2015 Food and Beverage Industry Outlook

Processors are up against four very big and very real consumer-related issues in 2015.

By Dave Fusaro, Editor in Chief

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Looking both forward and backward from the vantage point of New Year's Eve, 2014 may well be remembered as the calm before the storms of 2015. Several big issues loom for the food and beverage industry. All of them went begging for solution in the old year but look to be headed for some degree of resolution in 2015:

  • Ban on partially hydrogenated oils
  • 2015 Dietary Guidelines
  • National policy on GMOs
  • Greater transparency

All are strongly consumer-oriented and all have the potential to profoundly change the way you formulate your products ... and do business. Some old adage says every challenge also carries opportunity, but these look to be purely challenges, forced changes for many food and beverage processors. The last one, of course, does carry great opportunity if it improves your image or communication with consumers.

A ban on PHOs

PHO labelMost food processors have seen this coming for a few years, and many already made the switch. The FDA in November of 2013 declared it no longer considered a key functional additive, partially hydrogenated oils (PHOs), a "generally recognized as safe" (GRAS) ingredient. The "preliminary determination" kicked off a four-month comment period that dragged into 2014 and set the stage for an expected phase-out to be unveiled this year.

A spokesman for the FDA in late December said the agency still is "in the process of reviewing comments and [has] no additional information on the timing of any future action." But most observers expect an announcement to come early in 2015. Most also expect a gradual phase-out that could take several years.

The unusually long comment period, which ended March 8, 2014, elicited 1,587 comments. There were interesting divisions among them. Several large and important food processors wrote in opposition to the agency's stance, and many questioned the ultimate wisdom or safety of replacement oils. Several oil suppliers said they already have replacements available. Citizens and public health groups were unanimous in their support of a ban. Nestle said it's already planning to remove all PHOs in 2016 – and is likely to meet that goal before the end of 2015.

Partially hydrogenated oils and their resultant trans fats seemed like healthy replacements for saturated fats when they were introduced early in the past century. They gave foods taste and texture and they increased oil life and also the shelf life of products such as baked goods.

But it was discovered they are just as bad as saturated fats in raising LDL "bad" cholesterol and, unlike saturates, they also lower HDL "good" cholesterol, perhaps doing more damage than saturated fats. Trans fats are produced by a side reaction with the catalyst in partial hydrogenation.

Small amounts of trans fats occur naturally in beef, lamb and full-fat dairy products. But most come from partially hydrogenating liquid vegetable oil to become a solid fat.

In 2006, the FDA required food processors to declare the amount of trans fat in their products on the Nutrition Facts label. With public awareness growing of the health threat, many food processors already reformulated to reduce or eliminate trans fat in their products, but a substantial number of products still contain PHOs.

Some of the biggest offenders include anything deep-fried, baked goods that use shortening, some frozen dinners and oil-based products that use PHOs to make them solid at room temperature, such as margarines and cake frostings.

Citing scientific evidence, the FDA said removal of PHOs from the food supply could prevent up to 7,000 deaths from heart disease each year.

Dietary Guidelines

It happens only once every five years, and its effects on the food industry and the consuming public are questionable, glacially slow at best. But the Dietary Guidelines form the basis of nutrition education programs, federal nutrition assistance programs, such as school meals and Meals on Wheels programs for seniors, and dietary advice provided by health professionals. And the new edition is scheduled to be announced this year, with the first draft unveiled any day now.

MyPlateEven before any revelation, anxiety began growing in several food and beverage industry segments. Based on discussions at the committee meetings and current tradewinds, groups are concerned the 2015 guidelines will de-emphasize meat and encourage some degree of vegetarianism, will red-flag added sugars and in general try to incorporate environmental and sustainability concerns.

"If the committee's proceedings and its [interim report] are any indication, the 2015 'MyPlate' will feature supersized portions of … activism and food-nanny nagging. We should expect to be lectured on the need to eat sustainably, the imperative for mandated 'added sugars' food labeling and the importance of imposing market restrictions on certain foods," wrote the Washington Legal Foundation, an advocacy group committed to "a sound free market economy, a reasonable legal system, competent and accountable government, and a strong national defense." "It will be sadly deficient when it comes to actual nutrition assistance."

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