Profit remains elusive in heart health foods

According to Leatherhead estimates, the size of the market has at least doubled over the past five years and new product development has tracked increased consumer interest, with over 150 launches recorded between January 2007 and August 2009.

But not all these new products turn out to be blockbusters. Leatherhead said some big multinational brands have yet to deliver on vast amounts invested in development and promotion. And when promotional activity eases up, the research firm said sales have also tended to falter.

Brand failure​

In some cases lower than expected sales have led to total brand failure. Even after learning not to repeat big, cross-category launches like Kellogg’s Ensemble in Europe, Leatherhead said the industry has witnessed “numerous”​ individual brand failures.

Behind these failures are a number of recurring problems. Leatherhead said: “Reasons for this relatively high failure rate in the heart health market are many and varied, but there are a number of recurrent themes, including lack of consumer awareness, lack of product differentiation and resistance to the higher prices involved.”​

Overcoming these difficulties is not straightforward. For example, building consumer confidence is not just a question of spending more on advertising and promotion.

Consumer confusion​

Leatherhead said consumers face a barrage of contradictory messages from industry, the media, government, and medical authorities, making it difficult for people to assess product benefits and understand how they should be consumed.

This problem becomes especially thorny when contradictory advice comes from credible sources, and even on some occasions, from the same source. Leatherhead said an announcement from the American Heart Association that a review has shown soya to be ineffective at lowering cholesterol, despite sending out the opposite message for years.

Faced with this kind of uncertainty and contradictory advice consumers are understandably resistant to paying a premium.

Effective regulatory systems are one solution to this problem. It is hoped that the health claims legislation in Europe and the functional food approval systems in Japan and the US will build consumer confidence and convince people of the benefits of pricier foods.

But in the short term, regulatory flux is a potential barrier to market growth.

FDA is currently reviewing the soya protein heart health claim in the US and, even before a conclusion has been reached, companies are moving away from strong heart health claims. Combined with the professional disagreements about its benefits potential regulatory changes are draining soya milk from the heart health arena. A $1bn market is in danger of disappearing.

Such regulatory uncertainty makes it difficult for Leatherhead to predict future growth rates. The research company said overall sales could rise at least 40 percent between 2009 and 2014 but radical changes to the claims situation could bring that growth figure down to 25 percent.