A one-size-fits-all approach to healthy eating and wellness is yesterday’s news. A big opportunity for food and beverage manufacturers today is to get closer to consumers. Personalized nutrition captures an individual’s health desires and data—typically using digital platforms, wearables, and test kits—to develop targeted nutrition advice, products, and services.
It’s part of a broader personalization trend that Boston Consultancy Group says is responsible for a “seismic shift across the consumer-facing brand landscape.”1 Seven out of ten US consumers now expect companies to provide personalized interactions, and businesses that excel at personalization already generate 40% more revenue than average players.2
In the health and wellness sector, factors driving interest in personalized nutrition include the growing focus of consumers on health in the wake of the pandemic. This is reflected in the global prevalence of non-communicable diseases (NCDs), which kill 41 million each year – a shocking 74% of all deaths worldwide.3 The World Health Organization lists an unhealthy diet as one of the main risk factors for the NCD epidemic, and this is of course exactly the area that personalized nutrition is concerned with. We are also increasingly accustomed to integrating digital tools such as apps into our daily lives. In 2020, more than 500 million wearable devices such as health and fitness trackers and smartwatches were sold worldwide, and the market is still far from saturated.4
Still, with a projected $1 trillion health and wellness market by 2026,5 personalized nutrition By 2026, this segment is estimated to be worth only $20 billion.6 So what are the current barriers to growth preventing food and beverage manufacturers from taking personalized nutrition from the niche to the mainstream? And how can these obstacles be overcome?
Navigating a complex market
Whether you’re an established food and beverage company, a startup, a health science company, a dietary supplement manufacturer, or a technology giant, personalized nutrition is a complex area to navigate. You are sailing into the largely uncharted waters of value chain disruption. Rather than the typical raw material value chain from food manufacturer to retail consumer, personalized nutrition takes you directly to the consumer. It is a new business model for which no winning strategy has yet been identified. However, experience suggests that identifying a specific area of nutritional need, such as menopause or athletic performance, is more likely to engage consumers in the long term than a generic wellness offering.
The challenge of scaling
Scaling is essentially counterintuitive in the personalized nutrition arena. It is simply not economically viable to produce individually tailored products. One solution is to bypass physical products altogether and instead focus on providing coaching recipes and exercise programs. But food, beverage and supplement manufacturers want to sell products. Some have gone the route of selling blenders to mix nutrient powders in doses tailored to specific needs, but this approach can present problems. Not only could this be a suboptimal sensory experience, but the cost of such devices itself could be a barrier to scaling.
Availability and affordability
In a cost-of-living crisis world where every penny counts, affordability is a significant concern for consumers. A recent survey found that 38% of consumers chose not to subscribe to personalized nutrition because they felt the services were not worth the cost.7 Solutions that require additional money and effort from the consumer are likely to prove a turnoff for the mass market. For example, providing samples such as blood, saliva or stool may be acceptable for highly motivated people with specific needs such as diabetes. However, they are much less likely to appeal to the average consumer, not only because of the cost of the test kits, but also because of the potential discomfort or inconvenience of using them.
Democratizing personalized nutrition through digitization
In the final analysis, consumers simply want an affordable way to achieve their health goals and a personalized experience to support it. In fact, 88% of consumers surveyed say that the experience a company provides is just as important as the products and services it offers.8 With this in mind, the best way forward may be to build personalization into the digital journey through apps and wearable technology such as watches that measure activity levels. Not only does it meet the needs of consumers, but it also allows manufacturers to sell functional products directly to them and at scale.
Wearable devices can be seamlessly integrated with other technologies and applications that consumers already use, such as their mobile phone. It is important to make the interface and navigation as smooth and intuitive as possible to engage consumers and motivate them to continue using them. The in-app recommendations can be fully customized to the individual based on the goals and data they enter and information captured from their wearable device. Products based on their needs can then be ordered online through the app, creating an invaluable personalized experience.
Getting closer to consumers
For food and beverage manufacturers, perhaps the biggest benefit of personalized nutrition through digitization is unrivaled access to real-time consumer data. It’s a goldmine that provides another level of insight into consumer behavior and product experience—including how (and indeed whether) products perform in the real world. Most manufacturers supply products to retail and this type of intimacy with the consumer can only be dreamed of. The opportunity to get direct contact with and feedback from consumers can provide valuable insights for research and development and inspire new product development. In addition, interacting with consumers on a digital platform could be a highly effective way of testing new products on a smaller scale. This is crucial given the high proportion of new products that fail in the launch process. For food and beverage manufacturers, a digitized approach to personalized nutrition opens up a whole new dimension of success.
Signe Causse is the global leader in marketing innovation at IFF. He has over 18 years of experience in food ingredient marketing, with a particular focus on key health and wellness trends and solutions, including personalized nutrition through IFF Digital Health, a direct-to-consumer digital platform offered to food and beverage manufacturers.
- Abraham, M.; Mitchelmore, S.; Collins, S.; et al. Benefit from personalization. Boston Consulting Group. 8 May 2017. https://www.bcg.com/publications/2017/retail-marketing-sales-profiting-personalization
- Arora, N., Liu WW; Robinson, K.; et al. The value of a good or bad fit is multiplied. McKinsey & Company. 21 Nov 2021. https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying
- World Health Organization data. September 2022.
- Extra. Wearables – Statistics and Facts. 22 May 2023. https://www.statista.com/topics/1556/wearable-technology/#topicOverview
- Extra Best Health
- Markets and markets. Personalized Nutrition Market by Product Type (Active Metering & Standard Metering), Application, End Use (Direct-to-Consumer, Wellness & Fitness Centers, Hospitals & Clinics & Institutional), Form and Region – Global Forecast to 2027. https:/ /www .marketsandmarkets.com/Market-Reports/personalized-nutrition-market-249208030.html?utm_source=GlobeNewswire&utm_medium=Referal&utm_id=PaidPR
- LEK statistics. Personalized nutrition: driving consumer awareness. December 2021. https://www.lek.com/insights/ei/personalized-nutrition-riding-tailwinds-consumer-awareness
- Salesforce. Connected Customer Status Report, 5th Edition. February 2022. https://www.salesforce.com/content/dam/web/en_ie/www/PDF/state-of-connected-customer-fifth-ed-comp.pdf
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