1. TNS April 11, 2014
Bringing Functional Foods to Market
An innovation journey

2. TNS April 11, 2014
The Innovation Journey
Innovation & Product Development
Identifying Market
opportunities
Creating , Identifying and
refining promising
Concept ideas
Final product
distribution and
Launch
Communication
Plan
Creating Synergistic
products to promising
Concept ideas

3. TNS April 11, 2014
 Senior executives are unsatisfied with the financial
returns on their investment in innovation
 80% of new products fail and the cost of failure is high
 Successful product launches
don’t always result in top-line growth
It is getting increasingly hard to find
and launch successful innovations
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4. TNS April 11, 2014
Companies struggle along the continuum of innovation
24%
12%
14%
17%
18%
25%
44%
Other causes
Technical problems
Poor launch timing
Competitive strength or reaction
Higher costs than anticipated
In-effective marketing
Inadequate market analysis
SOURCE: Cooper and Kleinschmidt
24%
Main causes of new product failure
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Pinpointing opportunities for growth
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6. TNS April 11, 2014
Identifying high potential product-led growth
opportunities is essential for long-term success
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7. TNS April 11, 2014
Underperformance is the norm
Less than 1% of ideas succeed in-market
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8. TNS April 11, 2014
The cost of underperformance
extends beyond financials
Credibility impact among external stakeholders
(shareholders / trade)
Impact on brand equity
Opportunity cost
KPI impact for the development team
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9. TNS April 11, 2014
Causes of underperformance
Too narrow a focus leading to a battle for share of aisle
not consumer occasion
Healthy
Nutrition
All foods
Healthy foods
Functional
Foods
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10. TNS April 11, 2014
Causes of underperformance
Chasing empty spaces
Product
cluster
Empty
space
Empty
spaceProduct
cluster
Product
cluster
Product
cluster
Product
cluster
Product
cluster
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11. TNS April 11, 2014
Where opportunity hides
Core needs
Passport expectations all products are expected to deliver
– by all consumers in all occasions
Enjoyment
Tastes great
Satisfies a craving
Convenience
Convenient to use out of the home
Is not messy to use
Quality
Confident of food safety
Value
Is good value
GAP
GAP
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12. TNS April 11, 2014
Where opportunity hides
Occasion needs
Versatile Flavorful
Future orientated, ideal benefit bundles valued by a large number
of consumers in a large number of occasions
27%Tasty balance ($178m)
Mindless nibbles
($119m)18%
20%Enhancers ($132m)
14%Home style sensory ($92m)
Ultra indulgence
($139m)21%
a
I am looking for the best of both
worlds – the perfect blend of
taste and satisfaction without the
guilt associated with unhealthy
diet choices
Solutions to this need are
expected to not only taste good,
but also provide some added
benefit such as energy, mood
lift, or relaxation
I will not accept packaged,
for the masses options and expect
home-style products with unmatched
freshness and wholesomeness
Ultra-convenient options
optimised for multi-tasking
so you can enjoy a treat
without stopping what you
are doing
The ultimate indulgence when
only the best will do. All the
senses are engaged with this
rich taste and textural
experience
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13. TNS April 11, 2014
Opportunity identification
The difference between ideal and best available is the
opportunity
Tasty balance ($178m)
Consumer perceptions of best available
Client
Product A
Competitor
Product Y
Product
category 1
Product
category 2
Client
Product C
% agree Improvement opportunity (less than 35% agree)
SecondarySecondaryPrimaryPrimaryPrimary
Sensible balance
Is low in cholesterol 25 20 10 8 10
Is low in fat 48 40 35 30 34
Easy to portion into small servings 28 50 45 40 38
Is low in calories 40 35 35 33 34
Satisfaction
Tastes great 38 41 42 45 46
Satisfies my cravings 40 30 28 35 29
Is rich and creamy 35 36 34 35 35
Natural goodness
Is all natural 38 34 33 31 30
Not overly processed 34 32 30 29 32
Not a lot of artificial ingredients 36 38 35 36 36
Is made with real milk 48 28 28 26 40
Experiential
Has a unique taste 50 45 50 44 35
Has a distinctive taste 42 38 48 35 30
Is a nice change from the usual 38 34 33 35 30
Ideal requirements
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14. TNS April 11, 2014
Where opportunity hides
What is a Convergence opportunity- what is a
breakthrough opportunity
Tasty balance
Enhancers
Home-style sensory
Ultra indulgence
Home-style sensory
Versatile Flavorful
Convergence
Convergence
Unique expressions of different occasion need
Combinations highlighting more niche opportunities
a
Mindless nibbles
Home-style sensory
Breakthrough-
Home baked delights
($80m)
Pick me up ($120m)
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15. TNS April 11, 2014
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Being “healthy” used to be
all that was
required. Manufacturers
could communicate
around general long term
health and that was
enough. These health
promises though really
required “faith” as there
were no tangible/visible
proofs of efficacy
Consumers have become more
demanding and the proof of
efficacy timeline has shortened as
is not more TODAY focused than
FUTURE focused. Most of the
functional health claims noted in
the attached are health benefits I
can experience today (digestive,
joint, memory, energy, etc.). It is
not that people no longer care
about longer term health – they
do. However, a long term
health claim without TODAY
functional claims will likely
not be as successful.
The evolution
continues still as
there is evidence
“Energy” has
become table stakes
in many markets
and now functional
and emotive
REJUVENATION is
the new territory.
What we have learnt about the evolution of health while
identifying opportunities across the world

16. TNS April 11, 2014
Case study
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The Danone brand strategy evolution is an example:
In the 1970’s, Danone ran a very successful ad talking about long term
health – it is known as the Russians commercial. They showed a handful of
people from Russia who lived over 100 years and they all shared frequent
consumption of yogurt. Inference-> a yogurt makes you live longer – a
distant future promise.
Today, Danone has gone almost 100% into functional health.
Their main product Activia, makes digestive health claims. Benefits you can
see today rather than 50-60 years from now.
70s
http://www.youtube.com/watch?v=HYng_oCaL3w
80s
http://www.youtube.com/watch?v=2Xf3bG4vMs8
Now
http://www.youtube.com/watch?v=rZGOixS5NHo

17. TNS April 11, 2014
Creating Concepts and product ideas which will
resonate with consumers
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18. TNS April 11 2014
How you say it matters as much as what you say
18
Consumers need to be able to relate the
technical innovation to solving the
“tensions” in their everyday life.-
The ‘Aha’ factor makes the opportunity
come to life
WITH
Insight
WITHOUT
Insight
‘Appeal’
166 100
150‘Definitely
Buy ’
100
Presence of an Insight impacts product acceptance
Scores expressed as indices
Source : TNS R&D work

19. TNS April 11 2014
Opportunity Identification
Its all about tensions (tradeoffs existing products force me to make)
19
Unless a new product or package resolves an existing market tension, consumers
are not anxiously awaiting your new offer, decreasing odds of success. What are
the tensions in your market
Spoil Child Child Health
Convenience Wholesome
Satiety Obesity
Child’s Needs My Needs

20. TNS April 11 2014
The structure of a compelling concept
Strapline
Reason to Believe
Benefit
Insight
Title/ Concept Name
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21. TNS April 11 2014
Addressing Objective 1: Creating a Compelling Concept
Role of concept is to communicate product
details to the consumer in an effective and
realistic way. It should provide them with the
type of information and level of detail that
they would be likely to have in a real life
purchase situation.
A good concept should:
Use language that works with the target
audience – not marketing or technical jargon
Give as much information as a 30 second
advert
Be written in the right tone for the brand
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22. TNS April 11 2014
How to Create a Compelling Concept - Insight
All good concepts start with a brilliant insight
“Getting to the heart of why people do what they do, and using
that knowledge to help us grow”
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The insight is the reason why consumers keep reading
– draws the consumer into the idea and shows you understand them
An insight is the premise on which the idea is based and creates a
situation or perspective for the benefit & Reason To Believe
Needs to be based on true understanding of a consumer situation –
they are the needs, wants or beliefs identified from the consumer
portraits not just facts
Thoughts that express a feeling and a need in a very subjective way

23. TNS April 11 2014
How to Create a Compelling Concept - Insight tips
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All good concepts start with a brilliant insight
“Getting to the heart of why people do what they do, and using that
knowledge to help us grow”
Insights should not be too extreme or worthy, patronizing or preachy
Use toned down language like "sometimes", "often", "at times" and
"now and then" avoids consumers rejecting the concept because it
feels too extreme for them
…but try not to fall back on expressions such as “wouldn’t it be great
if…”
Consumers need to relate to the insights so try to make them feel
more personal
“you” can feel accusing or intimidating whereas “I”, “I feel” and
“some people feel” are often better received.
An insight should be expressed as a “need”, “want” or “belief”.
Avoid excessive negative phrasing – the insight should leave you
feeling positive
Should express the basic “tension” in consumers life – a common
structure – I would like to … But ….

24. TNS April 11 2014
How to Create a Compelling Concept- Benefit
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Should be something that perfectly answers the need
identified in the insight, with a real, noticeable benefit in a
compelling way.
Give consumers what they want (benefit), not what you’ve got
(feature)
Does it pass the “so what” test?
Consumers are very cynical about being told to buy a new
product simply because it is new.
The benefit is the reason consumers want to buy the product
Ensure your benefit is distinct, compelling and original
Benefits can be functional and/or emotional but must be
different and better than competitors
Functional - the tangible difference a product makes in the
consumers life
Emotional - the difference a product makes in how the
consumer feels
Often the benefit is emotional and the reason to believe is functional
The benefit that your product or innovation
will give to people
it’s the difference the product makes in a consumer
life and answers “what’s in it for me”?

25. TNS April 11 2014
More detailed description that persuades people to buy it.
It should support the differentiated benefit in a
compelling way
Avoid technical language that is not easily understood by
normal people
Consumers are not often swayed by complicated technical
words
Not always about “special ingredients”
Try to provide rational and emotional reasons to believe that
will persuade consumers to try the product
RTB should be distinctive from other products in the category
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How to Create a Compelling Concept - Reason to believe
The Reason to Believe supports the
benefit
It convinces consumers they will receive the
benefits promised.

26. TNS April 11 2014
How to Create a Compelling Concept - Reason to
believe can take many forms
4 Basic types of RTB
• Logical Explanation
• Describe why or how the product will solve consumers’ problem
•Build from consumer insight about how things work
• Hard Evidence
• Show Results - graphs, pictures
• Identify the source - special ingredients (including explanation
as appropriate)
• Give Data - % improvement, probability of success, etc.
• Outside Recommendations
• Professional Organizations e.g Doctors, Dental Associations,
Nutritionists
• Independent research/study results
• Celebrity Spokespersons
• Brand Track Record
• Relies on strength of brand heritage
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27. TNS April 11 2014
How to Create a Compelling Concept - Strapline
The Strapline
A short, snappy sentence that sums up and reinforces
the benefit of the concept.
Leaves the consumer with a clear, last thought.
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28. TNS April 11 2014
Without insight
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The term probiotic literally means
“for life”. Probiotics are beneficial
live bacteria found in the
intestinal tract. Given the fact
that 70% of the body’s natural
defenses are inside the digestive
tract, probiotics, when consumed
on a daily basis, may be beneficial
in strengthening the body’s
natural defenses.

29. TNS April 11 2014 29
Example concept - Probiotic food
Body
natural
resistance
Stresses of
modern life
Strapline : protect your body the natural way
Consumer Insight : my body faces a lot of stress from my busy modern lifestyle
but I don’t want to be popping pills all the time
Consumer Benefit : Probiotic foods increase my body's natural resistance is can
face the stresses of modern life in a natural way
Reason to Believe : Independent research/study results , Healthier Choice labels ,
ingredients like Inulin

30. TNS April 11 2014
Exercise : Omega 3
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Omega-3 refers to omega-3 fatty acids. Fatty
acids are the building blocks of fats, which,
despite their misunderstood reputation, are vital
nutrients. Omega-3 is used to regulate blood
clotting, build cell membranes and support cell
health. It's polyunsaturated, which is the
relatively heart-healthy kind of fats that help
reduce blood triglycerides (fats) and low-density
lipoprotein (LDL), the so-called bad cholesterol.
Omega-3 also curbs inflammation. Omega-3 is
called an essential fatty acid

31. TNS April 11 2014
A concept by Terence Chan
31
Description of the idea and benefits to Consumer:
Eating/drinking the “X” product which is high in Omega 3 conveniently reduces bad
cholesterol.
Consumer Insights:
Busy life in modern society leads to people consuming a lot of processed food which are high
in fats, bad cholesterol and salt. All of which leads to high blood pressure. Products that is
convenient and tasty is needed to counter high blood pressure that is a result of eating a lot
of food high in bad cholesterol.
Reason to believe – features (include things like pack sizes, flavours, price etc.)
• The product contains “ingredients” that are proven to be high in Omega 3. For example,
each bottle of product “X” is made from 500 grams of flax seed. (Flax seed is high in
Omega 3).
• Simple and uncluttered packaging design to differentiate the product from the “other
highly processed” food products currently on the supermarket shelves.
• Celebrities and common people to endorse the product. Typically celebrities and common
people who have a lot in common with the target market.
Tagline: Live life to the max with product ‘X’

32. TNS April 11 2014
A concept by AVA
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Description of the idea and benefits to Consumer:
• Omega 3 can regulate blood fats (triglycerides) and low density lipoproteins which are the
“bad cholesterol” .
• Omega 3 build cell membrane and support cell health
Consumer Insights:
I am afraid of contracting cardiovascular diseases due to high (blood triglyceride levels) and
cholesterol because I eat a lot of processed foods (high in sodium & fats).
Reason to believe – features (include things like pack sizes, flavours, price etc.)
• Omega 3 curbs inflammation (oxidative damage)
• Research has demonstrated reduced incidence of cardiovascular diseases in populations with
high Omega 3 intake
• Ease of consumption due to availability of capsules.
Tagline: Omega 3 is good for your heart & brain.

33. TNS April 11 2014
A concept by Anonymous
33
Description of the idea and benefits to Consumer:
• Omega 3 fatty acids are polyunsaturated fats that used to regulate blood clotting, builds
cell membrane and support cell health. It also helps to reduce blood triglycerides and low
density lipoprotein (LDL) which can lower the risk of heart disease. Omega 3 is an essential
fatty acid which can also curb inflammation.
Consumer Insights:
I like to consume meat but hardly exercise due to my hectic lifestyle
Reason to believe – features (include things like pack sizes, flavours, price etc.)
• Based on research trials done on people who have higher risk of heart disease problems.
The results showed that these people have reduced blood triglycerides and low density
lipoprotein after consuming Omega 3 products for 6 months.
Tagline: Protect your heart with natural source of Omega 3.

34. TNS April 11 2014
Developing winning products
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35. TNS April 11 2014
Developing winning products – the key to success
35
Innovation is at the heart of most
companies’ growth strategy. One of the
most critical factors in the long-term success
of new products is a strong repeat purchase
rate. And to achieve that it is essential to
create products that will meet consumer
expectations.
The strongest indicator of optimal
repeat potential is the extent to which
the product’s actual performance meets
consumer expectations. This is called
synergy. A strong product can be
undermined by a poor concept. A great
concept can raise expectations that an
average product cannot meet - so failing to
deliver repeat purchasing.

36. TNS April 11 2014
It is important not to test products in a vacuum
Repeatpotential
Synergy
High
Low
Product weak
vs. concept
expectations
Product strong
vs. concept
expectations
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37. TNS April 11 2014
Concept A
11%
30%
300
29%
Concept B
8%
45%
380
9%
Same product, different concept
To get the concept-product fit right you need to test
the product versus expectations
Trial rate year 1
Repeat rate
Volume year 1
Product worse than expected
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38. TNS April 11 2014
Bringing functional foods to market- a checklist
Identified a true whitespace opportunity
Created an insight driven compelling concept that tests well
Have you
Have a product that is synergistic with your concept
…then you are ready to go

39. TNS April 11 2014 39
Thank You