Jeff Hilton03.01.09
It should come as no surprise to anyone who has walked through the healthy food and supplement retail aisles lately that some significant changes are taking place. What used to be an endless sea of white plastic bottles has turned into a montage of tubes, gels, pouches, gummies, chews, strips and fizzy tablets. By these new higher standards ordinary capsules and tablets pale in comparison. Or do they?
What's fueling this expansion into new dosage and delivery frontiers? Consider this: The natural products industry has long been fueled by entrepreneurial innovation and creativity. New products are the industry's lifeblood. But in the past five years new product launches have slowed considerably. Why? Manufacturers in this tight economy and conservative credit environment are less risk-tolerant. Funds are finite. Media scrutiny and criticism continues in the face of more science-driven products. Competitive noise is intensifying as the retail shelves become more cluttered. Consumers are more selective and price shopping has become the norm. Profit margins on all sides are shrinking, resulting in pressure to do more with less and trim back on "quality" without negatively impacting product performance. And there's one more key issue to consider-truly breakthrough technologies and ingredients are much less common than they were even five years ago.
In short, there just isn't that many new, legitimately researched ideas out there, and when one does come along, only certain manufacturers are equipped to come on board. Everyone else plays "wait and see," and then the bandwagon effect begins. Can you say melatonin? Or coral calcium? Or mangosteen?
In a manufacturer's never-ending quest for consumer attention and loyalty, innovative dosage and delivery concepts allow companies to bring news and excitement to the marketplace more quickly with less risk and expense. (I don't mean this as a condemnation of industry, but rather as an acknowledgement and observation of what has consistently happened in the maturity stage of the product lifecycle generally.) Breathing new life into existing products and categories through "borrowed interest" is a time-honored tradition for marketing in maturing industries-think of OTC drugs, electronics and health and beauty.
The key is to build value into your brand by cultivating product qualities or attributes that are both unique and important. There are many excellent examples within this industry of manufacturers and suppliers, which have partnered to bring innovative new approaches to market, specifically:
• "Value-added" ingredients like protein water or fiber water
• Unique and timely technologies like steam sterilization
• Omega 3s added to a wide variety of food product applications
• Krill oil finding consumer acceptance in a new retail channel through food, drug, mass and club stores
• Liquid beauty supplements tapping into a "beauty from within" niche
• Gummy supplements repositioned and marketed to adults
The bottom line here is that your success in the marketplace, as a manufacturer or supplier, is directly tied to your ability to differentiate your product or service from the competition. That's it, simply put. If that doesn't happen, then the rest of your efforts are for naught. Recognized marketing guru Jack Trout wrote a book several years back called Differentiate or Die. In a nutshell the book says that a differentiated market position is the only way to succeed against killer competition, then it talks about a variety of effective approaches to do just that.
For example, Mr. Trout outlines a variety of potential roads to differentiation for marketers to consider. Specifically:
• Unique or proprietary ingredients (e.g., Method non-chemically formulated household products)
• How a product is manufactured (e.g., Papa Murphy's occupies a unique position between frozen and cooked pizza)
• Where a product is sourced (e.g., Evian water from the French Alps)
• How a product is formulated (e.g., Airborne was formulated by a school teacher)
• Market preference (e.g., Science Diet dog food is what veterinarians give their own dogs)
• Being "cool" (e.g., Anything Apple. I-Pod. I-Mac. I-Whatever)
• Specialization (e.g., Victoria's Secret wisely focused their concept on one category-lingerie-and now they own it)
• Leadership (e.g., Hertz will always be #1 and for good reason)
• Green marketing (e.g., Patagonia embodies the environmentally sensitive lifestyle)
• Attribute ownership (e.g., When I say fly cheap, you think Southwest
So as we digest these potential approaches to differentiation, let's detail some ways in which these might apply to your current or future products. You could:
• Provide added convenience to time-challenged consumers (e.g., single-serve tear pouches)
• Make products more appealing and palatable to their intended audience (e.g., omega 3 chews for kids)
• Give new life to mature product concepts (e.g., tea sticks)
• Help showcase innovative ingredients or technology (e.g., heart healthy tortilla chips)
• Provide variety and enjoyment (e.g., gummy vitamins for adults)
• Underscore key product benefits (e.g., fast-melt tablets for quicker absorption)
• Package your product in a distinctive container to maximize shelf impact (e.g., POM custom juice jugs)
• Deliver functional health benefits in an already familiar product (e.g., protein, fiber or vitamin water)
• Visualize brand performance through product attributes (e.g., fizzing tablets or powders)
• Make a compelling competitive contrast (e.g., efficacy of krill oil vs. fish oil in supporting cardiovascular health)
• Take a new approach to a traditional category (e.g., beauty from within supplements for hair, skin and nails)
So the question remains: Are these innovations meaningful improvements or simply, to quote our nation's President, "lipstick on a pig?"
Particularly in the natural products sector, where loyal consumers and growing retailers are always on the lookout for the next "new thing," this step in the evolution of product development seems right on track. But may I suggest that before you consider marketing glucosamine in a syringe, that you ask yourself some important questions:
• Will this dosage or delivery vehicle add value to my product concept?
• Is my customer willing to pay for this added value?
• Does the dosage or delivery form compliment or conflict with the features and benefits of my product?
• What will be a retailer's reaction to this new format?
• Is this innovation environmentally responsible and sustainable?
• How will my competitors react and can this be readily copied?
Perhaps the most important question of all is will this help build brand equity for my company and products? In other words, will it move my target consumer through the steps of brand awareness, brand acceptance, brand trial, brand preference and brand loyalty (which is really what marketing is all about)? And of course, ingredient suppliers must develop a plan to:
• Manage profit margin
• Protect intellectual property
• Obtain co-branding support as needed
• Educate manufacturers, retailers and consumers
My personal study and discovery has convinced me that there is great opportunity and value in these evolving dosage and delivery approaches. I have talked with several specialty and mass retailers over the past six months and most agree that these types of innovations have helped sustain a sagging retail market. Their overriding concern has more to do with the industry's future commitment to new product development and technology creation.
The answer to that question lies in our collective hands. The flow of creativity and product innovation in the natural space has always originated in the narrow specialty channels and then moved to the broader market. We all must participate in and support that important birthing process to maintain our leadership position in this growing enterprise.
So bring on the gels, tubes, sprays, liquids and patches.
What's fueling this expansion into new dosage and delivery frontiers? Consider this: The natural products industry has long been fueled by entrepreneurial innovation and creativity. New products are the industry's lifeblood. But in the past five years new product launches have slowed considerably. Why? Manufacturers in this tight economy and conservative credit environment are less risk-tolerant. Funds are finite. Media scrutiny and criticism continues in the face of more science-driven products. Competitive noise is intensifying as the retail shelves become more cluttered. Consumers are more selective and price shopping has become the norm. Profit margins on all sides are shrinking, resulting in pressure to do more with less and trim back on "quality" without negatively impacting product performance. And there's one more key issue to consider-truly breakthrough technologies and ingredients are much less common than they were even five years ago.
In short, there just isn't that many new, legitimately researched ideas out there, and when one does come along, only certain manufacturers are equipped to come on board. Everyone else plays "wait and see," and then the bandwagon effect begins. Can you say melatonin? Or coral calcium? Or mangosteen?
In a manufacturer's never-ending quest for consumer attention and loyalty, innovative dosage and delivery concepts allow companies to bring news and excitement to the marketplace more quickly with less risk and expense. (I don't mean this as a condemnation of industry, but rather as an acknowledgement and observation of what has consistently happened in the maturity stage of the product lifecycle generally.) Breathing new life into existing products and categories through "borrowed interest" is a time-honored tradition for marketing in maturing industries-think of OTC drugs, electronics and health and beauty.
Cultivating Differentiation
The key is to build value into your brand by cultivating product qualities or attributes that are both unique and important. There are many excellent examples within this industry of manufacturers and suppliers, which have partnered to bring innovative new approaches to market, specifically:
• "Value-added" ingredients like protein water or fiber water
• Unique and timely technologies like steam sterilization
• Omega 3s added to a wide variety of food product applications
• Krill oil finding consumer acceptance in a new retail channel through food, drug, mass and club stores
• Liquid beauty supplements tapping into a "beauty from within" niche
• Gummy supplements repositioned and marketed to adults
The bottom line here is that your success in the marketplace, as a manufacturer or supplier, is directly tied to your ability to differentiate your product or service from the competition. That's it, simply put. If that doesn't happen, then the rest of your efforts are for naught. Recognized marketing guru Jack Trout wrote a book several years back called Differentiate or Die. In a nutshell the book says that a differentiated market position is the only way to succeed against killer competition, then it talks about a variety of effective approaches to do just that.
For example, Mr. Trout outlines a variety of potential roads to differentiation for marketers to consider. Specifically:
• Unique or proprietary ingredients (e.g., Method non-chemically formulated household products)
• How a product is manufactured (e.g., Papa Murphy's occupies a unique position between frozen and cooked pizza)
• Where a product is sourced (e.g., Evian water from the French Alps)
• How a product is formulated (e.g., Airborne was formulated by a school teacher)
• Market preference (e.g., Science Diet dog food is what veterinarians give their own dogs)
• Being "cool" (e.g., Anything Apple. I-Pod. I-Mac. I-Whatever)
• Specialization (e.g., Victoria's Secret wisely focused their concept on one category-lingerie-and now they own it)
• Leadership (e.g., Hertz will always be #1 and for good reason)
• Green marketing (e.g., Patagonia embodies the environmentally sensitive lifestyle)
• Attribute ownership (e.g., When I say fly cheap, you think Southwest
Applying the Concept of Differentiation
So as we digest these potential approaches to differentiation, let's detail some ways in which these might apply to your current or future products. You could:
• Provide added convenience to time-challenged consumers (e.g., single-serve tear pouches)
• Make products more appealing and palatable to their intended audience (e.g., omega 3 chews for kids)
• Give new life to mature product concepts (e.g., tea sticks)
• Help showcase innovative ingredients or technology (e.g., heart healthy tortilla chips)
• Provide variety and enjoyment (e.g., gummy vitamins for adults)
• Underscore key product benefits (e.g., fast-melt tablets for quicker absorption)
• Package your product in a distinctive container to maximize shelf impact (e.g., POM custom juice jugs)
• Deliver functional health benefits in an already familiar product (e.g., protein, fiber or vitamin water)
• Visualize brand performance through product attributes (e.g., fizzing tablets or powders)
• Make a compelling competitive contrast (e.g., efficacy of krill oil vs. fish oil in supporting cardiovascular health)
• Take a new approach to a traditional category (e.g., beauty from within supplements for hair, skin and nails)
So the question remains: Are these innovations meaningful improvements or simply, to quote our nation's President, "lipstick on a pig?"
Particularly in the natural products sector, where loyal consumers and growing retailers are always on the lookout for the next "new thing," this step in the evolution of product development seems right on track. But may I suggest that before you consider marketing glucosamine in a syringe, that you ask yourself some important questions:
• Will this dosage or delivery vehicle add value to my product concept?
• Is my customer willing to pay for this added value?
• Does the dosage or delivery form compliment or conflict with the features and benefits of my product?
• What will be a retailer's reaction to this new format?
• Is this innovation environmentally responsible and sustainable?
• How will my competitors react and can this be readily copied?
Perhaps the most important question of all is will this help build brand equity for my company and products? In other words, will it move my target consumer through the steps of brand awareness, brand acceptance, brand trial, brand preference and brand loyalty (which is really what marketing is all about)? And of course, ingredient suppliers must develop a plan to:
• Manage profit margin
• Protect intellectual property
• Obtain co-branding support as needed
• Educate manufacturers, retailers and consumers
Conclusion
My personal study and discovery has convinced me that there is great opportunity and value in these evolving dosage and delivery approaches. I have talked with several specialty and mass retailers over the past six months and most agree that these types of innovations have helped sustain a sagging retail market. Their overriding concern has more to do with the industry's future commitment to new product development and technology creation.
The answer to that question lies in our collective hands. The flow of creativity and product innovation in the natural space has always originated in the narrow specialty channels and then moved to the broader market. We all must participate in and support that important birthing process to maintain our leadership position in this growing enterprise.
So bring on the gels, tubes, sprays, liquids and patches.
