Fortifications and Minerals / Ingredient Trends / Ingredients and Formulation

Products Strive for a Balance of Health and Indulgence

In our July cover story, we look at how premium food has evolved as a combination of better-for-you aspects with better taste.

By Pan Demetrakakes, Contributing Editor

Can food have it all?

It used to be that if food tasted good, it wasn’t good for you. And vice versa. “Better-for-you” and “indulgent” supposedly were diametrically opposed terms; you endured the former and rewarded yourself with the latter.

But food has evolved to where many products combine those two concepts, or at least aspects of them. This marriage often comes under the banner of “premium.” Products considered top-tier—and usually commanding top prices—offer consumers both an enjoyable eating experience and at least the perception of better nutrition.

“Personally, I think a product can be premium, indulgent and better-for-you all at once,” says Phil Kafarakis, president of the Specialty Food Assn. (www.specialtyfood.com).

As always, defining terms is half the battle. The problem is that there is no hard-and-fast, universally accepted definition of what “better-for-you,” “indulgent” and “premium” mean.

To Bill Bishop, head of retail consultancy Brick Meets Click (www.brickmeetsclick.com), the definition of premium food is simple: It costs more. “‘Premium’ is a statement about price,” he says. “Generally speaking, premium price products are being asked to carry a higher margin because they’re not selling as fast as popular items.”

Dave Donnan, a senior partner in the consumer and retail practice of A.T. Kearney (www.atkearney.com), has a more nuanced take. “There are no definitive definitions of these three terms, so different people will interpret them in varying ways,” he says. “For me, ‘premium’ is around higher quality ingredients, better packaging and a level of high quality positioning.”

“Indulgent” is a little easier to agree on, perhaps because of the meaning of the word itself. Its Latin root means “to grant as a favor,” and an indulgent food is a favor that you grant yourself (or whomever you’re feeding). As Donnan puts it: “Indulgent is emotional with attributes of high flavor and mouthfeel, not necessarily nutritious but with better taste and emotional attributes.”

As for “better-for-you,” the meaning of the words may be plain, but their application has many forms: lower in calories, fat, sodium, etc.; minimally processed; without artificial ingredients; with positive nutrients like vitamins and antioxidants, and other aspects.

Slippery impact

Because the terms are slippery, so is the assessment of their impact. It’s hard to survey the product field for concepts that don’t have strict definitions. But some research has been done, and it indicates that both premium and indulgent are at least somewhat ascendant over better-for-you.

In its Total Consumer Report for 2018, Nielsen (www.nielsen.com/us) divided foods (and other consumer goods) into five pricing tiers. Among branded products, the top tier, with 17 percent market share, showed 6.3 percent growth, by far the most of any segment. Among private label products, the top tier, which had just a 7 percent share—unsurprising, since lower price is a primary appeal of private label—showed growth of 10.6 percent.

In its 2018 State of the Industry report, IRI (www.iriworldwide.com) reveals that with snacks, the categories of “true indulgence” and “treat” showed positive sales growth, at 1.9 percent and 1.8 percent respectively. “Wellness” snacks, on the other hand, fell by 0.4 percent. Interestingly, the largest sales growth, at 2.5 percent, was for “permissible” snacks—which IRI’s Sally Lyons Wyatt, executive vice president and practice leader, defines as “products consumers feel are more permissible because they have less of [detrimental nutrients] or added benefits to their indulgent favorites.”

This idea of giving indulgent products a better-for-you tweak, either by reducing negative nutrients or adding positive ones, isn’t exactly new. But industry observers say it’s being now practiced to an unprecedented degree—and is redefining the major food categories.

The line between better-for-you and indulgent used to be clear. For some consumers, it still is, says Carol Culhane, president of International Food Focus Ltd. (www.foodfocus.on.ca).

“There has been a class of [better-for-you foods] that don’t have a positive taste profile,” Culhane says. “[But] there is a group of consumers where that is fine with them. They are suspicious of food that does have a positive taste profile. They think, if it tastes really good, it must not be good for me. There’s too much fat in it, there’s too much sugar in it, etc. They are attracted to foods that mainstream people would find it hard to consume on a regular basis.”

But those consumers have always been in the minority—and now that minority is smaller than ever.

“Marketers and retailers are realizing that—and this isn’t new, but it’s kind of surfaced as important—that just because it’s good for you doesn’t mean that people are willing to buy it, unless it also tastes good and is enjoyable,” Bishop says.

Karen Strauss, principal at Cadent Consulting (cadentcg.com), agrees: “We have to make sure that food tastes good, or I’m not likely to come back and buy it again as a consumer.”

Strauss says an increasing number of food products are merging the concepts of better-for-you and indulgent—and that these tend to land in the premium price tier.

“They do tend to be more expensive. When you’re shopping for a better-for-you food, whether it’s from an organic perspective or superfood ingredients, they will tend to add price,” she says. “But there are also those indulgent types of [food that] taste good but are [also] better for you. So if I’m going to have chocolate I’m going to choose dark chocolate, as an example.” (Studies have shown dark chocolate to be rich in antioxidants.)

Shelley Balanko, a senior vice president with Hartman Group (www.hartman-group.com), also sees indulgent merging with better-for-you, to the point where consumers almost expect aspects of both.

“We wouldn’t say that better-for-you and indulgent are mutually exclusive,” Balanko says. “We would say at one point in time in our food culture, that was true, like probably the 1990s. Today’s consumer expects better-for-you products, which are made with a clean label and more intentionally sourced and produced ingredients, are not only going to be better for them, but will actually be better tasting.”

Super ingredients

“Fortifying” foods by introducing ingredients or additives with health or nutritional benefits is a time-honored strategy. Some premium products put a new twist on that tactic by fortifying indulgent foods.

“There are many ways that a ‘premium product’ can combine aspects of health or nutrition with pleasurable consumption,” says Tom Vierhile, innovation insights director for GlobalData (www.globaldata.com). “One very popular way that companies do this is by adding what I would call iconic health ingredients to products to boost their perceived health value. Another way that companies can blend ‘better-for-you’ and indulgence features is to add gourmet elements via indulgent flavors to ‘regular’ products.” 

Premium foods often combine aspects of indulgent and better-for-you in ways that go beyond merely adding this or that ingredient. One such way is embracing the “clean label” trend, where artificial ingredients, additives, preservatives, etc., are entirely kept out.

Rich Products, a processor of baked goods, toppings and other foods for foodservice and retail, launched a “clean label standard” in 2015 that now encompasses more than 600 types of products. It restricts the use of certain ingredients, including high-fructose corn syrup and artificial flavors and colors.

“This appeals to both health-conscious and quality-conscious consumers,” says Jen VanDewater, Rich’s vice president for health, authenticity and sustainability. “We know consumers are driven by a range of motivations. For some, health is a main motivator, and for others, it’s about quality or indulgence.”

Foods with all-natural ingredients, or at least without artificial ones, have the ability to straddle the appeals of health and taste. Hartman’s Balanko puts it simply: “Consumers believe that when you take the junk out, not only is it better for me but it’s going to taste better.”

Clean labels often make food more expensive, which is one way of pushing it into the premium category. And consumers are willing to pay for that—up to a point.

In its 2018 Food & Health Survey, the International Food Information Council asked consumers how much more they would be willing to pay for a food product that was similar to one they were already familiar with, but that had no artificial ingredients. While 70 percent said they would prefer the clean-label product if there were no difference in price, 52 percent said they would be willing to pay $1 more for it; 42 percent said they’d pay $1.50 more; and 22 percent said they would pony up $2.

Not easy being clean

Clean labels can be problematic, or at least challenging, in another way: They can be hard to formulate, simply because artificial preservatives and other ingredients are used for a reason.

“I’ve seen more manufacturers sit down and say, ‘We’re going to market clean-label. Two years from now, we’ll be all clean-label,’” Culhane of International Food Focus says. “Then they’ll have that initiative shelved.”

Culhane notes that, not long ago, an idea took hold among some consumers, and producers, that food products should have no more than five ingredients.

“I know that’s popular in some segments of the North American market, but it’s very hard to bring a product to market that has only five ingredients and still have it withstand the rigors of modern food distribution,” she says. One of the first ingredients to go would be preservatives: “That’s fine if you want to shop at the grocery store every day. But if you want to grocery shop only once a week, it would be very hard for you to buy processed food with only five ingredients.”

This points to a wider challenge in formulating better-for-you products: Making them taste good often involves tradeoffs. Culhane points to some plant-based meat analogue products: “It’s a meat analogue, so it should be low in saturated fat, but look at the sodium that’s in there to generate a taste profile that’s similar to that of hot dogs.”

To complicate things even more, the cast of nutritional heroes and villains among ingredients is not fixed. Today’s bad ingredient could be tomorrow’s good, or at least not-so-bad, one.

Vierhile cites fat as an example. “I think one of the best examples of making a food ‘better,’ as in better-tasting, that also makes the food better for you, is what is happening in fats,” he says. “If you go back a decade or more, fat was widely perceived to be bad for you, and companies did everything they could to reduce fat contents for food products. That has now come almost full circle, with companies now turning to high-fat ingredients like ghee, whole milk and even lard (yes, lard) to convey that products are better tasting and better for you, partly because of the satiety effect of fat.”

Kafarakis of the Specialty Food Assn. points out that sometimes indulgent foods are shown to have some health benefits. “As more and more research goes into the nutritional value of food, we learn that some of those healthier options are truly pleasurable too,” he says. “Dark chocolate comes to mind. Red wine. Milk from grass-fed cows. Food producers are well aware of these trends. You’ll see it in their ingredient choices as well as their marketing.”

Movin’ on up

Some food processors are introducing premium products into categories that had been dominated by low-budget ones. Categories like yogurt, frozen dinners and entrees, boxed dinners like mac & cheese, even bottled water, have seen premium product rollouts in recent years.

In many cases, these have outstripped mainstream, lower-cost products in their respective categories in sales growth—or even in absolute sales. Major food processors often sell both kinds of products, sometimes side by side. Not only is this is smart bet-hedging across the product portfolio, it lends the premium products a bit of familiarity.

Alexandra Lewin-Zwerdling, vice president for research and partnership at the International Food Information Council (www.foodinsight.org), says that in this year’s Food & Health Survey, consumers named “familiarity” as a driver equal to price in food purchase decisions. Being based on an established company or brand can make a new product with a higher price more accessible to consumers.

“We know more and more that consumers want brands that align with their own personal values,” Lewin-Zwerdling says. “But I think to some extent there’s this balance or tradeoff that people make in their minds around wanting the familiar, and then wanting this alignment with their food values.”

When food products that are normally economy-based are reformulated and “premiumized,” improved taste is almost always the primary appeal. But increased healthfulness often comes with it.

With many low-cost products, “If you were to flip [the package] and look at the Nutrition Facts profile, you’d probably see high calories, high fat, high saturated fat, high sodium,” Culhane says. “And people can feel it. They may not taste the saltiness when they’re consuming the product, but afterwards they’ll be quite thirsty and think, 'Why am I thirsty?' So there is an opportunity for processors to deliver the convenience with a more positive organoleptic profile and a more positive nutrient profile.”

The bottom line is that the premium products that combine health benefits with great taste are the ones that best justify their added costs.

As Kafarakis puts it: “Dining choices are made for health and nutrition reasons, and for the sheer pleasure of having a flavorful, well-prepared meal.”