Many will recognize SWOT as an acronym for Strengths, Weaknesses, Opportunities and Threats. A SWOT analysis evaluates a company’s favorable and unfavorable, internal and external factors that may impact a project or venture.
Recently, I was invited to speak on companies’ functional food marketing issues and decided to arrange the presentation as if conducting a SWOT analysis. In an effort to be “efficient,” a term I prefer over “lazy,” this column reiterates a few points from that speech.
Perhaps the greatest strengths companies can possess are their brands. Indeed, in “Failures in Functional Foods and What They Reveal About Success,” Julian Mellentin says, “successful brands are expert brands,” and they must “offer a relevant benefit and have credibility,” as items one and two on a list of seven factors for success. By the way, this does not minimize the importance of company employees. Good people build brand equity; bad people can destroy its value virtually overnight.
Although one must believe in one’s own product, one weakness is that companies “over market” their products to the point that they can’t or won’t see emerging threats. An example would be new research offering contradicting evidence on health benefits. This can often occur when investigating the health benefits on small demographic (niche) groups.
Many threats exist for the successful marketing of functional foods. One of the greatest is the customers themselves. A 2008 Prepared Foods’ “R&D Trends: Functional Foods” survey asked: “When it comes to an emerging health ingredient and its use in a new product, which of the following factors are you or your company concerned with?” The highest response, 54% of the 237 surveyed, said: “Temporary consumer interest.” Many companies investing in low-carb foods in 2003 and 2004 can attest to that.
While the acronym is SWOT, not SWTO, I prefer ending on a positive note of “opportunities.” There are “easy pickings”--for example, the Baby Boomers at 78 million, with members such as Lenny Kravitz, Keanu Reeves and Marisa Tomei. (Yes, Baby Boomers, all.) There are “intermediate challenges”--for example, Mexico’s $1 billion per year health food segment, of which 30% is imported; of that, 65% from the U.S. And, there are the “tough nuts to crack.” Packaged food manufacturers sell a quarter to a third of their products to foodservices. In a recent Mintel Menu Insights study, 20% of restaurant-goers say food health is important when ordering; 77% say taste. pf