Strategic advice for the food and beverage industry

What are the ingredients for success? And what does success look like?

Inneov pic for blogImagine that you want to set up a business that will become a powerhouse in nutrition for skin health. What do you need to do? One strategy would be to create a partnership between a company that excels in branding and marketing in skincare – such as L’Oreal – and one that has the biggest research resource in the for industry – like Nestlé.

Laboratoires Inneov had both. And yet, exactly 12 years after it was launched, the joint venture is to be wound up.

The company launched its first product in March 2003. Called Inneov Firmness, it was a dietary supplement pill “intended for women aged over 40, concerned by the loss of cutaneous firmness,” the company said. The clinical effectiveness was shown by a a double blind clinical study, carried out on 90 women.

Sold only in pharmacies, the Inneov range soon included many more products and it went into many markets, including Brazil, Mexico, Russia, France, Spain, Germany and 7 others.

Inneov later moved beyond skincare to weight management, offering a 35-day weight loss programme that included personal coaching, nutrition and exercise.

Some commentators have said that the brand has fallen victim to Europe’s health care regime. This is clearly not true. Nestlé and L’Oreal have again and again communicated the extensive research – “more than 50 clinical trials” – behind the Inneov brand.

The problem is a straight lack of sales. Inneov has said it has sales of €52 million ($61.8 million). While most small and medium-sized companies and entrepreneurs would be delighted with this, for giants like Nestlé and L’Oreal it’s just a drop in the ocean. Investing effort in such a small business is not easy to justify to investors -especially if it has stopped growing.

And Inneov does appear to have stopped growing – sales appear to have been static since about 2008.

Low sales, no growth makes Inneov a disappointment for its owners. And in some ways Inneov does seem to be a failure. To sell in 13 countries – some of them high-growth markets over the last 10 years – and achieve a total of €52 million in sales is a weak result. Spread those sales over 14 SKUs and the performance looks even weaker – barely €300,000 per product per country. It seems that the combination of Nestlé science and L’Oreal marketing know-how created no value for most consumers.

Inneov is also a reminder that many benefits are niche – and that any company going into a new market or launching a new product needs to get its expectations aligned with this reality. Some benefits transition from niche to mass – as is happening with protein in foods – but no-one can force the transition, not even if you are Nestlé or L’Oreal.

Posted in Editorial, Mainsite

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