Are there hidden opportunities for challenger brands in HFSS ad ban?

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Are there hidden opportunities for challenger brands in HFSS ad ban? 1

Despite plenty of last-minute delays, it looks like next year will see an end to online and TV ads for high fat, salt and sugar (HFSS) brands.

Though the start date has been pushed back once again, this time until October 2022, the UK government says it still plans to introduce restrictions that will see these ‘unhealthy’ products removed from the airwaves before 9pm and from online channels 24/7. From confectionery to ready meals, bagged snacks and even yoghurt the crackdown could also force brands that fall within the HFSS definition to ditch multibuys and vacate prime retail space.

Experts have said the move will ‘risk jobs and restrict adult freedom of choice’ costing the industry as much as £3bn in lost sales. Others have welcomed it as a bold and necessary move in the fight against obesity.

But for challenger brands it creates a pretty unique opportunity. That is for two reasons. First, the decision last month, that the new rules will only apply to companies with 250+ employees (and in stores with 50 or more employees). That leaves small brands exempt, and free to enter into all that vacated advertising space, creating the chance to bump up market share and availability.

Second, many challenger brands have been created as cleaner, healthier alternatives to established brands. They have led from the front on gluten-free, plant-based and natural sugar alternatives. They have scoped out unusual superfoods and championed clean label ingredients, years before product development teams at major fmcg brands cottoned on. Sweeping supermarket shelves clean of their major HFSS rivals gives them a major boost too.

So, how can challenger brands on both sides take advantage?

Seek proof of non-HFSS status. Going forward it is likely advertising platforms could seek evidence that a food and drink brand sits outside the scope of HFSS status. We now know that the 2004/2005 Nutrient Profiling Model will be used to determine what is and is not an HFSS product (which is a relief after plenty of concerns we’d lack a clear definition) but there is a chance advertisers will require proof. At Clearcast, for example, the organisation that pre-approves the majority of British TV ads, grocery brands are now required to supply a Nutritional Profile Certificate, available online, to clarify their status before booking ad space.

…Then turn it into a selling point. A lot of the industry might have railed against an advertising ban for HFSS products, but it benefits from significant backing from the general public. A poll by The Grocer found 57% supported the removal of online ads for ‘junk food,’ growing to two thirds (63%) across those in the ABC1 demographic. This support, coupled with rising consumer awareness of the terminology, could create opportunities to incorporate ‘non-HFSS’ status into wider brand messaging and marketing for challenger brands. It could also pave the way for a flurry of M&A activity as HFSS stricken brands look to snap up smaller, healthier challengers that can occupy the shelf space they will lose in supermarkets.

Re-evaluate marketing spend to leverage opportunities. Currently, the government has said the policy will apply to ‘all online marketing communications that are either intended or likely to come to the attention of UK consumers’ with only b2b communications and ‘factual claims’ exempt.

With online ads accounting for around 25% of total marketing spend in fmcg (likely more given the impact of COVID) the need for big brands to remove their cash from this channel will create brand new slots online that challenger brands can take advantage of. Everything from MPUs on high traffic sites, to high profile digital partnerships or influencer collaborations. On the flipside, affected HFSS brands will likely reallocate spend to ‘allowed’ media channels, such as OOH, print or radio, driving up competition and price there. Brands should take all this into account when planning their investment per channel in the coming years.

Flag products as ‘HFSS alternatives’ or ‘HFSS exempt’ to retail buyers. Ahead of the ban major grocers are already setting targets to shuffle around shelf space and award greater availability to healthy alternatives. For instance, Tesco has said it is aiming to increase the proportion of sales from healthier products to 65% by 2025. And where HFSS products remain, it is likely we could see more priority given to smaller brands, exempt from in-store marketing restrictions.

Either way, this will feed directly into the current considerations of retail buyers, particular in categories where HFSS presents the biggest problems. Think carbonated soft drinks (CSDs), confectionery and snacking. Highlight your brand’s capacity to act as a direct replacement, drawing on insights that compare demographics, shopper preferences and proven shelf edge appeal.

To sum up, the crackdown on advertising for HFSS products could be seriously disruptive for many food and drink brands. But for those outside its scope it creates huge opportunities too. With the right preparation, challenger brands can take advantage of the legislation to leverage new marketing opportunities, broaden their exposure to new demographics and ultimately negotiate their way onto the most coveted spots in UK supermarkets.

If you need support with any technical assessments of your product, including nutritional feedback and advice on how you could rework your product to sit outside of the HFSS definition, our Young Foodies technical team can help. Head here to get in touch.

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