Strategic advice for the food and beverage industry

The Empire strikes back – food giant creates new mini-meal brand

Posted on:
August 3, 2018
Julian Mellentin



Unilever’s latest product launch shows that “Big Food” is just as capable of innovation as entrepreneurial start-ups.

As the UK market leader in mini-meals and owner of the No. 1 brand in instant pot products, Unilever clearly doesn’t intend to leave the reinvention of the category – growing at 20% annually – in the hands of upstart brands.

It has created a new brand called Prep Co alongside its existing market-leading brand, the mass-market Pot Noodle, targeting health-aware consumers.

In packaging, ingredients, flavours and marketing, Prep Co looks and feels exactly like a start-up challenger brand. It describes itself as:

“A one-pot…..lunch that’s delicious, made with natural ingredients, and ready in 5 minutes. So no need to panic if you have a ‘working lunch’ – Prep Co is ready and waiting.”

Its “better-for-you” credentials are based on using all-natural ingredients with no artificial colours, flavours or preservatives. Each pot also delivers one of the recommended ‘five a day’ of vegetables.

Prep Co comes in four “globally-inspired” flavours:

  • Mediterranean Couscous
  • Thai Green Curry
  • Indian Spiced Lentils
  • Mexican Chilli Rice

The instant pots are made by adding boiling water and weigh 252g after preparation. Each pot delivers between 6g and 12g of plant protein – important to many health-conscious urban consumers – and most ingredients are flagged as being “from sustainable agriculture”.

Once synonymous with quick and easy junk-food and seen as the centre-piece of the student kitchen cupboard, one-pot foods are now being re-positioned with healthier options. A number of start-ups have come into the category, but they struggle to make headway. Their struggle will be harder now – with Prep Co Unilever has taken away their chance of creating a point of difference or of positioning themselves as more-virtuous, all-natural brands offering something that ‘Big Food’ can’t or won’t offer.

Not only that, but with the benefits of scale on its side, Unilever can both capture the customers willing to pay a premium for naturalness and health – Prep Co is sold at a 100% premium to mass-market Pot Noodle – while looking like great value compared to the start-ups, which are positioned at a 50%-100% premium to Prep Co.

As a strategy, it’s always better to actively reinvent your category and create new brands and new segments than to sit with your existing brands and watch new entrants grab the opportunities.

In the past ‘Big Food’ companies would never have adopted such a bold strategy – leading many to conclude that the new entrants would reinvent every market. The launch of Prep Co shows that there’s nothing inevitable about that outcome.

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Under the influence: Brazilians get familiar with FODMAPs

Posted on:
July 30, 2018
Julian Mellentin

What’s the magic ingredient that can take a new food or diet from obscurity to ubiquity? Sometimes, it’s who you know.

FODMAPs is an established avoidance diet in Australia and emerging in US and UK, but it’s practically unheard of in most other countries.

But in Brazil, that could be about to change since a popular blogger introduced at least 2% of the population to the concept.

Gabriela Pugliesi is one of the country’s most popular fitness and health “influencers”, sharing her diet and fitness routine with almost 4 million Brazilians every day. In July, she devoted a special Instagram story to “leaky gut (IBS)” and explored how a diet low in FODMAPs – fermentable carbs found in many common foods – could help to overcome symptoms.

In a series of short videos she describes IBS, saying that it’s more common than most people think, and sharing her nutritionist’s advice that following a low FODMAPs diet for two months would change her gut microbiome and stop most IBS symptoms. She’s also posted charts showing which foods to avoid on a low FODMAPs diet, and which are OK.

Gabriela admits that she doesn’t follow this diet yet – but recommends it to everyone suffering from IBS (“give it a try if you can, it will change your life” she exhorts). And the effect of her “health tip” was immediately apparent, with the term FODMAP peaking on Google searches in Brazil during the week in which her Instagram video appeared online.

This is a perfect example of the influence that social media and “digital celebrities” have in rising awareness and discussion on topics. Even though there’s no way of measuring how many consumers listened to Gabriela’s talk and then sought and bought low-FODMAP products, the effect that influencers can have on consumers’ awareness about products and trends is undeniable.

So-called “influencer marketing” is worth an estimated $1.7 billion, fuelled by 13 million brands that sponsored influencer posts on social media platforms like Instagram.

“Digital influencers” have become a quick way of reaching a wide audience for brands, and this new “word of mouth” can truly boost the growth of new, even obscure, trends such as FODMAPS.

For further information about FODMAPS, see our report.

By Joana Maricato

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Danone embraces provenance and e-commerce

Posted on:
July 11, 2018
Julian Mellentin

Provenance, naturalness and newness are three of the elements that are well-proven to be a strong way to get consumers’ attention, freshen up their interest in your category and connect to some of the strongest growth trends.

These three are the key components of the now well-established Dairy 2.0 strategy, which is about taking a traditional, everyday dairy product from one country and introducing it in another country where the product looks new, exciting and different.

Greek yoghurt is one of the most successful and high-profile examples. Back in 2007, an entrepreneur took Greek yoghurt and took it to American consumers as something new and exciting. Greek’s thick, satisfying texture was a revelation to Americans, who had previously been accustomed to thin, overly-sweet yoghurts. This pleasurable eating experience coupled with the novelty factor – people are food explorers now, restlessly hunting for new and interesting eating experiences – helped make Chobani’s Greek yoghurt into a $1.7 billion, market-transforming success.

Another example is Icelandic Skyr, which has become a success in Sweden, Denmark and the US, where the Siggi’s brand has built a $200 million annual sales business – at premium prices – on the back of its Icelandic identity.

Danone has now embraced the strategy, with its launch in the UK in June of The Danone of the World, a new brand and a new range of five yogurts and fermented milks inspired by ‘authentic’ recipes from around the world.

The range includes:

  • Greek-inspired Straggisto yogurt
  • High-protein Icelandic Skyr
  • Lebanese-inspired Laban
  • Indian-inspired Lassi drink
  • A savoury Turkish-inspired Ayran drink

Cleverly, the range isn’t going into mass distribution right away in the big retailers but is being launched exclusively in Ocado, an online retailer with a strong base of higher-income, food explorer customers.

It’s a great way for Danone to experiment with new product ideas, find out what sells and what doesn’t and what refinements brand and products need before going to mainstream grocery.

Whatever category you are in, making your products different, giving them a connection to some provenance and trying them out in alternative channels – and particularly e-commerce – is a strong way to reduce your NPD risk and maximise your chances of success.

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