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When it comes to food and beverage products, one rule of thumb defines a true trend: Real trends don’t come and go; they grow – over years, decades or even longer. For processors, fads can still bring in big money, but the risk is high. Ask any food executive caught last year with a million bucks’ worth of low-carb inventory.
In between fads and trends are trendlets. These are the bubbles that pop up within a trend and are worth noting because they can provide a hook for food and beverage processors to hang their R&D hats on.
We went shopping for real trends. We sifted through numerous media reports on what was hot, comments from the editorial advisory boards of both Food Processing and our sister magazine Wellness Foods and the wisdom shared at the many food shows we attend each year. We culled a huge list down to six essential trends.
We’ve pegged Organic as the biggest and most significant trend for processors to watch. No great surprise, but more important than our No. 2 pick, Health & Wellness? Yes. Now entering its second generation of double-digit growth, organic is on another big upswing.
In simple terms, although the Health & Wellness category has a larger footprint than Organic – and the two often are lumped together erroneously – the fact is, any food product can be formulated to sport an organic label. However, not all products can wear the “healthy” tag.
Example: A rapidly growing niche in the beverage world is that of organic beer, wine and spirits. Discounting the studies showing possible benefits of moderate alcohol intake, organic vodka won’t likely get a health claim.
Health & Wellness is the second and broadest of the hot trends. It encompasses such huge components as diabetes and obesity, kids’ health, food safety, women’s health, allergies and immunity as well as the fringe issues of “well-being” and “energy.”
As a trend, Age Awareness certainly overlaps with Health & Wellness, especially as the latter concerns our aging population. But there are numerous non-health aspects for processors to consider as they help our 77 million baby boomers segue into their dotage.
Portion Control is our No. 4 trend. In some ways, it’s just a health tool. But this year, especially, it deserves its own category because it constitutes a merging of health with the perennial trend for more convenience. And it’s one trend numerous processors from all categories are jumping on.
Globalization is No. 5. Immigration controversies aside, Asian, Hispanic, African American and other ethnic minorities will make up more than 35 percent of the U.S. population in about five years, according to estimates derived from U.S. Census Bureau data. About half that figure will be Hispanics. But globalization and ethnic influences are more than population figures. Today’s businesses are international more often than not. The cultural traffic and instant global information (via mass media and the Internet) mean rapid diffusion of once regional preferences.
Rounding out the six major processing trends are Kosher and halal certification. The strange bedfellows continue to be prolific growth areas, with Kosher still progressing at double-digit rates and halal experiencing a sudden and major growth spurt.
That equation is not necessarily true, but the message is so ingrained in the minds of millions of consumers that the math cannot be ignored.
U.S. organic food sales totaled nearly $14 billion in 2005, according to the Organic Trade Assn. (www.ota.org), Greenfield, Mass. (OTA). Although this represents a mere 2.5 percent of all retail food sales, that total is a 31 percent increase over 2003 figures. According to OTA, sales of organic foods are expected to reach nearly $16 billion by the end of 2006.
“These findings show there is continued strong growth for organic products,” says Caren Wilcox, OTA’s executive director. OTA statistics show organic food categories experiencing the greatest growth during 2005 included meat (55.4 percent), condiments (24.2 percent) and dairy products (23.5 percent). Even Fido and Garfield are going organic: One of the fastest-growing organic categories during 2005 was pet food (46 percent).
|In addition to a wide range of organic produce, Melissa's has a line of processed organic products under the Good Life Food label.
“We’re at a point where demand for organic product exceeds supply,” says Robert Schueller, director of public relations for Melissa’s/World Variety Produce Inc. (www.melissas.com), Los Angeles. “Organic everything is hot, and it’s not just produce. Most of the top retailers in the country offer organic products in their stores, and many foodservice establishments have taken notice, offering organic foods and ingredients more often on the menu.”
One of the largest distributors of variety organic produce in the country, Melissa’s offers more than 350 organic produce items. Gearing up for a larger-than-normal increase in demand, Schueller notes the number will reach about 400 SKUs by year’s end. Since the 2004 start of its Good Life Food brand of organic processed items, sales have grown an average of 20 percent a year. Forecasts double that figure for 2006.
It’s not just the patchouli set that sees the advantages to organic foods. Surveys show the majority of Americans are concerned about what’s in their foods, where those foods come from and potential health risks from pesticides and chemicals in the food chain.
David Johnson, president-North America commercial at Kraft Foods Inc. (www.kraft.com), Northfield, Ill, has been quoted describing the organic food trend as “a freight train that’s going to pick up steam.” As the second largest food company in North America, the company is in the position to help make this a self-fulfilling prophecy.
According to a recent study by ACNielsen (www.acnielsen.com), Chicago, organic products topped the list of “best performing” items in the “good-for-you” product segments. But organic is its own trend, extending beyond foods, beverages and pet foods. The category has acquired such trendlets as environmental consciousness and sustainability, Fair Trade, local production, energy conservation and “natural,” minimally processed or stripped-down formulations. Although not making an organic claim, Cadbury Schweppes PLC (www.cadburyschweppes.com), Plano, Tex., recently reformulated and remarketed its 7Up beverage as a five-ingredient, “natural” product.
The twin epidemics of obesity and diabetes dominate the health and wellness category. No day passes without the mention of one, the other or both on television, radio or in newspapers. But in general, between one-fourth and one-third of consumers make food choices based on health for some reason.
This is a trend that plays directly to our desire to ingest specific foods or beverages for the purpose of preventing or palliating a disease or condition. The reason antioxidants, botanical extracts and the whole foods (berries, teas, soy) that contain them are critical underpinnings of this trend is because of the promise such items hold to improve how you feel and perform.
|Health and wellness concerns lead consumers to read labels — not just to seek ingredients that may promote wellness, but also to check for those that could trigger an allergic response.
From an ingredient standpoint, health and wellness concerns offer the best variety of options for processors. A manufacturer developing a product in this market has literally thousands of botanical extracts, antioxidants, phytochemicals, carbohydrate compounds (such as sugars, starches and fibers), protein compounds or fractions and healthy oils from which to choose.
The trend to address health reached its mainstream “tipping point” in food processing with the decision in 2004 by America’s second largest cereal maker, General Mills Inc. (www.generalmills.com), to reformulate all of its breakfast cereals to be based on whole grains. There certainly were defining moments along the way – fortification of flour and breads with folate, calcium enrichment of juice and other “health-value added” movements all are good examples. But the Minneapolis- based company was the first processing giant to change its entire line of products in such a manner.
Meanwhile, emphasis is shifting away from dieting and related fat and calorie-count issues. In a survey by Mintel International, Chicago (www.mintel.com) although seven in 10 American adults claim to be trying to eat healthier foods, almost that many – 65 percent – say calories don’t always count, with about half of Americans finding nutritional value the important factor.
According to NPD Group Inc. (www.npd.com), a research firm in Port Washington, N.Y., obesity rates have held steady for four years now. Diet still will be big; as are more than 60 percent of Americans. But our interests will turn toward other health concerns. Allergies (including gluten and lactose intolerance), energy, immunity and the more general “feeling better” issues are moving up to occupy a growing portion of the megatrend.
Another study by Mintel notes about 36 million Americans claim to suffer from either a food allergy or intolerance. And a Natural Marketing Institute report finds two-thirds of baby boomers are most afraid of fatigue as they age, and nearly half are worried about diminished mental capacity.
From a food and beverage manufacturing point of view, all these wellness areas are showing some of the strongest growth potential.
Health is still the biggest part of the aging trend. For every age group there’s a health concern some processor is targeting. Attention is split mostly among concerns of children (see “The Kids are Alright,” Wellness Foods, June 2006), teens (see “ru communic8n w teens?” Food Processing, June 2006) and seniors.
By sheer numbers, the last group is headed for steady growth as a trend. Basically, like Dylan Thomas, we will “not go gentle into that good night.” Besides, 60 is the new 40, mirrors be damned. If a food or beverage can boast an ingredient polyphenolics, antioxidants, omega oils – to put some bloom back on the rose, then we’re going to buy it.
But the aging trend involves more than ingredients and formulations. The doubling of the over-65 population by 2030 means increased need for easier-to-open containers. The logistics involved can include everything from packaging machinery redesigns to food safety concerns based on conflicting needs to creating tamper-resistant and sanitary packaging that doesn’t require sophisticated kitchen tools or a magician’s touch to open.
Then there’s labeling. Larger print on labels for presbyopic eyes means less room for those marketing blurbs, images, slogans and serving suggestions that go so far to separate one product from its competitors.
New findings in a joint study by Mintel and the National Assn. of the Specialty Food Trade, New York, show specialty food “continues to show strong mainstream movement,” and it singles out ethnic influences as part of the growth surge in the $35 billion product niche.
|Before 2001, few North Americans had ever heard of açai. Today, one of its chief importers, Sambazon, has its hands full keeping up with demand.
“American consumers are continuing to take advantage of the country’s diverse cultures and offerings,” said Marcia Mogelonsky, senior analyst for Mintel. “As consumer interest in new flavors and products continues to grow, so does the specialty food market. As immigrants continue to acculturate, their food traditions are becoming more mainstream. More Vietnamese, Thai and Indian flavors will continue to flourish within this category.”
Globalization can be a volatile category. One example is the healthy fruit açai. Before 2000, the fruit was enjoyed primarily on its South American home turf, usually at small juice stands. In 2001, the first company to bring açai to the U.S., Sambazon (www.sambazon.com), San Clemente, Calif., imported 40,000 lb. of açai pulp. In 2005, the figure was about 4 million lb., according to CEO Ryan Black, and demand is growing as fast as supply can fill it.
Globalization’s real heft as a trend, though, comes through such mega issues as the drive to enter the China market. (To find out more, check out our archived web cast, “Four steps to China: One billion hungry customers await you”). And as the sleeping tiger that is India awakens, another billion potential customers wait in the wings.
We’re controlling portions not just for health but convenience. As a trend, convenience has been high on the list of movements to follow for years. But the two aspects merged in 2004 when Kraft Foods Inc.’s Nabisco brand launched 100-Calorie Packs of some of its most popular cookies and crackers.
Those aren’t exactly health foods. But it was a clever move, because dietitians and other nutrition experts had been clamoring about portion control for years. Although aimed largely at the restaurant industry, it was a pleasant surprise when the cry for sensible portions finally was heard by the packaged food industry.
The trend took off with such gusto Kellogg Co. (www.kellogg.com), Battle Creek, Mich., brought out its 90-calorie packs of Special K Snack Bites and 130-calorie Granola Munch’ems. Frito-Lay North America (www.fritolay.com), Plano, Texas, joined in with 100 Calorie Mini Bites versions of its Cheetos and Doritos snacks. In the space of two short years, sales of such portioned packets passed the quarter-billion dollar mark.
Even manufacturers of healthy foods are hopping on the portion-control bandwagon. For example, Nspired Natural Foods Inc. (www.nspiredfoods.com), San Leandro, Calif., just went national with its 90-calorie O’Coco’s chocolate crisp packs. Vitalicious Inc. (www.vitalicious.com), New York, offers 100-calorie, natural, vitamin-fortified brownies and muffins.
Kosher broke away from ethnic as a trend of its own with the first wave of fear over mad cow disease. Halal certification, the Muslim equivalent of kosher, is finally grabbing at the same brass ring.
The religious oversight of food encompasses food safety, health and wellness, ethnicity and spiritualism with one stamp. Or two. In the past year or so, the growth of religious adherence among boomers is seeing the combining of kosher and organic. This trendlet (“trendmerge?”) is still too new to show reliable growth figures. However, companies such as Wise Kosher Natural Poultry Inc. (www.wiseorganicpastures.com), Brooklyn, N.Y., are literally betting the farm on it.
|Consumers see Kosher and halal products as being “safer,” “healthier” and “better for you.” Wise Kosher Natural Poultry Inc. offers product that boasts both Kosher and organic certification.
Kosher/halal isn’t just about meat, although the timing couldn’t be better with meat sales jumping. The number of products with some sort of kosher certification is nearing six figures. Estimates are that three-fourths of manufactured foods and beverages have, are in the process of, or are seeking some sort of religious oversight certification.
In a 2005 Kosher Food Report by Mintel, it was reported that 21 percent of food purchasers knowingly buy some kosher products, and 28 percent of all consumers purchasing kosher products are driven by taste and quality. Consumers, it was noted, see kosher as a synonym for quality.
Consumers see such products as being “safer,” “healthier” and “better for you.” Vegetarians have learned to trust the pareve (neither meat nor dairy) designation on kosher products because of the strictness that permits not even a trace of dairy via ingredient, equipment or handling.
In addition to vegetarians, Hindus, Muslims, Seventh-Day Adventists and just generally watchful consumers go for kosher. Sales of these certified products top $100 billion annually and are projected to increase 14 percent in 2007.
The half-trillion-dollar food and beverage business is trend-driven, make no mistake. The value to processors is in growing product lines not only to serve but to steer these trends. This doesn’t mean every new product needs to be an organic, whole-grain, 100-calorie, ethnic-oriented and kosher snack loaded with omega 3s and anthocyanins with an easy-open top and large-print labels. But indications are such a product would sell well.
As long as we remember that at the end of the game, taste trumps all trends.
|1. Organic||Non-GMO, Fair Trade, Sustainability, Regional, Minimalism, “Natural”|
|2. Health and Wellness||Diabetes and Obesity, Kids’ Health, Food Safety, Women’s Health, Allergies and Immunity, Well-Being, Energy|
|3. Age Awareness||Aging, Teens, Kids|
|4. Portion Control||Serving Size, Convenience|
|5. Globalization||Ethnic Flavors, Multinational Production Regulations|
|6. Kosher/Halal||Food Safety, Certification and Oversight, Spiritualism|
BEVERAGES TAKE TWO PATHS
A major trendlet is bubbling up in the world of potables. Beverages have become more or less. That’s not a misprint. With sales of conventional soft drinks dipping for the first time in years, the things we drink are polarizing into quaffs with “more” (concentrated meal-replacements, energy drinks and smoothies) and “less” (flavored and enhanced waters substituting nutraceuticals and exotic fruit extracts for calories).
Manufacturers with examples in the first category include such companies as Unilever/Slim-Fast, Odwalla, Naked Juice and Soyblendz. In the latter category are such no- and low-calorie refreshers as Glaceau Fruitwater, Gus Grown-up Soda and O2Go.
Tea is big again, too. Thanks to green tea being recognized for its health benefits, the category is now flooding the market with tea and tea-fruit juice blends that lean toward exotic fruits to take advantage of the health and wellness trends as well as globalization’s growing ethnic flavor offerings. Such combos are including tres chic fruits like açai, carambola and pomegranate.
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