Simplicity Rules
In their quest for health and wellness, consumers want cleaner ingredient statements, as well as fewer of any ingredients perceived as undesirable.
Just a few short decades ago, most consumers turned to foods and beverages simply to satisfy their appetites and meet their nutritional needs. They looked to the medical community, meanwhile, to prevent and treat illnesses and manage chronic conditions.
But most consumers now understand that certain foods and beverages go beyond just fueling the body or quenching thirst. These items also help ward off obesity, prevent a number of life-threatening diseases and ease the symptoms of specific chronic conditions. That reality — combined with a still-rocky economy that is forcing some consumers to limit their doctor visits — presents a huge opportunity on the store brand side for grocers and other food peddlers.
To succeed, however, retailers must deliver the right own-brand foods and beverages, at the right price, and merchandise and market them effectively. And by marrying such efforts with those tied to other store brand health-minded products such as supplements and over-the-counter medications, they could turn their stores into true health and wellness destinations.
Eye on trends
Retailers will want to pay close attention to a number of health-minded trends playing out on the product development side. Steve French, executive vice president and managing partner of the Harleysville, Pa.based Natural Marketing Institute (NMI), points to "simplicity" as one trend that is becoming increasingly important to consumers as an overall wellness promoter. The term is a catchall for products sporting cleaner labels, natural or organic ingredients and more.
Rebecca Stofko, marketing manager for Morgan Foods of Austin, Ind., agrees, pointing also to the related and continuing trend in the reduction of "less-desirable" ingredients such as sodium, certain fats, sugar and high-fructose corn syrup.
"We will most likely see more messaging in terms of 'natural' and 'clean labeling' products with the removal of artificial additives and ingredients," she says. "I would also expect to see a new focus on highlighting the positives of what is in a product rather than emphasizing what is not in it."
As for the much-hyped trend toward "functional" foods and beverages — those items actually designed/positioned for specific health benefits — French believes the jury is still out in terms of consumer acceptance. Although Smart Balance and some other national brands have done well here, numerous others have failed miserably. (Many of the successes have been in food and beverage categories already perceived as at least somewhat healthful.) But retailers definitely should keep an eye on the functional food and beverage arena and be ready to pursue product development that makes sense for their particular store brand shoppers.
As baby boomers age, Stofko believes the need for "super foods," not just functional foods, will increase.
"They are living longer and eating better," she says. "They will be interested in foods that supply nutrients to help preserve their youth and delay the aging process."
For the time being, French believes a bigger opportunity lies in tweaking existing store brand items within categories perceived as being not very healthful. For example, retailers could reduce some of the fat and/or sodium from a store brand frozen pizza instead of adding a functional ingredient and jumping straight into, say, a cholesterol-lowering claim.
"Typically what happens first is the elimination of negatives," he explains. "The next evolution will be the addition of positives such as fortification — adding in different vitamins and nutrients. And then in some cases, it would actually move to functional. It's definitely something to look at and monitor and explore."
Also of current interest are sports nutrition products, which have transitioned from being only for the serious athlete to fitting into the lifestyle of the casual workout enthusiast, says Rich Simon, senior partner at Westmont, 111.-based Boomerang Brands.
'Lifestyle brands will play a bigger role in defining ourselves in the future.' — Rich Simon, senior partner. Boomerang Brands
'I think there's definitely a notion of self-responsibility in terms of taking care of one's own health and wellness.' — Steven French, executive vice president and managing partner. Natural Marketing Institute
"Look for this mentality to seep into other aspects of a person's day," he says. "For example, the afternoon pick-me-up or the evening relaxation food."
Looking forward, Simon also believes that "lifestyle"type food brands — whether they be national brand or store brand — will continue to etch their way into the collective consumer consciousness.
"A person drinking a Mountain Dew is perceived differently than a person drinking a Naked Smoothie," he maintains. "Consumers are becoming smarter, and social media has made us more conscious of others. Lifestyle brands will play a bigger role in defining ourselves in the future."
On the store brand side, convenience and value also will remain critical components for success.
"The recent recession may have complicated consumers' dedication to healthier eating," Stofko says. "However, consumers are still stating that health and wellness product offerings are important to them and their families. Retailers should strive to make sure they have products that follow the current health and wellness trends while providing a value to the consumer."
Consumers really are not willing to pay more for better-for-you private label foods and beverages, French adds — similar to their attitude toward sustainable-type products and products in eco-friendly packaging.
"For a product to be successful, it's got to be of comparable quality [to conventional items] and have a comparable price," he says.
To succeed, retailers also need to create a brand architecture that clearly defines the attributes and benefits of healthful lifestyles throughout the store's product offerings, Simon adds, working with its suppliers to ensure the program is thoroughly executed and sustainable.
"Listen to your customers and define a product line for a category where the brands are not living up to consumer demand or healthy lifestyles," he says.
In the know
When it comes to marketing better-for-you foods and beverages, retailers also must not underestimate the nutritional knowledge of today's shoppers. According to Simon, consumers are better educated in this area than in years past — and are able to access nutritional information through many avenues, including the Internet, smartphones, package labeling and others. But that knowledge doesn't necessarily translate into wiser choices.
"We are still a decade away from making everyday practical choices based on this information and incorporating them into our daily lives," Simon maintains.
But consumers certainly are motivated to change, French suggests.
"I think there's definitely a notion of self-responsibility in terms of taking care of one's own health and wellness," he says.
So what steps could retailers take to ease the decision-making process for these educated shoppers who are still attempting to sort through the sea of information?
Many retailers have attempted to help here by introducing nutritional rating or ranking systems, Stofko notes, pointing to NuVal and Guiding Stars as examples.
"According to a news release by Food Marketing Institute (FMI), programs providing nutrition labeling guidance have been implemented by almost half of food retailers as a means of encouraging health and wellness," she says. "Adoption of these programs or other in-store efforts increased dramatically from 26 percent last year to 48 percent in 2011. Sixty-five percent of retailers believe that this information is helping consumes make better nutritional decisions."
But French is not convinced that the current scenario — with nutritional rating systems differing significantly from retailer to retailer — is all that helpful. Consumers spend a limited amount of time at the store shelf and can quickly become overwhelmed with information, so he believes retailers must identify the nutritional benefits of store brand products in a way that is relevant, meaningful and impactful.
"You could double or triple your shopping time if you were to seriously look at all the in-store [nutritional aids], and that's not going to happen, obviously," he says. "I think there is opportunity to perhaps provide some commonalities across various retailers rather than everybody trying to do their own thing."
Some retailers also have started to call out key nutritional benefits on the front of store brand packaging. Stofko believes such front-of-package labeling should make it easier for consumers to locate the most — and least — healthful foods.
But meeting the voluntary front-of-package labeling requirements introduced by FMI and the Grocery Manufacturers Association could be more difficult and costly on the store brand side, she adds, because of the large number of SKUs typically involved.
Still, the at-a-glance simplicity of such on-pack labeling does seem to resonate with consumers, Simon suggests.
"People want to know what they're buying, so you want your customer to be able to relate to the 'kitchen science' benefits immediately without causing confusion," he says. "Make sure the main callout is appropriate for the product line, and use imagery on the packaging to convey the benefits without being redundant."
Get noticed
The development of the right better-for-you store brand products and easy-to-navigate nutritional labeling is critical, but proper merchandising also goes a long way in enticing trial — and situating a retailer's stores as one-stop health and wellness destinations.
Stofko believes health-minded foods and beverages should get placement in the same sections as the "regular" products.
"This gives the consumer the option of choosing a healthier product versus a less-healthy option," she says. "Retailers could use shelf talkers/signage to make better-for-you foods easy for shoppers to find and compare at the shelf."
NMI's trend research has shown that consumers do not want to have to go to a store within a store, or even to a separate aisle, to shop for a particular healthful option, French adds. So the retailer really has two options for success: mixing better-for-you store brand options within the category or placing them next to the category.
"I think it's very effective to have a section next to the conventional category as long as it has some separate merchandising callout," he says, "whether that be signage or rounded shelving instead of a flat-edge shelf."
In addition to proper in-category merchandising, Simon notes that retailers should consider partnering key store brand items with various health organizations, fitness clubs or healthy lifestyle personalities. For example, his company recently worked with NBCUniversal Television Consumer Products Group, Reveille LLC of University City, Calif., and Deerfield, 111.-based Walgreen Co. to launch an exclusive line of "The Biggest Loser" branded meal bars and shakes in all Walgreens locations.
Retailers could tie-in prevention and holistic messaging with the pharmacy and/or health and beauty department, too, Simon says.
Brendan Leonard, president of Health Enterprises Inc. — a North Attleboro, Mass.based supplier of hot and cold packs, a spa foot therapy lineup and more — notes that the key to such tie-ins is a consistent message that makes sense to the shopper.
"We are seeing more of this in pharmacy, with retailers positioning product that complements key category drivers, making it easier to add products to the basket," he says.
Leonard notes that proper signage and clear, concise on-pack communication also are critical in health-minded categories outside of the food and beverage space.
'Retailers could use shelf talkers/signage to make better-for-you foods easy for shoppers to find and compare at the shelf.' — Rebecca Stofko, marketing manager, Morgan Foods
"We are focused on packaging that breaks through the clutter on-shelf to educate and inform the consumer," he says.
In addition, retailers should consider providing free samples or product information at local fitness events, Simon suggests.
"Have your store brand sponsor a local event, and use in-store signage to promote both your brand and message," he says. "Saying you're something is one thing, but actually doing it is a much stronger message and adds validity to your store brand."
Finally, give store brand health-minded items the national brand treatment, Simon adds.
"Drive the message through packaging, social media, local target advertising and cross-merchandising within the store," he says. "Retailers have such an advantage on what they can offer within their stores and [can create] multiple touch points for their store brand product lines and promote healthier alternatives."