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
But Johnson & Johnson’s appearance in this market, with its margarine
Benecol, is more intriguing. It is a company known for nappies, not
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 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
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.
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
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.
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
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.