THE MARKETING RELEVANCE OF NEW AND NOVEL

Today, more often than not, new has limited relevance from a competitive advantage point fo view. That is to say if newcan be imitated by competitors more or less overnight. I think one of the examples of the latter happening is the use of glucosamine-chondroitin in petfoods. The initiator of the use of these ingredients saw competitors follow suit within a period of not more than 6 months. So the uniqueness in claiming specific benefits got lost, and with that the competitive advantage. These ingredients can now be seen to be fairly standard in petfoods. It's novelty-value has disappeared.

On the technology-side we have seen the development of pouches for wet catfoods. For obvious reasons a branded operator started this development and before the new proposition got the chance to settle in the marketplace (and to give the initiator the opportunity to cream off to have a quick return on its development-cost), private label suppliers could offer a similar concept to the trade.

If I think of a genuine breakthrough that has sustained itself extremely well, I inevitably come to the development of the alu-cups by Mars. Clearly a new technology for petfoods as well as arriving at an outstanding (certainly from a palatability point-of-view) product-quality. Mars had the guts in the mid 80's of the last century to charge cat owners the price of prime beef for their Sheba brand. And they were successful in doing so. Of course they have been followed by others; but much more slowly then has been the case with the pouches, so the competitive advantage for the alu-cup product-concept lasted longer.

I think it is reasonable to say that the development of the alu-cups has been the last genuine breakthrough the petfood market has seen?

It becomes more and more fashionable in the industry to think about so-called novel ingredients. Certainly there where formulations drift increasingly in the direction of foods with more than a health and nutrition function. To an extent the inclusion of novel ingredients in formulations is in line with the trend towards more "natural" products. But what competitive advantage do they offer if these ingredients are freely available on the ingredient-market?. How long does it take to follow the initiator? And even more importantly, can the claims linked to the novel ingredient be scientifically substantiated? Various publications on this subject seem to indicate that the burden of proof is a very heavy one. From the point of view of sustainability of claims, the regulatory bodies continue to sharpen their knives. Within the EU, regulations regarding claims for human foods become very stringent. Legislation in this respect has already been approved by the EU Commission and will be applied before long. It is very likely that this will further effect the freedom with which one can use claims for petfoods.

Does the above imply that companies should stop looking for new and novel? By all means no!

There is always room for meaningful improvement, be it on the product and/or on the technology-side.

The challenge is to find the sustainable competitive advantages. Which can be developed into a monopoly! E.g. by assuring that one absorbs the entire world-supply of a novel ingredient (leaving the competitors to go for second best) or by applying human food technologies for petfoods, the investment in which creates entry-barriers for the competitors.

It all depends on the vision of the companies involved; do they seek to enhance the value of the brand – and thus implicitely of the company – by being at the forefront of developments or does one think it's wiser to wait and see how competitors' new and novel develop in the marketplace, before taking the initiatives to follow? Or, the choice between high risk/high reward and low risk/no reward.

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