Price Premiums Possible if Consumers Understand the Benefits, says BENEO-Orafti

When asked to rate a variety of ingredients that users found appealing, calcium absorption featured in the top four in the US and German surveys for both men and women (alongside ‘protects your heart’, ‘keeps your digestive system healthy’ and ‘reinforces natural defences’).

6 Jan 2010 --- BENEO-Orafti, world market leader in the production and marketing of prebiotic ingredients from chicory, has released its latest findings from consumer research conducted in the US and Germany and it appears that price premiums are still possible, if consumers understand and value the associated health benefits.

BENEO-Orafti’s consumer research, carried out in UK, Spain and France in the beginning of the credit crunch found that consumers were willing to pay if the benefits are understood. Almost a year on, BENEO-Orafti’s consumer research, designed to monitor the end user’s perceptions of premium priced functional foods, has shown that there is still a willingness to pay more, particularly in the arena of digestive health and calcium claims. German and US survey results were based on quantified surveys conducted on-line in July 2009 with 1,000 respondents for each survey - male and female respondents, between the ages of 18-64.

BENEO-Orafti tested a range of claims on the respondents and not surprisingly, more familiar health benefits are still proving popular. When asked to rate a variety of ingredients that users found appealing, calcium absorption featured in the top four in the US and German surveys for both men and women (alongside ‘protects your heart’, ‘keeps your digestive system healthy’ and ‘reinforces natural defences’).

Although popular as a health benefit, the BENEO-Orafti survey wanted to test if a range of calcium benefits would actually translate into potential purchases. In Germany it was found that when used on the packaging of a well known yoghurt, a calcium claim made the product more popular with regular, occasional and non users alike. 66% of all the respondents were more likely to buy the product with the accompanying calcium benefit and the same number was prepared to pay a premium for it. This preference was reflected in the US survey, where 79% of all respondents were more likely to buy a well-known cereal product that had a suggestion of a calcium benefit on the packaging and 60% of them would be prepared to spend more on this premium priced product. The types of reasoning from consumers for their choice of a cereal with added calcium benefits included: "This breakfast cereal is more appealing to me, because it shows an added benefit that is important to me" and "I am getting to the age where calcium and bone density is more of an issue to watch. I would tend to buy something that might help in this area and my kids can use all the calcium they can get."

The same in terms of popularity seems to be true of digestive health claims, as ‘keeping a digestive system healthy’ rates as one of the top four benefits for both men and women in the US and in Germany. As would be expected, a popular vehicle for digestive benefits for both sets of respondents was cereals. In Germany 67% would buy a well-known cereal brand that communicated a digestive health benefit over and above the same product without any specified claim and 70% would be happy to pay a higher price premium for this product. Similar findings in the US, where 79% of the respondents would be more likely to buy a cereal that had stronger bone messaging on it and 60% would be prepared to pay a premium price for it. In addition to more traditional products, respondents liked digestive health claims on a range of products such as cereal bars and fruit juices.

Tim Van der Schraelen, BENEO-Orafti marketing and communication manager, comments: “We tested a number of claims to see which consumers see as relevant. We have subsequently been able to show that if potential buyers see a benefit as relevant to their life, they are willing to pay more for it even in times of crisis. The results show that there is still a strong and very profitable market for those looking who create relevant functional foods. Not only has this new consumer research provided BENEO-Orafti with a valuable consumer insight tool that is helping the company plan future product developments, but it can also be used by the company’s business partners to develop attractive food concepts that appeal to a wide range of potential consumers.”