Module 1 INNOVATING NEW HEALTHY FOODS FOR THE

Module 1 : INNOVATING NEW HEALTHY FOODS FOR THE OBESITY CRISIS

OVERVIEW Please note – this module is based on innovation themes (in the main driven through consumer demands and global best practice). We strongly advise that you check with your local Food Authority to ensure that any new products that you develop are in full compliance with national and EU laws and regulations.

OVERVIEW This module will look at the challenge of obesity in the EU and the opportunities that they represent for a new commercial response. Learners will expand their knowledge and gain new tactical skills to understand the market opportunity arising and develop an innovation plan for their business to guide their development of new products with a healthy focus.

OBESITY Obesity rates have more than doubled over the past 20 years in most EU countries, with obesity related illnesses estimated to account for as much as 7% of total healthcare costs in the EU. Over 2. 1 billion people or almost one third of the population worldwide are estimated to be overweight or obese and this figure is on course to rise to almost half the world’s adult population by 2030.

THE CHALLENGE OF OBESITY IN THE EU Obesity is a major public health problem in Europe, and is described by the World Health Organisation as an ‘epidemic’.

Britain is spending £ 47 bn a year tackling the implications of an overweight population Obesity is a bigger cost for Britain than war and terror as Britain spends £ 47 bn a year dealing with the healthcare and social costs of an increasingly overweight population. What are potential obesity interventions and how many lives can they save ? (source Mc. Kinsey Global Institute) . .

Opportunity for food producers

LET’S LOOK AT KEY CAUSES. . . The key causes of obesity are . . . Increased consumption of energy-dense foods high in saturated fats and sugars, and reduced physical activity. Our food environment is also a key determinant The Harvard School of Public Health Food Environment has conducted fascinating research into understanding how the food environment influences our weight. Download their Research by Setting Summary – which looks at risk factors in Families, Workplaces, Schools, Neighbourhoods, Lack of Access to Supermarkets, Greater Access to Convenience Stores and Fast Food. View The Forum at Harvard School of Public Health’s webcast, “Why We Overeat: The Toxic Food Environment and Obesity. ”

GOVERNMENTS ARE LOOKING AT A LEGLISLATIVE RESPONSE . . . Fat tax is a controversial topic. . It is an additional tax imposed on high-fat food products. While taxes on alcohol and cigarettes have been commonplace for many years, taxes on specific unhealthy foods and drinks aimed at combating obesity have only recently been introduced by some EU countries. Many nutrition experts say that taxation is a powerful tool that has been effective in campaigns to reduce smoking and alcohol consumption. But many questions remain about how to make it work.

In Finland, soft drinks have been taxed since 1940, while the tax on the production of candy was introduced in 2011 and extended to ice cream. However, the candy tax is due to be scrapped at the end of 2017 as the European Commission has found that the tax is unfairly advantageous to Finnish producers as imported sweets also have to pay the tax on top of import duties.

In France, a tax on all beverages with added sugar or with artificial sweeteners had already been introduced in 2012. In October 2013, French parliamentarians also voted for a new tax on energy drinks, such as Red Bull. The new tax aims at promoting health by limiting the consumption of such drinks, but does not affect ordinary coffee.

In Hungary, since 2011 food considered to be unhealthy, including crisps, soft drinks and chocolate bars, have been subject to tax that is aimed at "improving the health of the nation". Initially called 'the hamburger tax', the measure was dubbed 'crisps tax' or 'fat tax' after the Hungarian government decided that it would not affect fast food restaurants.

Health and Wellbeing – Top Trends

Health and Wellbeing, THE TOP TRENDS SOURCE BORD BIA IRELAND

Health and Wellbeing, THE TOP TRENDS How can you interpret same to innovate your food business ? SOURCE BORD BIA IRELAND

KNOW WHAT MOTIVATES YOUR TARGET MARGET FOCUS ON 4 TYPES OF HEALTHY EATERS –

MAKING IT HEALTHY – Where to start? According to World Health Organisations – factors key to a healthy diet are: • Limiting intake of free sugars to less than 10% of total energy intake is part of a healthy diet. A further reduction to less than 5% of total energy intake is suggested for additional health benefits. • Keeping salt intake to less than 5 g per day helps prevent hypertension and reduces the risk of heart disease and stroke in the adult population. • WHO Member States have agreed to reduce the global population’s intake of salt by 30% and halt the rise in diabetes and obesity in adults and adolescents as well as in childhood overweight by 2025.

MAKING IT HEALTHY – Where to start? 1. Reduce free sugars in your products “Free” sugar is any sugar that is added to foods by the manufacturer, plus that naturally present in honey, syrups, and fruit juices. It does not include sugar naturally present in milk or whole fruit and vegetables 2. Reduce salt levels According to W. H. O. 5 million global deaths could be prevented each year if people’s salt consumption were reduced to the recommended level of less than 5 g per day

MAKING IT HEALTHY – Where to start? 3. Think about going Gluten Free With recent increases in people being diagnosed with celiac disease and gluten sensitivity, the idea of a gluten-free diet has been researched by physicians across all sides of the nutritional spectrum, including weight loss specialists, bariatric physicians, and dieticians. It has been found that a gluten-free diet can have a variety of health benefits, such as improving cholesterol levels, promoting digestive health, and increasing energy levels.

CONSIDER A ‘FREE FROM’ APPROACH Bord Bia – Irish esearch on “Free From” Foods 2010 See more on slide 44

Products purchased most often in ‘FREE FROM’ Category

MAKING IT HEALTHY? According to Nielsen: The world is facing a global health crisis—nearly 30% of the global population was considered overweight or obese in 2013—and consumers are attempting to take charge of their health. Nearly half (49%) of global respondents in Nielsen’s recent Global Health & Wellness Survey consider themselves overweight, and a similar percentage (50%) is actively trying to lose weight. And they’re looking for help from food and beverage manufacturers to make healthier choices

MAKING IT HEALTHY? According to Nielsen: On the list of new products consumers can’t find in stores but wish they could, healthy options are second behind affordability in all regions but one (North America) .

The Opportunity MAKING IT HEALTHY poses According to Nielsen: Nielsen’s Breakthrough Innovation research findings provides examples of how manufacturers can win by catering to consumers’ need for quick, healthy options. Sodebo identified an unmet need for active consumers who want a healthy lunch without compromising on quality and pleasure. It filled this gap with Salade & Compagnie, a range of healthy, gourmet salads that are both convenient and tasty. The launch generated sales that doubled Sodebo’s original estimates and played a key role in the packaged-salad market’s 60% growth https: //www. sodebo. com /fr/produitsfrais/saladecompagnie/1

The Opportunity MAKING IT HEALTHY poses According to Nielsen: In the U. S. , Mondelēz capitalized on a widely recognized need for nutritious, convenient breakfast options by offering something unique: a sustained energy benefit. The company’s Nabisco bel. Vita Breakfast Biscuits, which were adapted for the U. S. market following success in Europe, generated year-one sales in excess of $70 million and achieved more than 50% growth in year two. www. belvitabreakfast. com

The Opportunity MAKING IT HEALTHY poses According to Nielsen: Healthy eating isn’t just an opportunity for new products. Existing products and brands can also capture market share and sales growth by reinventing themselves as healthy, especially in crowded, undifferentiated spaces. For example, when Oberto, a family-owned beef jerky company with a 95 -year history, repositioned their brand as all-natural and healthy, they were able to attract consumers with an active lifestyle who were concerned about their health. The resulting repositioning helped Oberto increase sales by double digits and gain share on larger competitors with much larger advertising budgets. www. oberto. com

A FOCUS ON SPECIFIC SEGEMENTS OF ‘HEALTHY’ EATING – FUNCTIONAL FOODS

“If you understand your own life - you are half way to successful consumer marketing taking into account health concerns and problems, packaging, motivation individuality, brand communications and consumer segmentation. ” - Peter Wennström Find out more and follow his blog > http: //www. thehmt. com/peterwennstrom Peter Wennström, has earned his reputation as an international brand management consultant in over 25 years working for clients in functional foods, pharma & dietary supplements. He is the founder and President of The Healthy Marketing Team and is regarded as one of the world’s leading experts in functional foods marketing.

FUNCTIONAL FOODS “A functional food may be described as a food which provides a specific health or performance benefit over and above that expected from its normal nutritional value” Used to describe any food or food ingredient that has a positive impact on an individual’s health, physical performance or state of mind in addition to its basic nutritive value.

FUNCTIONAL FOODS Rapid advances in science and technology, increasing healthcare costs, However. . changes in food laws affecting label and product claims, an aging population, and rising interest in attaining wellness through diet are among the factors fuelling consumer interest in functional foods.

FUNCTIONAL FOODS Internationally, the functional food market has experienced remarkable growth and is one of the most dynamic sectors in the food industry in terms of product development and international expansion. While large food companies can aggressively harness larger market shares, SMEs are also successfully identifying untapped opportunities and building up a market niche.

Consumers look at Food as ‘Medicine’ And as a way of increasing performance EXAMPLE egg producers developing foods with resulting health benefits (e. g. Enhancing nutritional properties eggs, Omega 3)

Consumers look at Food as Medicine

SELLING BENEFITS CLAIMS (but tread carefully, claims MUST be substantiated ) • A Natural Product • With a high GI rating • Cholesterol reducing • Low fat • Low salt • No added sugar • Help concentration levels

SELLING BENEFITS Even applies to primary products. .

SPOTLIGHT ON ‘THE FOOD DOCTOR’ Case study http: //www. thefooddoctor. com/COUSC OUS-and-LENTIL-POT-with-tomatoesred-peppers-and-cumin-PPOTCNL/

HUNGARIAN CASE STUDY - Fullgrass http: //fullgrass. hu/ Benefits of Wheatgrass Juice : Wheatgrass juice is an effective healer because it contains all minerals known to man, and vitamins A, B-complex, C, E, l and K. It is extremely rich in protein, and contains 17 amino acids, the building blocks of protein. It is also one of the best sources of living chlorophyll and contains up to 70%. Chlorophyll is an important blood builder containing enzymes and super- oxide dismutase, a copper-containing protein found in mature red blood cells. This enzyme decomposes superoxide radicals in the body into a more manageable form, thereby helping to slow down the aging process.

EXERCISE. . 1) Consider what functional foods innovations are prevalent in your sector which meet consumer wants and needs 2) Understand EU regulations relating to functional foods, and understand what can and can not be said on the food label

A FOCUS ON SPECIFIC SEGEMENTS OF ‘HEALTHY’ EATING Reformulate existing products for lower sodium, sugar and/or fat content

Case Study (Ireland) Conor Murphy is the founder of Gym Chef, a ready meal brand based in Co. Meath, Ireland. The business was born out of the intense frustration experienced by Conor when he tried to improve his own health and fitness. He found a ‘scary’ amount of misinformation about ‘healthy-food’ and the ready meal sector had little to offer in terms of healthy and convenient food.

Case Study (Ireland) Gym Chef was set up with a simple aim, to make healthy eating easy. The business places great emphasis on providing information about nutrition to consumers. The key messages are – Clean Food and All Natural Clean Ingredients. Conor launched the Gym Chef range in 2014 as a pilot and built up a strong sales base through Supervalu outlets and independent retailers. He subcontracted the manufacture to his recipes and strict protocol. In early 2015, Conor reassessed the business and is assessing a new business model of taking over production himself or looking for a new manufacturing partner.

Case Study (Ireland)

FOCUS ON SPECIFIC SEGEMENTS OF ‘HEALTHY’ EATING - have you heard about Clean Labels and Nutraceuticals?

WHAT IS A CLEAN LABEL ? Basically, the term clean labels refers to the wholesomeness of a food product, the “naturalness” of its ingredients, and the absence of unrecognizable chemical names or processes. In other words, consumers want transparent descriptions of what goes into the food they are buying, and they want to make sure it’s all healthy. Brands are now keen to offer recognizable, authentic, unprocessed ingredients which appeal to a mainstream audience. While shoppers are now actively seeking authenticity from products in grocery and health food stores.

Health. Focus International tell us that 74% of people say they wish they could eat healthy foods more often but are just too busy. Their studies show shoppers consider words like natural, organic, non-GMO, artisan, grass-fed and locally-sourced as quick indicators of better nutrition choices. Natural Drivers “Clear Clues” are used as shortcuts by consumers to make choices. They include like the lack of chemical ingredients on the label, where they bought it, who manufactured and a host of other brand attributes. 37% of shoppers think natural is an extremely or very important brand attribute, compared to a similar 27% for organic.

FREE FROM – An example. . . When it comes to ‘Free From’ Brands, Kelkin is the principal Irish brand. This is their EGG FREE Mayonnaise

CASE STUDY - BFree Foods has been offering its range of award-winning gluten and wheat-free bakery products since its launch in 2011 and has now successfully developed the world’s first allergen-free fajita kit which has seen the company make a significant breakthrough in the UK market. https: //bfreefoods. com/

CASE STUDY - BFree Foods The idea for the new product came out of discussions with the Coeliac Society of Ireland, according to BFree junior brand manager Freya Ivory. “They told us that there weren’t really any meal options that the whole family could enjoy while not alienating the allergy sufferer. They usually have to make one meal for the non-allergy suffering members of the family and another meal for the one or two allergy sufferers. That was what prompted us to look at the idea of a meal kit. ” .

CASE STUDY - BFree Foods It was an instant success with BFree’s existing customers, including all the multiples in Ireland as well as Asda in the UK. It has also led to a breakthrough with Tesco UK. “Tesco UK saw the real innovation and the value that it would bring their consumers. The kit is now available in more than 1, 400 Tesco Express stores throughout the UK and sales from those stores alone have boosted our turnover by € 3. 7 million. ”

“Natural” stands for a lot of things that shoppers find desirable. The Health. Focus Consumer Understanding of Natural study released in 2013 reported even back then a growth of “natural” as a health indicator; it also predicted the growing negative association with genetic modification among consumers. On labels, “non-GMO” was very important to more consumers than any other phrases, including “ 100% natural ingredients, ” “no preservatives” or “no artificial flavors or colors. ” These specifics are the clearest of clues to natural shoppers.

Shoppers respond to clarity more than they respond to generalities. They are looking for things that give them immediate clarity—a Clear Clue. It’s fine to say “contains natural ingredients. ” It’s better to say “ 100% natural. ” As is often the case, there as many exceptions as there are rules. For instance, if a category is already considered “Better For You, ” like yogurt, natural takes a front seat in terms of importance, whereas, if the category is energy drinks, natural as an attribute can be somewhat less important. “into something they could also feel better about.

CASE STUDY – MENTES (FREE) Mentes are a gluten free, dairy free, lactose free Hungarian confectionery company. Keen to produce only the healthiest products, Mentes work closely with a nutrition consultant to create the best recipes and find the highest quality ingredients. http: //mentes. co. hu/ Their range includes cookies, cakes and baked goods. They also specialise in wedding cakes and fit cookies that are rich in protein.

WHAT ARE NUTRACEUTICALS? Nutraceutical, combining the words “nutrition” and “pharmaceutical”, was coined in 1989 by Stephen L. De. Felice, founder and chairman of the Foundation of Innovation Medicine. The term is applied to products that range from isolated nutrients, dietary supplements and herbal products, specific diets and processed foods such as cereals, soups, and beverages.

Some of the key target areas for nutraceutical ingredients are. . .

What do consumers rate as desirable. . .

Key Market Drivers (Europe)

Key Market Drivers (Europe) The nutraceuticals product market in Europe is driven on the basis of health claims

Key Market Restraints (Europe)

Key Market Restraints (Europe) Currently, product launches in the EU have slowed considerably due to the stricter EFSA guidelines and slow approval process.

CASE STUDY: All Beauty Water Skin Revitalization— from the Inside Out ‘All Beauty water delivers hydration along with a healthful dose of nutrients. ’ The product contains vitamins A, C, D, B 6, B 12, biotin, selenium, green tea extract, calcium and zinc. Jeremy Kerstetter The formula is said to contain eight “skinvitamins” and seven “skinnutrients” per serving. The zero-calorie, sugar-free concoction includes an assortment of vitamins, minerals and antioxidants that were all selected based on research showing their own positive effects on skin. (See Module Attachments for full case study)

BE CAREFUL WITH MARKETING CLAIMS Terms used in marketing terms by food companies to enhance the consumers view of the nature of the food product – but in many cases the use of such term is ‘misleading’ ‘natural’ defined following Supreme Court case & legislation & court cases for the use of terms such as ‘fresh’, traditional’ & ‘mountain’ Food Standards Agency Guidelines establishing criteria for the use of the terms ‘fresh’, ‘natural’, ‘pure’, ‘traditional’, ‘original’ authentic', ' home made’, ‘farmhouse’ No specific legislation or guidelines as so many Italian products have PDO/PGI status or national or regional denomination of origin

CLAIMS - USE OF TERMS ‘artisan’, ‘farmhouse’, ‘natural’ etc Artisan’ – it is a term that is popping-up on all sorts of products everything from Starbucks, Mc Donalds, to Domino’s Artisan Pizza. Datamonitor (UK) found that in the past 5 years an amazing 800 new food products had emerged on the market bearing artisan’ labels

CLAIMS – Ireland FSAI in conjunction with Taste Council and other stakeholders have drafted a Code of Practice on the Use of Food Marketing Terms n n Artisan/Artisanal Farmhouse Traditional Natural Great initiative – Ireland will be the only country in the EU to define the term ‘artisan/artisanal’

3 WAYS TO INNOVATE IN BUSINESS

1) Incremental Innovation Small, yet meaningful improvements in your products, process and other ways in which you do business. These tend to be the "new and improved" innovations we see every day: packaging improvements, waste reductions, supply chain enhancements, bigger/smaller sizing and cost reductions.

1) Incremental Innovation These innovations can be easily understood by the consumer, hence it is very important that not only a business innovates but that it clearly tells the consumer about these improvements – this is a valuable competitive advantage. What three Incremental Innovations have you introduced in the last 2 years ?

2) Breakthrough Innovation. This is a meaningful change in the way you do business that gives consumers something demonstrably new (beyond "new and improved"). Breakthrough innovation produces a substantial competitive edge for a while, although the length of time anyone can maintain such an advantage is growing increasingly shorter. Have you introduced a Breakthrough Innovation in the last 2 years ?

3) Transformational Innovation. This is usually (but not always) the introduction of a process change or technology that transforms our product or the way we work. These innovations tend to be very rare. In most egg sector businesses, innovations do not just happen-they are a team effort. Most successful innovation occurs through formal research and development for "breakthrough innovations" or less formal in house modifications of practice- such as solving a problem or gradual improvements.

Funding for Innovation – Ireland Enterprise Ireland/Local Enterprise Offices Can help eligible businesses to undertake R&D and increase the amount of innovation in their business. Through a mix of funding, advice and expertise, they can also help businesses source and license new technologies that could potentially transform your company. Video link : - http: //www. enterpriseireland. com/en/News/Media. Library/Innovation/ Weblink http: //www. enterprise-ireland. com/en/Research. Innovation/Companies/

Funding for Innovation – Ireland Revenue Commissioners Companies investing in R&D activities may also qualify for tax credits under the R&D Tax Credit Scheme which is managed by the Revenue Commissioners Innovation Vouchers (open to all small (limited registered) companies (less than 50 employees) in Ireland) The Innovation Voucher initiative was developed to build links between Ireland's public knowledge providers (i. e. higher education institutes, public research bodies) and small businesses. Innovation Vouchers worth € 5, 000 are available to assist a company or companies to explore a business opportunity or problem with a registered knowledge provider.