2012 Food Industry Outlook: A Taste of Things To Come

Healthier foods, more nutraceuticals, greener everything and other challenges and consumer trends for the new year.

By Diane Toops, News & Trends Editor

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While added nutraceuticals seem to be a luxury of the developed world, they're growing faster in the developing world, according to "World Nutraceutical Ingredients," a report from Cleveland-based Freedonia Group Inc. (www.freedoniagroup.com). These ingredients have clinically confirmed health benefits and broad applications in foods, beverages, dietary supplements and adult and pediatric nutritional preparations.

Increasing economic prosperity will enable the BRIC countries of Brazil, Russia, India and China, as well as Mexico, Poland and South Korea, to expand and diversify their food & beverage offerings to include nutraceuticals. Based on projected investment levels in these industries and rising consumer incomes, China will evolve into the largest global producer and consumer of nutraceutical ingredients by 2020, surpassing the U.S. and Western Europe, says Freedonia.

Nutrients, including proteins, fibers and various specialized functional additives, will remain the top-selling group of nutraceutical ingredients. Proteins will post the fastest gains as food & beverage makers throughout the world introduce new high value-added nutritional preparations. Functional additives and fiber nutrients also will fare well. Naturally derived substances, consisting of herbal and botanical extracts and animal- and marine-based derivatives, will command the fastest growth among the major groups of nutraceutical ingredients.

Responsibly green
The next big eco-issue will be the impact of our food choices on the environment – so says New York City-based-JWT (J. Walter Thompson Co.), a marketing communications company (www.jwtintelligence.com), in its seventh annual year-end forecast of key trends that will drive or significantly impact consumer behavior in the year ahead.

Consumer interest already exists, small but growing. The agency says various stakeholders -- brands, governments and activist organizations – will join in and further raise awareness around the topic, making everyone rethink how (and what) food is sold and how it's made. As more regions battle with food shortages and/or spiking costs, smarter practices around food will join the stable of green "best practices."

The greening of food continues, with packaging reduction initiatives, more ethical sourcing policies and the reduction of food miles, says Leatherhead.

Corporate social responsibility reports have become as necessary (and voluminous) as annual reports and 10-K statements for food & beverage companies, and most lean heavily toward environmental issues. It seems every company has a long-term plan for reducing its environmental impact … and who can argue with that?

"Heinz is on track to achieve or surpass our goal of reducing greenhouse gas emissions, solid landfill waste, energy consumption and water consumption by at least 20 percent each by fiscal year 2015," Heinz Chairman, President and CEO William Johnson says in the introduction to his company's CSR report. "Our Global Sustainability Process is driving continuous improvement in these four key environmental areas that are strategic priorities for the company."

But in the past year or so, the definition of "sustainable" has included the economic sustainability of the corporation. "Air. Water. Natural resources. These are things we all share. And we want to do our part to make sure we can keep doing so for a long, long time," reads the introduction to ConAgra's CSR. ConAgra puts a big emphasis on ROI for its sustainability projects, as we detailed in our Green Plant of the Year story in September.

"The only sustainable growth is consumer-demanded growth. Clearly, in a resourcefully strained world we need to think about environmental and social responsibility." Keith Weed, Unilever's chief marketing officer, told the annual Marketing Society conference in London in November.

To widely varying degrees, consumers are considering sustainability at the grocery store, and even at the restaurant. "Local" seems to be a word that brings together low environmental impact, freshness and quality, as well as helping the nearby economy. The National Restaurant Assn. and American Culinary Federation, in their joint "What's Hot in 2012" survey, found among the top 20 menu trends: locally sourced meats and seafood; locally grown produce; "hyper-local" items; sustainability as a culinary theme; locally produced wine and beer; and sustainable seafood.

Leatherhead, in its report, links some of the attraction of "local" to perceptions of quality and purity. "Consumers are more keenly aware of where their foods are produced and sourced," the report said.

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