Strategic advice for the food and beverage industry

Protein snacking: genuine innovation at super-premium prices

Horsemeat snackIf, like me, you like horses, look away now.

But if you can bear to read further, this is an innovative response to the protein trend that we can all learn from.

Many cultures are familiar with horse meat (where I live in France the local butcher and supermarket sell it. It’s indistinguishable from beef). But in many more countries the idea of eating horse is still unknown – even shocking.

“Bag of horse” is part of a new range of high protein snacks from online retailer, in the UK (where they don’t eat horse).

Similar in texture to jerky, each 50g bag has 114kcal – half as much as the same weight of potato chips – 21g of protein, 2.85g of carbohydrates and 2.1g of fat. The product is all natural, without additives or preservatives.

The company courted controversy when it launched its first line of horse meat products back in 2013. But since then horse has raced ahead and Musclefood reports that the newest launch is in response to significant increase in customer demand for horse meat.

Here are the two lessons from Bag of Horse:

1. Niches becoming the norm: when thinking of new products or flavours, marketers often think only of what is well-known and easily understood. And that makes sense if you are serving the mass market.

But increasingly markets are fragmenting into a wealth of niches – and consumers are eager to experiment with the new. It’s only the companies who have created “new and different” products that have thrived in recent years. Declining sales and margins in “safe” mass market products of all kinds show that marketers who “play it safe” are in fact taking a big risk.

2. Healthier profits lie in the niches: Senior management usually doesn’t like the idea of niches. But it’s in the niches that you find the best profit margins.

Bag of Horse retails for $4/€3.15 per 50g bag – equivalent to $80/€63 per kilo. Quality horsemeat is not expensive, neither is processing – leaving a very big profit margin for producer and retailer alike. Coupled with the fact that demand for meat snacks is growing at 15%-20% per annum in many countries (France, UK, US, Nielsen data), this looks like a smart innovation.

The health-conscious – in this case sporty – consumer is willing to pay premium prices for things that support their health. They are also the people willing to try anything new, different, interesting and fun. If your strategy doesn’t involve targeting these people, you need to re-think it.

Posted in Editorial, Mainsite

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