BUSINESS INSIGHTS Promoting Brand Simplicity in Food and Drinks

BUSINESS INSIGHTS Promoting Brand Simplicity in Food and Drinks Reducing product claims, brand dilution and private label threat Themes in simplicity Source: Promoting Brand Simplicity in Food and Drinks “These themes are key ways in which manufacturers can promote simplicity as a premium. Back to nature can be promoted through natural and organic food and drinks, which consumers understand and identify with. This can be seen in the success of brands such as Innocent that market natural food and drinks and demand a premium. Simplicity can also be achieved by refining brand values and making it easier for consumers to understand the core positioning of the brand. Furthermore, by going back to original packaging and taglines, manufacturers can appeal to a products’ core audience with tradition and heritage...” Identify future growth opportunities in brand simplicity with the new management report... Business Intelligence for the Consumer Goods Industry Business Insights' portfolio of consumer goods management reports are designed to help you make well informed and timely business decisions. We understand the problems facing today's consumer goods executives when trying to drive your business forward, and appreciate the importance of accurate, up-to-date, incisive product, market and company analysis. We help you to crystallize your business decisions. The strength of our consumer goods research and analysis is derived from access to unparalleled databases and libraries of information and the use of proprietary analytic techniques. Business Insights reports are authored by independent experts and contain findings garnered from dedicated primary research. Our authors' leading positions secure them access to interview key executives and to establish which issues will be of greatest strategic significance for the industry. Our consumer goods portfolio of reports can be used across a wide range of business functions to assess market conditions and devise future strategies and cover the food and drinks, ingredients, packaging, health, toiletries and cosmetics categories and key consumer issues including eRetail and marketing. Key issues examined by this report... Examples of Coca-Cola’s brand extensions • Complex food and drinks packaging. Product packaging is becoming more complicated and confusing for consumers to understand due to the increasing amount of claims and more scientific labelling on packaging. • Concern over artificial colors and flavors. Consumers are becoming more concerned about the effect of artificial colorings and flavorings. This is driving the increased demand for natural and organic food and drinks. Source: Promoting Brand Simplicity in Food and Drinks “Coca-Cola has launched 22 brand extensions. The soft drink was originally positioned to provide refreshment. Consumers that choose Coca-Cola do not often choose the drink for its health benefits, more for its flavor. Therefore by trying to position brand extensions with functional or health benefits, the brand is sending out messages that conflict with their core brand values... “ • Brand extensions diluting core values. The increasing amount of brand extensions has meant that the core product message reaching the consumers is often weak and the product’s brand values are diluted. • Promoting simplicity in store. Retailers are promoting simplicity in store, by developing market place formats to replicate farmers and local markets to instill trust in consumers. Promoting Brand Simplicity in Food and Drinks Reducing product claims, brand dilution and private label threat Heartfield Food Soy Crunchies The proliferation and diversification of brands has meant that there are many, sometimes conflicting, brand messages for the consumer to absorb. To counteract the many complexities that consumers have to deal with during the in shopping trips, manufacturers need to make purchasing decisions easier for consumers. This can be achieved by marketing simplicity as a premium benefit. Refining brand values, going back to original packaging and making packaging clearer are all ways that manufacturers are using simplicity in product and packaging formulation. Promoting Brand Simplicity in Food and Drinks is a new report by Business Insights that analyzes the consumer demand for simplicity and how manufacturers can make the most of this opportunity through the production and marketing of food and drinks. Enhance your strategies for building and maintaining brand simplicity using the actionable recommendations provided by this new report... Source: Promoting Brand Simplicity in Food and Drinks “The packaging for Heartfield Food Soy Crunchies has at least eight health claims printed on the front of the packaging alone, and this is in addition to all the information on the back of the packaging such as ingredients and nutritional information. Claims such as 32% flaxseeds may confuse consumers further as they don’t understand the benefit of this claim...” This new report will enable you to... Private label food and drink brands of 5 leading retailers • Implement the best-practice brand strategies of leading innovators in the food and drinks market using this report’s analysis of food and drinks companies including ‘Innocent’ and ‘Green & Black’s’. • Improve the effectiveness of your product marketing with this report’s analysis of claims on 15,000 food and drinks product launches between 2005 and 2008. • Understand the threat of private label based on this report’s private label data in Europe and the US between 2006-2011, highlighting ways manufacturers can minimize threat by promoting simplicity. • Identify the key drivers of consumer complexity in the food and drinks market and quantify the new opportunities that emerge for manufacturers and retailers. Source: Promoting Brand Simplicity in Food and Drinks “All five of the leading retailers have at least one premium private label brand, along with a standard private label brand and a low value private label brand. In all ranges, in areas where only branded goods used to compete, consumers are now confronted with a cheaper private label option which is often now perceived to be of equal quality…“ Your questions answered... Reflets de France • How are retailers promoting simplicity in store? • What is driving the need for simplicity? • How can manufacturers promote simplicity as a premium product attribute? • How can manufacturers prevent the dilution of a product’s core brand values? • Who are the key players leading the way in brand simplicity in food and drinks? • How do private label brands add to consumer complexity? Source: Promoting Brand Simplicity in Food and Drinks “The Reflets de France range of goods is an example of a private label brand which is available in Carrefour store. Consumers who purchase this brand can easily identify that the products are sourced only from regions in France. Consumers who are concerned over the sourcing of their products due to the environmental concerns such as the air miles of certain ingredients in food and drinks can have their concerns alleviated by buying into this brand...” Some key findings from this report... The cyclical nature of simplicity • In 2007 5.9% of products launched in Europe and the US made at least one product claim, whereas 3.9% of products had at least six claims. This highlights the added complexities consumers are facing in terms of labelling when they choose a product. • Private label sales in Germany are set to rise by a CAGR of 4.8% by 2011; this is linked to the growth of discounters in Germany and the acceptance of private label. Private label brands are growing in popularity in the UK. Source: Promoting Brand Simplicity in Food and Drinks “Traditionally products that have strong brand values are well established brands with simple brand messages e.g. Marmite. As new health and ethical trends impact the food and drinks industry, manufacturers often respond with brand extensions. This makes the shopping process more complex for consumers, which then again drives a need for simple products that have strong brand values and are easy to understand...” • The amount of employed females in the US has risen from 69m in 2002 to 75m in 2008. The total figure for Europe has also risen from 178m in 2002 to 186m in 2008. • Natural was the second most popular product claim in 2008 with 7.8% share. Manufacturers can utilize the growing popularity of natural food and drinks by using the back to nature theme of simplicity to develop products that have a simplistic positioning. Pages: 91 Figures: 26 Tables: 15 Sample from ‘Promoting Brand Simplicity in Food and Drinks’ Chapter 4: Promoting simple brand values Making claims easier to understand The type of claims that are being used by manufacturers is shown in Table 4.14. This table shows the top 10 product claims made on all food and drinks launched in the US and Europe from 2005-2008. Upscale was the most common claim on packaging launched in 2008 with 9.3% share of product claims on packaging in 2008. This is due to manufacturers developing premium food and drinks to attract consumers who are willing to pay a premium for food and drinks they perceive to be of a high quality. The growth in products launched that were upscale (8.6%) is a result of manufacturers developing healthy products that also have a premium positioning. However, there is an opportunity for manufacturers to target consumers with food and drinks that have a simplistic positioning, yet demand a premium. Natural was the second most popular product claim in 2008 with 7.8% share. Natural is a common tag used by manufacturers trying to appease consumer concern over artificial colorings and flavorings and additives in food and drinks. Manufacturers can utilize the growing popularity of natural food and drinks by using the back to nature theme of simplicity to develop products that have a simplistic positioning. With such products consumers have the benefit of knowing exactly what they are getting and this can be marketed as a premium attribute. Products making the organic claim are also growing in popularity with a CAGR of 11.4% during 2005-2008. There has been a large consumer demand for products that are organic due to environmental concerns such as animal welfare and the use of pesticides. Manufacturers can tap into these environmental concerns by providing consumers with products with a simplistic positioning that make the organic claim. An example is Cadbury’s Green & Black’s chocolate, which has a simple organic positioning that consumers can easily identify with. The increase in private label goods, from 2.5% in 2005 to 2.9% in 2008 with a CAGR of 4.6%, highlights the consumer acceptance of private label brands. Private label brands are adding to consumer complexity as they add more choice for the consumer. They are also a competitive threat to many manufacturers. Manufacturers need to be simplistic and clear in their offerings and provide consumers with something different, something which they cannot get from private label goods. Promoting simplicity thorough tapping into consumer heritage and tradition is a way that established brands can appeal to consumers which private label brands cannot. Source: Promoting Brand Simplicity in Food and Drinks Table 4.14: Top 10 claims on food and drinks packaging, Europe and US, 2005-2008 - 66 - Order this report today to find out more... Table of Contents CHAPTER 1: INTRODUCTION • Introduction • Definition of simplicity • Simplicity in the purchase to consumption chain • Simplicity over time • Themes in simplicity • The scope of the report CHAPTER 2: DRIVERS OF COMPLEXITY • Introduction • Private label • Private label sales • Brand extensions • Packaging CHAPTER 3: CONSUMER NEED FOR SIMPLICITY • Introduction • Consumer time complexities - Number of hours worked per week - Increase of women workers • Demand for natural and organic • Regaining consumer trust • Simplicity by age CHAPTER 4: PROMOTING SIMPLE BRAND VALUES • Introduction • Simple brand values • Going back to simplicity - Taglines - Packaging • Making packaging clearer - Reducing claims - Making claims easier to understand CHAPTER 5: SIMPLICITY IN RETAILING • Introduction • Retail propositions - Market place format - Carrefour - Morrisons - Farmers markets - Local sourcing • Private label brand values CHAPTER 6: CONCLUSIONS • Introduction • Manufacturers - Promoting simple brand values - Labeling complexity • Retailers - Store layout • Longevity of the simplicity trend • Index FIGURES • Definitions of simplicity • Simplicity in the purchase to consumption chain • Evolution of the Weetabix brand • Themes of simplicity • Private label, share of sales, by category, in Europe & US (%), 2006-11 • Examples of Coca-Cola’s brand extensions • Heartfield Food Soy Crunchies • GDA & traffic lights food labeling • Cadburys ‘Be treatwise’ labelling • Good Nature All Natural Antibiotic Free Pork • Level of consumer concern about potential risks related to food & drinks, 2006 • Arizona Diet Green Tea Blueberry • Simplicity for different age categories • Marmite • How Innocent promotes simplicity • Pot Noodle brand lifecycle • Wal-Mart’s Marketside Logo • Simple store layout at Carrefour Market Banner store • Market Street at Morrisons • Number of operating farmers markets in the US, 1994-2008 • Reflets de France • Green & Black's Organic Chocolate Bar - Dark 85% Cocoa • Example of - A Whole Foods Market store - Tesco Value private label brand • The cyclical nature of simplicity TABLES • Simplicity for consumers, manufacturers & retailers • Private label food & drink brands of 5 leading retailers • Private label sales in Europe & US ($m), 2006-11 • Number of brand extensions of the top 10 leading global food & drinks brands, 2007-08 • Number of brand extensions of the top 10 leading global food & drinks brands, by type, 2007-08 • Claims on food & drinks packaging • Average number of hours worked per week in Europe, 2001-07 • Number of women in full time employment, in Europe & US (m), 2002-08 • Natural & organic food & drinks market value in Europe & US, by category ($m), 2000-10 • The level of trust consumers have in various claims made by packaged goods manufacturers, 2004 • Beer brand share in the US, by volume, (%), 2002-06 • Share of products launched with 1, 6 & 10 claims on packaging in Europe & US (%), 2005-08 • Average number of claims on packaging, Europe & US, 2005-08 • Top 20 claims on food & drinks packaging, Europe & US, 2005-08 • How top 10 grocery retailers are using simplicity in store FAX BACK TO +44 (0)20 7900 6688 or +44 (0)20 7551 9089 Website 1. 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