Make haste with caution

Thanks to a certain illegal dye found in chilli powder called Sudan 1, obesity has not been the main food issue hitting the news over the past few weeks. But you can bet that, before long, obesity will once again be grabbing the headlines. And while product recalls can at least be dealt with relatively quickly, no similar solution exists to the obesity epidemic.

While much of the blame for obesity has been levelled at the food industry, companies need not fear that their very existence is threatened by the issue, according to one leading food marketing specialist.

Speaking at Food Manufacture's Winning ways to healthier NPD conference recently, David Hughes, emeritus professor of food marketing at Imperial College London, said the growing desire for healthy foods on the back of the obesity issue should be regarded as a great opportunity for those companies that have the expertise to exploit it rather than a threat. The conference was sponsored by Hi-Maize, The Solae Company and Tate & Lyle.

Hughes pointed to trends in consumer spending, for example, that showed there has never been a better time to develop healthier products which could command a premium price. Fifty years ago, he claimed, 25% of people's disposable income went on food. Today this figure has dropped to around 10%, and by 2015 it is expected to drop to just 7%, he added. Consequently, argued Hughes, while people will also want good value, they are becoming less obsessed with price as their food bills become an increasingly smaller part of their income.

"We'll value things other than price," he said. "So the relative importance of non-price attributes of our foods will increase. And this explains why there is growth in the premium end of the market for every category I've seen."

Hughes said this trend was especially important to UK companies, which can no longer compete on price. "It's really good news for us in the food industry, because if the future is only going to be about low prices then we'd be in trouble; as we are not low cost producers of anything ... possibly with the exception of turnips. If we're not low cost producers we have to be smart producers."

Functional opportunities

Making healthy products, including those with functional properties, is one way Hughes believes companies can act smart and raise the non-price attributes of their products -- that and emphasising the healthy credentials of existing products.

Hughes used the example of Quaker's very successful OatSo Simple brand, which is an example of an added-value product launched into the healthy category. PepsiCo's Tropicana is another. The drinks company recently revamped its Tropicana range, adding healthy variants such as orange juice with calcium. "Tropicana has stolen the clothing of milk, and created within the chilled juice category a health centre," said Hughes. "You can do that in lots of other areas too. It's clever positioning."

Even eggs, which Hughes described as "the dullest category known to man" can have their image livened up. Rich in omega-3, known among other things for helping to reduce wrinkles, eggs could have more of an appeal to women, he said. "If eggs are healthy and reduce wrinkles, is there some resonance there for a proportion of the population?" he asked.

But Hughes is by no means alone in recognising the growing market for healthy foods. Major manufacturers and retailers are also realising healthy products equal healthy sales.

Somerfield, for example, is broadening its healthier food options, and Stephen Ridge, technical solutions director, said the retailer recently held a conference briefing suppliers on reducing their products' fat, salt and sugar levels.

Taste challenges

Ridge said that Somerfield's Good Intentions brand would be going through "radical change" over the coming year, emulating the popular Weight Watchers brand. Those products deemed unsuitable for the range would be converted into a new "better for you type brand", he added.

However, he admitted that making products healthier was going to be a challenge:"The question is if we take out the fat, what the hell do we replace it with?"

This is a problem that others also face. Becky Jones, development manager at Greencore Pizza, said that while pressure to reduce salt and fat levels in food is increasing, a balance had to be struck to ensure taste was not adversely affected.

"You've got to be realistic that when you take salt out of a product there is a taste compromise," she said. "If you do it gently and slowly it works. We can do it but they don't taste like a pizza anymore. It's about being sensible."

Pepperoni, for example, is particularly problematic, said Jones. Attempts to alter the fat and salt profile of this popular pizza topping altered it to something almost unrecognisable. "Reduced fat and salt pepperoni is more like luncheon meat. Normal pepperoni is greasy, but it's what people want their pepperoni to be like."

Tate & Lyle is one company that has changed its focus over the past couple of years, reducing its dependence on sugar by offering sweeteners that help manufacturers reformulate their products to reduce their sugar content, but without a trade-off in taste.

Mike Augustine, Tate & Lyle's director of product applications, said the UK was following a more European approach to food where people look at products for their long-term benefit, rather than expecting a 'quick-fix'. "The idea is to make something that is balanced; that will be suitable for the long-term," he said. "People can consume these [products] without excessive amount of guilt or trade off."

Nutrition gives an edge

Nadia Sood, director of the Nestlé UK and Ireland strategic wellness unit, described her company's moves towards health. These include a number of projects "to develop nutrition as a competitive advantage"

One project, in particular, involves looking at human genes and finding out how genes are affected by food with the aim of creating products that help prevent specific diseases.

However, while products that can cure illness or increase longevity may be the ultimate goal of many food companies, Sood offered a word of caution. It does not matter how good the health benefits of a product are, if companies move too quickly, she warned, they run the risk of failing to meet consumer needs.

"The major challenge is in ensuring that you are not stepping ahead of the consumer," said Sood. "People are saying more and more that they care about their health and they want to consume differently. In practice, however, the majority of the population is still consuming in a way that does not reflect that they understand that food links into health."

The fact is that taste is still a major reason for purchase with consumers. But healthy products are tasting better, said Hubertus Devroye, director of European marketing at The Solae Company. The taste of products containing healthy soya, for example, has improved massively, he said.

According to Devroye, in 2003 the European retail value of soya foods hit euros 1.5bn. Soya-based drinks is one of the fastest growing categories, he said, partly because of a major improvement in their taste. So, expect soya to crop up in more drinks, desserts and meat products, as their quality continues to improve.

Hughes concurred that taste was paramount in healthy foods. "We are not in the medical business, which means we have to meet consumers' food wants. NPD must be pragmatic and realistic, from a consumer point of view, they want it to taste good; be consistent with lifestyles; and hit an appropriate price point. If it ticks one, two and three then go for a healthy option."

Simple messages

Healthy products also need to be able to convey their messages very succinctly. "Consumers still say they don't have time to read the labels and they don't have time to care about what they are eating," said Sood.

Andy Knowles, chief executive of branding and packaging agency Jones Knowles Ritchie, voiced the same sentiment. "The average store in Britain has about 25,000 products on the shelves and we give ourselves an hour to find 55 -- the average amount we put in our baskets," he said. "That means we are saying goodbye to 24,950 products. That's an awful lot of 'no's in an hour. The idea that we spend large amounts of time at the shelves is a nice theory, but in practice it doesn't work."

This was not the only hurdle for manufacturers, warned Hughes. "Power is polarising -- flowing out to life sciences companies and to major retailers that have proprietary information on how we consume products."

One solution, he said, was to look for more licensing of ingredients; especially from overseas countries with more developed functional foods markets.

"Companies should go to Japan to see what is happening in functional foods," he advised. "The licensing opportunities from Japan are enormous."

But whatever happens in the future, the focus on food will remain -- especially as people become less active -- claimed Mike Croghan, global business director for nutrition at National Starch. There is no option but to change the foods. "After all", he said, "you can't uninvent the Playstation."FM