Is niche marketing the future?

by Beth Day
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Consumers continue to search for products that feature clean labels and ingredients such as cage-free eggs and real butter.
 

Niche marketing can be an effective strategy for bakers and snack manufacturers to target a specific market segment or consumer demographic with high potential to connect with a product or brand. Many companies effectively use niche strategies in their overall marketing campaigns. It is an especially useful tool for smaller companies with limited budgets and products or services that are targeted toward a certain segment of the population.

Niche marketing is not for every brand. While large companies often use such strategies, it’s difficult for them to reposition well-known core products. Consumers have difficulty seeing them as something else.

“Niche consumers tend to gravitate to products that are created as ‘natural’ and ‘performance based,’ ” said Kara Nielsen, an independent trend market analyst who researches for firms like Packaged Facts. “There is an ¬≠‘authenticity gap’ when brands or companies try to replicate the success of another original product that offers new enticements. Not every brand can recreate the magic and gain customers if it just copies the success of some other product that successfully found a niche.”

For example, in the breakfast biscuit category, belVita, produced by Deerfield, IL-based Mondelez International, was positioned as a European, fiber-rich healthy breakfast alternative. It also met demand for increased snacking, on-the-go portability and portion control.

“Other brands tried to capitalize on these newly popular characteristics, and now there’s every kind of breakfast biscuit to meet this same niche market,” Ms. Nielsen said. “While copycat products won’t ¬≠necessarily attract true niche consumers, they can bring brand-loyal users into a niche experience.”

Food manufacturers must identify a target niche and then market their product’s features to satisfy the specific need while considering price, production, quality and customer demographics.

“The most important thing is to understand who your target is,” said Cara Figgins, vice-president, Partners, A Tasteful Choice Co., Kent, WA. “Once you know that, then you can focus on marketing different features and benefits of the product or change the packaging or other characteristics to better position it.”

Today’s niche products focus on healthy attributes and active lifestyles.
 

Looking for authenticity

Smaller companies can compete with the larger ones because they have more product development flexibility and usually deploy tech-savvy marketing campaigns to introduce products, according to Innova Market Insights’ 2016 Top 10 Trends. Small companies tend to do one thing, but they do it well, and this appeals to the millennial need for authenticity.

“Millennials tend to buy products from smaller entrepreneurs or start-ups they feel are more authentic,” Ms. Nielsen said. “These entrepreneurs usually create products starting with a vision to fulfill a personal need, tell a story, improve on current products, or meet dietary needs and issues, like allergy or gluten-free.”

Boston-based Fancypants Baking Co. focuses on two niche markets, namely allergen-aware consumers and those looking for an authentic, better-for-you cookie. “I believe that our authenticity is something that resonates well with the millennial demographic,” said Steven Evancho, director of marketing, Fancypants Baking. “It’s hard to find food manufacturers whose owners still care so much about their products that they personally oversee quality control and are willing spend a Friday night at home doing recipe development with their kids.”

Consumers searching for nut-free snacks are finding more options in the retail arena.
 

New niche occasions

Purposeful snacking driven by the need for energy, satiety and indulgence has blurred the lines between traditional meals and snacks. Seventy-three percent of snacking is driven by the desire to fill unsatisfied needs around food, according to the International Dairy-Deli-Bakery Association (IDDBA)’s “Snacking Opportunities: Building Better Snacks.”

These new niche occasions create a need for snackable foods that are portable, convenient, single-serve and offer enough variety for all dayparts. Today’s consumers are all about fulfilling personal needs during the eating occasion. Baked goods and snacks are well-suited to be marketed to occasions and can be positioned as convenient or served fresh.

“In-store bakeries now offer smaller portions and individual servings made with quality ingredients that allow a small indulgence, an on-the-go snack or the opportunity to sample a variety of flavors and choices,” Ms. Nielsen pointed out.

Again, consideration of the eating occasion is vital. Consumers are not sitting down for big meals but opting for smaller meals and snacks. It’s less likely they will buy a whole pie or cake for dessert unless entertaining a large group.

“Catering to the new eating occasions is a good move for food manufacturers,” Ms. Nielsen observed. “They can create and supply niche products for different moments of the day, for example, something to eat when you finish at the gym, a pick me up, energy replenishment or desire for a small indulgence.”

Indulgence is an important driver of snacking behavior, and “treating oneself” is the No. 1 reason to snack between meals, according to “What’s In Store.” Highlighting gourmet, distinct flavors and rich textures enhance offerings of indulgent snacks.

Fancypants Baking targeted the health-conscious consumer looking for a cookie that tastes good but doesn’t break the calorie bank. It has 15 different Crunch Cookie flavors made with non-GMO ingredients and provides 100 Cal per serving. “We spent a lot of time developing our Crunch Cookie line with the ideas of portion control, simple ingredients and taste in mind,” Mr. Evancho pointed out.

According to IDDBA’s snack report, 61% of consumers are opting for healthier snacks, 53% smaller portions, and 47% new ethnic flavors and cuisines. In-store bakeries can highlight health claims, which influence certain demographics, specifically older couples, empty nesters and households with children.

“Bakers should continue to create products with quality ingredients,” Ms. Nielsen said. “In-store bakeries are seeing success offering new, artisan products made with wholesome, fresh ingredients that appeal to millennials.”

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