Product Launch
Introduce a product
A healthy, organic alternative to Nutella
Product and successes
Nutella is one of the most popular ‘comfort foods’ in Europe. However, many European consumers have expressed concern about the fact that Nutella contains hydrogenated palm oils. Our product is a new version of the popular chocolate hazelnut spread, only it is entirely organic and made without palm oil and partially-hydrogenated vegetable oils. In contrast, Nutella is composed 31% of palm oil, and has been the target of a great deal of criticism as a result. “The destruction of the world’s rainforests and peatlands to make way for increased palm-oil plantations is driving climate change — every time the rainforest is trashed, huge amounts of greenhouse gases are released into the atmosphere” (Nutella, 2008, Greenpeace). In the U.S., consumers are turning to our product as a healthier and a more environmentally-friendly substitute.
Prospective retailers
Nutella has been called the ‘European peanut butter’ and is extremely popular in the United Kingdom and Europe. “Worldwide, Nutella outsells all peanut butter brands combined” (The story of Nutella, 2004, H2G2). It is widely available in UK supermarkets, including Tesco, Selfridges, and Marks & Spencer and also has a strong following in France. A temporary cafe was even established in France to celebrate the 40th anniversary of the product’s existence (Lebovitz 2005). Nutella has a wide distribution, and competitors could easily find a venue in supermarket chains in England and France. “It is impossible to overestimate the French love of Nutella, the chocolate and hazelnut spread invented in Italy about 70 years ago and eaten with gusto all over most of Europe…If you think about how attached we Americans are to peanut butter, you’ll have an idea of how much the French love Nutella. It’s a perennial at crepe stands all over the country, sometimes along with bananas. Spread on a slice of bread, it’s often the after-school snack of choice” (Bhide 2011).
Overview of the country: History, sales, goals, growth potential
The market for organic foods in the UK is still growing, although it has been somewhat curtailed by the recession. There has been a greater demand for organic produce within the UK than in the U.S. For some time. The supermarket chain Asda’s sales of organic products jumped 25% in 2008, while Morrisons saw its organic sales rise by 3.2% “Some 90% of UK households bought organic products in 2008” (UK demand for organic food slows, 2009, Just Food). Although British cuisine was once mocked, Britain today is a major player in the world of food. One of its most prominent food celebrities Jamie Oliver has gained international notoriety for his advocacy of healthier eating in schools.
“With an estimated value of organic food sales of U.S.$850 million, France ranked fourth in 2000 in Europe, behind Germany, the United Kingdom and Italy” (France, 2011, FAO Corporate Directory). While growth of the organic market in France has lagged behind the U.S. market, it has been steady. France also has a deeply-entrenched food-focused culture. Although to some extent this has been eroded by the growing U.S. influence and emphasis on fast and convenience food, there is still a strong tradition of eating seasonally and locally in France, and many French people still make an effort to shop regularly at local markets for dinner. This concern about healthy eating and minimizing overly processed food can be tapped into when advertising the proposed product.
Why the foreign retailers you identified should consider selling your product in their countries
The product enables consumers to enjoy a popular product ‘guilt free’ of many of the health and environmental concerns that have dogged Nutella in the past. The European market has been traditionally more rather than less concerned with issues such as genetically-modified organisms (GMO) s and sustainability. Nutella has become something of a fraught issue in recent years. Italy, the nation that manufactures Nutella, staged a protest when the European Union attempted to mandate that all products contain nutrition labels prominently displayed on their labels and products that were high in saturated fat contain prominently-displayed warning. “A government official launched a ‘Hands off Nutella’ committee, quickly supported by the governor of Nutella’s home base in Piedmont. The Cabinet minister for EU affairs warned against the risk of nutritionist fundamentalism” (Rizzo 2010). The increased interest and concern over unhealthy foods is likely to spawn a newly-activated desire to find organic alternatives.
Socio-economic and/or cultural, political and competitive environments
The greatest challenge will be resistance to a product that is a rival to a beloved European staple. In the UK, however, there has been a growing acceptance of food marketed from a ‘health’ standpoint in recent years, such as Jamie Oliver’s recent campaign for Selfridge’s supermarkets to encourage people to eat more healthfully and Marks and Spencer’s calorie-controlled lines of packaged foods. The UK has traditionally been hospitable to U.S. enterprises and foreign companies in general: “The UK is the single largest export market for U.S. services exports” (Country commercial guide: Doing business with the UK, 2011, Buy American). In addition to EC-specific environmental legislation, the UK Climate Change law “is the world’s first long-term, legally binding framework to address climate change through renewable energy with a target of 26% reduction in greenhouse gas emissions by 2020, and 80% by 2050. UK commitments to low-carbon targets are driving market demand for U.S. products and services in renewable energy/low carbon/green technologies” (Country commercial guide: Doing business with the UK, 2011, Buy American). The concerns that environmentalists have raised regarding palm oil and the depletion of the rain forests could thus be a strong selling point in the environmentally-conscious UK. France is taking even more radical measures within its borders to make selling and buying sustainable products more attractive: “The French Government is seeking participants in a pilot project on sustainable consumption labeling” (Country commercial guide: Doing business with France, 2011, Buy American).
What tools do you believe will benefit you when approaching foreign markets?
In the UK, an advertisement was banned that promoted Nutella as a healthy product, based upon parental complaints (Sweeny 2008). Working with parent’s groups, pro-sustainability groups such as Greenpeace who have criticized Nutella, and celebrity chefs like Jamie Oliver who have been prominent in advocating for a more sustainable lifestyle is an essential component of promoting the product, as well as more conventional advertising routes.
In France, given the success of ‘experiential’ marketing for the original product in ‘pop-up restaurants’ and the prominence of outdoor markets in the food scene, launching the product not just in supermarkets but in PR campaigns at outdoor fairs and food festivals would be a component of marketing the new item. This would also be an effective way to stress the naturalness of this new item, creating an association between being in the healthy, open air and the new, rival organic hazelnut chocolate spread. The critical challenge would be not to market this as an ‘American’ product but as a healthy product.
References
Bhide, Monica. (2011, June 1). Nuts for Nutella. NPR. Retrieved June 7, 2011 at http://www.npr.org/2011/06/01/136824166/nuts-for-nutella
Country commercial guide: Doing business in the France. (2011). Buy USA.
Retrieved June 7, 2011 at http://www.buyusa.gov/france/en/357.html
Country commercial guide: Doing business in the UK. (2011). Buy USA.
Retrieved June 7, 2011 at http://www.buyusa.gov/uk/en/uk_commercial_guide.html#_section2
France. (2011). FAO Corporate Directory. Retrieved June 7, 2011 at http://www.fao.org/DOCREP/004/Y1669E/y1669e08.htm
Lebovitz, David. (2005, June). La Table Nutella. Retrieved June 7, 2011 at http://www.davidlebovitz.com/2005/06/la-table-nutell/
Nutella. (2008). Breakfast for Champions? Greenpeace. Retrieved June 7, 2011 at http://www.greenpeace.org/international/en/news/features/nutella-football-ferrero-280508/
Rizzo, Alexandra. (2010). Italy fears for Nutella. ABC News. Retrieved June 7, 2011 at http://abcnews.go.com/Business/wireStory?id=10954015
The story of Nutella. (2004). H2G2. Edited Guide Entry. Retrieved June 7, 2011 at http://www.bbc.co.uk/dna/h2g2/A2986112
Sweeny, Mark. (2008, February 28). Nutella banned over health claims. The Guardian.
Retrieved June 7, 2011 at http://www.guardian.co.uk/media/2008/feb/27/asa.advertising1
UK demand for organic food slows. (2009). Just Food. Retrieved June 7, 2011 at http://www.just-food.com/news/uk-demand-for-organic-food-slows_id106127.aspx
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