New trends in natural and organic FMCG.

This week I visited the Natural & Organic Show in Olympia, a trade show featuring hundreds of ‘good’ brands founded by passionate people more interested in health than wealth.

 

The market is a growing one, mainly driven by health rather than saving the planet (that’s now a cliché as no one believes eating a choc or muesli bar will really achieve that ‘one bite at a time’).

RUDE HEALTH

Only recently the Ethical Consumer Markets Report showed that demand for ethical consumer goods and services continues to grow, in 2012 it was 12% growth. Spending overall on ethical products now is greater than that of alcohol and cigarettes (£54bn in 2012) with FMCG growing at 36%. Rainforest Alliance certified goods have seen a dramatic growth, which have been adopted by big brands such as McDonalds, who also now uses RSPCA Freedom Food certified products

 

It’s always interesting to see the latest trends in the eco-ethical arena and this year coconut water, and its many variations, was back in fashion. The market has seen a number of brands dominate like Vita Coco and Chi, many smaller brands have disappeared and some not doing so well, such as Coca-Cola’s ZICO brand, well it is from concentrate and from Coke so hardly the ethical consumer’s first choice.

rihanna-vita-coco-04CHI

But now there’s been an explosion of flavoured waters, milks, oils and snack bars, all driven by a health rush for less manufactured drinks and snacks, helped by the fact many A list stars now drink coconut water like Rihanna (who’s an investor in Vita Coco). It’s come a trend for A list stars to invest in healthy products, Katy Perry has a share of Pop Chips (which Walkers have just copied).

katy_perry_popchips_barbeque_potato

The buzz word of the ethical food and drink scene is ‘raw’, specially on chocolates, so  I guess we’ll soon see it on larger brands packaging.

 

New trends include mushrooms – apparently Japanese emperors have used them for generations to reduce stress (I know a few students who use them that ay as well). And seaweed, which is rich in iron so a good way to reduce fatigue. The energy market keeps growing and shifting towards ethical products as many people seek a solution to their bad diets and poor lifestyles.

 

I do have a problem with some of the claims made by some products, maybe the founders are just a little too passionate about the health benefits, especially when it comes to snack bars and some drinks. Can a small sachet of orange flavoured powder every day really enhance my IQ?  Can a tub of wild berry cream really make me look 10 years younger?

 

And, as with all products that over claim to improve your internal balance, you need to take it for months… of course because that’ll make their bank balance healthier too.

 

The problem many face is that most markets are saturated – there are far too many coconut waters and healthy snack bars about for example, all claiming the same ethical values – natural, no GM, organic, fairly traded, etc, so the differential is no longer the content but the brand. And for many of these products, they don’t have the money to market the brand properly.

 

Beyond the trend and claims, many of the brands, new and established have at least learnt one lesson quickly – you need a great brand name, a great brand positioning and great pack graphics. Thankfully rough and scratch graphics is now gone out of fashion, replaced with slick design. Alas, few have decent ad campaigns, mostly resorting to a pack shot and a pun (a good reason why you should never let your design or PR agency, do an ad for you).

 

Rude Health has one of the best packaging designs of any brand I saw, and the products are very tasty too (we have them in the office). Simple colourful graphics, great copy too (check out the bottom of the packs). I think this brand will do very well in the main supermarkets and with middleclass consumers. 10/10.  http://rudehealth.com/

 

Rude Health was founded by Nick & Camilla Barnard, they make high-end cereals, snacks and drinks, free from added salt and refined sugar and have seen dramatic growth, especially in the porridge sector, driven by a backlash against refined sugar in breakfast cereals. Between 2008 and 2013, sales of hot cereals almost doubled to £241m. This is certainly a company to watch!

vivid_ff_lineup

Another brand to watch is VIVID drinks. Founded by James Shillcock, who has a background in tea. He has branded a green tea drink known as ‘matcha’ in Japan, drunk originally by Samurai warriors to boost their energy. It’s high in antioxidants, 130 times more than an average cup of green tea, it also containes caffeine and the amino acid L-theanine, which is a mood-booster and said to strengthen cognitive ability, so it’s no wonder it is tipped to be the next drink fad. http://vividdrinks.com

 

Having spoken to many owners (many of the brands at the show were still in their infancy) I was shocked how many were basing their business model on assumptions rather than any real research or consumer insight. I think they all need to take a lead from Paul Lindley, founder of Ella’s Kitchen, he spent almost 2 years researching his audience before launching and it paid off, Ella is one of the most successful new FMCG brands in the last 10 years. Great product, great design.

Beef stew with spuds

Too many people think there’s one type of ethical consumer, when there are in fact many types and alongside that you need to understand the trends that are adopted by sudo-ethical consumers (like ‘suburban off-setters’) who can be more valuable customers than eco-hippies.

 

I have no doubt next year a good percentage of the brands will have vanished and a new enthusiastic collection will have appeared. My advice to them all is do your research first before you mortgage the house.

 

Finally, having sampled lots of very tasty food I was puzzled by one thing, if you are a passionate meat hating vegan, why would you set up a business making vegan food that attempts to look like meat but tastes terrible by comparison?

Vegan Burger

#naturalorganic

 

 

 

  • Katey Walter

    Great piece Chris, as always. It is alarming that people get so passionate about some new idea they get they throw in the job, cash in the house and go for it… without doing any research at all.
    I heard you were co-writing a book about entrepreneurs and what happens 2 years later called When the Dream is Gone?

  • Martin Smith

    Interesting article Chris. Coming from a slightly different perspective (a media owner who has been operating in the health & fitness space for 20 years) I’ve always been very surprised how very few of these brands want to communicate and engage the very audience who take these issues very seriously. Budgets may be an issue but I can’t help feeling that smaller brands overlook their most important customers, perhaps as you say by a lack of research or lack of understanding who their target audience is and where to find them. Martin

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