Healthier food products to spur growth for manufacturers

Posted by Daniel Palmer on 3rd December 2009

Food manufacturers are confronted with conflicting messages from consumers, with most saying they plan to commit to a healthier diet but relatively few following through. However, it hasn’t stopped a number of manufacturers from reaping great success from adopting a health and wellness focus and a new American report – “Health & Wellness: Redefining Healthy Living” from market researchers IRI – suggests the bulk of the health and wellness potential remains untapped.

“During the past several years, marketing programs have effectively stimulated demand for healthier CPG solutions, but there is still a lot of opportunity for growth,” IRI Shopper Marketing and Innovation President Thom Blischok suggested. “For instance, retailers and manufacturers should consider leveraging the brand strength of existing national and private brand products and introduce brand extensions that feature healthier and/or organic ingredients.”

Innovative marketing efforts will also increase interest in better-for-you products and living habits. IRI cited the example of independent organization Guiding Stars who developed a simplified rating system based on the nutritional density of food products per 100 calories. Foods are rated on a point system, ranging from 0 stars (does not meet nutritional requirements to receive any star) to 3 (best nutritional value). The goal is to simplify and increase information about healthy products and do a better job of “telling the story” about these products and their nutritional benefits.

Savvy CPG marketers and retailers are also exploring merchandising opportunities. Use of displays or kiosks featuring better-for-you products, cross-selling healthier products on packages of “traditional” products and selectively reducing prices are examples of three successful strategies being employed today, according to the report.

CPG retailers and manufacturers seeking to develop effective brand strategies in relation to consumer health and wellness trends should consider the following action items:

* New Product Development: Invest to understand important wellness considerations across key consumer and target groups; re-evaluate store brands to identify opportunities for targeted line extension opportunities.
* Marketing: Develop targeted marketing messages against high-potential segments, communicating specific health benefits linked to the ailment/condition/wellness goal.
* Merchandising: Leverage shopper insights to assess shopping patterns of healthier brand buyers to identify optimal shelf placement, adjacencies and promotions.

“The world of CPG marketing is changing quickly,” adds Blischok. “As the economy continues to evolve, so to will CPG-related attitudes and behaviours.”

“Today’s value and health-oriented environment provides opportunity for marketers to really connect with shoppers. Those forging solid relationships today will reap rewards long after the recession ends.”