A new report from New Nutrition Business has found that the over-dependence on health benefit claims is the most common reason for failure in the functional food and beverage sector.
Director of New Nutrition Business, Julian Mellentin said that a number of companies are relying on the overuse of health claims as a differentiation point to other products on the market, however he says that companies need to do more in order to succeed in the category.
“Surprisingly often, companies make the health benefit the sole point of difference for the product, undervaluing key factors such as convenience,” said Mellentin. “When a product is essentially a me-too, with a health benefit attached, it’s inviting failure.”
In addition to the over-dependence on health claims, the report also highlighted other common reasons for failure within the function food space including:
- Overestimating the potential market
- Targeting the mass market too early instead of starting in a niche and growing from there
- A perceived mismatch between the product and the benefit (such as fish oil in yoghurt)
The research itself drew on 17 years of qualitative and quantitative research in functional foods, and in addition to the failures identified, the report also outlined the "10 Golden Rules for Success" which include initially targeting a brand at a clearly defined group of consumers, and the importance of a focused benefit message that is easy for people to understand.
“The smartest people know that studying the failures of others teaches us how to succeed,” says Mellentin. “Examining the most common mistakes that companies make enables others to avoid them – and increases their chances of success.”