Food and Beverage Industry Outlook: Five Important Issues for 2016

Five main concerns food processors will face in 2016: the 2015 Dietary Guidelines, GMOs, business consolidations, animal welfare and more moves to clean labels.

By Lauren R. Hartman, Product Development Editor

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Congratulations, food processors, you made it to 2016, which was no easy feat, considering 2015's trials and tribulations. But this is no time to sit back. Get ready for even more challenges in 2016. Here are five of the critical issues processors will deal with in the year ahead.

2015 Dietary Guidelines

As we write this a few days before New Year's, it looks like USDA and the Dept. of Health and Human Services have again missed the deadline of publishing the Dietary Guidelines for Americans (in 2010, they missed the Dec. 31 deadline by a month). What will be the eighth edition of the Dietary Guidelines could have an impact on heart health, diabetes risk and obesity reduction, if adopted as expected. Issued every five years, the DGAs also rewrite school lunch standards, government agricultural subsidies and research priorities at health agencies, in the process affecting nutrition labels and generally raising the pressure on food processors and foodservice venues to provide healthier products.

We got a glimpse at what the guidelines could be when the 2015 Dietary Guidelines Advisory Committee (DGAC) gave its Scientific Report in February. Much was expected: the promotion of vegetables, fruits, whole grains, low- or non-fat dairy, seafood, legumes and nuts, and warnings against sugar, sodium and refined grains. Surprises included reconsiderations of fats and dietary cholesterol and particularly strong warnings about red and processed meats. The committee also said the environmental impact of food should be considered when choosing foods.

The committee recommended capping added sugar to 10 percent of the daily diet. It's more sugar than the American Heart Assn. recommends, but is still considerable.

The advisory report set off months of criticism from food's special interest groups and members of congress, and USDA and HHS said back in October they won't include environmental considerations in the final guidelines.

Whenever the 2015 Dietary Guidelines are issued – we hear mid-January – we'll certainly report on them immediately on

Something's gotta give on GMOs

The clock literally is ticking on the issue of labeling foods if they contain genetically engineered ingredients (genetically modified organisms or GMOs). Vermont passed a law requiring labeling back in 2014, and it will go into effect this July 1 unless blocked by court challenges or a federal labeling law that pre-empts it.

Just this past November, the FDA repeated its convictions about GMO food and ingredients: they're safe and no different than conventional food. That month the agency approved the genetically engineered AquAdvantage salmon developed by AquaBounty Technologies as safe to eat; and the same day the FDA denied a 2011 petition from the Center for Food Safety that would have required the agency to create regulations for GMO labeling. FDA did release two guidance documents about its current thinking on GMO labeling, one specifically for the AquAdvantage salmon and the other for other foods with (or without) genetically engineered ingredients.

The decisions brought praise from food & beverage processing organizations and associations, most of which favor working with Congress to create a national food labeling framework instead of having numerous state labeling mandates. But they're unlikely to quell the groundswell of consumer (and some state legislature) demands for knowing if their foods contain GMOs.

Perhaps as a pre-emptive strike, the Grocery Manufacturers Assn. on Dec. 2 revealed SmartLabel, an on-package QR code that could indirectly provide consumers with tons of information about the food product, including if a product was genetically engineered. Shoppers would need to scan the QR code with a smartphone to find the information. Critics say less than 20 percent of the population has ever used QR codes. Regardless, GMA estimates that within five years more than 80 percent of the food, beverage, pet care, personal care and household products that consumers buy will be using such codes.

Last summer, the bipartisan "Safe and Accurate Food Labeling Act" (HR 1599) passed the House of Representatives, but the Senate has yet to take action. The bill would require the FDA to review genetically engineered ingredients intended for food and to decide on a case-by-case basis if a "contains GMOs" label is necessary. Perhaps more importantly – and more contentious – the bill also would prevent individual states from creating their own GMO labeling laws.

USDA Secretary Tom Vilsack in late December told the Des Moines Register he will summon food industry members, consumer groups and other stakeholders this month to debate how to label products containing GMOs and try to resolve the contentious issue.

Business consolidations, brand buyouts

The recent mega mergers of major food companies like Kraft with Heinz and AB InBev with SABMiller have been striking and are growing. Fewer companies constitute more of the business. It's a sign of consolidation (with the promise of cost-cutting) of established companies but also an opportunity for new entrants to the market.

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