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Cool ~ Reshaping Way of Enjoying Healthy!



Cool ~ Reshaping Way of Enjoying Healthy!

With the emergence of health consciousness, healthy concepts have been incepted in daily life. In return, products related to health concerns have become quite popular with most consumers in recent years. According to a study from Kantar Worldpanel, the total health food market grew by 11.4% in 2009 versus 2008. Apart from the increasing demand on the general standard health food, health drinks, which are favored by young consumers, is another important driving factor for the growth of overall health sector. Among all new products, the most revolutionary one must be the “Pure Concentrated Oat Drink (Chun nong yanmai)” which was launched by AGV in the year end of 2008. It not only solved the trouble of preparing instant health food on your own, but also inspired all Taiwan marketers that product revolution is still worth investing in.

Key Success Factor 1- Situational advantage

The Melamine incident at the end of 2009 provided cereal drink a great advantage to emerge its newfound market in such a short time. Due to the concerns of the origins of milk powder, not only consumers but also beverage makers, such as drink stalls, coffee shop etc significantly increased their demand for fresh milk. However, shortage of fresh milk continues to be the issue on the market leading consumers to switch their consumption onto the emerging product - Cereal drinks which combine the benefit of chilled liquid diary and healthy cereal powder

Key Success Factor 2- Open up the youngster market

Kantar Worldpanel indicated that cereal drinks reached more than 3.2 million consumers in just one year after its launch and its market size even surpassed that of rice milk. Although market situation provides great advantage, these cereal drink products with price around NT$25 to 35 are actually more expensive than other dairy drinks on the market. What were the main reasons that successfully sustained its premium positioning during the time of financial crisis when consumers meticulously plan all expenditures? Apart from the growing health concerns, successfully opening up the market on youngsters was the key driver for its great performance! This kind of appeal for convenience and instant health drink is much closer to modern and youngsters’ life style as well as their preference for quick and easy products. As a result, being healthy is no longer a troublesome process of preparing hot fusion, but cool, refreshing and convenient – a more enjoyable experience!

In order to aggressively target the young consumer market and attract them, manufacturers not only made high investment on popular celebrity for endorsements, but also selected convenience stores as the major distribution channel at the first stage of launch. Based on Kantar Worldpanel Beverage’s observation, 36% of the Cereal drinks buyers are under 30 years old, comparatively higher than 26% for liquid yogurt and 32% for fresh milk. That is to say, being healthy is no longer exclusively for elders but starts to reach youngsters nowadays.

Shortage of fresh milk has long been an issue when summer comes. With more and more manufacturers sequentially joining competition and launching new flavors, it significantly reflects that these manufacturers
are vigilantly seeking to grab more shares from this continually growing market. Meanwhile, cereal drinks help to alleviate the shortage in milk market, but does traditional oatmeal or instant health drink confront severe threats?

Key Success Factor 3- Innovation expansion of consumption

Kantar Worldpanel noticed that original oatmeal consumers were indeed aware of the cereal drinks. Upon until the first quarter of 2010, about 17% of these buyers had also purchased cereal drinks. However, just like the fresh milk market, cereal drinks did not cannibalize the market of instant oatmeal because most consumers are additionally to increase their consumption occasions for this new and convenient cereal drink!

Under the predicament of economic recession and milk shortage, cereal drink was launched with great insight into the market. It stimulated up consumer’s new demand additionally, so that the similar categories (e.g. fresh milk, yogurt, oatmeal, cereal powder and etc.) are still able to continue their growth at the same time, which can be recognized as win-win situation. This is certainly a valuable lesson for marketers because it proves that with insights into consumers’ demand and consumption trend, plus innovation of product and marketing strategy, there’re still possibilities to create amazing opportunities even in a stable and saturated market.

The market is still promising for now since consumers’ new demand has well supported most of the expansion of cereal drinks. However, whether the relevant categories will still be able to develop well in their own market respectively or will gradually start cannibalization in the future is definitely what the manufacturers should watch out and take precautions carefully.

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