Functional brands: the first step toward personalisation? – DFInsights November 18

Hi,

We hear a lot of things about personalisation, but what does that mean, especially for food products and how are we going to go there?

The goal is pretty simple to explain: make everyone’s products personalised. And as often with ventures that are simple to explain, there is a considerable amount of effort to go there. Few questions arise immediately:

  • how to define personalisation for each customer: are we going to use genetics to know the person’s needs or are we letting him choose?
  • Where will the personalisation take place? At home with a 3D printer, with supplements or directly in the retail store where products will arrive semi-finished and will be “completed” there?

As much as we like to discuss long-term strategies, we also want to see what is the first step to get there. For personalisation, we call it « functional branding ». More and more new brands are selling products that don’t market their taste but what value they will bring to your lifestyle.

We can divide these functional brands into 3 sub-categories (with some overlapping):

  • heath functional brands: they build products based on natural ingredients (such as turmeric) that may be hard for consumers to add to their diet. Each ingredient having effects on the customer’s health (anti-inflammatory effects for turmeric)
  • nootropics: products (mostly drinks) acting on mental functions for improving your energy or focus
  • CBD (cannabidiol): most CBD-based products (Cannabis) don’t brand the taste but the functions (less oriented toward health or productivity)

DigitalFoodLab

Here are 5 examples of startups building functional brands:

  • Dirty Lemon is a beverage startup with a twist. You don’t buy one of their drinks for the taste but for what it contains. You can choose between the matcha drink for vitality, the charcoal one for detox, CBD to relax, etc. As many DNVBs (Digital Native Vertical Brand) brand has been really successful online with a lot of fans on Instagram and it is now opening its first store in New York.
  • Synapse which defines itself as a “natural cognitive boost”
  • LifeAid has a range of functional drinks, among which one for golfers (however, it is recommended to consume ice cold, even on the course).
  • Olly and OneGum, two startups developing gums. The former is mostly health and beauty oriented (a gum to be more beautiful is a strong promise) and the later helps you get more energy.

And you can see through these examples, this trend can mostly be seen in beverage startups. Few food products currently have functional branding, but that may change. These functional products are more and more seen into larger offers. For example, a meal delivery startups such as Urban Remedy who sells ready-to-eat meals for diets (to kick-start your keto diet in 3 days) is selling anti-inflammatory (with turmeric) juices.

Considering this trend, a major question arises: who will tell customers what functions they need? But this will be the theme for another article.

Have a great week,

Matthieu


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