Emerging business opportunity for food and beverage makers amid coronavirus

With the pandemic showing no sign of abating, many FMCG and pharmaceutical companies that had launched immunity-boosting food or beverage offerings as a response to what they assumed was temporary demand now see this as an emerging business opportunity.
 

Food or otherwise, product development is usually a lengthy process that entails understanding consumer needs and developing products accordingly. However, in a pandemic-like situation where one witnesses sudden demand for specific kind of products, the response has to be quick but at the same time, companies have to ensure that the proper blend of health and taste is offered and, that they do not go overboard with their claims. 
 

Take ITC. The company already had a long list of food items in the pipeline but is keen on adding more as it has witnessed a growing preference for health and wellness products in the foods segment.
 

“So while our scientists continue to work on their original platforms, we have also created a special Growth Team that focusses sharply on delivering specific and targeted ‘hi-science’ offerings to consumers who are looking for credible solutions to their problems through their trusted brands,” says Hemant Malik, divisional chief executive, foods division, ITC Ltd.
 

This, he says, has also helped the company in narrowing down to some specific areas of research and development like immune health, metabolic disorders and so on. While a focussed approach helps, legacy companies have the added advantage of years of experience and domain knowledge as well as consumer insights gleaned over the years.
 

Malik says this helps in time management of an important new launch. “An illustration of this is the development and launch of the unique immunity supporting B Natural Plus range with two variants — orange and mixed fruit — in a record time of less than two months,” he says adding that the process of claim development has to be in accordance to and in line with the specific conditions laid down by the Food Safety and Standards Authority of India or FSSAI.
 

In the food category, a chyawanprash-flavoured ice cream or the more recent Bhabhiji papad — the latter endorsed by Union minister Arjun Ram Meghwal who claimed that its ingredients helped in building antibodies to fight Covid — were both panned by social media users. For the first, taste was questioned and for the second, many said the claims had been exaggerated.

Even beyond food, Siyaram’s "anti-corona" fabric was questioned after it was launched last week as was Patanjali's Coronil.
 

Perhaps this is the reason why many companies have steered clear of making a mention of Covid-19 when discussing their new offerings. This also prevents them from falling into the trap of purpose washing, a topic discussed in this section (Making the most of a good crisis, June 4) as well as on the Op-ed page (‘Purpose washing’ in times of crisis by Ambi Parameswaran, July 16) in recent weeks.
 

That being said, some companies have a relatively less structured regimen and rely on conventional wisdom to try out new products. Amul MD R S Sodhi tells BS Strategy that in coming up with products such as ginger, tulsi or haldi milk, the formulation is mainly based on ingredients with proven medicinal benefits and are practically developed on the shopfloor itself, of course the top management keeping a close watch and giving suggestions on taste, colour and other factors before quality control checks and formal launches are carried out.
 

Palette is just as important as nutritional value and the target group has to be kept in mind. “At Mother Dairy, safeguarding nutrition is paramount. However, the challenge was to make a product that suits the palette of even children. Hence, we thought of infusing turmeric milk with butterscotch and the response has been amazing. So, much so that we have had to double our production of these new flavours in milk,” says a spokesperson of Mother Dairy Fruits and Vegetables.

 

Then there are those who have made minor tweaks to the formulation of their existing health products to resonate with the current health crisis. An HUL spokesperson explains how Horlicks boosted the zinc levels from 4.3mg/100g to 8.3mg/100g, which demonstrated significant “positive immunity outcomes in children with respect to respiratory and gastrointestinal infections”, a claim the company attributes to a clinical study. HUL has about 80 per cent of its products addressing the health, hygiene and nutrition needs of consumers and this has grown at about 6 per cent in the last quarter that went by under the shadow of the pandemic.
 

Boosting immunity is not the only claim made by those foraying into the wellness space. Take food brand Del Monte that recently launched Heart Smart, which it claims is a cholesterol-reducing fruit juice. BS Strategy sought more information from the company such as whether the cholesterol levels of volunteers were compared before and after consuming the juice for a fixed period, but the questions remained unanswered.
 

For a unani and ayurvedic pharmaceutical company such as Hamdard, the challenge is also to capitalise on their existing brand equity. Hamdard’s squash concentrate Roohafza has claimed — a claim  acknowledged by many diehard consumers — that it has a therapeutic effect, created by the herbal ingredients that are an essential part of the recipe. So this year, the company sensed that there was an opportunity and decided to launch Roohafza Fusion and Milkshake in Tetra Pak packaging.

“The safe and aseptic Tetra Pak packaging provides our consumers with a completely hygienic and safe product... We also want our consumers to experience the product out of home, and in packs that are safe and convenient,” says Mansoor Ali, chief sales and marketing officer, Hamdard Laboratories India. 
 

While FMCG players expect the sales of immunity boosting food to continue soaring for a while, what do experts make of it?

Siddharth Shekhar Singh, associate de­an (digital learning) and marketing/PR strategy, Indian School of Business, feels he hasn't really seen a radically different product from any player and most are tweaking their existing ranges. This is understandable as companies have to keep these products and variants affordable too.
 

The other question is whether such products fall under the essential category or the discretionary category. Devangshu Dutta, chief executive officer of retail consultancy Third Eyesight, says if the core product (say atta or milk or juice) is essential, then the fortified or immunity booster version would also be deemed essential.