AGENDA: Spreading the health benefit - Johnson & Johnson’s cholesterol-reducing spread is the latest food product to make specific health claims. Sue Beenstock asks why the firm is moving into a new market

While all foods are functional, some, according to the manufacturers, are more functional than others. A new sector is fast emerging, the so-called neutraceuticals, comprised of foods that make you more healthy just by eating them.

While all foods are functional, some, according to the

manufacturers, are more functional than others. A new sector is fast

emerging, the so-called neutraceuticals, comprised of foods that make

you more healthy just by eating them.



In the next few months this area will move to centre stage with a

head-on clash between two of the world’s largest companies, Unilever and

Johnson & Johnson.



Both are set to launch margarines that are claimed to reduce cholesterol

- one of the major causes of coronary heart disease - by up to 10%. It

is a product benefit the average brand manager would kill for.



At the moment, the neutraceuticals sector contains a few pioneer brands

- such as Ribena Fruit Juice and Fibre, Yakult and the Pact brand range

of yoghurt, orange juice and butter, each fortified respectively with

folic acid, calcium and fish oil.



Unilever already has a strong presence in the chill cabinet with brand

leader Flora in its many guises, so its extension into the area is

logical.



But Johnson & Johnson’s appearance in this market, with its margarine

Benecol, is more intriguing. It is a company known for nappies, not

margarine.



The analysts, of course, claim to have seen it coming. According to one:

’Johnson & Johnson has been trying to pick up products like these in

North America and market them for others for some time; its marketing of

Tate & Lyle’s Sucralose product in the US is an attempt to break into

this market.’



This is just what it will be doing with Benecol, bought from the Finnish

brand owner Raisio for a payment of dollars 30m (pounds 18.5m), and now

handled in Europe by Johnson & Johnson’s marketing company McNeil

Consumer Nutritionals.



It is a big move for Johnson & Johnson; at its last quarterly results

investment analysts noted that the company had organised a special

announcement solely on Benecol. ’They’re treating it as a major

project,’ said Anne Alexandre, European food analyst at Credit Suisse

First Boston. Johnson & Johnson’s launch of the product in the US next

January is reputed to have a dollars 60m (pounds 37m) adspend.



But will UK consumers take to a margarine that can cost up to ten times

as much as a conventional one? Benecol has certainly done great things

for Raisio in health-conscious Scandinavia, giving it 4% of the Finnish

margarine market and boosting the company’s share price to an all-time

high, despite the product’s high unit cost. Clearly, there is potential

for functional foods in the UK, too.



The independent Leatherhead Food Research Association (LFRA) estimated

the market for functional foods in the UK was pounds 239m last year, and

worth about pounds 830m across Europe.



Supermarket savvy



Johnson & Johnson has long experience of dealing with supermarkets;

whether cotton buds or margarine, many of the issues are the same. But

will its infrastructure, its ethos and the fact that Benecol will get to

the shelves before Unilever’s product be enough to guarantee

success?



No, says David Goudge, managing director of the Henley-based Brand

Development Business. Like many food industry analysts, he believes this

may be a brand extension too far for Johnson & Johnson. ’On the one hand

they’ll want to exploit their healthcare image, but on the other, it

will be so surprising to find a name associated with baby oil in the

fridge.’ On paper, says Goudge, it should be an ideal fit, but the

reality is consumers may find it a turn-off.



Research credentials



As yet unpublished research by LFRA backs up Goudge’s reaction.

According to LFRA’s market intelligence manager, Moira Hilliam, most

consumers named multinationals such as Nestle and Unilever as the

companies they would trust to produce functional foods.



Indeed, companies arriving in the sector with medical credentials may be

at a disadvantage, she says, because ’people want to believe that what

they’re eating is natural, and not some sort of prescription food,’ she

says.



So far, McNeil Consumer Nutritionals doesn’t have a UK presence. Saatchi

& Saatchi Healthcare Connection was appointed last week to handle the

launch but is keeping quiet. Hill & Knowlton is handling PR and

patiently explaining its job at the moment is to say nothing.



Whether the forthcoming margarine war will kick-start the

neutraceuticals sector remains an open question. The only thing we know

is that its price, pounds 3.50 for 250g, compared with the usual 50p or

60p, could prove hard to swallow.



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