Professional Documents
Culture Documents
By Julian Mellentin
November 2016
Presented by
Asia-Pacific Office:
PO Box 21675
Henderson
Auckland 0650
New Zealand
Trademark notice: Product or corporate names may be trademarks or registered trademarks and are used only
for identification and explanation, without intent to infringe.
2.Summary slide14
3.The10KeyTrends slide26
KeyTrend1 slide27
SnackificationCaseStudies slide43
KeyTrend2 slide61
Fat/sugarCaseStudies slide82
KeyTrend3 slide97
CheeseCaseStudies slide115
KeyTrend4 slide130
ProteinCaseStudies slide146
KeyTrend5 slide153
DigestiveWellnessCaseStudies slide165
KeyTrend6 slide174
DairyfreeCaseStudies slide200
KeyTrend7 slide220
PermissiontoIndulgeCaseStudies slide229
KeyTrend8 slide244
KeyTrend9 slide258
DigitalRevolutionCaseStudies slide274
KeyTrend10 slide283
HelloSavoryCaseStudies slide288
Foundedin1995,NewNutritionBusinessistheworldsnumber1providerofstrategicand
marketinsightsintothebusinessoffood,nutritionandhealth
Fromglobalgiantstostartups,ourclientsincludetheworldsmostinnovativefood,
beverageandingredientscompanies.
Weinterviewmorethan500seniorexecutives,worldwide,infoods,beveragesand
ingredientseveryyear,givingusaninformed,firsthand,globalviewofwhatworks,what
doesntworkandwhy.
Webringaglobalperspective(officesandaffiliatesinEurope,NorthAmerica,AsiaandNew
Zealand)andourlanguageskillsgiveusacompetitiveedgeinunderstandingmarketsand
cultures.
Expertiseinglobalmarketsandacrossmultiplefoodandbeveragecategories.
Aroundtheworld,companies
largeandsmalluseourtrends
toinformandguidestrategy
andidentifyclear,actionable
stepsfor:
R&D
productdevelopment
marketstrategy
Forus,aKeyTrendisonethat:
Drivesgrowth
Willendure
Weconstantlymonitoramassofqualitativeandquantitativedata,includinginterviewswith
morethan450seniorexecutivesinthefoodandbeverage
industryaroundtheworld.
Overtimewehavebeenabletocontinuously
test,challenge,refineandimproveour
methodology.Weveaddedlayeruponlayer
tooureverdeepeningknowledgeofthe
consumer,themarketandthekeydrivers.
WeusetheTrendDiamondasadisciplineto
evaluateatrendoneveryfactorfrom
regulationtotechnologytoconsumerbelief.
New Nutrition Business 9
TECHNOLOGY
CONSUMERS LIFESTYLE
MASS MARKET
CONSUMERS
CONSUMERS
TechnologyconsumersThesearetheearlyadopters,peoplewhohaveanearmedicalneed
foraproduct.Theymakeup10%ofconsumersandtendtobeolder.Theyneedthetechnology
ofthefunctionalfoodtoaddresstheirhealthcondition.Theyseeproductsinamedicalised
contextand,aswithdrugs,theywillpayasubstantialpremiumforsomethingthataddresses
theircondition.
LifestyleconsumersThis20%30%ofpeopleareinterestedinmaintainingtheirwellness,
notfightingillness.Theywilladoptnewbrandsandwillpayapremiumforaproductbutonly
ifitsupportstheirlifestyle.
MassmarketconsumersTaste,price,brandoften/usuallytakehigherprioritythanhealth
forthis60%ofthepopulation.Healthmessagesmustbesimple,easytounderstand(contains
fibre).Motivatedwhenabenefitbecomesastandardandisavailableinproductswithlowor
nopremiums,ideallyfromwellknownandtrustedbrands.
Key Trend 1
Key Trend 2
Key Trend 3
Key Trend 4
Key Trend 5
Key Trend 6
Key Trend 7
Key Trend 8
Key Trend 9
Key Trend 10
1. Dairycompaniesaretodaypresentedwithsomegoodopportunitiesforprofitable
growthatgoodmarginsiftheycanconnecttotheKeyTrends(seeSlide15).
Dairyhaslongbeenoneofthemostcreativecategoriesinthesupermarket,possibly
rivaledonlybybeveragesincreatingnewproducttypesandbringingnewbenefitsto
theconsumer.Atthesametimedairyisfacedwithadistinctandgrowingcompetitive
threatonethatsomecompaniesarealreadyturningintoanopportunity.
2. Amajoradvantagefordairyisthatscienceshowitisoneofnaturesnaturally
functionalwholefoods(seeSlide23).For30yearshealthprofessionalsdemonised
dairyforitssaturatedfatcontentcreatingthemarketforlowfatdairyproducts.Butas
researchrollsbackthenegativesaboutdairyfatitsconnectiontoriskof
cardiovasculardiseasehasbeenfirmlydebunkeddairyisundergoingahealthrebirth,
itshealthbenefitsputtingitonaparwithalmondsandblueberries.Thispositiveimage
meansdairyproductscanbepositionedasbothhealthyandindulgent,andmany
successfulbrandsofferpermissiontoindulge,capitalisingondairystasteandtexture
advantages.
3. Moveawayfromlowfat:Asaresultofnewscienceaboutdairyshealthbenefits,insome
marketsthemosthealthinformedconsumersarebuyingmorefullfatproductswhilesales
oflowfatareflatorfalling.Somebrandshavegivenupofferinglowfatvariantsand
successfullyfocusonthetasteadvantageofmadewithwholemilk.Inmostmarkets,it
willtake20yearsbeforeconsumersunderstandthatfullfatisahealthyoption,butthe
trendisclear.
4. Cheeseisoneofthebiggestbeneficiariesofthesciencebasedrebirthofdairy:There
nonegativesassociatedwithcheesefromthefatorsodiumanditactuallyconferssome
healthbenefits.Snackingisthebiggestgrowthopportunityforcheeseandafewcompanies
arealreadygettingmoresalesathighermarginsfromfocusingonsnacking.
5. Thedemonisationofsugarhasdairycompaniesbusyworkingouthowtomeet
consumersdemandsforlowersugarproducts:Wisecompanieswillsimplylowersugar
levelsandincreasefatandavoidthetasteandcostproblemsofusingsweeteners.The
strongestwaytodealwithconsumersneedforlowersugarproductsistoreeducatethem
backintothetasteandhealthbenefitsoffullfat.
6. Thepremiumisationtrendisakeyopportunityfordairycompanies.Asconsumer
beliefsabouthealthfragmentmassively,thenichescollectivelyareeatingupthemass
market,startinginthewealthiestcountries.Premiumnichebrandsareachievinggood
growthevenascommoditybrandsstagnate.
7. Aportfoliooflowvolume,highvaluenichebrandsisthewayaheadforprofitability
inalmosteverycase.Beginbyaddressingthelifestyleconsumerwhoiswillingtopaya
premiumforahealthierproduct.Thehighvolumecommodityfocusofmanydairiesisa
mistake,unlessyouaretheoneortwoplayerswhocandominatethelowcostpartofthe
marketusingpricebuteventhenyouwillbeunderconstanterosionfromprivatelabel
andyourvolumemaybeflatordecliningasconsumersbecomeevermoreeducatedabout
healthtrustedbrandsandswitchtopremiumbrands,ifnotforalltheirdairypurchases,at
leastforsome.
8. Singleserveandsnackifiedproductshavetobepartofeverycompanysstrategy.
Thisisoneofthestrongestwaystogetbetterpricesandbettermargins.Singleserveon
thegoproductsarebetteralignedtomodernlifestylesthanthetraditionalfamilyoriented
bulkpackswhichhavebeenthefocusofmanydairysmanufacturingled,commodity
basedstrategies.
9. Proteincontinuestobeagrowthopportunity,particularlyinAsiaandtheMiddle
East,wherethemarketforsuchproductsisatDay1.Consumersseeproteinasabenefit,
andthemosthealthawareknowofproteinsconnectiontohealthyweightandbody
composition.Proteinisslowlytakingoverastheingredientmostassociatedwithweight
management.
10. Nondairyplantmilkssuccessfullyusethemessageofbetterdigestivehealthasaway
ofpositioningthemselvesagainstdairy(seeKeyTrend5).Muchofthenegativityabout
dairythatiserodingdairyinsomemarketsandisgoingtoerodedairyevenmorearises
fromconsumersseekingdigestivewellnessandassociatingitwithdairyfree.
11. Digestivehealthisamajorwellnessissueformanyconsumersandhasbeena
growthdriverinmanycategoriesforover20years.Companieshavetreateddigestive
wellnessandthefreefrommarkets(meaningglutenandlactosefree)asseparate.Butthey
areinfactthesamemarketsinceglutenfreeanddairyfree/lactosefreeconnectvery
stronglytodigestivehealth.Whenpeoplereducedairyorlactose,theyreportthatthey
feelthebenefitoneofthemostimportantreasonsforanyonetobuyahealthier
product.
12. Nondairydairyisbothanopportunityandathreat:Alldairycompaniesmust
decidehowtorespondtonondairyinmanycasesthatwillmeanenteringthe
market.In2016bothDanoneandCocaColabecamemajorplayersinnondairy
dairythroughacquisition.Danoneisnowoneoftheworldstop10dairycompanies
andalsotheworldsbiggestplayerinthenondairymilksmarket.
13. Companiesmustpushbackagainstattacksondairy:Justwhenacriticalmassof
scienceisrevealingthatdairyisanaturalwholefoodwithawealthofhealthbenefits
(seeKeyTrends2and3),itfacesagrowingtideofnewnegatives,spawnedbythe
digitalrevolutionandsocialmedia.Attacksondairyaregoingtoincreaseinintensity
andfrequency,anddairycompaniesneedtocommunicatethemanysciencebased
healthbenefitsofdairy.
14. Increasinglyconsumersarepersonalisingtheirdietsastheymaketheirownfood
choices,tailoredtotheirbeliefsandlifestyles.Thedigitalrevolutionismakingevery
consumerintotheirownhealthandnutritionexpertbygivingthemaccesstoan
unprecedentedamountofinformationontheirportabledevices.Thiscomesatthemoment
whenexpertadvicehasacredibilityproblembecauseofthefailureoflowfatdietadvice
(andmanyotherexamplesofpoorexpertadvice).
15. Cleanlabeldoesnotcreateapointofdifference(seeSlide25)andthereisnoevidence
thatgoingcleanlabeldeliversincreasedvolumesorhighermargins.Offeringconsumers
productsthatarecleanlabelhassimplybecometablestakesinmostcountriesits
justwhatconsumersexpectyoutodo.Infactinmanymarketspeoplestillplacetaste,price
andotherfactorsabovecleanlabel,evenintheUS.Cleanlabelisnotagrowthtrend.
16. GMOfreehaslittleornoeffectonconsumerbehaviourinmostmarkets.Whilethe
GMOfreemessageisbecomingmorecommonintheUSandJapan,theresnoevidenceof
itcreatinggrowth.
Consumersdesireforfoodsandbeveragesthattheyperceiveasnaturallyhealthyornaturally
functional(asdefinedinthemindoftheconsumerthisisnotaregulatoryortechnicaldefinition)isthe
biggesttrendacrossallfoodandbeverageandthebiggestdriverofsuccessfulgrowth.
New Nutrition Business 23
For30yearshealthprofessionalsdemoniseddairyonthegroundsofallegedharmfromits
saturatedfatcontentproducingaconsumerobsessionwithlowfatdairyproductsinsome
countries.Butresearchersarerollingbackthenegativesaboutdairyfatandtheviewthat
dairyfatisconnectedtoriskofcardiovasculardiseasehasbeenfirmlydebunked.
Thediscoverythattheseandmanyothernaturalfoodsnotonlydonoharmbutmakea
positivecontributiontohealthhaspushedmanypeopletobecometheirownexperts.
LunchablesUploaded,the
mostsuccessfulnewUS
brandof2014,with$143
millioninsales,has60
ingredients.Araremass
marketsuccess.
Somepeoplecareabout
cleanlabelonlysomeofthe
time!