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01.27.2005

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Refining Our (consumer) Understanding of Functional Foods

Functional foods have been around for quite some time, yet success is exceptional, as most attempts at functional foods have been at least disappointing, if not utter failures, for the companies marketing them. There are several reasons for this, that could be lumped together and labeled "misapprehension of the functional consumer." Most in the food industry now understand that conceptualizing functionalized foods as "magic bullets," with a corresponding consumer looking for such things to fix specific health issues, is a mistake. But nothing has emerged to fill the vacuum left by the departure of that conceptualization. Some have suggested that marketing functional foods more toward consumers pursuing general wellness, rather than targeting specific health problems, is the way to go. This makes sense, as the trend toward wellness is well established and continues to grow. Then, the trick is to understand wellness consumers better, and what kinds of functional products would resonate with them.

We have a few ideas.

History Matters

We surveyed ourHartman Interactive panelists in November 2004. These participants are more likely than the average consumer to be savvy to new health and wellness developments; many are what we would call "early adopters." Interesting is that the foods where functional additions are most acceptable are mostly the same foods that people are already putting to functional use. For instance, juice was judged to be acceptable for functional additions by 72% of respondents - the highest rating for any of the foods we asked about. Juices had the second lowest rejection rate (people saying "I don't want functional additions in juices") at 11%, second only to food bars at 10%. Forty-five percent (45%) of respondents said that they're currently using functional juices, the highest use rate of any of the foods we asked about.

In fact, the top-scoring items - juices, food bars, cereal, etc. - remain a unity in high acceptance, low rejection and current use. The first two, high acceptance and low rejection, may seem like an obvious unity, but they aren't. Some of the foods we asked about have both high acceptance AND high rejection rates. These bimodal items may prove especially interesting in follow-up studies, giving clues as to pivotal decision criteria that vary across different consumption groups.

Why is juice so acceptable? There is a long cultural history of adding extras - functional extras - into the blenderized concoctions most of us call "smoothies." Extracting themselves from health clubs and specialty juice bars, smoothies gained mainstream appeal in the mid 90s as chains like Jamba Juice expanded around the country. Now functionalized and fortified juices are (relatively) safe, though competitive, territory for introducing new products; therefore, products that have a history of being "added to," "adjusted" or otherwise "messed with" have more permission to claims of functionality in the minds of consumers.

It Must (appear to) Be Natural

Functionalized foods run an inherent risk of being perceived as "medicine," or worse "drugs," by consumers. Health and wellness consumers are increasingly aware of what they put in their bodies, and are often wary of human-made additions (or modifications) to foods. Consumers that we've interviewed say they strongly prefer to get their functional ingredients in food, as a naturally occurring constituent such as fiber in fruit. If an ingredient is added, it must be added in a way that does not seem too "unnatural." Some existing categories of functional foods, with certain additions, are well established, such as juice with calcium, and food bars with added protein. Innovators, however, will need to pay close attention to the combination of base food and the functional ingredients to avoid a combination that consumers will perceive as "wrong."

The flip side of this issue is that some categories are perceived as too natural to be "messed with," such as meat. While most would expect meat to be perceived this way, some food categories may not be so obvious, such as dairy. Milk has been fortified with extra vitamins and minerals for years, but after reviewing Figure 4, one might hesitate to go forward with a functional cheese product. Understanding the subtleties of consumers' ideas of "naturalness" presents a serious challenge to food companies.

Marketers also need to pay attention to how product use regimes will frame interpretation by consumers. Functional foods that need to be administered three times a day - or at any regular interval - do not come across as natural or convenient. They seem like medication. One mom told us "my kids don't want to feel like they are being medicated. It [a functional ingredient] needs to be in something they like and recognize so I can get it in them." And it's not just kids who feel this way.

Lifestyle Integration

Benecol (actually a nutraceutical) was somewhat of a sales figure disappointment, but Flora pro-activ, a suite of products (spread, milk, yogurt and yogurt drink) that use plant sterols, has been relatively successful. Why? Unilever made a point of marketing Flora pro-activ more as a healthy, lifestyle-oriented product and made use relatively convenient as opposed to something you need to take three times a day to discourage the grim reaper, and that appears to have made the difference.

"Lifestyle" means a specific pattern of consumption. Since it is a pattern, a consumer is not going to regularly buy one item in isolation without accoutrement. Imagine buying a tennis racket without having a place to play regularly, people to play with and, of course, the right pair of shoes to play in. After a couple uses, the racket sits in the basement, never resurfaces and there are no more tennis-related purchases. No commitment to a larger pattern of behavior has been made. The same thing happens when a functional product is used for a single (non-chronic) condition or occasional health worry, and then neglected when the condition appears to have subsided, especially if using the product is a chore or if it is not appealing as food. Conversely, integrating with a lifestyle is a solid product strategy. For instance, a food bar with extra protein to build/repair muscle and added B vitamins for energy (among other additions) has a clear relationship with a fitness-oriented lifestyle and the potential for long-term use by those adopting such a lifestyle.

Final Thoughts

There is a fairly obvious, conservative, short-term path available to food marketers: go with what is already accepted as functionalized and try to compete in those categories. More ambitious marketers will build an understanding of different wellness consumers, explore pivotal product categories, and fine-tune a strategy accordingly.

At The Hartman Group, we'll be leveraging our existing intellectual capital on wellness consumers, exploring finer gradations of product categories that are ripe for functionalization, and further refining our understanding of how consumers conceptualize functional foods in relation to their lifestyles.

Stay tuned.

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