In a break with tradition, Danish ingredients firm Danisco is to license the HOWARU probiotics brand directly to a retailer, the upmarket South African chain Woolworths.
The move, which sees Woolworths gain exclusive rights to the rhamnosus and bifido strains for use in its dairy, soy and fruit juice ranges, is designed to build brand loyalty among consumers and health professionals, Danny O'Regan, cultures business director at Danisco, told NutraIngredients.com.
The bifido strain will be used in milk and soy products, while the more resistant rhamnosus is destined for use in cheese and fruit juices. The exclusive deal means Woolworths' own-label products will be the only foods in South Africa to contain HOWARU, featuring the logo prominently on their packaging.
No fewer than 45 repackaged varieties of yoghurt containing the cultures have already hit the store's shelves, and research is underway for their use in cheese - notably cottage cheese - and fruit juices. Woolworths currently holds 7 per cent of the retail market in South Africa, but more importantly it claims 15 per cent of the total yoghurt market, representing an important and lucrative partnership for Danisco.
O'Regan declined to provide exact figures, but did reveal that "the deal represents a significant amount in terms of turnover (for Danisco), but even more so in profit", no doubt due to the fact that cultures are high margin ingredients.
These latest probiotics are the result of work in New Zealand by the Fonterra Research Centre (NZDRI) and NZMP, from whom Danisco acquired production and marketing licences in 2001. The cultures were placed on the market in July 2002.
Danisco has adopted a selective approach to marketing the HOWARU range, working with only a handful of companies, because of the large number of probiotics on the market, and Danisco's reluctance to cut prices in order to gain competitive edge, said O'Regan.
The company will support the Woolworths marketing campaign - launching mid- to late September - with scientific reports on the new culture for use in journal editorials, and by organising conferences in Durban, Johannesburg and Cape Town.
The campaign aims to inform family doctors and nutritionists on the benefits of probiotics, in the hope that these professionals will advise clients of the potential benefits.
Danisco will be aiming to build a brand that can add significant value for its suppliers. "We don't just want to sell the culture," said O'Regan, "we want to create a sustainable business for both Danisco and the supplier."
The HOWARU name emerged from Danisco's recognition that the majority of consumers do not understand the science behind probiotics and are unlikely to remember a science-based name. On that basis, the company decided to 'take the science out of marketing' and choose a name which would be easily retainable and instantly recognisable, explained O'Regan.
The South African market is, however, further behind Europe in terms of awareness of the medical benefits of probiotics or even the existence of such ingredients. But O'Regan is optimistic that being first on the market will give Danisco competitive advantage and time to create brand loyalty.
New partnerships are also in the pipeline, with Danisco expecting to announce a deal in the Americas by late September, and another in Europe to follow close on its heels at the end of October 2003.