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Avoid Mediocrity.

Byline: Nevenka Jevtic

Collaborating with flavor, fragrance and ingredient suppliers and capitalizing on emerging consumer trends are key to creating successful destination-type store brand products.

Consumer tastes and preferences are constantly evolving. With the global reach of today's social media and information-sharing platforms, consumers are increasingly aware of other cultures, foods and cooking/preparation techniques. As a result, their palates are hungry for more -- more flavor, more variety and more authentic taste experiences. Even classics are getting special treatment with unique flavor blends, reimagined recipes and authentic sourcing.

With so much going on within flavors, fragrances and ingredients, retailers have their work cut out for them when formulating new private brand products. A collaborative relationship with flavor, fragrance and ingredient suppliers, therefore, is key to the successful development of differentiated products that keep consumers coming back for more.

Be novel

Just how important is differentiation to creating "destination-type" store brand products? Depending on a retailer's own individual goals, it can make all the difference.

"Product differentiation makes all the difference in developing a private label offering," says Dan Fox, director of sales, Nielsen-Massey Vanillas, Waukegan, Ill., "unless, of course, your sole aim is low cost, low margin."

Tom Lauzurica, marketing director for Carteret, N. J.-based Berje, agrees.

"Creating a novel combination of ingredients, flavors or fragrances is a critical tool for driving differentiation," he adds. "A unique aroma or enticing new ingredient goes a long way to set a product or brand apart in the consumer's mind."

While retailers will always have to offer "the staples" when it comes to flavors, fragrances and ingredients, consumers are interested in having more options available to them. Offering only run-of-the-mill store brand products just doesn't cut it anymore.

"To address this behavior change, we see the shift in store brand products where many trendy flavors are introduced for the first time," says Jean Shieh, marketing manager, Sensient Natural Ingredients, Turlock, Calif., "[e.g.,] ethnic flavors, unique flavor combinations and category-blurring flavors."

In order to pinpoint the right destination-type private label products, retailers must first identify what products consumers are aware of and cannot easily find elsewhere, says Anton Angelich, group vice president of marketing, Virginia Dare, Brooklyn, N.Y.

Currently, emerging ethnic cuisines from countries such as Peru, Korea, India and the Caribbean could offer retailers great inspiration and opportunities for developing destination-type products, he adds.

And increased interest in diversity goes hand in hand with consumers' new emphasis on authenticity.

"Where consumers might have once been satisfied to know that a product was made with "real Mexican chiles,' there's a real desire to know what kind of chiles, from what part of Mexico," says Mitchell Padnos, national retail sales manager, Woodland Foods, Waukegan, Ill. "There's a real benefit in being able to name specific ingredients down to the varieties and sources."

And flavor companies want to not only fulfill that consumer desire, but also educate retailers as to what exactly is going into their product.

"First and foremost, our mission is to help product developers understand the differences and nuances of our vanilla and possible applications," Fox says. "When brought into the early stages of product development, we can help create the building blocks of a superior product."

Share consumer insights

Before retailers can offer novel products to their customers, there must first be effective communication among the retailer, private label suppliers and flavor, fragrance or ingredient companies.

"Sharing insight across the supply chain is essential to launching a product that fits both the consumer's immediate convenience needs and the broader trends that are driving the market in flavored and fragranced products," Lauzurica says. "This synergy starts with meetings and trend presentations between ... retailers, private label suppliers, and flavor and fragrance companies."

As long as both sides have done some preliminary homework, Fox says, a simple brainstorming session is often a good starting point in the product ideation process.

"If, for example, a new ice cream line is being considered, the supplier should know the end product's goal -- premium, super-premium, etc. -- and offer flavor combinations that meet those goals," he adds.

An experienced flavor, fragrance or ingredient company can also be an invaluable resource.

"Even though we are a probiotic ingredient company," says Michael Bush, senior vice president, Ganeden Probiotics, Cleveland, Ohio, "we try to be a resource to help take that ideation process and move it through so that they can get that product on the shelf as quickly as possible with the right combination of ingredients and flavor profiles, etc."

Companies that can provide consumer insight research in addition to their knowledge and experience make it possible for manufacturers to keep pace with national brand launches and even ahead of consumer trends.

"If manufacturers of store brand products develop products early on based on emerging trends and flavor preferences, their products will enter the marketplace at the same time as the major brand launches," Angelich says. "Hence, they will have gained sales from the category's start, as compared to later catching the sales wave."

And when a custom solution is required, the earlier flavor, fragrance and ingredient companies are involved, the better.

"Creating a conversation with product developers regarding their goals at the early stages of development enables us to deliver the exact sweetener that will plug in to any current formula," says Thom King, president of Steviva Ingredients, Portland, Ore.

Steviva Ingredients specializes in creating custom sweetening systems that are unique to the retailer and manufacturer, beginning with the creation of a custom sweetener that delivers both functionality and a unique flavor profile, King adds.

Constantly in flux

Flavor, ingredient and fragrance trends are constantly in flux. It comes as no surprise, therefore, that a trend might begin in one category and shift quickly into another one. Of course, retailers do their best to stay on top of these fluctuating trends, but flavor, fragrance and ingredient companies could help them predict where any given trend is headed next. Take, for example, the sweet-heat trend.

"While savory and sweet items containing chili peppers such as fruit salsas and chili-infused chocolate bars have been around [for a while]," says Tina Rzeha, marketing associate, beverage flavors North America, Sensient Flavors, Hoffman Estates, Ill., "this captivating flavor combination is becoming a staple in the beverage industry as well."

Observing "flavor preference migration" can be especially valuable, Angelich says. And it often serves to guide product developers. Beverages, in particular, find these data helpful.

"The beverage category is the most innovative and experimental," he says, "and many new product developments start in this industry and then often migrate to bakery, confectionery and dairy."

Beverages also present excellent opportunities for innovation with unique delivery systems.

"For example, we pioneered the "shake and drink' concept for the healthier on-the-go beverage marketplace," says Mark McKnight, senior vice president of sales and marketing for RiceBran Technologies, Scottsdale, Ariz. "We manufacture a range of smoothie on-the-go products, as well as healthy beverages for energy and antioxidants."

Personal care trends

Flavors, fragrances and ingredients aren't limited to just food applications. For example, when it comes to ingredients, the personal care product category has seen a surge in the use of various types of exotic fixed oils. Argan oil, jojoba oil and shea butter are becoming widespread in Western markets.

"Now that the first generation of fixed oils has been on product labels for a few years, we're expecting a new wave of exotic oils with product-enhancing benefits to drive differentiation in the personal care area," Lauzurica says.

With the success of these products, it's likely that retailers will expand their presence within the personal care category.

"Store brands are going to start getting more into the personal care side of things because they are realizing that margins are huge and shelf space is at a premium," Bush says.

Regardless of the category, retailers and their private label suppliers must have a strong relationship in order to be well prepared for emerging flavor, fragrance and ingredient trends.

"It is no secret that for most grocers, developing a new private label item usually takes a year or more from concept to shelf," Padnos says. "Therefore, creating a culture of innovation and maintaining an inventory of potential new private label items is essential to capitalize on emerging food and ingredient trends before they become obsolete."

"A unique aroma or enticing new ingredient goes a long way to set a product or brand apart in the consumer's mind."

-- Tom Lauzurica, marketing director for Berje

"There's a real benefit in being able to name specific ingredients down to the varieties and sources."

-- Mitchell Padnos, national retail sales manager, Woodland Foods

Flavor, ingredient and fragrance trends are constantly in-flux. A trend might begin in one category and shift quickly into another one.
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Author:Jevtic, Nevenka
Publication:Progressive Grocer's Store Brands
Date:Nov 1, 2015
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