Seeing a series of backlashes against major food brands that failed to adopt clean label standards, a food manufacturer proactively cut its ingredient list by over 50%. However, because this initiative carried significant upfront and ongoing costs, the manufacturer had to effectively market this change without turning off its base of loyal shoppers. It sought IRI’s help to repackage, re-message and reposition its brand in a way that attracted new shoppers while maintaining its existing base.
IRI began by fleshing out a key series of guiding principles for premium brands in the client’s market space, noting that successful clean label initiatives had key common factors: None of these successful initiatives included a price increase for an existing brand and line, and in addition to new health claims, most highlighted that the taste did not change. With these overarching guidelines in mind, IRI worked collaboratively with the manufacturer to design a series of new packaging options, with varying claims, colors and designs, to emphasize the product’s clean label advantages.
IRI then tested each of these options via a discrete choice exercise, against existing competitors and substitutes in the market, specific to each major retail channel. These forced trade-offs, applied to IRI’s historical data and the client’s cost information, enabled a full business case for both the manufacturer and retailer for each packaging option. Additionally, IRI collected qualitative responses on each, diving into the rationale behind each response.
The recommendations from IRI allowed the client to turn its investment into an annual gain of more than $10 million in revenue, while making the wrong repositioning choice could have cost it nearly $30 million.
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