Patchwork Synergies and Logical Extensions

I regularly tend to touch on the concept that products should appeal to distinct cross sections of consumer demographics in order to gain good, cost-effective levels of success. Likewise, when one product works well for a given consumer group, it often makes sense to try to diversify that product in different forms to appeal to other related aspects of that demographic.

For instance, consider the increasing market for organic milk (here's an interesting chart: http://www.boston.com/business/articles/2006/06/19/US_sales_of_organic_milk/; interesting to note that the figures don't include Wal-Mart, the biggest retailer of organic milk in the United States… Here's a good bit on Wal-Mart and organics (with a bit on milk), that I came across a little while ago: http://www.economist.com/business/displayStory.cfm?story_id=7041288). Last year, consumers made a run on organic milk and the market remains strong.

So: Mom buys organic milk for the kiddies--and quite possibly for herself, as well. But what about her newborn? It logically makes sense that she will want to provide organic formula for her little ones as a supplement to, or in lieu of, breastfeeding (hopefully a supplement, whenever possible).

As I mentioned a couple of months ago, when Horizon Organic stopped manufacturing its organic baby formula, consumers (mostly women) in New York were clamoring for the last few cans, even going so far as to buy them on eBay for ungodly prices (see http://www.foodproductdesign.com/blogs/doug/?m=art&a=65h129182.html for more on that post).

In Horizon's absence from that ludicrous market, Wal-Mart stepped in with its organic formula (see http://www.walmartfacts.com/articles/1669.aspx), which reports note is selling quite well (see http://www.pbmproducts.com/?deptid=174&display=article&qaid=1222&phrase=horizon-organic-infant-formula-parents-choice; skip through the boo-yah slap-yourself-on-the-back treacle to the end where they note the bit about sales of the formula).

Now it looks like the retail giant will have some competition (see http://www.brightbeginnings.com/products/organic-baby-formula.asp; or, if you watch "The View," I'm sure you'll hear about it as Elisabeth Hasselbeck has signed up as the brand's "spokesmom"; see http://media.prnewswire.com/en/jsp/search.jsp?searchtype=full&option=headlines&criteriadisplay=show&resourceid=3253369). Also, it turns out that Horizon must have sold its organic-formula business to Hain Celestial's, to be sold under its Earth's Best brand (see http://www.horizonorganic.com/products/infant/index.html#2d). I recently bought a can from my local Wild Oats (not for myself; I have a nine-month-old son…), but--unlike the Parent's Choice and Bright Beginnings formulas--they didn't have a version with DHA and ARA, which I think will hurt their chances to fully compete … Hain Celestial should be working to remedy this situation, since I know of many a shopper who would love to not patronize Wal-Mart, if at all possible, but they've been the only game in town for a good handful of months now… But I digress…

These types of logical product extensions make a lot of sense in today's retail environment. And I bet dozens of currently profitable niche--and mainstream--products could learn a thing or two from this milk-meets-formula scenario. It's just a matter of seeing where potential products might fall within the patchwork demographics of products with currently robust sales, and then logically extending the concept to another consumer group.

Of course, it's much easier to see where the dollars are going and then quickly jump on the bandwagon. The real trick is to pioneer into that new demographic ahead of the competition.