Expo West exclusive:Six forces shaping the food industry
Expo West exclusive:Six forces shaping the food industry
2015-03-19 From:Food Business News by Monica Watrous
“For a long time, natural and organic was 1%, 2%, 3%, so we’re finally making some critical mass in terms of total food sales, and that’s expected to accelerate as more food companies and big retailers start to get more into natural, organic and healthy foods,” said Carlotta Mast, executive director of content and insights at New Hope Natural Media. She and Jenna Blumenfeld, senior food editor at New Hope Natural Media, discussed industry trends during a presentation at Natural Products Expo West held March 5-8 in Anaheim. Sales of natural, organic and better-for-you products are expected to grow 8.1% annually to $226 billion by 2018. Driving the steady growth are robust product innovation and an accelerated shift in consumer behaviors. Additionally, more consumer packaged goods companies are entering the segment. “We’ve got a lot more people from some of the large companies and C.P.G.s because they’re all trying to learn how to be more successful with natural, organic and healthy products,” Ms. Mast said. “And a big part of that is our industry as a whole is growing more than two and a half times faster than mainstream packaged foods. This is where the growth is, this is where the innovation is, this is where the excitement is.” Early estimates track just over 12% growth of natural and organic food and beverage sales in the United States last year. While conventional frozen food sales have been stagnant in recent years, sales of organic frozen foods increased nearly 16% in 2014, up from 8.6% in 2013, according to research from New Hope Natural Media, which produces Expo West. Organic oils grew 30% last year, led not only by olive oil but coconut oil and avocado oil, too. Non-dairy, non-soy products grew 17% last year. What’s driving this dynamic growth? Ms. Mast and Ms. Blumenfeld pointed to six key forces shaping the industry. “One of the reasons it’s important to pay attention to the trends is that, as we’ve seen, it’s really accelerating in terms of the timeline that a trend will move from the organic and natural channel into mainstream,” Ms. Mast said. “Things are moving much, much more quickly these days. It is important to be on top of what’s new and what’s happening and really be able to identify those trends that have a lot of staying power. “We believe the trends related to our macro forces have a lot of staying power and are very quickly moving from niche and natural all the way into mainstream.”
Ancient wisdom “It’s about going back to basics with simple, clean ingredients,” she said. “What smart manufacturers are doing is making these products very accessible.” Nature’s Path, for example, introduced Q’ia Superfood Superseeds & Grains oatmeal, made with gluten-free rolled oats, chia, hemp and buckwheat. “Maybe a shopper isn’t going to make a full bowl of buckwheat for breakfast, but they most certainly will eat hot cereal,” Ms. Blumenfeld said.
Feed me Forward-thinking companies are addressing the challenge and opportunity of feeding a growing population. From Blu Dot Protein Tea with whey protein to Chapul energy bars made with cricket flour, a growing number of products are developed to deliver sustainable protein. “What’s exciting about cricket flour is not only is it a very sustainable source of protein compared to beef or chicken — it takes a very small amount of water to produce the crickets needed to produce cricket flour — but it’s also a highly nutritious protein,” Ms. Mast said. “Of course,” she added, “there’s the ick factor.”
Increasingly more consumers are gaining identity not by what they wear or where they live, but by what they eat or don’t eat, Ms. Blumenfeld said. “Brands can market to specific food tribes, but the really smart brands are combining and blurring these quite different tribes,” she said. “One of my favorite buzzwords of late is ‘peganism,’ which is a blend of paleo and veganism. The products there are very clean and also contain no dairy or meat or grains.” Then there are “lessitarians” and “flexitarians” who may reduce intake of animal protein, grains, gluten or dairy. For these consumers, there’s Beyond Meat’s Beast Burger, a meat-free, dairy-free patty that is marketed not as vegan but as 100% plant protein-based. Another example is Cluck ‘n Moo Burgers, which combines grass-fed beef and chicken meat to contain less saturated fat and calories than a traditional ground beef patty.
More companies are providing transparency through certifications and product claims. Thirty-eight per cent of products exhibited at Expo West included an organic claim, and 35% had a gluten-free claim, according to New Hope Natural Media. And despite recent scrutiny of natural claims, 25% of products were labeled as such. A growing claim, Ms. Mast noted, is “made in the U.S.A.”
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