As technological advances continue to reshape the world we live in, industries from automotive to financial services are undergoing great change. For the food and beverage industry, it’s no different. Whether it’s the chemical composition of the food that we eat, who is selling it, or where it’s being sold, brands must adapt their offerings to fit the need of the modern consumer. Here, we take a look at four trends that are shaping the future of the food industry.
With some consumers adopting diets that eliminate the consumption of meat and others simply choosing to diversify their meal options, we’ve seen an uptick in brand investments in plant-based proteins. Currently, CB Insights estimates that the market is worth $11 billion, and that number will only continue to grow as we understand other ways to substitute plants for dietary staples.
Traditionally known as a meat company, Tyson has been one of the early innovators in this space. The brand has invested in Beyond Meat, which produces beef and chicken substitutes with pea protein, and has also begun branding itself as a protein company rather than solely meat. Similarly, brands such as Nestle, PepsiCo, and Impossible Foods have made investments in the space and will look to expand distribution and applications in the coming year.
Hold the Sugar, Please!
With sugar being one of the latest items that consumers are looking to remove from their diets, brands – especially those in categories like candy – are looking for ways to make healthier snacks. However, it’s not just about getting rid of candy altogether; instead, brands are leveraging advances in biotechnology to make products that taste the same, but contain less sugar.
How are they doing it? One such change is coming in the form of stevia. Extracted from plants, stevia is a sweetener that is more than 200 times as sweet as normal sugar, and we’re seeing companies like Coca Cola working on ways to integrate it in product development. Similarly, monk fruit extract is over 150 times sweeter than sugar and has been used by the likes of Unilever in gelato. Outside of these more powerful, natural sweeteners, a Kellogg’s-backed startup is experimenting with mushroom molecules. Rather than adding sugars, these molecules create “bitter blockers” that, when added to food, lead to a sweeter taste and allow for a sugar reduction of more than 40%.
Private Label Products
Some of the biggest innovations in food aren’t happening to the food itself, but rather in how it is being sold. If you’ve recently stepped foot in a CVS or a local grocery store, you may have noticed the proliferation of products sporting the store’s own logo. It’s true, retailers – both of the brick-and-mortar and e-commerce variety – are investing more in their own private labels to increase profit margins and bolster loyalty with customers.
In the world of e-commerce, especially, brands like Amazon are making their own private label products. By observing the types of products consumers are looking for, seeing where there’s a dearth of competition, and understanding pricing, they’re able to undercut the competition and win over consumers. In the traditional grocery category, brands such as Trader Joe’s have seen great success over the years with private label products, and Albertsons and Kroger are following suit, generating $1 billion and $2 billion in private label sales in 2018, respectively. Expect this trend to grow within the grocery category going forward.
The Ever-Shifting Point of Sale
With fewer and fewer consumers choosing to venture out to stores, many companies have adopted the direct-to-consumer model with online sales. Yet, for consumers craving food during their busy days, online sales – or even food deliveries – can still take time to reach their final destination. With that, some brands are taking it a step further and finding consumers during their daily routines.
Take Uber, for example. The popular ride-hailing company has partnered with Cargo, a service that installs mobile kiosks within Uber vehicles to sell food from the likes of Mondelez and Kellogg’s, among other brands. This trend isn’t just hitting your commute either; it has reached the workplace, too, with WeWork creating a marketplace in its own offices for brands to test out their products in a controlled environment. As brands continue to experiment in this space, we could see the point of sale reach your gym, your car, or even your home.
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Source: CB Insights Food & Beverage Trends 2019