Shoot and score: Retailers starting to recognise functional products as long-term trend – Red Shoots

05-Sep-2023 - Last updated on 06-Sep-2023 at 01:22 GMT

Daily Good's products are formulated with natural produce and ingredients that claim to support immune health through the “food as medicine” approach. ©Red Shoots

New Zealand-based FMCG company Red Shoots says consumers are increasingly looking for products with functional benefits in supermarkets, which has sparked partnership opportunities with major retailers.

Red Shoots recently secured an AU$1m (US$644,000) retail partnership with Australian supermarket chain Coles. This will see Daily Good, a brand under its portfolio, stock its Immunity Shots in more than 700 stores across the country from mid-September.

The functional beverages are formulated with natural produce and ingredients that claim to support immune health through the “food as medicine” approach.

“We met Coles back in January. They were looking at new products in the immunity category and were interested in what we are doing, partly because they could see that it is a growing category and one that consumers are very much vested in.

“They recognised that we’re committed to marketing to these consumers, who are looking to fulfil functional needs from products in the supermarket environment,” Rhona MacKenzie, co-founder of Red Shoots, told NutraIngredients-Asia.

In New Zealand, the Daily Good Immunity Shots are available on its website, and in Countdown supermarkets, Chemist Warehouse, and HealthPost.

Woolworths was the first major retailer that the brand partnered with in Australia. It now also has presence in selected independent pharmacies and health food stores, as well as the upcoming entry into Coles.

“There is definitely a demand [for functional drinks]. COVID-19 has made many consumers hyper aware of their health and re-evaluate their consumption habits. There were different trends over the past few years, but immunity stayed around. Consumers are aware of immunity and gut health, and they are aware of such functional products.

“Based on consumer behaviour and all the research that we’ve read, it shows that the trend is here to stay. We’re just at the beginning and the category is still evolving at the moment. It’s a new area for large retailers, and the fact that they are accepting products like ours suggests that they, too, see it as a long-term trend worth investing in.”

In addition, MacKenzie believes that retailing at Coles will give Daily Good access to a wider consumer base who are keen on natural immunity.

“I think there’s a move away from tablets. Rather than pharmaceuticals, it’s really about the food that you put inside your body every day. For Woolworths, there are over 200 stores that we sell in. Coles is our biggest retail distribution to date. Having presence in more than 700 stores means we can have a greater impact.”

Developments in the pipeline

While the firm views immunity as a long-term trend, how the category and product offerings will grow remains to be seen.

“This is why we are doing NPD. To stay on top of the trend, we need to know how consumers are looking to receive functional benefits. Do they want it in a liquid, or do they want it in powder form?” MacKenzie shared.

The Daily Good Immunity Shots are made with ingredients, such as USDA-certified organic turmeric and ginger from Fiji, New Zealand Manuka honey, blackcurrant, apple cider vinegar, and zinc.

During each juicing process, pulp residue is formed as a “valuable” by-product.

“We have been freezing the pulp from every juicing for four years. Last year, we managed to find someone who could dry it in a way that works for us. Now, we have developed immunity powders in several flavours, including turmeric and ashwagandha. We’ve also almost finished making a mushroom one. Hopefully, these will roll out by this year.”

At the same time, the firm is working on a sparkling version of the Immunity Shots that comes in a RTD format.

Each bottle of the current range contains seven servings that are meant to be consumed daily in a week. It can be taken neat, or diluted in hot or cold water.

“The Immunity Shots are priced at AU$19 (US$12.20), which is considered premium. With the new product that we aim to launch from mid next year, we will be able to offer an ‘entry level’ option at around AU$5 (US$3.20) to AU$6 (US$3.90).”

Beyond Australia and New Zealand, Red Shoots is eyeing the UK market, which it believes has “less barriers” — or higher consumer acceptance — for premium products.

“We are looking to expand into the UK with Daily Good. We have been having some discussions with retailers in the local market, and we will be attending a food show in London in September to show our commitment in setting foot there,” MacKenzie added.