Increasingly mobile and health-conscious consumers are forcing food and drink manufacturers to become even more inventive when it comes to creating new products.
A new report from market analysts Datamonitor shows that the changing demographics and lifestyles in much of the western world have led to the creation of products such as 'skingestibles' and 'sippables' which increasingly blur the lines between what were once distinctive product categories.
"The idea of manufacturers promoting products through the notion that what consumers ingest can improve one's skin and the patina of their appearance is just one example of the growing synergies between traditional categories and sectors in packaged goods," said Daniel Bone, Datamonitor consumer markets analyst and author of the report, Emerging Concepts in Food, Drink and Personal Care.
Until recently, skin health was still considered to be the domain of the cosmetics industry and restricted largely to topical creams rather than internal nutrition. But consumer packaged goods (CPG) developers are now promoting the idea that the outside of the body is a reflection of what goes inside, tapping into the growing consumer concern about 'wellness'.
Datamonitor consumer surveys have found that 87 per cent of respondents across Europe and the US already follow a health and beauty regime of some type, a large, receptive audience for innovative food products.
Among the products targeting these consumers, Datamonitor has identified what it calls 'skingestibles' (healthcare supplements promising beauty benefits), beverages containing beauty ingredients such as aloe and collagen, and drinks being co-branded with a spa or beauty salon. A recently launched US product illustrating the concept is SkinCola. Described as an all-natural, super-oxygenated drink, the beverage claims to be helpful in hydrating and beautifying.
"As the connection between beauty and health grows, there is an opportunity for manufacturers and retailers to develop sophisticated product offerings by promoting personal appearance through food and beverages. Ultimately, successful innovation relies upon a clear understanding of consumer needs and how to satisfy them with the appropriate product offering," said Bone.
Ingredients with a positive effect on health are also increasingly being introduced in foodstuffs rather than in supplements, Datamonitor said. Instead of focusing on what can be removed, such as sugar or fat, manufacturers are embracing the concept of positive nutrition - what can be added to foods to make them healthier.
Historically, products possessing ingredients with a health effect were related much more to categories and product lines with a healthy image such as dairy products and fruit juices. However, now they are increasingly being incorporated into categories such as biscuits and sweets that have clearly sought to overcome negative consumer perceptions concerning health.
UK supermarket chain Tesco's launch of what it claimed was the first cholesterol-lowering hard cheese product, called A Healthy Alternative To Cheese, in the first quarter of 2003 illustrates the move towards positive nutrition. The product is made from milk which has had all its dairy fat removed and replaced with a vegetable oil which is naturally high in phytosterols and thus helps prevent cholesterol entering the blood stream. The product was developed by fellow UK firm Angel Technologies in association with researchers at Cambridge University.
On-the-go challenge for packaging
Greater time spent commuting has encouraged consumers to multitask while travelling in order to save time, increasing their propensity to eat on-the move, the report continues.
This, in turn, has led CPG producers to introduce new types of packaging more appropriate for eating or drinking while moving. Datamonitor's report highlights a number of important innovations in this field.
Simple design features which enhance convenience and mobility, such as 'sippable' packages, appeal to a broad age range. For example, in the US, Land O'Lakes has found success with its single-serve Grip'n Go fluid milk line. Products include skimmed milk as well as strawberry, chocolate, chocolate shake and coffee-flavoured Grippacchino. The product illustrates the growth opportunities available to CPG players by taking milk from its former status as a mealtime staple to a convenient and nutritious on-the-go beverage.
Opportunities and threats
As product innovation in any industry causes category boundaries to shift, traditional players often face new challenges and threats from both emerging and established players in ways that were not previously possible.
"Spotting such trends early is crucial to getting, or staying, ahead. Marketers need to relentlessly observe how lifestyles and buying habits are changing as this is critical for the new product development process," said Bone.
"While the growing synergies between sectors represent an enormous opportunity for future innovation, especially in the form of joint ventures and strategic alliances, it will also mean many players will be faced with an increasing threat from companies and/or brands outside the traditional remit of what is traditionally considered direct competition."