What Does the Second Half of 2021 Hold For Product Innovation?

May 26, 2021
We’ve got Arwen Kimmell, Director of Innovation Marketing at JPG Resources, helping us predict what product innovation will look like for the rest of 2021 and into 2022.

In today’s episode, we’ve got Arwen Kimmell, Director of Innovation Marketing at JPG Resources helping us predict what product innovation will look like for the rest of 2021 and into 2022.

You won’t want to miss this episode because we break down the what, the why, and even the when of food and beverage product innovation for the next year.


Erin: Can you talk to me for a bit about what JPG Resources is?

Arwen: JPG Resources is a food and beverage innovation and commercialization group. And we're based here in Battle Creek, Michigan. We're a cross-functional team, so we've got over 50 industry veterans from all kinds of functions offering end-to-end support across the innovation lifecycle.

We go from brand creation all the way through product development, essential supply chain, and even ongoing supply chain management for some of our clients. We've been around for more than 10 years, and we've worked alongside teams ranging from founders pre-revenue super early on in their process, all the way through to some of the largest and most established CPG brands in the world. This brand...sorry. Let me start that sentence again if that's okay.

For more than 10 years, we've worked alongside teams starting with founders that are all the way pre-revenue, don't even really have an idea yet, all the way through to some of the most largest and established CPG brands in the world. This breadth gives us a view of the marketplace that gives us both their cutting-edge best practice from the big world and emerging trends from the little world, which lets us see the whole market. This view combined with bringing what's really an integrated cross-functional approach across all of our capabilities, you know, whether it's an idea or supply chain or something in market, we bring the full cross-functional team together. And that helps us to give brands more positive business outcomes and add value for our clients.

Erin: Quick follow-up question to that. What is your role at JPG?

Arwen: I joined the team here at JPG earlier this year to help build out our insights and marketing capabilities. I come with 15 years of experience working with some really great brands, representing the consumer perspective, really helping them to shape their strategy, their innovation, their advertising, everything. And I'm working now to take that experience and bring more marketing fundamentals, more consumer insights and trends into JPG's existing processes and to create a new set of offerings to really help smaller brands get closer to their consumer, build better brand foundations, stay on top of trends, and really bring more consumer and data-driven innovation to market.

Erin: I want to dig a little deeper and ask, from your perspective, what CPG trends have stood out to you in this first half of 2021?

Arwen: That's a great question. 2021 is shaping up to be an interesting year. The first part of 2021 kind of felt like an extension of 2020 where it was still this kind of COVID-dominated world. And we saw brands and consumers being a little more internally focused. So brands thinking about maintaining their supply and safety of their employees and consumers really focusing on their inner circle and the well-being of their families. But in the most recent months, we're seeing both brands and consumers start to open up and transition to the next phase. And what we're seeing is a shift outward, both physicallyy as people are more comfortable leaving their houses, and then more abstractly as I think emotionally and mentally they start to put the last year and a half behind them. And think more about the outside world. And this is coming to life in the innovation that we're seeing hit right now for the back half.

There's a nod toward the return to out-of-home occasions that we, sort of, saw slack in the last year with formats and packaging that are helping people get outside. And then we're seeing some cool boundary-pushing that I think is the era that we're entering into. So blurring between categories, some really cool adventurous flavors, unique mashups of both flavors and categories and formats. And this innovation is giving people an opportunity to push their own boundaries and experience something new at exactly the right time when they're looking to open up and get back out in the world.

Erin: Which trends do you see as having staying power as we head into the second half of 2021?

Arwen: Yeah, there are some things that have been gaining momentum that sustained through COVID that I think will continue to accelerate into the back half, and even into 2022. I'll give you my top three.

The first one is low sugar. Right now, that's often coming to life as keto, you see a lot of keto offerings in the marketplace. But I think low sugar is going to exist beyond keto. And if keto like other, sort of, approaches to food starts to wane, low sugar is going to stick around. So you'll see it in products that are just less sweet. Adding less sugar, but you're also going to see increased use of sweeteners like monk fruit and allulose that deliver a sweet product but with a lot less grams of sugar.

Second is high protein, which is not going to be a surprise to anybody, I think. This one has been evolving for a really long time. But the underlying protein push has not gone away, and I don't think it will. I think you're going to continue to see an evolution of protein. I think the next wave is going to be continued diversification of protein sources. There was a time when it was just soy.

And now there are a ton of different protein sources out there, from peas to collagen to crickets, you name it. And I think you're going to continue to see that, kind of, high grams of protein from unique sources.

And then the third is plant-based and its many expressions I think are going to continue to evolve, you're going to see shifts in that space. But it's also going to continue to accelerate, and we're going to see more and more plant-based offerings in the market.

Erin: Are there any trends that have maybe surprised you in the last year?

Arwen: Yes, I find that most things most of the time make perfect sense looking backwards. But there were certainly things in 2020 that surprised me at the time. I think one of my favorite examples is comfort food. For years and years, we saw natural and organic product growth outpacing mainstream sales across the grocery store, nearly every category, you would see natural and organic doing better. But during the early COVID stock-up period, we actually saw a rise in classic categories and indulgent foods and brands. And declining categories, like cereal, and a bit of a wobble in the natural and organic space where it was a little unclear what was going on. And at the time, I remember being surprised thinking with all of this focus and anxiety around health, I would have expected that people would be doubling down on healthy food so that they're shoring up their immune system.

In retrospect, it makes perfect sense that we were at a time of true chaos and anxiety. And in those first stock-up periods, people were shopping in this space of chaos and anxiety, and they were looking for ways for comfort and a little joy. And that came to life in grocery carts as sweets and treats and cereals and snacks that people may not have eaten since they were kids. But they were putting these things in their cart at record numbers. And for a minute, I raised my eyebrows and was like okay, what's going on with this data? Why are we seeing natural and organic struggle? But that need for comfort really helps to contextualize those results. And fairly quickly into, sort of, the second and third stock-up waves, we saw natural and organic sales stabilize and return to gaining share most places. And today, people might still be buying some Lucky Charms to bring a little joyful memory into their life, but they're also investing in their health the way we would expect them to be.

Erin: I want to touch a bit on the plant-based protein trend. In your opinion, why do you think it's taken off the way it has?

Arwen: Plant-based protein does this beautiful thing of bringing together several consumer benefits in one package. So protein, which we already talked a little bit about, is the macronutrient that consumers talk about the most, it gets the most positive buzz. And by being plant-based, that protein comes in a package that is perceived to be even more helpful than the protein people believe they need. So, doing that both by what it doesn't have. So it's lower in things like saturated fat and cholesterol. And it's providing plants, which most people know they should be eating more of. And then beyond those personal health benefits, plant-based protein also brings an environmental benefit because it's using less resources than animal-based products. And then on top of all that there's an animal welfare benefit when you eat plant-based as opposed to animals. And this trend has been around forever. So these combination of benefits is not new.

But I think two things have unlocked the exponential growth that we're seeing today. The first is a new focus on improved taste and experience. The innovation that we've seen in the last few years has really upped the game and overcome a lot of the taste barriers historically associated with plant-based alternatives across categories. The second is a shift we've seen in language from vegan to plant-based. Vegan is a word that has a lot of baggage. It's associated with what's a fairly extreme and pretty judgmental stance that most consumers out there don't aspire to. There are not a lot of people out there saying I wanna be fully vegan. And the word vegan represents all of that tastes baggage that I was talking about, about these historical plant-based alternatives and products. Plant-based, on the other hand, is a friendly, acceptable kind of phrase. And it focuses on the positives of plants and the positive of protein. And that combined with the fact that people are really making products that actually delight and people really enjoy eating, together those things have really changed this market.

Erin: Something this podcast focuses on a lot is entrepreneurship and early-stage food companies. I know JPG recently launched a new division aimed at helping those entrepreneurial businesses. Can you talk about that a little bit? And in doing so, what if any products from it have made it to market?

Arwen: Sure. From the very beginning through to today, JPG Resources has worked with brands of all sizes, including working with a ton of founders and entrepreneurs. We've helped support and guide entrepreneurs all the way through the process from before they even have a brand and a fully formed idea all the way through to launch. And in some cases, we've supported brands all the way through to a successful sale of that brand on the other side. We have two new exciting initiatives that build on that legacy of supporting emerging brands. One is called The Garden and the other is called RCV Frontline. So I'll talk about The Garden first. Because we've been doing this work of building new brands and working with entrepreneurs for more than 10 years, we've learned a ton and we've seen up close what drives success and what drives failure.

This year, we launched The Garden as one way for us to help bring some of those lessons learned forward to very early stage teams to help them get smarter on their journey in a more accessible way. The Garden team helps educate our clients on critical issues and challenges across all of the aspects of their business, so product packaging, the placement, staffing and people, pricing, promotion. So you name it, we pulled together lessons that they can work through in a very seamless, self-directed environment. We've created a different package that allows for that self-directed learning coupled with industry networking and coaching at various levels to help them with every aspect of starting a business. We've got great content, articles, webinars, lessons that really address all of the top issues and questions of startups that we've experienced over and over again.

We also have a new strategic partnership with RCV Frontline, which is an early-stage venture capital fund dedicated to investing in entrepreneurs who are working to reshape the food and beverage industry. RCV Frontline was founded by industry veterans Jeff Grogg, who is also the founder of JPG Resources, and Andrew Reynolds of RCV Partners. And together they put this team together with the mission of really helping some of those underserved, early-stage founders to help them navigate through the challenges. So RCV Frontline typically participates in season Series A round financing with emerging brands. They're looking at food, beverage, and food technology. And then once they've invested, they leverage their partners' really extensive ecosystems, including things like JPG Resources, to help them build really sound and sustainable businesses and hopefully succeed in the marketplace. So far, RCV Frontline has invested in a handful of brands, including This Saves Lives, Lemon Perfect, Aunt Fannie's, Bonafide Provisions, and A Dozen Cousins, so you can look out for those brands in the market today.

Erin: If you were to take out your crystal ball and look into 2022 product trends, what do you think you would see?

Arwen: I love this question. I'm going to give you my top three. I could talk trends all day, but my top three starting with immunity. So immunity is no surprise in the COVID era, it was actually trending with consumers before COVID and will continue to benefit from people's enhanced focus on their well-being and building a strong foundational immune system. This is alive and well in supplements today. What I expect to see happening more going forward is a lot of these immune-supporting ingredients to show up in more foods and beverages and work their way out of the supplement aisle.

Similarly, mental and emotional health and sleep were trending pre-COVID. They were in trend reports prior to COVID. But in the last year-and-a-half, they've become more of a focus for people under the unique strains and pressures of 2020 and 2021. So as people figure out what the future looks like and what their new normal looks like, I think they'll continue to prioritize their mental and emotional well-being and increasingly look for food and beverages to help support them. This could look like the inclusion of superfoods like tart cherry or botanicals like chamomile, or all of the range of CBD and its many expressions. It could also come to life in allowable indulgence, that sweet treat or glass of wine that feeds your emotional health. And if you combine those things, that indulgence with some of these functional additions, I think you're going to find a great solution for consumers in the future.

And then my last one kind of underpins most other trends you see in the marketplace, including immunity and sleep, but also keto and protein and some of those other things, and that is gut health. Historically, most consumers would think about gut health in terms of like regularity and indigestion kind of problems that are more obvious and immediate. But leading-edge health and wellness consumers today understand that the health of their gut is connected to every other aspect of their health, not just their indigestion, but their immunity, their sleep, their emotional health, their weight, their heart, and on and on and on. Many of the trends that we've seen in the last five years, whether they know it or not, have a gut-health connection. So the rise of probiotics and kombucha, but also low sugar, gluten-free, keto, Whole 30. A lot of these trends in diet have underlying gut health benefits. And I think we're going to see products continue that are either implicitly or explicitly answering this call. So probiotics and prebiotics. I think we're going to see more prebiotics as we go forward. But also want to minimize things like eliminating sugar or eliminating highly processed grains to really help consumers unlock that solid gut health, which is the foundation of all other health and wellness.

Erin: Well, I look forward to seeing if your predictions line up next year. If someone wanted to learn more or get in contact with you or JPG, how could they do so?

Arwen: Our website is jpgresources.com and I am Arwen, [email protected].

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