Criminalist Finds Patterns in Food Industry Chaos

Suzy Badaracco, CEO and President of Tualatin, Ore.-based Culinary Tides

After a successful career in Criminalistics, Badaracco enrolled at the Pennsylvania Culinary Institute, where she earned an Associates degree in Culinary Arts, and then to Washington State University for a Masters of Science degree in Human Nutrition. She worked as an analytical chemist, corporate chef, nutrition specialist, trainer, and knowledge manager for Mintel, USDA, Nestle, T. Marzetti, and Ajinomoto Inc. In 2004, she founded Culinary Tides, a forecasting company focusing on the birth and death of trends, rather than the statistics generated once a trend hits an industry.

"I took my skills from Criminalistics and morphed them for the food industry; the techniques and principles are universal really," explains Badaracco. "It seemed like the perfect combination for the job. It takes being fluent in several different languages to track what I track. If I am to move seamlessly between them, I must be fluent in their language too, or everything just remains chaos. I've worked with the USDA, I've testified in court as an expert witness, I can speak to chefs, I can speak technology and research, and that's how I can find patterns out of what appears to be chaos. My entire job as a forecaster is to not only find patterns, but also direction in chaos, just as I did when I was a Criminalist. I combine this with competitor intelligence and global data to give clients a complete picture for a baseline and going forward. That's exactly what I did as a criminalist."

Badaracco uses military style forecasting, which has a longer history than business intelligence techniques, and she believes it is more reliable. "I track 23 players/industries to see what will affect the food industry," she says. Her presentations begin with the story of six blind men and the elephant. "The six men each touch a different part of the elephant and come to six different conclusions," she says. "That explains linear analysis, which is what many companies do -- they only understand one part of a trend.

By tracking all food, flavor, health, packaging, and consumer trends as well as tracking governments, research, technology and allies/adversaries to a trend, I present the entire elephant to a client. Then I combine this with competitor tracking to complete the picture. All this is attached to a specific actionable question or goal the company has, otherwise the information is pretty useless."

Badaracco looks for all trends. "I don't believe in fads, rather well supported and weakly supported trends," she says emphatically. "I watch for blips, shadows, and trends. The blips are dots in chaos, shadows are the birth of trends or blips coming to the front of the pack with very loose ties to other existing trends, but still a bit nonsensical. An example is white. White chocolate is coming in because it's balancing all the dark chocolate. In restaurants, we're seeing white mousse for desert. White asparagus is showing up in magazines, and cauliflower is also making an appearance. Other shadow whites coming up at the same time are white vanilla (used by Martha Stewart), white balsamic vinegar (at Trader Joe's) and white tea. It's just a guess, but they may tie into consumer desire for simplicity.

Trends, weak or strong, have a clear pattern or tie to other trends. They can be tracked and profiled and have the power to create new births or deaths. An example is the whole grain phenomenon. It's linked into regional, single grain and flat breads. It's tied into other trends and you can track it, profile it, see whose weighing in against it and what companies are doing with it. Some people track trends, meaning they just watch what's happening and stand behind the whole time. I profile the trend to see what the government is doing with it, is there a new ally coming on, or, look this company is coming out with new products -- you'd better watch out. I'm still ahead of the trend, even though it's hit the ground. Trackers are followers."

Birth and death of a trend

Health and wellness is a topic, according to Badaracco. "Say an item, like a particular fruit, pulls away from the chaos and has a voice of its own, a champion and links to other supporting trends that are sustainable, it's a birth," she explains. "Whole grain's original champion was the launch of South Beach by Kraft Foods, the first time whole grain was given a voice."

Three things that will typically kill a trend are research running counter to it (one of the things that killed low-carb), a powerful adversary like the American Dietetic Association (ADA) or American Medical Association (AMA) coming in against it, or a more powerful competing trend that kicks it out of the public consciousness, according to Badaracco. "When it morphs, it's a trend that just changes its spots, like Tapas moving to Meze to Izakaya, which has lately shown up in New York City, Scottsdale and Los Angeles, and getting a lot of press. Tapas is still here, but it's been joined by other cousins that are taking center stage now."

Most forecasters believe trends start at the high-end restaurant, move to chains, and are incorporated last in food processing, so we asked Badaracco if she agrees. "Very few trends ever start within the food industry, so to say they follow any particular birth pattern is ridiculous," she responds.  "For example, low-carb was birthed by the AMA with Dr. Atkins and hit retail food manufacturers long before restaurants got into the game. In fact, restaurants were the last player to enter the trend. Tapas is thought to be born in the restaurant industry, but was born two years earlier in the wine industry. And dark chocolate's success is in part due to the research started in universities with UC Davis and Mars. Yes, it is now in restaurants, which tagged onto the health benefits, along with some other linked trends supporting it.  If you are only watching restaurant happenings, you are touching only one part of the elephant."

Chasing shadows

Asked to check her crystal ball about upcoming developments in health and wellness, Badaracco begins by saying the question is essentially unanswerable due to the vast pool of possible answers, but recommends a few areas to watch. "Cocoa and superfruits are now being backed by research, along with whole grains, a new phenomenon which will alter all three lifecycles," she says. "Any age related research including dementia, memory, depression, macular degeneration linked to baby boomers, and beauty foods. People don't want to age. And the obesity epidemic is manifesting as government legislation globally against marketing to children, so watch for that. The FDA is behind and getting flack internationally for it, especially from Europe."

On the flavor front, Badaracco points to a new superfruit on the horizon. "Miracle Berry, or Synsepalum dulcificum, is coming in due to its ability to make sour things appear sweet," she says. "Eat it, followed by something sour like a lemon, and you taste sweet for extended time. It's not coming in just because of its flavor, but also for its other attributes. Japan has had this in dried form for a while now, and it's appearing in Hawaii. What about a secondary purpose beyond flavor? Could it be converted to a sugar replacer? Flavors in general are being tied regionally due to consumers' desire for local and sustainable, so flavors are getting more sophisticated. An apple is no longer an apple on menus, but a fuji or winesap."

Other shadows to watch are whole grains morphing into single grains like barley. "Barley now has an FDA health claim so it is linked nicely," she says. "Smoke is crossing from meats to salt; I bet someone figures out how to smoke chocolate -- companies are already adding salt to it, so the sky's the limit. A few years ago, the beef industry promoted "new cuts," including the club steak and flat iron. Now new pork cuts -- pork breast, cap steak, and pocket roast -- are coming out. Oh yes, in 2006, cupcakes morphed to brownies (not very successfully) and are now morphing to high-end donuts (check out Frittelli's Doughtnuts and Coffee in Beverly hills). I think one reason donuts will be more successful is that brownies are one-dimensional; they tend to be chocolate, but donuts can be made in gazillion flavors. And don't forget the morphing of Tapas to Izakaya."

Demographics play a role in future trends as well, according to Badaracco. Baby boomers and echo boomers are driving the green and sustainability movement. "Two terms coming from oversees I expect to hit are "carbon footprint," meaning the smaller the carbon footprint a company leaves the more attractive for consumers, and "food miles" basically the amount of travel a food takes to get to market," she says. "Organic is not enough now, farms are beginning to be "biodynamic" it is like organic farming on steroids. There are some 32 certified biodynamic farms in the U.S. They use solar power, conservation, recycling systems and sustainability. But I'm really worried about the beehive colony collapse syndrome. Canada lost 90 percent of all hives. No one is certain of the cause, but the dead immunocomprised bees are riddled with parasites. Organic farming relies heavily on bees and butterflies, so this could have a devastating effect on that category."

There are opportunities for the food industry to connect with mom, according to Badaracco. "There is a return to home cooking that is being tied to celebrity chefs sharing their home recipes with consumers, who want to be celebrity chefs in their own home," she says, "Personalized and professional level kitchen design this year is also tied with celebrity chefs." For non-cooks, there is now Dinner by Design, Dinner's Ready and similar companies to make them rock stars."

Surprising findings

Badaracco says the trend among food companies to have "consumer insights" groups, which are only loosely tied or not tied at all to any other part of the organization, but makes the decisions on what products to launch has been surprising. "To focus on consumers is starting hours into the race," she says.

"Consumers are almost always the last to act on a trend, so the company has fully missed the birth. By the time the company rolls out a product, the consumer has moved onto something else. You must look at consumer behavior, yes, but if you want to be offensive what you should be looking at is what is influencing the behavior -- consumers don't act as a mass consciousness, they are responding to external forces -- find the forces and you are now in an offensive position with the consumer."

Another surprise is that low-carb is swinging around again because of new published research. "The two main studies both support low-carb again, but if you read them they both also admit the diet isn't sustainable," she says. Few GI products have been as successful as low-carb during its height, which might account for the re-interest in low-carb. "Consumers were sucked into low-carb once; I don't foresee they will fall for this again by any stretch. In general, moderation seems to be the key, but two diets on the radar are the LA Weight Loss diet (franchises have jumped from 132 to 800) and the Sonoma Diet." She speculates that a food company might launch a line based on the Sonoma diet, which does not limit or cut out food groups and has the promise of wine, grains and fresh fruits and vegetables (it is modeled after the Mediterranean diet.

Connecting the dots

Why is trend watching essential for food companies, and what do you recommend they consider as a successful strategy, we asked. "Trend watching is only essential if the company wants to be in an offensive position; if they would rather remain in a defensive position (as a follower), then trends are not as essential," she replies.

"A company must first decide if they want to be a leader among their peers or not, and decide on their playing field. Having said this, if they do want to play offensively then they must be looking spherically and outside the food industry, while simultaneously keeping tabs on competitors and leaders outside their immediate playing field. They must connect the dots and tie them to actionable questions that direct strategy -- this seems simple but few companies do it well or at all for that matter. A couple of months ago, Nestle partnered with L'Oreal, but so has Coca-Cola -- they are both now playing in beauty food. You can't just look at who you think are your competitors; you have to watch any movement that comes into your playing field. Companies can and will jump tracks into categories or trends they don't currently play in and that is where a company can be blindsided by unexpected competition."

There is one thing that keeps Badaracco up at night. She fears she will tell a client what they already know. That means she will have failed to give them new insight. The body of evidence proves she has nothing to worry about.

Suzy says

The most common mistakes in defining trends include:

• Not consider world governments as a trend player. Companies have regulatory departments, but they are not linked into the consumer insights group or innovation center of the company. If they aren't linking them, they are not looking at government as a trend player. Look what happening in trans fats. Twenty states are passing laws to eliminate trans fats in restaurants, so government is a major player here.
• Focusing on consumer behavior to make decisions. You have to look at consumer behavior, but since consumers are the last to know, it's like you are starting the marathon two hours after the pack. Consumers act because they are responding to something bigger. You need to find out what it is that makes them react; that's how you stay ahead of the trend. Basically, I watch the experts watching consumers. I read consumer reports from experts, link to 70 blogs and bulletin boards. I'm interested in the response the blogs generate. All consumer behavior does for me is to confirm what I already know.
• Use linear analysis, or touching one part of the elephant to make strategic decisions. Linear analysis is when a company has a consumer behavior division, and they make strategic decisions based on those findings (usually once a year) and expect the trends to stay unchanged.
• Rely on a Top 10 list or a one time study of consumers, product releases or other to make strategic decisions. This assumes trends are static: rather they are dynamic.
• Having no profiling capabilities once a company enters a trend. You enter a trend, launch something, and then you don't watch. You have to have an exit strategy, because trends change, morph and die. They certainly don't last forever.
• Having no exit strategy after entering a trend.
• Not watching allies/adversaries to a trend. This could come in the form of competing trends, research, technology, outspoken consumer or professional organizations, etc.
• Mistake a morph for a death, so you get out. Maybe, all you need is a directional change, letting you continue to play inside the trend. Let's say you introduce frozen Spanish Tapas appetizers. Instead of getting out, just morph to little Meze appetizers and morph again into Izakia. Looking inside the food industry for new trends is a mistake.
• Looking inside the food industry for a new trend.  You will be entering the race hours past other runners. Most companies take six months to get into a trend, which is pretty quick, but you'll be outpaced and will not have the lion's share of the market.

Biggest challenges for the food industry

• Speed to market - It takes a minimum 4 to 6 mo., and up to one to two years.
• Timing of trend entry - If it's a long launch period, allow time to morph.
• Keeping up with governments globally as silent trend players.
• Reconciling advances in ingredient technology with consumers desire for simplicity and cleaner ingredient declarations, such as salt replacers or sugar replacers.