Products derived from biodiversity offer sustainable and inclusive business opportunities for smallholders and rural populations in the countries of origin. Commercialisation of underutilised species contributes to the conservation of biodiversity and promotes food security, thus helping to achieve two of the United Nations’ millennium goals.
Snacks from Superfoods, source: own
Novel food products from so called previously “neglected and underutilized species” are booming.
The US market for herbal supplements saw an increase in volume for the ninth consecutive year, closing at almost 5.6 billion USD in 2012. In most of the cases, these products are made directly or indirectly from plants that have been neglected over the last few centuries but which are now being rediscovered thanks to their many benefits.
However, there are challenges when it comes to establishing novel plant products. Experts list four major issues that need to be solved in order to build and maintain a successful novel plant product business that generates sustainable development benefits in the countries of origin:
1. No clear benefit
Often, new products are being launched just to disappear only months after their first market appearance. Why is that? Simply because there are no or not enough functional benefits, or these benefits are not communicated clearly enough.
Markets can be developed, competition can be displaced, and consumers can be educated. Indeed, many measures can be taken to drive business forward. However, there is one big potential showstopper – legislation. The danger of legislation was made apparent in 1999 in the case of Noni (Morinda citrifolia), where the US-based company Morinda Inc. had to delay the EU market introduction of their Noni juice product because they did not apply for approval in accordance with the EU Novel Food Regulation.
3. Unsteady supply situation
It is a chicken and egg situation: consumers are not willing to buy until they have gained enough confidence in a product or are otherwise convinced of its value. This means it takes producers a while to achieve significant sales volume when introducing a new product. At the same time, producers need to provide enough stock, in case demand should pick up.
If demand is not as high as predicted then producers in the countries of origin might reduce or even stop their production and the supply of ingredients to the manufacturers of consumer products will run dry. Once demand picks up and orders start coming in, supply will then not be sufficient to meet demand.
Hence, consumers might turn away from the product, leaving it behind. This can be disastrous, especially for producing communities in the countries of origin, as a commercial flop might take away their livelihood.
4. Lack of consumer awareness
Consumer awareness of a new product (or ingredient), relevancy and trust are the most important factors when it comes to the adoption of novel food products from underutilized species. This calls for generic marketing to establish the product category in consumers’ minds.
Often, companies refrain from executing generic marketing campaigns. They fear costs and free rider effects. Consequently, the market might ignore a product, even if the novel food ingredient itself might be highly beneficial.
So is there a solution? How to overcome the challenges of marketing novel plant products? Weiterlesen →