body and mind intake burn moderation excess supplements nutraceuticals organics body image denial postrationalization exercise aromatherapy self-love self-control self-definition stress management me time family time lack of time ethics simplicity naturalness superfood frankenfood fair trade vitamins regimens prevention procrastination sexuality active living active cultures indulgence heredity habit guilt self-control gmos bfy beauty sleep naturals sweeteners diabetes alternative medicine pharmacology longevity vitality love handles scented candles botox reeboks aox obesity functionality gastro surgery cane sugar corn syrup work-life balance fat fiber slow food fast food clean food mindless munching green living education regulation medication taxation segmentation liberation simplicity duplicity energy yoga premiumization socialization laying blame proving claims labelling lobbying sodium transfat portion control heart health preserving wealth no-cal lo-cal and please buy local. BEYOND BFY: A NEW MANIFESTO FOR WELLNESS INNOVATION
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It is no news to anyone in the innovation business that Health & Wellness is one of the most potent dynamics of our age. It is universal in its appeal (being unhealthy & unwell doesn’t get many votes), ubiquitous in its reach (few industries untouched), and seemingly boundless in its opportunity (from love handles to scented candles, a vast array of human experience fits under the Health & Wellness construct).
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INTRO
ut the very characteristics that make this ostensibly life extending dynamic so powerful, can also serve to shorten the lifespan of those tasked with working on it. Amidst the swirl of often-contradictory crosswinds of temptation, moderation, education, satiation, motivation, relaxation, regulation, medication, false perception, taxation and segmentation, the seemingly simple business of Health & Wellness has more awkward tugs and twists than a pair of jeans two sizes too small.
All of H&W’s myriad dimensions matter to consumers, which makes it hard to separate the merely interesting from the commercially valuable. Even for the elite companies in Food & Beverage that we work with day in and day out, finding ways to simultaneously please both the consumer and the CFO is often a daunting thread-the-needle task. One that seems straight forward until you try to actually push it through.
This paper is a synopsis of Fahrenheit 212 President Mark Payne’s presentation to the IFT’s Wellness10 conference in Chicago. It lays out our perspective on why the old models for monetizing the Health & Wellness dynamic
aren’t igniting consumers and growth the way they once did, takes on some unhelpful myths that have permeated the Health & Wellness conversation, and offers up a new ‘Beyond BFY’ playbook to propel F&B wellness innovation into the future.
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Pleasure
INTRO
HE A LT H
The Grass is Leaner on the
Other Side The first thing we need to do to make sense of the extraordinarily complex landscape we call Health & Wellness is recognize the fundamental divide between those F&B businesses born in health and those born in pleasure. This divide is the pivot point of a quiet class war unfolding before us in the grocery store – a clash between bringing Pleasure-to-Health and bringing Health-to-Pleasure.
By Pleasure-to-Health, we mean brands and businesses born in irrefutably healthy positions – like water, yogurt and oatmeal – driving growth through innovations that up the pleasure. Take yogurt and flavor it to taste like cheesecake, or pump in sugar and color to make kids love it. Serve up the goodness of oatmeal in a chocolate-covered, caramel-centered bar that’s not much different from a candy bar. Take water and recast it as a 120-calorie fruit flavored beverage. Take organic milk and chocolatize it with more sugar per ounce than carbonated soda. Take fruit and reconstitute it as a leathery tooth-binding snack that’s 70% sugar by weight and you get the picture. These plays in Pleasureto-Health succeed because they simultaneously please our senses and appease our conscience. Marching into the H&W fray from the opposite flank are businesses born in pleasure, now innovating to maintain relevance in a more health-conscious world. Think here of chocolate sold as a heart health play, of vitamin-fortified carbonated drinks, whole grain donuts, 100 calorie bags of cookies and BFY ice creams. There’s no judgment in play here. Any of these plays represents a healthier option than some less healthy foil they seek to displace. It’s simply a strategic fault line along which many H&W initiatives play out.
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IN Much of what separates the players across the divide is the strategic difference between playing offense and defense. Bringing Pleasure-to-Health is pure offense. Health & Wellness is not a threat to these healthy-born businesses, but a helpful tail wind pushing them past the incumbents in the consumption occasions they stretch into. For the Health-to-Pleasure set, H&W innovation is typically more defensive – it’s a quest to ensure consumers don’t leave their categories behind as they reach for products with perceived health advantages. In many ways, this class war is an unfair fight. Increasingly health-conscious consumers are, more often than not, basing decisions on broad-brush perceptions rather than granular realities. No matter what the fine print says, anything called a fruit snack has got to be healthier than a cookie, right? Stats be damned.
Oatmeal is healthy and candy bars aren’t and you can’t convince a mom otherwise. In this loosely informed climate, the category your product sits in often matters far more to mom’s decisions than what’s actually in your product.
What this means for F&B companies is that the competitors you may need to worry about are no longer just the ones sitting adjacent to you in aisle six. The class war is fought between categories as much as within them, and in the attendant chasm between perception and reality. What’s important to take out of this is the need for ruthless clarity of intent when marching into the fray. We’re consistently surprised at how much H&W activity goes on without real clarity of intent – is this an offensive growth move or a defensive hedging strategy; are we out to deliver bona fide nutrition, or just feel-good permission? The result of blurred intent is a disproportionate amount of activity and investment relative to concrete strategic and commercial traction, often resulting in little more than technical improvement and marginal gains in the claim game – moves that can be helpful as tie breakers at the shelf, but that fall short of delivering the game breakers shareholders are craving.
INTRO
As ROI comes under the microscope, the requirement for F&B players is becoming clearer by the day: Health & Wellness needs to be transformed from a mere activity stream consuming attention and resources, into a growth engine hurling off new revenues and margins. The old BFY playbook of shaving off a little naughty stuff (addition by subtraction) or sprinkling in a little fortification into an otherwise unchanged product (addition by addition) just isn’t as impactful as it used to be. The time has come for a new playbook to inspire new bona fide transformation at the intersection of consumer and shareholder interests. But before we go there, we need to clear the slate by putting aside a few unhelpful myths that are clouding the H&W conversation.
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MYTH BUSTING
BODY OF PUBLICLY AVAILABLE NUTRITIONAL KNOWLEDGE
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SIZE OF AVERAGE BODY
MYTH-BUSTING MYTH NO.1
CONSUMERS ARE GETTING SMARTER ABOUT WHAT THEY EAT
If this is as true and black & white as it sounds, knowledge must be highly caloric. Consumers’ consumption of nutritional information has grown exponentially over the past two decades, yet the body of knowledge and the size of the average human body are heading north in lock step. Are consumers voicing preference for healthier sounding products? Absolutely. But we can’t mistake this for bona fide smarter eating. Truly smart intake is making headway for only a savvy minority. For the majority, reaching for things that sound healthier is as
far as we’ve come, and this is at best a mixed blessing. On the plus side, it says people are at least thinking health. But on the downside, products like ‘No Trans Fat’ cookies create a diversionary halo that shifts focus away from the realities of mainlining sugar, calories and fat, making us feel like we’re making smarter choices, when in truth the needle isn’t moving. Smarter choices and smarter eating are two very different things.
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MYTH BUSTING
MYTH NO.2
This isn’t untrue, of course – to quote the inscription on the statue at Animal House’s Faber College, ‘Knowledge is Good’. But it misses the point.
WE NEED TO EDUCATE CONSUMERS TO MAKE HEALTHIER CHOICES To say that education is the principle answer is to ignore human nature. Knowing something is unhealthy has rarely in human history stopped us from doing what feels good. The senses’ timetested ability to overrun sensibility should no longer be questioned. The better way to think about it is this: we need to give eating right a fighting chance against the undeniable pleasures of eating wrong. Yes, let’s educate, just don’t expect it to do much. We can’t lecture consumers over to the good side, we need to entice them. We need to enroll the senses as our pied pipers that create healthier behavior that education alone has failed to convert.
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MYTH BUSTING
CONSUMERS READ LABELS
CONSUMERS WHO READ LABELS CONSUMERS WHO DON’T READ LABELS
MYTH NO.3
CONSUMERS WHO ONLY READ COMICS
Even as obesity reaches epidemic proportions in the United States, only 34% of weight-conscious grocery shoppers regularly read nutritional labels (IRI).
majority of label comparison happens within a two-foot radius, comparing similar products within categories, but rarely comparing across them.
And the label reading that does happen has a limitation nobody talks about. Spend some time watching what happens in a grocery store, and you’ll see that the vast
This means that while the conscientious consumer may give herself a pat on the back for a healthier call within a given category, she’s still relying on broad-brush
category perceptions (and misconceptions) to decide which categories are healthier. And, in the end, most unhealthy intake is a function of choosing unhealthy categories and consuming too much of them, rather than failure to spot the slightly healthier option in the same section of the store.
MYTH NO.5
BFY IS A GOLDMINE
MYTH NO.4
BFY PRODUCTS ARE ABOUT CREATING HEALTHIER BODIES
The number of weekly inputs into the average individual’s diet make it virtually impossible for any single product to make any demonstrable difference to a single human body, much less a population of them.
This doesn’t mean the F&B industry shouldn’t relentlessly pursue incremental product improvement, but let’s not kid ourselves that we have the power to change bodies. We have the responsibility, but we don’t actually have the power.
Consumers have rarely been asked to pay an extra nickel for traditional BFY products that promise less bad stuff or more good stuff, and they usually won’t. Most of what traditional BFY has actually done is protect against attrition and shift share within categories.
It creates tiebreakers, but not game breakers. This type of product improvement is an evergreen model that will always have a role, but it will, for most companies and categories, never become the transformational growth engine they need. 07
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BOXING PAVLOV
BOXING
PAVLOV So why isn’t traditional BFY (less of the bad, more of the good) doing more to materially change consumer waistlines and company bottom lines?
It’s because as we innovate in BFY circa 2010, we’re essentially boxing Pavlov. Through the past few decades of traditional BFY innovation, the F&B industry has inadvertently but relentlessly conditioned consumers to expect disappointment. We’ve shaved off bits of naughtiness and apologized every step of the way – trust us, it still tastes good. We’ve let them open 100 calorie packs of their favorite snack brands, only to find that what was in that pack was an altered, less tasty hybrid rather than the beloved original. To be fair, this type of innovation has produced some helpful near term wins, but at a price. It made the trade-offs between health and sensory expectations seem as inevitable as death and taxes.
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BOXING PAVLOV
“It’s the expectation, not the taste, that really foils consumers,” says Brian Wansink, Director of the Cornell University Food and Brand Lab, and author of Mindless Eating: Why We Eat More Than We Think. A Cornell study showed that labeling an energy bar as containing “10 grams of soy protein” led people to rate it as less tasty with an “unpleasant aftertaste,” compared to another group who rated the identical bar more favorably when not carrying that claim. Sensible, it seems, has in aggregate been positioned as the opposite of pleasurable.
Sensible gets the nod in the focus group – which is arguably the only place on earth where consumers can be counted on to consistently make healthy choices. But sensible gets washed away in the ebb and flow of daily habit, grab-and-go eating, temptation and a debit-credit system where we promise ourselves we’ll be good in a tomorrow that never quite gets here.
The solution – for the waistline, the lifeline and the bottom line, is to change the game.
“It’s the expectation, not the taste, that really foils consumers,” 09
Beyond BFY:
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The New Health & Wellness Innovation Playbook With well-worn BFY models doing little more than breaking ties, real shareholder value lies in new innovation vectors that can actually grow categories and margins. Here are our top six picks for the new H&W playbook:
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INNOVATION PLAYBOOK
IP 1
INNOVATION PLAYBOOK
The Pleasure Principle
The Pleasure Principle is simple. We need to upend the old model of ‘it’s healthier but trust us it still tastes OK’, moving instead to a new paradigm – new products that are more pleasurable than what came before, but just happen to be healthier. This is not just saying taste matters; it’s far more fundamental. It’s about the visceral imperatives that drive intake. We are fundamentally a pleasureseeking species.
(If procreation didn’t feel so good, we would have died off long ago).
We need to entice consumption over to the good side. A Pleasure Principle Example: The Pringles Rice Infusions concept we created for P&G Europe represented a 35% fat reduction vs. regular Pringles. But the idea that unlocked its commercial potential came at it from the culinary perspective, leveraging rice’s ability to absorb more cooked-in flavor than a potato. Incidentally, rice also absorbs less fat. Thanks to its emphasis on the senses rather than sensibility, this new offering helped Pringles grow market share in Europe, grew the category, and hit its payout threshold a year ahead of schedule.
“We are fundamentally a pleasure-seeking species.”
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“WH2OLE, the water that quenches your hunger.”
IP 2
INNOVATION PLAYBOOK
Next Wave Hybrids Remember, the category your product sits in often matters more than what’s in your product.
“WH2OLE, the water that quenches your hunger.”
For many brands and businesses, the opportunity this points to is new offerings that transcend traditional category definitions to unlock new health benefits, occasions and revenue, wrapped in highly differentiated consumer experiences.
A Next Wave Hybrids Example: Take milk. It’s a tough business to grow these days, as calorieavoiding young women struggle to accept that milk has a role in their daily lives. When New Zealand dairy cooperative Fonterra came to us with a clear taste-neutral protein extract derived from milk, we put it in water, creating a new hybrid play: WH2OLE, the water that quenches your hunger. Suddenly, a milk company had a role to play in water.
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INNOVATION PLAYBOOK
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The Process Leap
“Being different is better than being just a little better.”
Since we’ve spent decades conditioning consumers to think healthier means less tasty than the original, process leaps deliberately uncouple from what came before, presenting not a better thing, but a new thing, made a whole new way.
Edy’s Slow Churned Ice Cream, Baked Lays, Con Agra’s hundred million dollar Café Steamers… give these cooks their props, and extra dessert to the strategists who said being different is better than being just a little better.
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IP 4
Powdered drinks keep packaging out of landfills.
INNOVATION PLAYBOOK
RFY: Right-For-You RFY products go beyond the nutrition stats to support a healthy values system and lifestyle. They’re about the kind of person you want to be and the life you want to lead.
We all know about the organic and natural lifestyles on offer at Whole Foods or the neighborhood food co-op, but there’s more to RFY. Consumers can achieve moral health through fair trade purchases. Powdered drinks keep packaging out of landfills. Frozen foods provide an alternative to preservation chemistry. Simpler living is embodied in a five-ingredient ice cream.
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INNOVATION PLAYBOOK
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Ancient Natural Miracles
Ancient natural miracles redirect science from engineering scary new sci-fi foods to studying age-old magic. Time-tested natural options proven across centuries rather than a few trials, marry our desire for new potency with our fear of the new and engineered. Green tea, red wine, soy and acai are just the tip of the iceberg. On the horizon are the health benefits of antioxidant-rich cocoa, an ancient Asian secret called monk fruit that sweetens without calories, the Goji berry long known as the “longevity fruit�, the immune systemboosting roots of the Ashwaganda plant, and many more.
From top left to right: Soy, Acai, Monk Fruit, Cocoa, Goji Berry, Green Tea
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IP 6
Follow the Money No one really talks about it being a big problem that consumers have rarely been willing to pay more for traditional BFY offerings, or that most of these offerings do little more than limit attrition and create marginal short-term share gains in a P&L neutral way. But this is a very big deal for one big, fat reason: the more profitable healthier offerings become, the more the Food & Beverage industry will drive them with the force required to meaningfully change the way people eat.
We need to break out of the current chicken and egg situation where the BFY innovation that companies churn out is too marginal to pay more for. Breaking this cycle requires a discipline that’s surprisingly scarce today. H&W innovation programs need to spend as much time thinking from day one about how they’ll make money as they do understanding what mom is thinking.
This isn’t about easing up on consumer insight. It always holds the keys to the castle. But consumer insight needs to be relentlessly paired up with commercial insight pointed at profitability. While mom is up for just about any healthier offering, every business has certain types of innovation that are prone to being more profitable than others. In businesses like soft drinks and restaurants, smaller servings almost always command higher margins. In others, fat is a big cost component so cutting fat has a head start toward profitability. In other businesses, on-the-go consumption commands a premium over back-of-store offerings. What needs to be avoided is the naïve belief that what is attractive to consumers, and what makes financial sense, will somehow magically connect at some point far down the development track.
Working what’s good for consumers and what’s good for the business in parallel is a model whose time has come.
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INNOVATION PLAYBOOK