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What role do branded ingredients play at retail?

By Stephen Daniells

- Last updated on GMT

What role do branded ingredients play at retail?

Related tags Business Retailing

Ingredient suppliers can spend a lot of time and money differentiating their products but how do they communicate with the consumer, what issues are important to retailers, and is the investment worth it?

“There are multitudes of so-called branded ingredients in the market that simply use a brand as a name, without actually deserving this definition,”​ said Sébastien Bornet, VP of global sales and marketing at Horphag Research, which supplies Pycnogenol.

“A true branded ingredient is an ingredient that stands for a higher standard and for uniqueness. In other words, it should stand for a product identity to which ultimately the consumer can relate to for quality, safety and proven efficacy,” ​he added.

“In the rapidly expanding, highly competitive supplement market, retailers are not just looking to stock their shelves with premium products. They want standout, novel merchandise that helps them not only entice consumers to their stores/websites/catalogs, but also keeps them coming back for more,” ​explained Lynda Doyle, VP of global marketing at OmniActive Health Technologies. “The loyal buyer is the keystone to retail success.”

“Products containing differentiated, scientifically substantiated branded ingredients are a must to meet this demand.  Branded ingredients represent quality, efficacy and safety, and portray that a premium ingredient is contained within the product on the shelf, catalog or webpage,” ​she said.

Building a successful branded ingredient does not happen overnight, said Bornet, nor does it come without the proper investments. The prerequisites are high quality manufacturing following the highest international standards, an impeccable safety file and a lot of proprietary science, not borrowed research, he said.

Manufacturers are also looking beyond the ingredients themselves, said Doyle, to branded ingredients from suppliers that provide multi-dimensional assistance including R&D, marketing, co-branding, claims, educational and messaging support to help provide retailers with exciting and successful products.

Communicating with retailers to consumers

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More than ever, retailers are investing in educating their store associates and customer service representatives in the health benefits of the ingredients in their products, said Doyle, and that creates opportunities for suppliers to support consumer education with messaging, positioning, scientific substantiation for the ingredients they offer and package this in a consumer-friendly presentation for their customers/retailers.

OmniActive offers in-depth support and training to its customers, she added, laying the groundwork in science, marketing and messaging. “Manufacturers can then customize it to fit their products in the retail space. This allows for a smooth and effective transition of ingredient information from supplier to manufacturer, manufacturer to retailer, and finally retailer to consumer.”

Multiple channels

Marketers for ingredient suppliers, manufacturers and retailers have so many channels though which they can communicate with consumers. Heather Thompson, global marketing manager at Stratum Nutrition, noted that specialty ingredient suppliers are generally a step removed from retailers, but “consistent messaging and education to multiple audiences develops a footprint in stores”​.

Multiple communication channels are vital to allow more end-consumer conversations, noted Thompson.  “Supporting finished product partners with in-hand and in-store content allows for more consistent branded messaging.  These type of materials help extend the education efforts and answer questions,”​ she said.

Stratum Nutrition regularly conducts training webinars on its branded ingredients with finished product partners, their sales team, and some retailer representatives invited, she said.

John Gehbauer, business manager at BASF Nutrition & Health, told us that building awareness at the consumer level is fundamental to building a successful branded ingredient. “The Tonalin brand is supported by an integrated marketing program including social media, an interactive website, advertising, public relations and special events,”​ he said.

“Aligned, cohesive marketing messages with retail partners strengthen the relationship with the consumer.  When the consumer receives a consistent message the communication begins to resonate and an affiliation with a brand is established.”

What kinds of questions do retailers ask of suppliers?

As Stratum’s Thompson noted, suppliers are generally one step away from the retailers, but that’s not to say that there isn’t communication. Gehbauer said that BASF partners with its customers to understand and predict consumer needs and desires. “Often, our customers look to us to share consumer insight and category intelligence based on retail sales,”​ he said.

“Retailers ask about emerging opportunities and innovative new ingredients,” ​said Doyle. “They want to find opportunities to grow their business and provide their customers the latest and greatest products with scientifically substantiated ingredients and unique differentiation factors. 

“Their questions include product messaging focused on their customers—the consumer—and how to make their products stand out in a crowded marketspace.  Scientific substantiation is top of mind, and questions revolve around the research that supports the unique claims on their products.” 

Measuring brand awareness

Multi-dimensional marketing material and strategies are one thing, but how does a company actually measure if its branded ingredient is known among end consumers? Horphag’s Bornet said that they not only track and measure sales as a key indicator on awareness to see how the brand is resonating with consumers globally, but they also use specific tools such as Google Trends, which allows their team to evaluate how many consumer searches have been done on Pycnogenol.

“For instance, by utilizing Google Trends, our team gathered insightful information, learning that Pycnogenol is one of the top branded ingredients being searched and has lead the category for the last decade,” ​he said.  

“Last but not least, Horphag Research also vigorously defends the Pycnogenol brand from any type of infringement, which comes at a cost, but ultimately benefits the retailers.”

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