Rinka Banerjee

Regional Technology Director

Foods

Unilever R&D, South Asia

March 17, 2011Nutra India SummitBangalore

Finding the sweet spot: Health Foods

�The D&E opportunity

�Understanding today’s consumer

� Issues & Opportunities

� Some best practises

What will I talk about…..

Large business opportunities in Asia

Foods and HealthCare

Foods market in China + India: >€500B growth projected in 2025

Source: McKinsey Global Institute Analysis

Sweetspot:Health foods

The health food and beverages market

growing 20-30%/annum in Asia

Health & Wellness Food & Beverage market:

� India €3bn in 2010 expected to grow to €7bn by 2015

Euromonitor, Tata Strategic Management Group, 2010

� China €15bn in 2010 expected to grow to €54bn in 2015 (incl. TCM)

RedFern, 2010

The India Story: Key Drivers

2/3rd Population below age of 35 Population to grow wealthier

Steady increase in Urbanisation Favourable consumption pattern

• Changes in the incomes and expenditure is creating opportunity at all levels.

Source : National Council of Agriculture & Economic Research; Family Budget Study

2003181 million households

2013231 million households

131

46

3

124

11

96

Affluent

Aspirers

Strivers

Rich Classes

Top End Business

Changing attitudes

Trebling

Credit Culture

B.O.P Opportunity

Aspiring Classes

Striving Classes

>$ 4,675 p.a.

$ 975-4,675 p.a.

<$ 975 p.a.

Shifting Income & Expenditure Trends

2006Expenditure Groups

>$ 326 p.m.

$152-$326 p.m.

Upto $ 152 p.m.

2015 (projected

)

45%

18%

37%

28%

41%

31%

1% 4% 6% 8%

29%37%

42% 45% 48% 49% 53% 55%

68%

99% 96% 94% 92%

71%63%

58% 55% 52% 51% 47% 45%

32%

Bangladesh

India

Pakist

an

Sri La

nka

Vietn

am

China

Indonesia

Mala

ysia

South K

orea

Philippin

es

Taiwan

Thaila

nd

Hong K

ong

Modern Trade Traditional Trade

• Shifts in consumption and expenditure will also alter the Trade Structure in favour of the modern trade

Changing Consumption Pattern

~1990

UndernutritionObesity and

cardiometabolic disease

now

“Double burdenof malnutrition”

Undernutrition is now mainly characterized by nutrient deficiencies,not so much lack of energy

‘Nutrition Transition’

India is a global epicentre of diabetesIndia is a global epicentre of diabetesIndia is a global epicentre of diabetesIndia is a global epicentre of diabetes

● Estimates that 60 million adults in India have diabetes today

● Diabetes prevalence is even high (and rising) in Indian towns and villages

Ramachandran A, et al. Diabetes Care 2008;31:893–8

18.6

16.4

9.2

20

18

16

14

12

10

8

6

4

2

0

Chennai Town Village(city)

Dia

be

tes p

reva

len

ce

(%

)

Consumer attitudes towards H&W

Inner HarmonyIntegrating emotional

wellbeing into a holistic view of health and

wellness

Return to NatureSeeking reassurance in nature for the safest and

best choice

Force FieldingDefending the body against illness and

disease

Debit-Credit Lifestyles

Doing good to make up for the bad

Permission to Indulge

Seeking products that offer guilt-free indulgence

Fashion Your BodyEnhancing physical

appearance beyond what Mother Nature gave you

Key Semantics of health

Good health is seen to automatically

convey clean immediate

surroundings, personal hygiene

Significant of no deficiencies or

lethargy ���� thus, allowing an individual to perform with vigor

and energy

Enables me to do more

Good health is culturally

equivalent to a high standard of

living. Therefore, associated with personal wealth. Also,

traditionally associated with

superior castes.

Good health also leads to

affluence since ‘health is wealth’Refers to the prolongation of youth

and a feeling of inner as well as

exterior beauty “If I am healthy then

my face will look rosy and young”

Refers to an absence of any illness

(more critical or less)

Allows no room for disruptions

Associated with an intake of ‘healthy’, fresh and wholesome diet * Internal consumer research data - HUL

Life Threatening

Sudden and disruptive;little control

Can only be cured;

cannot be managed

Diseases which can be managed or controlled

Cause disruption of order in

everyday life

Offer little control

Can only be cured; cannot be managed

Consumer perception of disease

* Internal consumer research data - HUL

Other insights which are changingthe dynamics

Shoppers are concerned about quality: will buy trusted brands

…which could be driven by bad experiences

Chocolates teeming with worms and covered with thin faecal matter

– Financial Express,January 2005

“51% of all food items contaminated with pesticides”“Grapes, cabbages, spinach and rice get sprayed at least 20 times with pesticides”

– Outlook, August 2006

Are afraid of poor quality and unsafe products

Per cent agree/strongly agree

87

2323

35

42

India China Brazil Russia US France

…which could be driven by bad experiences

Chocolates teeming with worms and covered with thin faecal matter

– Financial Express,January 2005

“51% of all food items contaminated with pesticides”“Grapes, cabbages, spinach and rice get sprayed at least 20 times with pesticides”

– Outlook, August 2006

Are afraid of poor quality and unsafe products

Per cent agree/strongly agree

87

2323

35

42

India China Brazil Russia US France

Source: How Half the World Shops (2006)

Barriers to Packaged Foods exist, need special efforts to overcome

65

41

45

• I will never buy pre-packaged vegetables or fruits

• I will never buy pre-packaged meat, poultry, or seafood

• Chicken isn't fresh if I haven't seen it killed in front of me

India average*BRIC average*

* Excludes Struggling

Source: How Half the World Shops (2006)

25

26

35 65

41

45

• I will never buy pre-packaged vegetables or fruits

• I will never buy pre-packaged meat, poultry, or seafood

• Chicken isn't fresh if I haven't seen it killed in front of me

India average*BRIC average*

* Excludes Struggling

Source: How Half the World Shops (2006)

25

26

35

New meals: South Indian, Chinese, Kid combos..

Eating out: restaurants & 6 million street vendors

Special needs: Health, Preventive, Kids nutrition

New meals: South Indian, Chinese, Kid combos..

Eating out: restaurants & 6 million street vendors

New meals: South Indian, Chinese, Kid combos..New meals: South Indian, Chinese, Kid combos..

Eating out: restaurants & 6 million street vendors

Special needs: Health, Preventive, Kids nutrition Special needs: Health, Preventive, Kids nutrition

& Indians are eating out with gusto & Indians are eating out with gusto

Define consumer segments: are you speaking to managers, healers or investors?

Strugglers

Managers

Healers

Disciples

Unmotivateds

Investors

Key Challenges – finding the sweet spot

� Ride the wave vs creating a wave

� Tasty & Healthy

� Building trust & credibility

� Consumer communication

� Intuitive fit – brand, product, benefit,

Health products typically exhibit a market pattern

Technology consumers:

•Have a near- medical need for a product•Pay a premium for

something that addresses their

situation•Typically constitute 6-8% of consumers

Lifestyle consumers:•Interested in

maintaining wellness, not fighting illness•Will pay a premium

only if it supports their lifestyle

•Typically constitute 20-25% of consumers

Mass market consumers•They are motivated only when a benefit becomes

standard•Will pay no/ marginal

premium and be attracted to existing strong brands

•About 60-70% of consumers

An explosion of consumer choices

Approaches across the pyramidApproaches across the pyramid

Consumer communication challenge

� Consumers seek healthy foods and beverages, but:

� do not always know what choices to make

� often have misconceptions about what is healthy or unhealthy

� They are interested in nutrition information, but:

� often don’t read back-of-pack information at point of purchase

� have difficulty understanding labelling information

� Simple “smart choice” front-of-pack logo to endorse health credentials of the product

The Choices Stamp

Visual expression of choice

Scientifically referenced

Qualifying criteria for key nutrients

Saturated fat

Trans fat

Sodium

Added sugar Dietary fibre

Energy

Building awareness and education

Building awareness and education

Empower Rural India to combat Micro

Nutrient Deficiency through Education

on Health & Nutrition – Vitaglow demo

Using Shaktiammas to educate BOP consumers on

need for iodised salt

Driving Taste & Health

Understanding Top Down Expectations

Using Bottom up Senses

Need to drive taste and health together

Health Taste

The Sweetspot!

Aligning brand, product and benefit

Intuitive, consumer-friendly fit

brand

productbenefit

It’s worth riding a wave rather than trying to create one!

Leveraging traditional knowledgeLeveraging traditional knowledge

-- an examplean example

Ayurvedic ingredients helps protect

my family from common illness like

cough and cold.

Target consumer : Contemporary urban

homemaker who wants the best for her family’s health

Define the consumer insight

Some people fall ill less often than

others. During change of weather

some people get cough and cold

while others don’t which is because

of immunity.

ImmunityImmunity-- Red Label Natural care Red Label Natural care

Consumption of Brooke Bond Red Label (BBRL) Natural care tea significantly improves NK cell activity

�Tea fortified with Ayurvedic herbs�Two clinical trials to back the immunity claim on pack

The Product

�A unique mix of 5 ayurvedic ingredients -

Ashwagandha, Mulethi, Ginger, Tulsi and cardamom

�In house developed low cost technology for

uniform distribution of extracts on tea

�5 panel artwork - a packaging innovation to

differentiate the ingredients to consumers

0 .0 0

0 .50

1.0 0

1.50

2 .0 0

2 .50

3 .0 0

3 .50

4 .0 0

C ont ro l Ginger B asil M ulet hi A shwagandha

Cell Culture Based BioCell Culture Based Bio--AssaysAssays

Natural Killer Cell Assay

Would it work in Human ???

Natural Killer cell activity enhanced by herbs in vitro.

Gingerol, λλλλmax :320nm, λλλλmax :355nm

Withaferin A , λλλλmax 228nm

Detection wavelength: 282nm

Detection wavelength:

250nm

Retention time: 8.48 min

Retention time: 6.910 min

6-Gingerol

Detection of Herbs in Tea ExtractGlycyrrhetinic acid , λλλλmax: 276nm

Ursolic acid , λλλλmax: 200nm

Detection wavelength: 250nm

Detection wavelength: 210nm

Retention time: 7.42 min

Retention time: 5.64 min

Result Result

Consumption of Fortified tea significantly improves NK cell activity.

0

5

10

15

20

25

0 1 2

Intervention Duration (Months)

NK

Cell A

cti

vit

y (

%)

Regular Tea

Fortified Tea*

1 2

*

Execution:

- 360 communication

- Activation

Business Results:

Strong double digit growth

Significant contribution to RED LABEL

“In store” Activation

Red Label Natural Care: 360 Communication

Summary

� Nutrition transition: Double burden

� Large, fast growing market for health & wellness foods

� Consumer attitude to disease delaying – still not in preventive space !

� Leveraging key consumer trends, insights/beliefs and major market

segments is the key to success

� Products should deliver taste & health – key challenge

� Traditional knowledge – great opportunity – needs to be in today’s reality

� Claims must be backed with appropriate scientific substantiation

� Claims that do what they say and say what they do !

� Ensure alignment of product, brand and benefit; “Intuitively must make

sense”

� Consumer communication - 360 degree approach required (industry,

government and NGO’s, health care experts, consumers, customers)

Small actions every day can make a big

difference !