As manufactures continue to seek new ways to take advantage of the growth in functional beverage consumption, traditional boundaries in the packaged goods industry are becoming increasingly blurred. Datamonitor’s Daniel Bone investigates a phenomenum which is opening new opportunities for the world’s drinks producers.
Until recently, skin health was still considered to be the domain of the cosmetics industry and restricted largely to topical creams rather than internal nutrition. But CPG developers are now promoting the idea that the outside of the body is a reflection of what goes inside. The proliferation of consumers concerned about wellness and adopting health and beauty regimes suggests that consumer demand for such products is likely to be high.
Products reflecting this development include ‘skingestibles’ (healthcare supplements promising beauty benefits), beverages containing beauty ingredients such as aloe and collagen and drinks being co-branded with a spa or beauty salon. A recently launched US product illustrating the concept is SkinCola. Described as an all-natural, super-oxygenated drink, the beverage claims to be helpful in hydrating and beautifying.
As the connection between beauty and health grows, there is an opportunity for manufacturers and retailers to develop sophisticated product offerings by promoting personal appearance through food and beverages. Ultimately, successful innovation relies upon a clear understanding of consumer needs and how to satisfy them with the appropriate product offering.
Ingredients with a positive effect on health are being introduced in foodstuffs rather than in supplements. Instead of focusing on what can be removed such as sugar or fat, manufacturers are embracing the concept of positive nutrition.
Historically, products possessing ingredients with a health effect were related much more to categories and product lines with a healthy image such as dairy products and fruit juices. However, now they are increasingly being incorporated into categories such as biscuits and sweets that have clearly sought to overcome negative consumer perceptions concerning health.
UK supermarket chain Tesco’s launch of what it claimed was the first cholesterol-lowering hard cheese product, called ‘A Healthy Alternative To Cheese’, in the first quarter of 2003, illustrates the move towards positive nutrition. The product is made from milk which has had all of its dairy fat removed and replaced with a vegetable oil which is naturally high in phytosterols and prevents cholesterol entering the blood stream. The product was developed by fellow UK firm Angel Technologies in association with researchers at Cambridge University.
On-the-go consumerism reshapes packaging
Greater time spent commuting has encouraged consumers to multitask while traveling in order to save time, increasing their propensity to eat on-the-move. The need for ‘lifestyle-supporting’ packaging therefore is on the rise.
A number of important innovations are embracing the on-the-go consumerism concept. The concept of ‘sippable’ packages in particular appeals to a broad age range. Whenever possible, manufacturers and retailers must consistently seek to incorporate simple design features that provide consumers with enhanced convenience and mobility for their on-the-go lifestyle.
For example, in the US, Land O’Lakes has found success with its single-serve Grip’n Go fluid milk line. Products include skim milk as well as strawberry, chocolate, chocolate shake and coffee-flavored Grippacchino. The product illustrates the growth opportunities available to CPG players by taking milk from its former status as a mealtime staple to a convenient and nutritious on-the-go beverage.
Opportunities and threats from category and sector synergies
As product innovation in any industry causes category boundaries to shift, traditional players often face new challenges and threats from both emerging and established players in ways that were not previously possible. Spotting such trends early is crucial to getting, or staying, ahead. Marketers need to relentlessly observe how lifestyles and buying habits are changing as this is critical for the new product development process.
Whilst the growing synergies between sectors represent an enormous opportunity for future innovation, especially in the form of joint ventures and strategic alliances, it will also mean many players will be faced with an increasing threat from companies and/or brands outside the traditional remit of what is traditionally considered direct competition.