food

'Simple' Ingredients, Messaging Win Consumers

Haagen Dazs/Pillsbury Simply

With health and benefits claims having reached bewildering proportions in recent years, major food and beverage marketers are taking a cue from niche companies and succeeding with a growing number of products positioned as "simple," both in ingredients and messaging.

More than half (56%) of food/beverage product categories in the U.S. showed decreases in the average number of ingredients per product between 2008 and 2009, with an average ingredients decrease across categories of 2.4%, according to Mintel International CPG trend insight directors Lynn Dornblaser and David Jago, who detailed the simplicity trend during the recent IFT 2010 annual meeting and food expo.

This is a response to consumers increasingly shifting their nutritional health/wellness focus toward "natural," "real" and additive-free foods -- meaning those offering inherent goodness, freshness, wholesomeness and balanced nutrition, they pointed out. These days, a "simple" message is often perceived more positively than didactic or vague "good for you/healthy" messaging.

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While most "simple" offerings are still coming from smaller companies, often as offshoots of organics, large companies are also jumping on the trend, sometimes by introducing "simple" extensions of well-established brands (e.g., "Simply Heinz" tomato ketchup).

"Inherently" simple product success stories include Yoplait Greek yogurt (three best-selling varieties have cumulatively sold $9 million since January 2010), and the refrigerated, packaged smoothies category (which, while impacted during the recession, logged 82% growth between 2005 and 2007 and is forecast to reach $250 million by 2011).

Other successful new offerings from majors include Pillsbury's Simply...Chocolate Chip Cookies (ready-to-bake dough free of trans fats, high-fructose corn syrup/HFCS, and artificial colors, flavors and preservatives), with sales of $10.3 million since its May '09 launch; and Haagen-Dazs's Five ice cream line (just five, all-natural ingredients), with sales of $21 million in its first year.

Such successes clearly point to a growing number of "simple" choices in every category going forward, pointed out Dornblaser and Jago.

Food/beverage categories showing a reduction in average numbers of ingredients last year included alcoholic and non-alcoholic beverages, meals, side dishes, dairy, both sweet and savory spreads, desserts/ice cream, sauces and seasonings, both chocolate and sugar/gum confectionary, and pet food. (Interestingly, however, categories showing increases in ingredients included baby food and fruits/ vegetables, as well as processed fish/meat/egg products, soup and snacks. Breakfast cereals showed no change.)

Product introductions featuring "all natural" and "no additives/ preservatives" claims rose steadily between 2006 and 2008, and while growth flattened last year, each has accounted for about 14% of launches in 2010 to date. "Whole grain" introductions are on a notable growth curve, rising from about 3% in '06 to a current 4% of product launches. However, after peaking at about 12% in 2008, "organic" launches are on a dramatic decline (currently accounting for just 8% of total launches, despite private-label introductions).

Use of a wide variety of sugars is up, while more CPG and restaurant marketers are touting the absence of HFCS in new or reformulated items. Despite the HFCS industry's efforts to counter such perceptions, Mintel Menu Insights data show that 42% of consumers believe that HFCS in beverages promotes obesity, and 31% say they usually look for beverages that do not include HFCS.

But marketing "simple" isn't necessarily simple, the Mintel executives emphasized.

For starters, all products claiming to be simple/wholesome/natural must be "wholly transparent" -- or risk not only non-purchase, but potential collective protests from today's empowered consumers, they pointed out.

Many food/beverage marketers are conveying product simplicity and wholesomeness with clean, simple labels, sometimes calling out (with checkpoints or limited messaging) what's not in a product as well as what is. An example is Yoplait's Simply...Go-Gurt yogurt, whose package lists three points (good source of calcium and Vitamin D, no HFCS, no artificial colors or flavors), and which reached sales of $4.2 million in its first 20 weeks on the market.

However, manufacturers need to focus on better conveying the benefits of existing, inherently simple brands, as well as achieving the most effective balance of positive versus "no" (as in "no additives," "no junk") claims for new brands or products, they said.

Marketers must also be careful to ensure that the consumer bases for "simple" line extensions of existing brands are sufficiently differentiated, so that new offerings that are perhaps perceived as "better" alternatives do not cannibalize their core businesses, they warned.

Pricing and the nature of the category or subcategory are also major considerations. While many consumers are willing to pay somewhat more for simple/natural/wholesome products, many are also compromising on benefits because of tighter budgets -- and some are bound to question why a product with fewer ingredients costs more, Dornblaser and Jago noted. Furthermore, some categories/subcategories may not be cut out for "simple/natural" positioning.

They cited the contrast between the fortunes of two U.S.-marketed naturally positioned beverages, Kraft Foods' Crystal Light Pure Fitness drink mix (sweetened with stevia and evaporated cane juice) and PesiCo's Pepsi Natural (all-natural cola made with sparkling water, sugar and kola nut extract). The Crystal Light product has seen sales reach $6 million since its December '09 launch, while Pepsi Natural's sales have been sliding and the product is "disappearing" from some markets, they reported.

Possible reasons: "Natural" consumers may not be soda drinkers and/or Pepsi Natural's price (9.56 cents per ounce, versus 2.38 cents per ounce for regular Pepsi) may be too steep, they speculated. In comparison, Crystal Light Pure Fitness costs a relatively inexpensive 35 cents per full serving.

2 comments about "'Simple' Ingredients, Messaging Win Consumers ".
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  1. Matthew Barbour from Product Ventures, August 4, 2010 at 11:59 a.m.

    Especially when it comes to packaging: http://www.productventures.com/press/PVE_Brandweek_Simplicity.pdf

  2. Matthew Barbour from Product Ventures, August 13, 2010 at 1:19 p.m.

    Read: Why These Complex Times Demand Simpler Packaging: http://www.productventures.com/press/PVE_Brandweek_Simplicity.pdf

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