Welcome to Nutraceuticals World   
April 2014 Issue
Last Updated Thursday, April 17 2014
Print

Marketing Nutraceuticals: What's In A Name? Brand Name, That Is



Or, a rosehips by any other name may be more successful.



By Greg Kitzmiller



Published September 1, 2000
Related Searches: Packaging Functional Foods & Beverages Kellogg Coca-Cola


My apologies to the bard. But some nutraceutical marketers get it, some don't. Some firms are simply stuck on selling generics and ingredients. Yet ingredients don't drive value. Trusted brand names drive value. There may be 50-100 brands of vitamin C with rosehips. And without a strong brand image, the consumer will buy the cheapest. In the nutrition business, very few marketers have built really strong brand names. Companies like Inter-Cal are starting to build ingredient brands like "Ester-C" so they can co-brand with supplement manufacturers. Yet the largest selling brand of vitamin E in the U.S. is Wal-Mart's "Spring Valley" store brand and it has nearly four times the market share of the number one branded item. (The Hartman Group's Natural Products Census: Supplement Report). Strong brands build strong firms.

What is the best food brand name in the world? While we each may have our own idea of what "best" can be, the folks at Interbrand actually place a value on global brands. Interbrand Group is a leading international branding consultancy specializing in a unique range of brand-related services and activities; the company pioneered a proprietary brand valuation methodology and has, to date, valued over 1600 brands worldwide. Interbrand's survey is limited to 25 industries, the brands must be global and there must be sufficient public information for them to make a judgment. Interbrand uses a valuation process that estimates future earnings, the brand's role in generating earnings and the associated risk. The company has been doing it for 13 years and has had such clients as Kellogg's, Pharmacia & Upjohn and Sony.

According to Interbrand (Table 1), Coca-Cola comes out on top. In the food industry, we can either argue that McDonald's (number 9 overall) or Nescafe (number 22 overall) comes in second depending on where we want to place food service. What is perhaps more interesting is that beverage brands make up most of the food brand names in the top 75. While Coke is number one overall and Nescafe 22nd, Budweiser is 26th, Pepsi-Cola is 35th, Bacardi 57th, Moet & Chandon 59th, Heineken 64th and Guinness is 73rd. Note that beer and spirits brands have done a much better job of creating large global brands than other foods. In fact, the only consumer food brands in the top 75 that are not beverage or fast-food are Heinz (25th) and Kellogg's (33rd).

So what does this imply for nutraceuticals? The two most important assets most companies in this business have are their people and brands. Most products are not technologically superior. Firms in the year 2000 and beyond are learning that what drives their firm is usually the people they've hired and the brand equity they create.

Coca-Cola and Budweiser, to pick two beverages, have done a marvelous job of creating brand value in their name. Coke has been proven in independent taste tests not to be the best tasting cola. Yet it is the number one seller. Most beer connoisseurs will turn up their nose at Budweiser (I was very surprised to see Budweiser actually being sold in the bastion of great beers, the London pubs). Yet Anheuser-Busch has also created such a strong brand name that most beer vendors worldwide won't be without it. In addition, there is something to these brands that we had when I was running Gatorade (which would undoubtedly be on the list if it only had more global presence.) With Gatorade we marketed an image, not a product.

Branding In The Nutraceuticals Industry


Thus far, there are few nutraceutical or functional food brands that can be recognized for their strong branding and their image. One standout is Yakult. The Yakult brand name may be recognized as one of the top global nutraceuticals. While that brand is not on the Interbrand list, according to the company website, every day there are 25 million bottles of Yakult consumed in the world. And unlike many global products, they do not have a presence in the U.S. Yakult has a very unique package. The 65 milliliter bottles are easily recognizable. And what baseball team does Tony Lovullo play for? The former Philadelphia player is now playing for the Yakult Swallows of the Japanese Central League. Yakult uses sports marketing in Japan. Yakult would be my nominee for one of the strongest brand names in the nutraceutical arena.

The care of a brand is an extremely important role for a firm. Too many firms marketing nutraceutical products have concentrated on ingredients. The ingredient is the core of the product but not the actual product. Ginsana would sell much more if it was not so easy to introduce Ginsun and other brands of ginseng that play off of the generic ginseng name. Many supplement companies have created umbrella brands with hundreds of individual items, no single item having exceptionally strong sales, with very little strength in their brand. Yakult and Gatorade do not rely on an ingredient name to succeed. Both products have unique and distinct packaging. Both products have clear, simple, short brand names. They have highly identifiable logos. I'm not suggesting that the Yakult packaging is optimized, but it is clearly identifiable.

Brand care usually requires consistency and integrated promotions. For example, it does not make sense for a company marketing a functional food to give away a cruise unless their positioning involves relaxation. It makes much more sense to give away a visit to a spa. The health connection carries over from the prize to the brand. Why did Pepsi spend a lot of money on Pepsi points, giving away a lot of Pepsi gear? Pepsi was positioned as a youthful product and most of the gear appealed to younger adults. Most of the gear had a fun connotation. This also spread the Pepsi logo everywhere. While its target of youth has been questioned since Coke has a broader target (and in fact is the reason Pepsi switched to the "Joy of Cola" theme), Pepsi was consistent. Even its current campaign fits with the "fun" image.

Packaging itself is very instrumental. Global packaging may be changed slightly to reflect local customs and tastes. While "Benecol" has an English muffin on the package in the U.S., Europeans don't eat English muffins so the European package shows vegetables. Yet the brand name is distinct and the package is distinct. The name cannot be mistaken for a generic ingredient. Despite other problems, Johnson & Johnson clearly thought through its branding and packaging. Every one of the top brands valued by Interbrand has a distinct package. Coke is red. Pepsi changed their color to blue. McDonald's restaurants don't look like any others. Plus, the golden arches stand alone, without the brand name. Nescafe has a unique logo, distinctive tall bottle and deep brown coloring.

Global brand care means marketing a clear, distinct image, not a core product. This starts with a simple, unique and clear brand name. Add a unique and highly identifiable logo. Use consistent integrated promotions that support your image. Change global packaging only slightly to reflect local customs and tastes. Build relationships with customers; don't just sell them. Building brands can transform firms from producers to marketers. Accelerate your value with branding.

NW

Greg Kitzmiller is a marketing faculty member at Indiana University's Kelley School of Business, Bloomington, IN. He is also on the Board of Advisors and is part of the faculty for the Johnson Center for Entrepreneurship at Indiana University 's Kelley School of Business. He combines international and domestic strategic and marketing management experience with university teaching, professional speaking, executive education and consulting. Mr. Kitzmiller can be reached at 1309 East Tenth St., Bloomington, IN 46405-1701; 812-855-1004; Fax: 812-855-6440; E-mail: gkitzmil@indiana.edu.


Receive free Nutraceuticals World emails
Sign up now to receive the weekly newsletter, and more!

Enter your email address:
Follow Nutraceuticals World On