2019 Food and Beverage Industry Outlook

From cultured meat to cannabis and trade wars to labeling changes, 2019 will brings new challenges for food and beverage processors.

By Dave Fusaro, Editor in Chief

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Happy new … challenges! The new year brings with it a bunch of, shall we say, opportunities to move your food or beverage business ahead, or at least not to get left behind.

2018 saw two seemingly far-off topics – cannabis ingredients and cultured meat – brought to the here and now. There also was some serious realignment of the largest companies. In the past, most purchases brought the acquirer into new markets, but several deals toward the end of 2018 saw big companies shedding recent acquisitions that were going nowhere in favor of focusing on their legacy products and markets.

What will 2019 bring? There are a couple of sure things, foremost among them the preparation needed to meet two landmark labeling changes taking effect on Jan. 1, 2020. Those would be the new Nutrition Facts panel, with its call-out of added sugars, and GMO labeling – although now the preferred term is “bioengineered” or BE.

We can’t recall if global trade has ever been in the spotlight before, but it definitely impacted certain segments of the food industry late in 2018 and probably will in 2019. Then there are the recently perennial discussions of transparency, mergers and acquisitions and how Big Food can get its groove back.

So let’s take a look:

New Labels, New Laws

As we said, there are two things every food processor needs to be working on this year: getting new labels ready for the Jan. 1, 2020 deadline for the new Nutrition Facts panel and the bioengineered food disclosure law.

While they once were separate issues – and had enactment deadlines years apart – they’ve been tethered by the two federal food safety agencies. As USDA explained in a guidance on the bioengineered foods regulation, “The proposed compliance date of Jan. 1, 2020, is intended to align with FDA’s … changes to the Nutrition Facts and Supplement Facts label...” Makes perfect sense.

Every food processor we’ve talked to has the new Nutrition Facts panel under control. Processors must modify serving and maybe even package sizes and add a separate listing for “added sugars” – that last point is processors’ biggest fear. Micronutrients Americans need more of – vitamin D, potassium and choline – will be added while some old favorites (vitamins A and C) will disappear. Calorie counts will be in larger, bolder type.

Label Insight (www.labelinsight.com) says it’s already counted 43,049 unique products that were using the new label format as of Dec. 1, 2018.

On the other labeling issue: GMOs, or genetically modified organisms, have been a polarizing issue for years, so maybe the first step is to bury that acronym. Bioengineered or BE is the preferred term from USDA, which has been charged with regulating them. The final rule for bioengineered foods was just published by the Agriculture Dept. in late December  with one major deviation from the previous directives: While it sets the “implementation date” at Jan. 1, 2020 for large companies (and Jan. 1, 2021 for small companies), it actually gives food and beverage processors till Jan. 1, 2022 as “the mandatory compliance date.”

It also settles a contentious issue on the side of food and beverage processors: Highly refined ingredients – such as sugar, oils and high-fructose corn syrup – will not force a final product to wear the scarlet letter. Corn, soy and canola are some of the most bioengineered crops, all above 90 percent, and 100 percent of sugar beets are genetically engineered, according to USDA. But processors and ingredient companies argued that trace amounts of genetic material from those crops are eliminated during processing.

Companies have several disclosure options: text, symbol, electronic or digital link, and/or text message. Additional options such as a phone number or web address are available to small food manufacturers or for small and very small packages.

That “electronic or digital link” refers to SmartLabel, the QR code created by Grocery Manufacturers Assn. and Food Marketing Institute. If consumers use a QR code-enabled smartphone, “SmartLabel gives consumers access to more product information than could ever fit on a traditional package label,” GMA says. “Consumers can find out not only what ingredients are included, but also why those ingredients are in the product, what they do and even where they come from. SmartLabel can include detailed descriptions on allergens, usage instructions, information about how the product was produced, how animals were treated during the development process or the product’s environmental impact.”

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