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Developing a Functional Food Product - Part 2

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Part 2 of a 2-part series

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Developing a Functional Food Product - Part 2

  1. 1. Considerations in Developing a Functional Food Product & Making it Good for a Successful MarketStart Dr. R. B. Smarta Managing Director Interlink Marketing Consultancy Pvt. Ltd. Honorary Secretary Health Foods & Dietary Supplements Association (HADSA) 11th April 2014
  2. 2. Successful MarketStart
  3. 3. So Far we have discussed Inside-Out Approach!!! Lets now appreciate the Outside-In Approach!!!
  4. 4. OUTSIDE-IN APPROACH
  5. 5. Outside-In Approach Trends Needs Problems Platform Source: Innovation in Healthy & Functional Foods, Market –Focused Innovation in Food & Nutrition
  6. 6. 10 UPCOMING TRENDS
  7. 7. 10 Upcoming Trends 1. Emerging Economies 2. Value of Science 3. Increase in health consciousness 4. Awareness of Functional Foods 5. Increasing disposable incomes SOURCE: http://www.nutraceuticalsworld.com/issues/2014-01/view_editorials/10-trends-to-watch-in-2014/ 6. Quality & Safety 7. New Rules & Regulations 8. Claims Enforcement 9. Sustainable Supply Chains 10. Personalized & Preventive Medicines
  8. 8. The Market for Health Promoting Ingredients
  9. 9. CONSUMER FOCUSED MARKET DRIVERS
  10. 10. Market Drivers focused on Consumers  Rising Incomes  Major Brands re-positioning towards more towards Health  Increasing incidence of Self-medication & Personal responsibility  Increasing Awareness of Medical Consumers & Healthcare professionals
  11. 11. MARKET TRENDS BASED ON CONSUMER NEEDS
  12. 12. Market Trends based on Consumer Needs • Digestive Health • Convenience Foods • Benefit Foods • Energy Yielding & Slow energy releasing • Fruit & Super fruit • Weight wellness & Gluten-free
  13. 13. CONSUMER DILEMMAS
  14. 14. Consumer Dilemmas CONSUMER DILEMMAS What is the price – value equation? How good is product nutritionally? Does the product call for longer cooking time? How is the taste affected by nutrition? Source: Innovation in Healthy & Functional Foods, Marketing, PR, Ad & Media for Brand building of innovative Foods & Nutritional Products
  15. 15. MARKET ENTRY BARRIERS & OTHER CHALLENGES
  16. 16. Market Entry Barriers faced by the companies • Lack of adequate Marketing & Product development infrastructure • Lack of adequate funding for R&D and overall Business • Regulatory policies/procedures/processes
  17. 17. Other Market-related Challenges 1. Conversion of Science to Business 2. Value of Science a Regulatory mechanism 3. Consumer behaviour, Market mapping and Product development 4. Barriers in Development and Marketing 5. Viability and Commercialization 6. Funding and Financing
  18. 18. KEY CHALLENGES IN DEVELOPMENT
  19. 19. Key Challenges in Development • Ensuring that Healthy choice is the Easy choice for consumers • Assuring & Delivering Health, Safety & Quality • Achieving Sustainable food production • Managing the food chain • Optimizing Communication, Training and Technology transfer. Source: New Developments in Novel and Functional Foods, Lisbeth Munksgaard, SM, Danisco A/S
  20. 20. 5 CRITICAL SUCCESS FACTORS
  21. 21. 5 Critical Success Factors 1. Notice-ability 2. Superiority 3. Compatibility 4. Practicality 5. No Complexity
  22. 22. MARKETING & BUSINESS STRATEGY
  23. 23. Marketing Strategy • Strategy for ‘Targeted Market Segment’ • Strategy ‘In Societal Context’ • Strategy ‘To Meet the Future Demands’
  24. 24. Targeted Market Segments based on Customer Needs Sufferers At Risk Prevention Mass Market Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert
  25. 25. Strategy for Targeted Market Segment Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert
  26. 26. Strategy In Societal Context Factors to be considered:  Legal systems  Claims made on the label  Politics  Cultural norms and values  Finances and other societal factors Harmonized legal systems for food and medicines would facilitate production and trade with these products. Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert
  27. 27. Strategy to Meet Future Demands Factors to be taken into considered:  Extend product lines by combining the portfolio of existing and new product forms with innovative new components.  Follow a strong trend, to identify emerging growth opportunities that can be accelerated into the mainstream market through competencies in marketing and distribution. Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert
  28. 28. Business Strategy Building a Brand Clinical Studies Proprietary ingredient/product Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert
  29. 29. Business Model Source: Functional Foods for Added Value Developing and marketing a new product category, Cecilia Mark-Herbert
  30. 30. COMMERCIALIZATION
  31. 31. Process of Commercialization Creation & Commercializa tion Diffusion & Absorption Shifting out to the global/local frontier of awareness, knowledge, exchange & performance Moving toward the acceptance of innovators& early adopters of the market Product Innovation Product Innovation Marketing Innovation Commercial process Innovation Better and cheaper products in global, national and local markets in response to consumer needs. Source: Innovation in Healthy & Functional Foods, Market –Focused Innovation in Food & Nutrition
  32. 32. Manufacturing & Packaging Industry Nutrient and Supplement Suppliers & Manufacturers Confectionery, Beverage & Chocolate Manufacturers Ingredient Manufacturers & Suppliers Equipment Providers Vegetables & Fruits Suppliers Cereals and Grains Suppliers Equipment Providers, Processing Industry Stakeholders for Functional Foods Market
  33. 33. 7 POINT CHECKLIST FOR SUCCESSFUL MARKETING OF FUNCTIONAL FOODS
  34. 34. Checklist for Successful Marketing of Functional Foods 1. Successful brands are expert brands 2. Offer a relevant benefit and be a credible brand 3. Aim for a benefit the consumers can feel 4. Remember - an ingredient is not a point of difference – it must give Value Proposition Source: http://www.nutraingredients.com/Industry/Learning-from-functional-foods-failures Learning from Functional Food Failure 11 June 2009
  35. 35. Checklist for Successful Marketing of Functional Foods 5. A future of niches – focus on value, not volume 6. Differentiate using packaging design 7. Open new categories & segments – don’t be me-too Source: http://www.nutraingredients.com/Industry/Learning-from-functional-foods-failures Learning from Functional Food Failure 11 June 2009
  36. 36. Mantra For Marketing ‘Filter the Promise from the Challenge’
  37. 37. WHY PRODUCTS FAIL?
  38. 38. (Functional Foods line, Novartis) CASE STUDY
  39. 39. WHY DO SOME PRODUCTS SUCCEED?
  40. 40. (Creamy yogurt containing Bifidus ActiRegularis1, Danone, France) CASE STUDY
  41. 41. Your Wellness is in Your Hands!
  42. 42. Any Questions?
  43. 43. Interlink’s Offerings to Clients 1.Market Mapping Location / Therapy-wise Organ Specific General Management Disease Care 2. India Entry Strategy  Entry mode  Regulatory & Product Deve.  Communication & Health claims  Positioning & Pricing strategy  Partner search / alliances  Licensing-in
  44. 44. Interlink Marketing Consultancy Pvt. Ltd. 3A, Central Plaza, 166, C.S.T. Road, Kalina, Santacruz (E), Mumbai - 400098 Tel: (022) 2666 6611 / 44 info@interlinkconsultancy.com www.interlinkconsultancy.com Enabling Corporates to succeed in competition! In life you have either Reasons or Results…
  45. 45. Thank You for Your Attention
  46. 46. AFRIS. AsianFoodRegulationInformationService. We have the largest database of Asian food regulations in the world and it’s FREE to use. We publish a range of communication services, list a very large number of food events and online educational webinars and continue to grow our Digital Library. We look forward to hearing from you soon! www.asianfoodreg.com adrienna@asianfoodreg.com

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