Executive Summary
Part I: Strategy
1. Targeting the right consumers
1.1 Technology consumers
1.2 Lifestyle consumers
1.3 Mass market consumers
1.4 Early-adopters are the key to start-up success
2. Open new categories and segments – don’t be a me-too
3. Commercialising new “naturally healthy” science
3.1 Get the strategy right from the start
3.2 Avoid commodity comparisons by using “extreme differentiation”
3.3 Super-premium price
4. Distribution & routes to market: smart thinking finds smarter ways to take health to market
4.1 Alternative channels a particular opportunity for small businesses
4.2 Identify the alternative retailers
5. Marketing communications
5.1 Public relations
5.2 Sampling
5.3 Social media
Part II: Case studies
Beverage start ups
Case study 1: Beet It – science gives beetroot a superfood boost
Case study 2: Wild Bunch reinvents vegetable juice
Case study 3: Green Coco – German technology redefines coconut water market
Case study 4: GoodBelly – building probiotics among the early adopters
Case study 5: Mile High – lessons about branding and distribution
Case study 6: Wat-aah – creating an urban lifestyle brand with social media
Case study 7: Celsius – creating a new niche for calorie-burning beverages in the wake of Coke’s failure
Case study 8: Provita – cracking the code for protein drinks
Case study 9: Click – women’s lifestyles and convenience needs guide innovation
Case study 10: Evoid beats cola giants to get foot in school door
Case study 11: Froose infuses juice with whole grains
Snacking start ups
Case study 12: Popchips – fewer calories + less oil + social media = a recipe for growth
Case study 13: Sahale Snacks – portable, healthy gourmet treats
Case study 14: Red’s All Natural focuses on protein, fibre, fun and Facebook
Case study 15: Moma Foods – reinventing healthy breakfast with smart distribution
Case study 16: Better Bowls – giving a sweet treat a healthy makeover
Case study 17: Go Picnic – airline meals inspire lunch-in-a-box
Food service start ups
Case study 18: Red Mango tempting lifestyle consumers with immunity and ambience
Case study 19: Naked Pizza – reinventing pizza with probiotics and social media
Kids’ food start ups
Case study 20: Ella’s Kitchen – innovative products, packaging and marketing
Case study 21: Tum-E Yummies heralds evolution of kids’ beverage category
Case study 22: Bear – all natural snacks
Science start ups
Case study 23: Strategy rethink boosts BLIS oral health probiotic
Case study 24: Lo-Gi-Cane – low-GI sugar enters the sweetener war
Case study 25: Barleymax – demand for innovative fibre cereal outstrips supply
Case study 26: Probake50 – sarcopenia solution takes the biscuit
Case study 27: Brocco Sprouts – anti-cancer benefits drive sales of super-premium natural product
Case study 28: Booster Broccoli – first failure shows importance of differentiation
CHARTS AND TABLES
Chart 1: The nutritional product life cycle – how it works
Chart 2: Technology consumers, a key segment for health brands
Chart 3: Lifestyle consumers, a key segment for health brands
Chart 4: Mass market consumers
Chart 5: Green Coco juice nutrition facts
Chart 6: Comparison of per-litre retail prices of Goodbelly & DanActive with non-probiotic beverages
Chart 7: Antioxidant content of AOk compared
Chart 8: Ingredients and nutrition facts for Provita protein drink
Chart 9: Nutrition facts panels for Click
Chart 10: Evoid One nutritional information
Chart 11: Froose Playful Peach beverage nutrition facts
Chart 12: Froose Gummy Snacks nutrition facts
Chart 13: Popchips nutrition facts compared
Chart 14: Nutrition facts for cashew and pomegranate glazed nuts
Chart 15: Red’s All Natural Burritos ingredients & nutrition facts
Chart 16: Better Bowls ingredients & nutrition facts
Chart 17: Naked Pizza nutrition facts panel
Chart 18: Nature’s Plus Tooth Fairy nutrition and ingredients facts
Chart 19: Lo-Gi-Cane nutrition compared with white sugar
Chart 20: Probake50 ingredients and nutrition facts
Chart 21: Nutritional content of BroccoSprouts
Chart 22: Booster Broccoli nutrition facts
Chart 23: Sulforaphane content for Booster Broccoli and conventional broccoli compared
Table 1: Summary comparison of how to – and how not to – commercialise the science of
“Naturally healthy foods”
Table 2: Popchips and Flat Earth – a comparison
COMPANIES AND BRANDS
Applied
Nutritional
Research
Barleymax
Bear
Beet
It
Better
Bowls
Blis
Booster
Broccoli
Brassica
Protection
Products
BroccoSprouts
Celsius
Click
Comvita
Danone
Ella’s
Kitchen
Evoid
Froose
GoodBelly
Goodness
Superfoods
GoPicnic/Mighty
Munch
Green
Coco
Horizon
Science
James
White
Drinks
Lo-Gi-Cane
Mile
High/AOk
Moma
Foods
Naked
Pizza
Next
Foods
Popchips
Popina
Food
Servies
Probake50
Provita
ProViva
Red
Mango
Red’s
All
Natural
Sahale
Snacks
Tum-E-Yummies
Vital
Vegetables
Wat-aah
Wild
Bunch
CONTINENTS/COUNTRIES/REGIONS
ASIA
PACIFIC
Australia
New
Zealand
Singapore
Hong
Kong
EUROPE
UK
Finland
Germany
Spain
Sweden
NORTH
AMERICA
USSwitzerland
UK
NORTH AMERICA
Canada
US
Functional Food Industry
If you have an idea for a new food or beverage with health benefits, or nutrition science that you want to commercialise, how do you successfully take it to market? Even a successful serial food entrepreneur such as Steve Demos, who made his fortune by creating the American soy milk market, initially got it wrong with a new start-up, as this report shows. Demos explained that the business plan for his new product had not targeted the right consumer group – a mistake that he fortunately realized in time to remedy.
In the challenge and excitement of planning a new venture, it can be hard to be clear about fundamentals such as: which consumers will buy the product and at what price; how big a group they are; will this be a high-margin business or a high-volume business; and how will the product be distributed, retailed and marketed. Yet it’s vital to find the best answers to these questions because the rate of failure in healthy start-ups is more than 95%. Taking new healthy foods and beverages to market is risky; the cost of marketing is always higher than entrepreneurs believe it is going to be, and the rate of sales growth is always slower. This report sets out the five elements of successful start-up strategy over 21 pages, drawing on lessons from 28 key case studies of recent start-ups, both successful and unsuccessful. All the case studies are based on interviews with the companies themselves to give you a first-hand account of what works and what doesn’t. Taking together the strategy section and the insights from entrepreneurs this report enables you to maximize your chances of success
Our case studies cover diverse areas including: Our case studies cover diverse areas including: This report is written in our trademark opinionated, data-rich style to provide executives in marketing and technical roles with real-world insights that can be applied in any setting.
COMPANIES AND BRANDS
Alpro Ameal S Amp Anlene Ascend Becel Calpis Campbell’s IQ Campina Optimel Cereal Partners Coca-Cola Dairy Crest Dairy Farmer’s Best Omega-3 Danacol Danone Actimel Danone Activ Danone Activia Danone Essensis Delamere Dairy Top Life Prime Time Emmi Aktifit Emmi LactoTab Evian Evolus Flora pro.activ Fonterra Full Throttle Gatorade General Mills General Mills Harmony George Westons Hansel Natural Monster Hero Fruit2Day Innocent Kellogg’s Ensemble Kellogg’s Special K Kelloggs K-Sentials Lipid Nutrition Lipton Meiji Dairies Minute Maid HeartwiseEnviga Minute Maid Enhanced Juice Müller Vitality Murray Goulburn Nutritionals Nairn’s Naked Naturally Gorgeous Nestea Nestlé Novartis Aviva PepsiCo Pom Wonderful Provexis Quaker Oats Nutrition for Women Red Bull Rice Crispies Rockstar Sanitarium Shredded Wheat Shreddies Silk Sirco Tip Top Up Omega-3 Tropicana Unilever AdeZ Unilever pro.activ Unilever Take Control Up&Go Valio Volvic Weetabix Yakult
CONTINENTS/COUNTRIES/REGIONS
Asia China Hong Kong India Indonesia Japan Korea Malaysia Singapore Turkey Australia North America Canada US Europe Austria Belgium Finland France Germany Ireland Italy Netherlands Norway Portugal Scotland Spain Switzerland Turkey
