills in oat baking to
International sales don’t yet define Nairns’ produce innovative products. And the reward
business, but it’s a good illustration of the for reinventing the oatcake and helping to
long-term, consistent and ambitious nature reinvent oats as a modern snack-food is sales
of the company’s strategy – a strategy that have quadrupled over the last five years to
that has seen Nairns nurture its point of over £16 million ($29 million/€19 million).
OATY BAKES ARE THE LATEST INNOVATION FROM NAIRNS
Healthy snacking
BOX 12: CREATING A FREE-FROM ADVANTAGE FOR OAT SNACKS
Nairns has sourced a variety of oats which is cultivated

because it is guaranteed to be gluten-free and used this
to launch its first-ever gluten-free line, which is approved
as suitable for coeliacs. The company uses production
facilities segregated from its other lines.
Healthy snacking
Case Studies 11, 12,

13, 14 & 15:
Fruit & Vegetables
Healthy snacking
Case study 11: Nature Addicts – Europe’s

most successful new snack brand
Like Wonderful Pistachios in America, the The company made a strategic decision in
Nature Addicts brand has created a new 2008 to debut in healthy and partnered with
category with a simple, all-natural snacking a European company which specialises in
proposition. manufacturing 100% fruit snacks – all based
One of the most successful product on fruit purees rather than fruit concentrates
launches in Europe in 2010, after initial and juices. After a year of brand development
success in France the brand has since been and consumer testing, Solinest launched the
rolled out in Belgium, Netherlands, Germany, Nature Addicts’ fruit snacks brand in France
Switzerland and Italy. Nature Addicts is a in mid-2009.
perfect case study for anyone to learn from
who wants to understand how to create a STRONG ALL-NATURAL
success in healthy snacking.
The company behind Nature Addicts,
POSITIONING
Solinest, is the leading player in the
The brand has a clear naturally healthy
confectionery market in France, with
proposition with messages on pack and in
particular expertise in the “impulse” segment.
advertising as follows:
It distributes brands such as Chupa Chups,
• no added sugar
one of the biggest confectionery brands in
• no sweeteners
Europe, among others.
Healthy snacking
• no preservatives
• no artificial colours or flavours blackcurrant, strawberry, peach and
• 100% fruit orange-cranberry and blueberry-
• contains 3 times as much fibre as the same pomegranate. Described as: “For a 100%
weight of an apple fruit break, where you want it, when you
• naturally high in fibre want it.”
• without any chemical manufacturing • 40g fruit sticks, the newest addition to
process the line, in apricot-peach and strawberry-
banana. Described as “For fun!”
CONVENIENT FORMATS, SMALL The packs are re-sealable and have a

PORTIONS premium look and feel.
Nutritionally, a 30g sachet of bites has
Nature Addicts includes two formats in a wide just 100 calories and 24g of sugars – all of
range of flavours: which is sugar that is naturally present in the
• 15g bars in single or twin-packs, in fruit. On a 100g basis that makes the sugar
strawberry, peach and raspberry flavours. content 79g, which many would argue is high,
Described as “super practical”. however most consumers accept the presence
• bites (very small pieces of fruit shapes of sugar in good-tasting things – which is
called “pepites” in French) in 30g and why confectionery markets are so large. They
100g packs. Flavours include: raspberry, are particularly relaxed about sugar content
Healthy snacking
if what’s offered is only what is naturally to have cost over €2 million ($2.9 million).
present – with nothing added – and that is the
strength of the Nature Addicts proposition. PREMIUM PRICING, SALES
The high sugar content is balanced also SUCCESS
by the low calorie count in each portion-
controlled pack as well as the brand’s 100% N.A.! products are super-premium priced:
fruit and all-natural credentials.
Nature Addicts – abbreviated to N.A! on • €1.59 ($2.28) for 30g pack of small bites.
the label and in advertising – also makes a • €1 ($1.44) each for the 15g bars.
strong play about the natural fibre content of
its products. Fibre content is 1.8g per 30g. In other words, on a price per kilo basis, the
brand sells at:
MARKETING AND MERCHANDISING • €53 ($76) per kilo for the bites
• €66 ($95) for the bars
The launch of Nature Addicts was one
of the most professional that the snacking This puts the product at a huge premium
category in Europe has ever seen and similar to fresh fruit, but on a price per pack basis
in scale and scope to the successful launch of the brand is comparable with many other
Wonderful Pistachios in the US. snacking products in the impulse section of
Solinest doesn’t disclose any data, but the the supermarket.
heavy investment in print and TV advertising, These prices show how much people are
merchandising, POS materials, a website willing to pay for health and convenience.
and Facebook page and an extensive PR Despite super-premium pricing, 2010 retail
campaign is estimated by one advertising sales were €20 million ($29 million), according
executive who spoke to New Nutrition Business to industry estimates. Bearing in mind that
Healthy snacking
France has a population of 60 million, that’s on-shelf in almost every possible impulse
equivalent to a €100 million ($144 million) situation, near cash-registers in all the major
brand in a large market such as the US. supermarket chains, as well as petrol stations,
This accomplishment is made all the more convenience stores and other outlets.
impressive by the fact that French consumers Nature Addicts created a point of
have become very price-sensitive in every difference in the snack market and in France
category in the supermarket. has effectively created a new category. It has
One of the keys to N.A!’s success is good leveraged convenience, naturalness, taste and
merchandising. Solinest has strong existing merchandising skills and has backed its idea
access to stores of all types and sizes and it with a significant and consistent marketing
has effectively leveraged this to get the brand spend.
Healthy snacking
BOX 13: TELEVISON ADVERTISING FOR N.A!
Voiceover:
To keep you from sinning all day [as woman

attempts to cram fruit into her bag]
N.A!.It’s new.
It’s nothing but fruits concentrated into pieces

and bars.
It’s 100% fruits
No added sugars
No sweeteners
No preservatives
N.A!. Nature, it’s in your pocket.
Healthy snacking
Case study 12: Castus fruit snacks – a hit with

Danish children
Castus is part of the Whole Company, a • Banana (dates 79%, bananas 18%,
Danish group that owns businesses marketing vegetable oil, water)
a range of food and beverage products, • Raisin (dates 68%, raisins 24%, apricots
including healthy snacks, teas and dietary 1%, vegetable oil, peanuts 3%, water)
supplements. • Apricot (dates 67%, apricots 26%,
The Whole Company acquired Castus vegetable oil, water, acidity regulator: citric
from Unilever in 2003, at a time when the acid)
brand was selling 4.2 million fruit bars a year. • Blueberry (dates 73%, raisins 20%, dried
Since then, it has transformed Castus into blueberries 3.5%, vegetable oil, water,
Denmark’s leading fruit bar brand. natural blueberry flavour)
Castus fruit bars are principally aimed
at the children’s market, where they are ALL NATURAL, HIGH FIBRE
positioned as the perfect healthy solution for
lunchboxes (all children in Denmark take The products are all marketed as being 100%
packed lunches into school every day) and as a natural, containing no artificial ingredients.
wholesome snack between meals. They are also positioned as being high in
There are several varieties, all made from dietary fibre, with each 25g bar containing
a recipe based on dates, with each individual between 2.5g and 3.5g, depending on the
bar weighing 25g: recipe.
• Fig (dates 54%, figs 41%, vegetable oil, As well as providing a nutritious alternative
water) to less healthy products, Castus fruit bars are
• Nut mix (dates 86%, hazelnuts 5%, offered as a more convenient and less messy
peanuts 4%, vegetable oil, water) alternative to fresh fruit and yoghurt. The
• Strawberry (dates 75%, raisins 20%, bars are sold in pouches, in packs of five, for
dried strawberry 1%, vegetable oil, water, DKK15 (€2.00/$2.87), which the company
natural strawberry flavour) says means each bar costs roughly the same
• Pear (dates 95%, dried pear 1%, vegetable as a piece of fresh fruit. The brand is worth
oil, water, natural pear flavouring 0.1%) around DKK100 million at retail level (€13.4
Castus realised it needed to change its branding for the UK market, opting for boxes rather than pouches and calling its bars “Be
Fruity”, which resonated better with British consumers.
Healthy snacking
million/$19.1 million). Norway, Sweden and Finland. The company

Castus bars have wide distribution in also identified the significantly bigger UK
Danish supermarkets, where they are typically market as a potential rich seam of sales and
sold in multiple locations – alongside fresh launched its bars there about 18 months ago.
fruit, in the ambient grocery aisle and, of Henrik Winther-Olsen, managing director
course, with other snack products. The brand of Castus, says: “The population is much
is prominently promoted in store using point larger in the UK, and the snack bar category
of sale displays and merchandise (such as there is very developed. There are lots of
branded footballs) designed and provided different fruit and muesli bars in the UK and
by Castus. The brand is also advertised in we could see demand there was growing.”
women’s magazines. In the UK, Castus sells 4.5 million bars a
Castus estimates that around 80% of the year. With five bars in a pack, and a retail
products it sells are eaten by the target market selling price of around £2.00 (€2.26/$3.30),
of children, but that the remaining 20% are this equates to a brand worth roughly £1.8
eaten by adults. As a result, it is looking into million (€2 million/$2.97 million).
the potential for launching a fruit bar with a Castus took great care to research the UK
more grown-up positioning. market in depth before launching there a year
and a half ago. For example, it held focus
UK A RICH SEAM – BUT DIFFERENT groups, where it was pleased to discover that
APPROACH NEEDED British consumers liked the products – and
particularly their all-natural positioning.
The success of the Castus range in Denmark But based on other responses from the
has led to its recent launch into nearby participants, it made some changes to the
TABLE 9: INGREDIENTS AND NUTRITION FACTS FOR CASTUS FRUIT BARS (STRAWBERRY)
FRUIT BARS WITH STRAWBERRY

Ingredients Nutritional values Allergens Storage Net weight
Fruits: 96% (dates 75%, May contain traces Keep dry and One Fruit bar:
raisins 20%, dried pr. 100 g pr. frugtstang of peanuts and not too warm. 25 g
strawberry 1%) Energy kJ/kcal 1330/320 330/80 other nuts. Castus Fruit
vegetable oil, water, Protein 2g 0-1 g Bars don't
natural strawberry Carbohydrate 65 g 16 g need cool
flavour. - of which sugars 63 g* 16 g* storage.
Fat 5g 1,5 g
- of which saturates 2g 0-1 g
Dietary fibre 9g 2,5 g
Sodium 0g 0g
* NO ADDED SUGAR
Healthy snacking
product proposition. The Be Fruity products are based on the

It opted for a different brand name – Be same recipes as Castus bars in Denmark.
Fruity – which the company found resonated Three products from the Castus range are
better with British consumers than the original available: Apricot, Strawberry and Fig. They
Danish brand Castus (which means ‘pure’ in are listed with supermarket operator Waitrose
Latin). and health food chain Holland & Barrett.
It also gave the product a new look, with
consumers having expressed a preference GETTING RETAIL BUYERS’
for a different kind of brand design. Castus ATTENTION KEY TO SUCCESS
also decided on new outer packaging – a box
instead of a pouch – because this brings Be Winther-Olsen admits that Castus has so far
Fruity into line with other snack bar multi- been disappointed by the performance of Be
packs in Britain. Fruity in the UK. The company had hoped
The company went to the trouble of sales would be greater in a country whose
setting up a UK subsidiary in a bid to crack population, at 60 million people, is more than
the market there. This course of action was 10 times the size of Denmark’s.
considered preferable to using an importer. He says it has proven difficult for Castus’s
Winther-Olsen says: “The problem with representatives in the UK to meet with
working with a distributor is that you may retailers. Part of this, he explains, is down to
be competing with other brands they are the fact that buyers frequently change jobs in
representing. We felt that the UK market was the UK. “There is a new buyer every second
so interesting so we would put the maximum month,” he says wryly. “It’s very hard to get
effort into it.” in.”
Unlike many fruit snack products, many of which are based on concentrates and closer to confectionery than to snacks, Castus
highlights its fibre content.
Healthy snacking
This state of affairs, he says, is compounded

by the fact that it is a struggle for a small
brand such as Be Fruity to command buyers’
time in the face of competition for their
attention from much larger companies. “It’s
very difficult because we only have our Be
Fruity brand. We’re not like a Nestlé or a
Unilever, who have a whole range of products
they can talk to their customers about.”
Castus has also been restricted in its ability
to undertake marketing. Unlike Danish
retailers, UK supermarket chains do not
usually allow manufacturers to create branded
displays in-store. Winther-Olsen says Castus
will invest in more marketing, but only when it
can achieve more listings.
Ironically, in spite of all this, Winther-Olsen
says Waitrose has actually been pleased with
sales of Be Fruity and recently increased the
number of stores in which it sells the bars.
However, at this point in time Castus remains Henrik Winther-Olsen, managing director of Castus – which
means “pure” in Latin – has seen his company conquer the
frustrated in its efforts to gain further listings Danish market and now Castus has its sights set on bigger
with other major retailers, although David challenges. “The UK market is absolutely one of our highest
priorities,” he says.
Cross, joint managing director of Castus
UK, tells New Nutrition Business that he is
“anticipating listings shortly with Sainsbury’s According to Cross, the Be Fruity adult
and Tesco”. range will be introduced to the trade at the
Castus remains committed to the UK beginning of 2012, as part of a “phase two
market for now, despite the challenges it has launch” for the brand.
faced there. “The UK market is absolutely one Meanwhile, back in Denmark Castus has
of our highest priorities,” says Winther-Olsen. just appointed a dedicated export manager
Indeed, the company has also developed a to evaluate opportunities in another 10
range of Be Fruity bars aimed at adults. These countries in Europe. Having made its mark
will be slightly larger than the kids’ bars (30g) on the Danish snack bar category, it is clear
and offer a coarser structure with whole pieces that Castus is now committed to taking its
of fruit. There will be three varieties: unquestionable domestic success to markets
further afield.
• Cranberry, fig and nuts
• Mixed nuts
• Apple, cinnamon and nuts
Healthy snacking
Case study 13: Frito-Lay’s fruit and vegetable

snack brand ambitions fall to earth
How is it that Frito-Lay’s Flat Earth snacks, a fruits and vegetables a dynamic success in the
brand judged as one of Symphony/IRI’s top snacking world.”
20 new product launches in 2007, with a loyal Clearly, the debut of Flat Earth in February
following and innovative product, can be deemed 2007 was part of an increasing trend in which
a failure? mainstream snack companies have begun to join
PepsiCo unveiled its Flat Earth brand at a a handful of boutique snack makers in folding
meeting with securities analysts in October 2006, significant portions of fruits and vegetables with
after which Frito-Lay CEO Al Carey couldn’t say grains into traditional chips. Kraft, for example,
enough about the bright future he predicted for rolled out Roasted Vegetable Ritz Crackers in
Frito-Lay in Flat Earth. June, emphasising on the box that the product is
“We’re looking forward to [Flat Earth chips] “Made with real vegetables”.
making a significant contribution to Frito-Lay’s Flat Earth chips contain a half-serving of fruits
growth in healthy snacking,” Carey told the Wall or veggies per ounce, or about 11 chips per 28g
Streeters gathered in New York. “We want to (6oz) bag.
make healthy snacking our absolute top priority.” Each 2g serving has less than 5g of fat and
At the same time, Carey was sanguine about about 130 calories – approximately the same as
the marketplace possibilities for Flat Earth: many of Frito-Lay’s other snacks, most of which
“The intent to purchase [among tested have been reformulated in recent years to have
consumers] is probably the highest we’ve ever significantly reduced fat, sodium and calorie
seen. It’s off the chart … This is a terrific new levels.
product that will give us an opportunity to make The rice- or potato-flake-based chips, which
Flat Earth’s redesigned packaging (right) made more of the product’s vegetable content and gave consumers a clearer message
about what flavour they’d find in the bag.
Healthy snacking
are baked, not fried, were initially available before, Carey noted, but always encountered one
in six varieties of vegetable and fruit flavours: huge problem:
Farmstead Cheddar, Garlic Herb Garden, “Consumers are quite sceptical, because most
Tangy Tomato Ranch, Wild Berry Patch, Apple other products have either tasted good and
Cinnamon and Peach Mango Paradise. The haven’t been that good for you, or they’ve been
suggested retail price was $2.99 (€2.38) for a good for you and haven’t tasted good. Moms
6oz bag, a small premium over Fritos, PepsiCo’s couldn’t get their kids to eat them”.
market-leading potato chip brand. In fact, the size of the challenge that Frito-Lay
perceived in developing Flat Earth is indicated
MAINSTREAM AMBITIONS FOR A by the name of the product as well as the line’s
NICHE PRESERVE logo on the packaging: a pig with wings.
“We knew consumers were sceptical and
Previously, such chips were largely the domain would say to themselves that there would be
of niche firms such as Terra Chips, but Carey this kind of a product – with no compromise
nevertheless said that Frito-Lay was persuaded between taste and nutrition – ‘when pigs fly’,”
that fruit and vegetable chips are “a huge Carey said. “But we came up with a product that
idea with consumers” in the mainstream and is ‘impossibly good’ in the way that it does both.”
that the company needed to make a play in
the segment. The increasing attention being EARLY SUCCESS
paid by nutritionists, the news media, the food
industry and consumers to the “significant gap” Launched in supermarkets at the beginning of
between recommendations of fruit and vegetable 2007, Flat Earth jumped to over $26 million
consumption, and what Americans actually eat, (€20.5 million) in retail sales in its first year,
was another factor, he said. according to Symphony/IRI supermarket
The company had considered such products scanning data – meaning that its sales were over
CHART 13: THE DECLINE AND FALL OF FLAT EARTH
Sales in supermarkets, drugstores, and mass merchandise outlets (excluding Walmart).

30
$26.20
(€20.6)
25
$21.95
(€17.27)
20
$
millions
15
$10.72
(€8.44)
10
$5.04
(€3.97)
5
0
2007 2008 2009 52 Weeks Ending
Jun 13, 2010
Source: Infoscan Reviews, SymphonyIRI Group - the leading global provider of enterprise market information solutions
Healthy snacking
$30 million (€24 million) when sales in Walmart Saliba told NNB in 2009. “Their appeal wasn’t
are taken into account. as broad as with veggies, which were really
As a result Symphony/IRI told Frito-Lay compelling. Women engaged with them.”
late in 2007 that Flat Earth was likely to qualify Frito-Lay added a new, fourth vegetable-
as one of its top 20 new product launches of based flavour: Spicy Salsa, which includes
the year – and the only one under the rubric red-pepper bits that are baked into the chips.
of a fully new brand – the company gave itself The “innovative technology” for baking spices
a deserved pat on the back. “We were really or dried vegetables into each crisp, Frito-Lay
proud of that,” Jennifer Saenz, associate brand said, “delivers great flavor without increasing fat
manager for Flat Earth, told New Nutrition Business content”.
at the time. Second, Frito-Lay realized that the original
“Flat Earth filled an area where we just packaging for Flat Earth had done the brand a
didn’t have product and the health and wellness disservice. The ingredients that provided the key
portion of the market was consistently growing,” appeal for the product – vegetables – had been
says Saenz. “The closest thing was Sun Chips, marginalized in the design. Vegetables resided on
which are made from whole grains but still in the visual fringes of the packaging while typical
traditional salty-snack flavours.” images of chips occupied the centre. “The
Aiming at the kids market, multipack versions vegetables got lost on the shelves,” Saliba said.
of the Farmland Cheddar and Flat Earth Apple The new designs put “vegetables front and
Cinnamon Grove flavours were added to the center” on Flat Earth packages. These ‘hero’
line in summer 2007. With a suggested retail vegetables on the new package designs were
price of $3.49 (€2.40), each multipack contains based on feedback from women. The company’s
five single-serve bags. Marketing support for release said that the new designs “help women
the extension included a back-to-school-themed more easily identify products in the aisle and
national coupon effort, a sampling programme better illustrate the product they will find when
and online couponing at the brand’s dedicated they open a bag”.
website, www.FlatEarth.com. Visitors to the site As the chart shows, the new approach seems
were able to able to register and download a to have done nothing to arrest the decline of
coupon that entitled them to a free 6oz bag of the brand. What can’t have helped is that a $30
Flat Earth chips. million (€24 million) brand is nothing to write
Female shoppers were the keenest purchasers, home about for the executives of Frito-Lay, the
generally consuming the chips themselves. “We world’s biggest manufacturer of salty snacks with
anticipated that the shopper would skew that annual sales of $10 billion (€7 billion) and more
way but we were surprised how much Flat Earth than fifteen $100 million brands in its portfolio.
is something that women enjoy for themselves,” Industry sources speculate that the failure of
said Saenz. Flat Earth to rapidly become a $100 million
success meant that executives lost patience with
SALES DIP SPURS CHANGES it and brand support was quickly and quietly
downgraded, prompting the decline reflected in
But there was trouble brewing with Flat Earth the chart.
even as its growth rocketed. In 2008 sales slipped
back and Frito-Lay relatively quickly realized COMMENT
that at least a couple of things weren’t right.
First, the fruit-based flavours didn’t catch While smaller companies would accept the
on with consumers; only the vegetable-based presence in their portfolio of a product whose
varieties did. “Fruit crisps had a strong following, primary appeal is to the (large) niche of lifestyle
but it was narrow,” Frito-Lay spokesperson Julia consumers and use that as the basis for creating
Healthy snacking
a long-term growth strategy for the brand – reflecting consumers’ widely divergent personal
playing in the lifestyle niche and investing in views about health and wellness and the fact that
decade-long, slow brand growth – such an making positive healthy choices is the preserve
approach doesn’t fit with the mass-market profile of the 30% of the population who are most
of the Frito-Lay business. motivated by health. These niches may provide a
This is a common problem for many foundation from which to grow brands, but none
businesses competing in health and wellness – can rush into the mass-market – certainly not
most boards of directors got their experience at as quickly as traditionally mass-market-focused
a time when it was still possible to create mass- businesses would wish.
market brands rapidly from a standing start. And hence Flat Earth, which has now
Those days are now gone – no-matter what disappeared from the market, may have fallen
category you are in. And in health and wellness victim to being the right product launched by the
in particular one of the core lessons of the past wrong company more than any other reason.
15 years is that health is about a mass of niches,
Healthy snacking
Case study 14: Ocean Spray – from bog fruit

to big fruit
Launched back in 1995, Ocean Spray’s America’s $1.2 billion (€860 million) dried
sweetened dried cranberries debuted as a fruit and fruit snack market; it has taken the
an eat-from-the-hand snacking item, just position as the third-biggest fruit snack brand
one small element in Ocean Spray’s robust in the US, after Sun Maid Raisins (although
strategy of delivering its cranberries – of the gap is closing every year) and General
which it controls 80% of US supply and Mills’ Betty Crocker processed fruit franchise.
around 60% of world supply – as a beverage For the first 10 years of Craisins’ life,
and as an ingredient in foods of all kinds, Ocean Spray faced off-and-on supply
while at the same time bolstering their health constraints for Craisins, both because it didn’t
credentials. It’s a strategy which has helped invest quickly in vast manufacturing capacity
make cranberries arguably the world’s most for the product and because the entire
successful superfruit, with sales in excess of cranberry-cultivation industry had problems
$1.5 billion (€1 billion) a year. ramping up acreage fast enough to satisfy
Dried fruit were not known for their accelerating worldwide demand.
snacking convenience back then, and Craisins Because its supply problem meant that
was America’s first viable snack alternative it couldn’t initially exploit market demand,
to raisins. Since then Craisins has helped Ocean Spray never advertised the brand. All
transform the staid world of fruit snacks that changed in the middle of the decade.
and today accounts for a 10.5% share of First, Ocean Spray made a huge new
commitment of financial and manufacturing
resources to Craisins by moving to triple
manufacturing capacity for the product to
100 million pounds a year (46 million kilos) by
2009.
Second, beginning late 2006, Ocean Spray
began to advertise Craisins with a TV ad
featuring cranberry growers Henry and Justin
– the staples of its advertising campaign –
standing in their cranberry bog, persuading a
little girl that Craisins are the sweetest way to
consume cranberries.
The result was a massive jump in sales in
2006, followed by steady double-digit annual
growth ever since, with not even America’s
severe economic downturn halting progress –
growth continued at 16% in 2008 and 12.5%
in 2009. A 6oz/170g pack of Craisins sells for
about $2.99 (€2.30) per pack, equivalent to a
healthy $17.60 (€13.50) per kilo.
Outside the US the popularity of Craisins
By making cranberries convenient to eat, Craisins transformed has been rising as well and while Ocean Spray
the world of fruit snacks and became America’s first alternative doesn’t disclose figures, industry estimates of
to raisins.
Healthy snacking
Craisins sales in Canada, the UK, Australia the product, and that has allowed us to take
and elsewhere suggest that the Craisins brand the governors off the things we can do for
is at least as big internationally as it is in the growth” with new products, package sizes and
US. Demand for dried cranberries as an other ways to expand the brand, said Brian
ingredient in other foods also about equals Gormley, senior marketing manager of the
consumer demand for Craisins-branded domestic foods business for Ocean Spray.
products. So, earlier this year, Ocean Spray
About two years ago, Ocean Spray finally re-launched cherry-flavoured Craisins and
reached its desired capacity to produce added pomegranate- and blueberry-flavoured
Craisins. “We’ve invested billions of dollars in Craisins. To attain those flavours, Ocean
that capacity and adding production lines for Spray extracts much of the natural juice from
BOX 14: OCEAN SPRAY CRAISINS ADVERT
Voiceover:
Man 1 (on lefthand side):

We asked my niece if she agrees Ocean Spray Craisins sweet and dry cranberries are sweet.
(Silence)
Man 2 (on righthand side):

We will take that as a yes.
Craisins – the sweetest way to eat a cranberry.
Healthy snacking
the dried cranberries and then infuses them Gormley said.

with sugar and, respectively, each of the other Ocean Spray also began introducing new
juices. package sizes to expand the distribution
“That allows us to capture consumers who footprint of Craisins into venues such as club
weren’t as keen on the original [cranberry] stores.
flavour of Craisins, our flagship product,”
BOX 15: GOOD MERCHANDISING BOOSTS CRAISINS SALES
A key part of Craisins’ success has been effective merchandising and related close-to-shelf communications.
In this particular example:
• A sweepstakes was developed for a chance to win $50,000 dollars in a shootout.

• The programme was promoted via in-store POS, shippers, circulars and in-store radio.
• Trial occurred at select NY Liberty games. Fans were given sample packs of Craisins.
• The programme was executed in 192 Shoprite supermarkets in the New York market.
• Craisins increased sales during the three month period 5% nationally and 33% locally.
Healthy snacking
CHART 14: US SALES OF OCEAN SPRAY CRAISINS 2004-2010
TOTAL US supermarkets, drugstores and mass merchandise outlets (excluding Walmart)
$86.129
90 (€61.830)
$78.202
80 (€56.139)
$69.504
70 (€49.893)
$59.734
(€42.879)
60
$49.846
$ (€35.781)
50
millions
40 $34.400
$30.600
(€24.694)
(€21.966)
30
20
10
0
2004 2005 2006 2007 2008 2009 52 Weeks
Ending
Source: Infoscan Reviews, SymphonyIRI Group Aug 8, 2010
Healthy snacking
Case study 15: Berries – convenience,

indulgence and “natural functionality” drive
a super-premium success story
What is it that drives consumers, even in a This is, of course, the story of berries. And it’s
zero-growth economy, to pay a super-premium a story from which every packaged food category
price for berries – in fact a 90% premium over can learn something valuable.
the next-highest-priced category? It comes down
to six factors – including convenience, smart BERRIES THE MOST VALUABLE
merchandising and science. But these factors SEGMENT
aren’t exclusive to berries – they’re also key in
packaged food categories, making the story of In the US and the UK berries – naturally
berries’ success a must-read for anyone wanting to healthy, ultra-convenient snackfoods – have
market “naturally functional” benefits. achieved the impossible and overtaken the
Imagine you launched a product with health- traditional mass-market fruits to become the
plus-convenience benefits that grew from nothing single most valuable segment of the fruit market,
to become the most valuable in its category. And even though volumes are still low (see Charts 15
imagine that you achieved this despite being in a and 16). In the UK in 2011 berries account for
category which has historically been price- and a mere 5.4% of fruit market volume (measured
volume-driven, despite being the most expensive in tonnes) – but an impressive 18.4% of market
item in your category and despite not using any value. However, it’s important to note that this
advertising – or even any health claim, relying does not mean that berries are mass-market – far
instead on the power of “natural functionality” from it. The low volumes show that they are still
to create sales. You would probably be pleased in the “health conscious” niche, even though it is
with that result (and more importantly, so would a “big niche”.
your boss). And while it’s blueberries that have caught
Healthy snacking
the headlines, they are not the main reason for with £200 million in sales ($326 million/€227
this phenomenal success. Blueberries account for million), and a globally recognised expert in
around 20% of the US and UK berry markets, marketing commodity foods (the professor’s
as the box shows. advice is in such demand internationally that
To illustrate how fashions change, blackberries NNB found that the easiest place to meet him
were once the most-consumed berry in the UK was at an airport).
after strawberries. Until as recently as the 1970s The factors that have been important in the
schools in rural areas took a holiday in the berry transformation of the fortunes of berries are also
season to allow children to harvest them from key factors in packaged food categories:
the wild.
And while these two markets may be in the 1. VALUE MATTERS MORE THAN
lead, the berry phenomenon is not confined VOLUME
to them. In mainland Europe berries have
always been highly seasonal, available for only Charts 15 and 16 tell the story – like all the most
a few months of the year, but now Germany, successful healthy foods, berries are a high-value,
the Netherlands and other northern European low-volume business. The data shown is for the
countries are steadily moving in the same UK, but, says Professor Hughes, the picture is
direction, according to Professor David Hughes, the same in the US.
Emeritus Professor of Food Marketing at We are told from all sides that consumers are
Imperial College London and a director of highly price-sensitive, but the success of berries
Berry Garden, the UK’s biggest berry company shows that is not true for all categories. Even in a
CHART 15: HEALTH AND CONVENIENCE ENABLES THE LOWEST VOLUME PRODUCT TO COMMAND
THE HIGHEST VALUE
Value is shown in millions and volumes in thousands of tonnes
£764
£744
8 $1255
$1222
€864
€842 737000
£622
7 £612
$1022 £570
$1005
€704 $937
€693
6 €645
513000
5
£343
4 $564 £306
365000 €388 $503
€346
3
237000 £199
$327
2 192000 €225
151000 145000
134000
1
0
Value Volume Value Volume Value Volume Value Volume Value Volume Value Volume Value Volume Value Volume
Berries Apples Bananas Citrus Grapes Stone fruit Tropical fruit Pears
Source: Kantar, 52 weeks ending June 12th 2011
Healthy snacking
zero-growth economy such as the UK people are with blueberries, very specifically. It’s remarkable
willing to pay a super-premium price – in fact because there have been no advertisements
the highest price for any fruit and a healthy 90% claiming that and no claims on packages. It’s a
premium over the next-highest-priced category message that women have picked up from the
of fruits. media and it has grown through word of mouth
The reason of course is that what people are – a bit like the cranberry story.”
willing to pay for any product is not merely a The rise of awareness of the skincare
simplistic question of price but a question of benefit underscores that it is possible to be very
perceived value – and a product that delivers successful without having any health claim on
value in many ways. your product – or using any kind of specific
claim in marketing – as long as your product has
2. THE COMMUNICATION POWER OF a “naturally healthy” image that has appeal for
“NATURALLY FUNCTIONAL” the media.
“The berry companies in the UK together
“One of the strongest parts of berries’ value have funded a PR campaign which has had
proposition is health,” asserts Professor Hughes. genuine success over the years, not because we
“Consumers have a very strong positive image of are smart but because the media like to write
berries in their minds in both the US and UK. about berries.”
Berries have been riding on the coat-tails of the The appeal of a foodstuff as having natural
health and wellbeing trend. health benefits is one that is very strong in
“Female consumers in particular,” he adds, consumers’ minds and is getting stronger. It is
“have got the link between wellbeing and berries what underlies the success of coconut water,
in general, but they identify the antioxidant marketed as nature’s sports drink, propelling
message in relation to blueberries. 100% sales growth for the leading coconut water
“We’ve found in consumer research that a skin brands in the US and Germany in 2010.
care benefit has a surprisingly strong association It’s a reality which points manufacturers in
CHART 16: BERRIES – THE SUPER PREMIUM SUCCESS STORY

Health and convenience enables the lowest volume product to command the highest value (prices shown
in average price per tonne). Berries’ average retail price is a 92% premium over the next-highest-priced fruit
category.
£5,701
6 $9369
€6452
4
£2,969
$4879
£2,272
3 €3360
$3734
£1,677 €2571
£1,450 £1,291 £1,372
$2756
2 $2383 $2122 $2255
€1898
€1641 £844 €1461 €1553
$1387
1 €955
0
Berries Apples Bananas Citrus Grapes Stone fruit Tropical fruit Pears
Source: Kantar, 52 weeks ending June 12th 2011
Healthy snacking
the direction of choosing signature ingredients snack food, easy to eat from the hand or scatter
for their products which can credibly be seen as onto breakfast or other dishes. Women in
naturally connected with a product’s claimed particular have turned to them as a healthy
benefit – even if it’s another ingredient that’s snack.
actually delivering the benefit. “Berries are well loved,” observes Professor
“If you are pushing in the direction people Hughes. “Adults see them as affordable
want to go in, it’s much easier,” observes treats. Children like them: if you put a bowl
Professor Hughes. of strawberries out at a children’s birthday
party, they disappear. Women shoppers tell
3. THE POWER OF “SNACKABILITY” us in consumer research that children eat the
AND HEALTHY INDULGENCE berries in the car on the way home from the
supermarket and they are all gone before the
Berries are of course the ultimate all-natural family gets home.
“Parents don’t have to persuade children to eat
TABLE 10: US AND UK BERRY SALES TO MAY 2011
UK market retail sales of all berries in the 52 weeks to May 2011 was £764 million ($1.2 billion/€865
million), broken down as follows:
Strawberries £440m/$716m/€498m (57.5% of total)
Raspberries £151m/$246m/€171m (20%)
Blueberries £140m/$228m/€159m (18%)
Blackberries £28m/$46m/€32m (3.5%)
In the US market the total retail value of berries is $3.1bn (€2.2bn) of which:
Strawberries $1.7bn/€1.2bn (55% of total)
Blueberries $700m/€488m (22.5%)
Raspberries $350m/€244m (11%)
Blackberries $210m/€146m (6.5%)
The Good Natured Fruit brand addresses all the six key criteria for success set out in this case study. It is an example of how smart berry
companies have used sound brand strategy to differentiate themselves and drive berries to their current outstanding levels of success.
Healthy snacking
berries in the way that they have to be persuaded historically there was no UK production.
to eat other fruits and of course vegetables.”
6. SCIENCE ALSO KEY TO SUCCESS
4. SMART MERCHANDISING
A significant investment by the main berry
Like all successful brands, getting the right shelf- companies in R&D has given birth to new
space – and the right amount of space – is key to premium and proprietary varieties of berries,
success. with better shape, flavour and shelf life, and
“The UK and US are far ahead of other extended the season in which berries are
markets in having well-structured product tiering available.
at retail – a “good, better, best” offer that is Funding of university research into berries’
characteristic of more sophisticated grocery. health benefits is translating into a steady stream
In the US specifically Driscolls, who are of “new news” about why berries are healthy
number one worldwide in berries, have very which is not used in marketing but can go
sophisticated category management. They direct from academics to the media. This both
characterise it as “the berry patch” and work reinforces berries’ healthy image and makes sure
with selected retailers who will give them the that they stay in the media’s spotlight.
latitude in store to put all the berries in one
place, en masse, to create a blaze of colour BERRIES OFFER LESSONS FOR ALL
which generates consumer interest.”
In northern Europe berries have traditionally For any company looking to be successful in
been strongly seasonal, but Europe is developing health, addressing the factors above is a key
the same way now, accelerated by the entry of element of creating a successful business.
Driscolls into the European market, offering Even “locally sourced” – the weakest and least
berries grown in Spain, Portugal and Morocco. significant of the six – has value if you can
source some or all of your ingredients within
5. “LOCALLY GROWN” HAS A ROLE your market and use it to create a point of
difference. Unlike smart merchandising or a
In the UK strawberries – above all other “naturally functional” health benefit it won’t do
berries – benefit from being domestically grown. much for your sales price or your volume, but
“Strawberries are riding the trend of being it will be an insurance policy, showing the most
locally or regionally produced. Retailers know loyal consumers that you share their growing
that customers like strawberries from the UK concerns about local sourcing.
and so they are willing to support domestic Given the increasing difficulties around using
producers,” observes Hughes. specific health claims, all food and beverage
Blueberries, on the other hand, have not marketing is becoming more and more like that
suffered from being primarily imported, for berries.
particularly from Poland and Chile, since
Healthy snacking
Apps and social media

strategies in healthy foods
and beverages
Key lessons and case studies
February 2011
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Healthy snacking
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challenging and fast-changing area of probiotics. It sets out the seven steps to
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dairy and emerging new segments such as fruit juice and solid foods.
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The Food & Health Marketing Handbook
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Since 1995 New Nutrition Business has proven itself to be the most reliable,
practical & useful source of analysis & insight into the global nutrition business. NEW NUTRITIO
N
Today over 1,000 companies in 42 countries around the world use
BUSINESS
VOLUME 12 NUMBER 6
www.new–nutrition.com
APRIL 2007
Yakult starts its

ISSN 1464-3308
New Nutrition Business as a practical tool to help them do business.

European fight-back
Yakult Honsha, the world’s
Using a wealth of strategy, branding, regulatory and technology case studies based
biggest marketer the assault of Danone Actimel,
of digestive health products, Yakult even
is bringing one managed to maintain market is LGG (Lactobacillus Goldin
of the most successful of leadership in the it licenses & Gorbach), which
its home-market from Valio Dairy of Finland.
brands to Europe in a bid Netherlands until 2005.
to boost flagging Now, even though it LGG
has lost ground to Danone, is the world’s most-resear
sales. Yakult still holds a ched probiotic and
can be found in around 30
on our own primary research, New Nutrition Business will help you: Launched in the Netherland 34% market share – far dairy brands
s in February, higher than in either
Germany (7%) or the UK worldwide.
and likely to be launched (13%).
later in the year in Unfortunately, ViÅt was
Germany too, Bifiene is Campina’s last
a milk drink with attempt at doing anything
the active ingredient Bifidobacteri innovative for
um breve some time and the company
Yakult, delivering a dose of – which has a
at least one billion reputation for conservatis
bacteria per 100ml package. m and a remarkable
self-conÅdence – stood back
• understand innovation in the nutrition business Although plastic bottles

the standard container for
products in Europe, Bifiene
100ml Tetra Pak, as it is
have become
daily-dose dairy
is packaged in a
while the daily-dose sector
It wasn’t until 2005 – almost
Årst launching ViÅt – that
and did nothing
romped ahead.
ten years after
Campina extended
in Japan, where the the brand into a 100g daily
product has been marketed dose. Campina’s
• learn “best practice” for successfully commercialising nutrition science

– albeit under a failure to see the clear signs
different brand name – since of how the
1978. The packs market was evolving have
are sold in threes and retail left ViÅt as a minor
at Albert Heijn, probiotics player in its home
the Netherlands’ biggest market.
supermarket chain, The Netherlands is also
at €2.99 ($3.99) per 3-pack. home to one of
Europe’s most innovative
The Netherlands is an important daily dose products
• identify international new product developments that you can apply in your own business in the history of functional
– it was where the whole
market had its naissance
country
foods in Europe
European daily-dose
in 1994 when Yakult
Much of Danone Actimel’s
Europe relates to its very
“challenges” as a marketing
success in
effective use of
tactic (see
– ActiFruit from Hero, one
biggest juice companies.
a real point of difference
by providing digestive health
of Europe’s
ActiFruit established
in a crowded market
launched its flagship 65ml November 2005 NNB). These benefits from
daily-dose product, challenge the fruit – each 100ml bottle
customer to take Actimel
• monitor key developments in global markets

called simply Yakult. every day for 2 has a 3.3g dose
weeks and to claim their of fruit fibre (pectin) – and
The Dutch daily dose dairy-drink money back if they this is clearly
market don’t feel any difference. communicated on the label:
has grown strongly in recent On average, the “fibre from fruit”.
years and in number of money-back Thus for the many people
2006 was worth, at retail requests is in single – particularly
prices, around €110 women – who
million ($147 million) – a figures while the challenge want digestive health benefits
staggering 800% concept tends to in a convenient format but
• keep up with regulations worldwide growth over 2001 – mostly

extremely aggressive and
of Danone Actimel, which
market in 2000.
driven by the
effective marketing
entered the Dutch
boost sales by millions.
The only Dutch dairy company
in the sector was Campina,
biggest Dutch dairy groups
competing
one of the two
intake of dairy products,
perfect alternative.
want to limit their
ActiFruit provides a
Athough privately-held Swiss-based

and one of the has declined to comment Hero
Despite being first-to-mar world’s biggest dairy companies. on its brand’s
Campina was performanc
• keep pace with market data.

ket in Europe, the also e, industry sources tell NNB
Netherlands is the only country spurred by the introductio that
where Yakult n of Yakult in sales of Actifruit, which
has had any enduring success. 1994 to launch its own probiotic was launched in
Weathering daily dose November 2006, have been
product, called ViÅt. ViÅ going well.
t’s active ingredient
Minute Continued on page 5
Maid lifts its Biggest fish in

The rise and rise
nutritional omega-3:
Robert Orr of Açaí in the US
portfolio
A subscription entitles you to: Page 3
THE JOURNAL
F O R H E A LT H Y
Page 15-16
E AT I N G , F U N C
TIONAL FOODS
Page 25
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In the fast As food, beverage and foodservice

companies take up the challenge
kids R
NUTRITION
E P O RT
www.kidsnutritionreport.com
evolving kids’ of children’s nutrition, KNR Unilever unveils first

MARCH / APRIL 2007
VOLUME 3 NUMBER 5
ISSN 1744-5450
delivers to you every two months: kids’ brainfood rang

e
nutrition • analysis & insight of their strategies
By Paul Vincent
Unilever has debuted Amaze,
brainfood for kids” in Turkey.

kids aged 5 to 12, the Amaze
of lunchbox snacks and
which have been developed
a brand it
describes as the “first specifically
designed
Aimed at school
range is made up
flavoured milk drinks
by the nutrition
very positive,” Geert van
Director of Nutrition for
Poppel, Ph.D. and
Unilever’s new
Vitality platforms, told Kids
“In less than four weeks,
more than €3 million worth
Nutrition Report.
the brand attained
and mental development of news coverage
programme Unilever
marketplace
in the Turkish media,” van
established in 2000. They Poppel says. “The
represent, the sales channels are proactively
company says, the culmination asking to list the
& tactics
of extensive products which is a good
research by the company early sign.”
into kids’ nutritional
needs.
Amazing Mums; not
But what makes Amaze confusing
amazing? them
• The brand is the first of
its kind. The
products are specifically The marketing campaign
developed to for Amaze, is fully
support children’s mental integrated to cover press
development advertorials, in-
needs. It does not involve
• explanations of trends and the fortification store sampling, TV advertising

and direct
it pays to stay
of existing kids’ products communication with medical
with functional professionals and
ingredients and to our knowledge a website.
there is
no similar product to be ensure the bioavailability “The brand is fundamenta
found anywhere in of nutrients is lly targeting
Europe or the US. increased, an issue which mothers and TV is the main
is increasing in communication
• Amaze is truly science-base medium,” explains van Poppel.
market developments
d: Unilever importance for all companies
says that it conducted a review with ambitions “There are also, however,
of over in the nutrition industry. advertorials,
200 scientific studies on Amaze has also been formulated a website and TV infomercial
nutrition and s to help
mental development in kids to be as mothers understand the
before creating low as possible in ingredients essentials in kids’
Amaze. As a result of this known to be nutrition and how the Amaze
research Amaze harmful when consumed formula would
products have been designed in excess (trans and help them in giving their
to deliver 33% saturated fats, sugar and children a better
sodium) and therefore
informed
of all the key micronutrie conforms to the WHO’s start. The product launch
nts that science dietary guidelines. has generated a
indicates kids need daily Amaze lunchbox nibbles great deal of interest among
for optimum mothers on the
• profiles of key & emerging mental development – such and milk drinks Internet.”
as iron, iodine have been on sale nationwide
and B-vitamins – as well in Turkey since The communications for
as important February, through all the Amaze “are
macronutrients such as protein grocery channels designed to reflect the great
and omega-3 Unilever has access to in the country. science behind the
DHA. They product and the specifically
are priced at €0.38 ($0.51) designed, unique
• Unilever emphasises that and €0.49 ($0.65) formula,” says Poppel, and
it has gone respectively. what he describes
companies & individuals

to great lengths to formulate “The initial consumer response as a “rational voice” is used
Amaze to in TV ads to help
has been mothers understand that
their kids’ nutritional
Yoplait adds Martek Continued on page 3

’s NutriPals wants to make
Omega-3 to Jacky makes
friends with US moms
its kids’ omega-3
yoghurt more palatable
• new product launch data Pages 4-5

for Nordic kids
Kids Nutrition Report is the first

Pages 7-9
Page 6
and only publication worldwide • brand and product profiles

to focus on the highly active • analysis of newly-published research into children’s nutrition
area of children’s nutrition and
and health
child-oriented food products,
strategies, policies and politics. • analysis of marketing & retailing developments
Every two months we bring
fresh and exclusive news, Edited by Julian Mellentin, co-author of the best-selling book
trends and analysis of what is The Functional Foods Revolution, and one of the world’s top five experts
rapidly becoming a key issue on the global nutrition business, Kids Nutrition Report brings to its
for the food industry. readers analysis that will help them make better business decisions.
To order visit: www.kidsnutritionreport.com or email: info@new-nutrition.com

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Trends and

Telephone +44 207 617 7032

Phone: +64 (0)9 361 2687

This edition printed August 2011

© The Centre for Food & Health Studies Limited 2011

British Library Cataloguing in Publication Data.

1. Healthy snacking: a wealth of innovation opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2. Key trends in healthy snacking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

3. Brand positioning in healthy snacking

4. Seven strategies to increase your chances of success in healthy snacking . . . . . . . . . . . . . . . . 41

Targeting the technology consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Targeting the lifestyle consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Targeting the mass market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

“Naturalness” – the biggest trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Fruit & vegetables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Box 5: Simply Eight keeps it simple for consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Companies and brands in this report

Apure Foods Frito-Lay PepsiCo

Continents/Countries in this report

• Snacking is the over-arching trend in food and health: it is affecting every

• No limits on innovation: given the convergence of innovation in processing

• Innovation in formats: in many segments of the snacking market it’s difficult to

• Innovation in marketing: probably the most important type of innovation. It is

• Invest in marketing: on today’s crowded supermarket shelves it is difficult to stand

• Transforming a snack commodity with marketing: Paramount Farms, the

• Innovation in ingredients: marketers and formulators tend to be very focused on

• Snacking Trend 1 – naturalness: in most Western markets “natural” is becoming a

• What is “Natural”? “Natural” has two meanings in snacking:

1. Natural = few ingredients, simple ingredients. “Natural” is not used in

2. Natural = “natural functionality”. For many consumers a health benefit that is

1. Healthy snacking: a wealth of innovation

1. Excellent taste. 1.2 INNOVATION WITHOUT LIMITS

• Probake 50 (Case Study 3) short-term success, followed by stagnation;

BOX 1: PORTION CONTROL A “WIN WIN” STRATEGY IN SNACKING

For snack producers, controlled-calorie packs have three attractions:

• they draw new customers into brands and product lines

3. Innovation in packaging the snacking aisle and today it is in national

TABLE 1: POPCHIPS AND FLAT EARTH: A COMPARISON

POPCHIPS FLAT EARTH

The suggested retail price is

RULES FOR SUCCESS IN HEALTHY SNACKING

2. Key trends in healthy snacking

2.1 TREND 1: NATURALNESS In fact, says SymphonyIRI, the “vast majority

Although there are some brands which make

2. Natural = “Natural functionality”

The message that a food or food ingredient

BOX 2: NATURALNESS IS A KEY ELEMENT IN BRAND SUCCESS

Kind Mini Bar X X

continued from page 16

BOX 3: EVEN MARS CHOOSES INGREDIENTS WITH A HEALTH HALO

Even a mass-market brand like Mars’ Marathon

As Mars acknowledges, “With increasing time

CHART 2: 2010 NEW PRODUCT PACESETTERS

• Fruit can also be a carrier for

Case Studies that illustrate this trend:

CHART 3: FRUIT & VEGETABLE SNACK PRODUCT LAUNCHES 2009-2011 (YTD)

Source: Mintel GNPD

CHART 4: CHANGE IN BODY WEIGHT DURING THE DIOGENES STUDY

Source: Diogenes study

obesity. The researchers favour diets with 25% of