Nestlé Creates Medical Foods for Growing Market

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Let food be thy medicine. With this mantra, food manufacturing giant, Nestlé, is developing a new line of food – medical foods. Medical foods are not your usual protein or nutritional bars. They are prescription-based drinks and powders that are designed to meet the nutritional needs of patients suffering from certain diseases.

The company sees a significant potential in this market due to the aging population which accounts for 22% of the total population of the world. The company is relying on this new product to boost sales that are currently suffering from the decline of the loss of market share in the packaged food market. In fact, the company signed a deal with Seres Therapeutics to develop food products that can restore the natural microflora of the gut. It also bought shares in Pronutria Biosciences to develop amino acid-based products to treat muscle atrophy.

 

Supplements vs. Medical Foods

Head of Nestlé’s Institute of Health Science, Ed Baetge, noted that eating the right food can make a huge difference in people suffering from certain diseases. So what makes medical foods different from supplements? Unlike the latter which can be used by healthy individuals, the former is designed for people suffering from chronic conditions. Thus, they should be used under the supervision of medical practitioners. This new line of products contains active ingredients that are recognized by the Food and Drug Administration (FDA) as safe.

The company is currently analyzing human DNA to develop personalized nutrition programs for age-related conditions such as intestinal disorders and epilepsy. The researchers from Nestlé aim to determine which foods should particular patients need to eat to reduce or even treat their symptoms. Consumers do not need to worry that they are eating Franken-foods. Scientists are developing the medical foods from all natural compounds that are obtained from foods like grapes, tomatoes, and coffee.

The company is placing its faith on medical foods to create a stable profit in the long run. The project for developing medical foods was set up five years ago and will run until 2021.

Hurdles in Medical Foods

One of its challenges is the enormous research cost. Improving medical food is similar to developing drugs and FDA subjects them to rigorous monitoring to ensure that the company is following sound medical as well as nutritional principles. But perhaps, one of the biggest hurdles Nestlé is facing is that this new niche is uncharted and comes with uncertain benefits. The company also faces different obstacles, such as not all medical and scientific experts are convinced that medical foods will be successful in treating certain symptoms or chronic conditions.

Many foods can elicit placebo effects since the consumers think that they benefitted from the food that they are eating. This is the reason why medical foods are dubbed as the “Wild West” of the industry. More medical data is needed to determine the efficacy of medical foods. Otherwise, it is no different than the food types that dominate the food market today. Although this may be the case, patient groups still welcome Nestlé’s initiative.

Inspired by wsj.com

U.S. Organic Produce Leads to Record High Sales of Organic Products

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With more people opting for healthier lifestyles, sales in the U.S. organic products industry was at a record high in 2015. The industry was able to amass $43.3 billion in sales revenue which is 11% higher than the previous year according to the survey conducted by the Organic Trade Association. Much of the revenue was generated by organic food sales at $39.7 billion which is ten times higher than the income produced by organic non-food products that made $3.6 billion last year.

 

Organic Produce Is the Backbone of the Organic Products Industry

organic produce in the grocery store applesOrganic produce is the backbone of the organic industry as it generated sales worth $14.4 billion last year. Consumers often feel a close connection with the industry via the food they eat. About 13% of the produce sold in the country is labeled organic.

The demand for organic foods is evident in the rising demand for fresh organic juices which enjoyed a 33.5% growth in the previous year. Other categories of organic produce that are in high demand include condiments and dairy which have generated $1 billion and $6 billion in sales, respectively, last year. The organic snack food category is also a major player in the industry which has seen a growth of 14% since 2014.

 

High Demand but Low Supply

The unprecedented development of the organic products industry was due to high demand by the consumers for organic products. However, the high demand also means supply issues as the production of organic products in the country is beyond its capacity to meet the consumption needs of the people. Nearly 5% of the foods sold in the United States are labeled organic.

The organic industry came up with different means to address this challenge as well as other issues that influenced the industry including poor infrastructure and policies. The organic industry has joined hands with other companies to fortify their supply chain so that there is a constant stream of products to support the healthier lifestyle of consumers.

organic produce grocery store

Supply Chain Challenges

Organic products have now found their way to the mainstream market. Today, many supermarkets, membership warehouse clubs, and other outlet stores provide organic offerings to consumers unlike before. However, the organic industry has experienced supply chain challenges over the recent years. For instance, the grains and dairy were two areas in the industry that could have enjoyed a more robust growth if not for the supply chain challenges.

The hurdles in the sector have led stakeholders to secure more organic acreage to grow produce, encourage new farmers to adopt organic practices, and develop programs to help experienced conventional farmers transition into the organic way of life. These initiatives were met with enthusiasm as more organic companies are working with one another to address the concerns.

Despite the problems, the organic industry stakeholders are confident about the future. They are making sure that the industry is built on transparency and the engagement of interested parties to garnish the consumers’ trust.

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UN Launches “Decade of Action on Nutrition” Resolution

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Every country in the world faces problems with poor nutrition. Researchers noted that the lack of proper nutrition in the first 1,000 days of a child could lead to irreversible developmental gaps. The problems of poor nutrition are often linked to the lack of food security. Food insecurity is a leading cause of the high rates of early death as well as disability among children, pregnant mothers, and older people. Ultimately, problems with inadequate nutrition are leading governments to spend more money on health care costs in the long run.

 

The UN Resolution

The United Nations General Assembly placed nutrition at the core of its sustainable development agenda by launching the “Decade of Action on Nutrition” resolution. The resolution recognizes the importance of improving nutrition and food security to achieve the 2030 Agenda alongside eliminating extreme poverty and climate change.

According to Food & Agriculture Organization (FAO) director general Jose Graziano da Silva, “Children cannot focus on their education if they lack the nutrients that they need.  Sadly, the problem with malnutrition and food insecurity affects children and is a rampant problem in many emerging countries around the world. As a result, economies are affected as malnourished children grow up to be chronically tired workers.”

This resolution aims to provide a platform for change and action for the many stakeholders around the world. Signatories of the resolution–mostly world leaders and other organizations–call for the support of international organizations, governments, private sectors, academia, and civil societies to work together to end world hunger by improving the food security and nutrition of young people. The United Nations encourage all agencies and member states to encourages collective effort by sharing information and technology to improve food security. The resolution also proposes creating policies that can be implemented at the regional levels of countries around the world.

Non-government organizations such as Action Against Hunger was impressed that many advocates have agreed to support and commit to eliminating malnutrition by 2030. However, international advocacy director Glen Tarman noted that the resolution would require an enormous amount of both financial and political commitment from all countries involved and the United Nations only has a decade to make sure everything is aligned.

 

Obesity as Another Rising Problem

The resolution documents the UN’s concern that more than 800 million people are chronically undernourished all over the world. The resolution also expresses concern about the rising number of individuals who are overweight. About 1.9 billion adults are overweight in the world which also showed signs of micronutrient deficiency. Just because people are obese does not mean that they get enough nutrients from food.

Director of Nutrition of the UN Food and Agricultural Organization Anna Lartey noted that the rising numbers of obese people in poor regions particularly in Africa made the UN include obesity in the 2030 resolution.

Both obesity and malnourishment are significant problems in developing countries, and the United Nations has been working hard to address the problem. The decision may pave a way to finally finding a solution to this long-standing issue.

Inspired by fao.org

Food Product Transparency Impacts Purchase Behavior

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Consumers today are smarter, as they demand food product transparency when it comes to items they buy in the grocery store. The request for transparency is influencing the evolution of the food industry as it requires many food manufacturers to provide consumers accurate and detailed product information.

According to the 2016 Label Insight Food Revolution Study, most consumers value the transparency of goods since it forms some of the data points that they consider when making a purchasing decision. The report also indicated that most consumers do not trust the information provided because of the way many brands deliver it on their products. The study was conducted by Label Insight, a global leader in providing SaaS data solutions to empower the transparency between food brands and consumers.

 

What Did The Food Revolution Study Cover?

The study surveyed more than 1,500 consumers and identified how they made different food choices. The survey also covered consumer expectations from the food manufacturers in providing the product information. Recently, many users have developed high expectations when it comes to the transparency of ingredients in the food that they consume.

CMO of Label Insight Patrick Moorhead indicated that the high demand of food product transparency from the consumers is pressuring the industry players and even small food manufacturers to finally provide the information that the consumers require—not only to create better spending decisions—but also to avoid customer confusion and highlight many opportunities that food manufacturers have in innovating their products.

 

Why Is There a Need for Food Product Transparency?

Food product transparency solves different issues not only within the food manufacturing industry, but also to their consumers. The most important reason for transparency is to eliminate customer confusion. Label Insight’s report revealed that 81% of the consumers admitted to consumption of packaged food products that contained ingredients they do not recognize.

Confusion also affected the purchase decision of many consumers. In the study, 94% of the respondents admitted that they did not know the ingredients in their food, which makes it difficult to make an informed decision. In fact, 83% mentioned that companies that provide food product transparency are more valued by consumers which, in turn, promotes consumer loyalty. Consumers are more likely to switch to brands that provide detailed information on their products.

 

The Repercussions

Many retailers are pressed with high demands from consumers in terms of providing food product transparency. Food manufacturers cannot simply ignore such demands as many see their customers turning to their competitors. This movement presented many opportunities for emerging brands to gain a chunk of the market and secure loyalty from the dismayed or discouraged consumers.

Brands are always in a position to develop ways to improve the long-term relationship with their customers. Food product transparency is another form of the clean label movement, and it is essential to success over the next ten years.

Inspired by bizjournals.com

Sodium Related Label Claims Grew Sales by 3% in 2015

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The US Food and Drug Administration (FDA) noted that the average American consume about 3,400 milligrams of sodium daily. The agency issued a warning that too much sodium can have serious repercussions on our health, which includes hypertension and the risk of various cardiovascular diseases. They drafted guidelines that are intended to reduce the daily intake of sodium by 2,300 mg. Americans may start cutting back on their favorite, salt overloaded, comfort foods as companies use new sodium label claims to their advantage.


The Dangers of Too Much Sodium

Sodium is a widely popular food additive and flavoring. However, excess amounts can be dangerous for your health. Excessive consumption of sodium can lead to a plethora of diseases. One of the negative effects of too much salt in the diet is an increase in blood pressure.

When too much salt is ingested, it holds or retains the liquid in the body that contributes to the growing pressure of the blood.  It all starts in the kidneys. As sodium builds up in the body, the kidneys have trouble keeping up with the excess amount found in the bloodstream. Then it accumulates and holds onto water to dilute the excess sodium. This, in turn, increases the fluid in the surrounding cells and the blood volume. This process adds a lot of burden on the heart. As a result, excess salt intake also increases the risk of heart failure and stroke. Aside from high blood pressure, intake of too much sodium can also lead to stomach cancer and osteoporosis.

Low Sodium Label Claims Sell

While most Americans still consume significant amounts of sodium, there is an increasing trend seen in the population who show consciousness when it comes to their daily intake. They are shifting towards products that contain less to no salt.

Many consumers prefer to buy products which contain only 40% (or lower) sodium as they prefer to add the salt themselves. In fact, there is an increase in sales of products that claim to have less salt by as much as 23% since the end of April 2016. Nielsen found that the goods that have the highest sales are those that come with labels of “low salt” which has 72% of all sodium related products. On the other hand, products that are sodium-free only make up 3% of the sales.

sales sodium claims

So what could have attributed to this trend? More and more people in the United States are aware of the repercussions of including too much salt in their diet.  However, this does not mean that the sales of salt have decreased significantly. Studies still indicate that there is a spike in sales of salt by as much as 7.7% since last year. This is especially true for specialty salts such as kosher salt, sea salt, black salt, and Himalayan pink salt. Apparently, people who find it difficult to avoid salt are looking for better alternatives. These specialty salts contain more nutrients and essential elements than conventional salts. Despite their health benefits, consumers still need to control the amount of salt that they use every day.

Inspired by nielsen.com

Consumers are Replacing Traditional Breakfast with Nutritional Drinks

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The adage “breakfast is the most important meal of the day” is no longer valid today, thanks to the rise in the popularity of performance and nutritional drinks. With the dietary habits of people evolving, many people opt for nutritional beverages as a favorite breakfast item these days.  About 35% of Americans agree that they do not adequately take care of themselves because they live very busy lifestyles and drinking performance drinks has become the norm for breakfast. Research conducted by Mintel indicated that 39% of people consume nutritional drinks every morning as a meal replacement while 48% consume them as part of their daily meals.

 

What Consumers Think About Nutritional Drinks

About 80% of consumers view nutritional drinks as a guilt-free beverage. Moreover, 69% believe that they are excellent sources of nutrients compared to tablets and pills. Many consumers drink nutritional drinks because they provide a more convenient method for eating whole foods.

Nutritional beverages are marketed very effectively by convincing consumers that they can maintain healthy lifestyles just by drinking them. The functional characteristic of nutritional drinks sets them apart from the rest of the beverages sold in the market.

Senior Food and Drink Analyst at Mintel, Beth Bloom, noted that performance drinks are the epitome of modern drinks as they provide the convenience that can fit the lifestyle and diet choices of the average American. Moreover, as many consumers move away from eating the traditional three meals a day, such beverages, fit in perfectly with their current lifestyle as they are affordable and accessible to many people who live very busy lives.

The Large Market Share of Nutritional Drinks

The favorable attributes of nutritional drinks are the reason why they are gaining a significant market share in the beverage category. Currently, there are now a lot of types of drinks under this category which includes weight loss formulas and sports drinks. Many consumers look for three basic characteristics when buying nutritional drinks including flavor, amount of protein, high fiber content, essential vitamins, and minerals.

Between 2010 and 2015, there was a surge in the sales growth of nutritional drinks of around 67% which is equivalent to $31 billion. Most of the sales come from sports drinks, which the industry growth is pegged at 22% during the same period. Weight loss drinks only have a 5% growth.

According to the Mintel’s Global New Products Database, manufacturers of products such as fruit juices, water, coffee, and tea have used the functional positioning as a platform to sell their goods to the market. Currently, many products have used the value of having functional attributes which are challenging the nutritional drinks in their strategy. Since the competition is very tough, the market has diversified the choices to their consumers. Nutritional beverage manufacturers should focus on promoting and substantiating their products’ efficacy by going for more natural products.

Inspired by mintel.com

Taste is Leading Consumer Indicator for Beverages

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The rise of lifestyle diseases like diabetes and obesity have created a growing concern for parents and everyone at large to move to beverages that offer more benefits. This migration is what has come to be known as the better-for-you alternatives. It is the direction that the non-alcoholic beverage companies are moving with 90% of the new products they bring to market. However, taste still plays a major role in new product development of healthy alternatives.

Taste + Health = Top Beverages

After recent research by Mintel, it is clear that most people’s choice in non-alcoholic beverages is still primarily driven by taste. The percentage of individuals that prioritize taste above all else stands at a staggering 72% while health or nutritional benefits follow by a far cry at 21%.  The least influential factor for consumer preference according to the study happens to be functional benefits at 12%.

The same research shows that there was a stagnant or decline in sales between 2014-2015 and the saddest part of the story is that this trajectory is synonymous with the findings of the research. Carbonated soft drinks had a 0.1 percent growth, and juices grew by the same margin. The largest hits, however, were dairy milk that fell by 7 percent. On the other hand, beverages like coffee had an 8.7 percent growth and energy drinks had an 8.9 percent growth.

In the report, Mintel indicated that consumer preference was quickly changing and the numbers that stood at 66% for juice drinkers, 64% of carbonated soft drink drinkers and the same for dairy products would soon shift. This was as a result of the more than half of the Americans (67% to be precise) were often buying different or new style beverages. Another 18% indicated that they drink a vast variety of drinks. This goes to suggest that the scope of the non-alcoholic beverage industry is rapidly changing.

There is no doubt that the beverage market is doing all it can to meet the consumer’s need for healthier options. However, flavor and taste are still a big part of why customers prefer different drinks. If the taste is not great, then there is no doubt that the consumers will not even touch it. One of the beverage analysts at Mintel went ahead to state that the vast diversity of products that were available in the market made it much easier for consumers to move on to the next one.

It is true that the better-for-you movement is reshaping the industry, and the sales trends are proving this. However, brands will still have to consider factoring in the flavor factor which is primary as well as function and health.

The Future of Beverages

There has also been an emergence of cross-category beverages that has led to the development of new drinks. They add to consumer preference confusion and makes it also challenging for brands that would like to keep their new customers without polarizing those that have not yet made up their minds.

These varieties continue to diversify the options with 40% of customers being encouraged to purchase a new beverage as long as there is a sample in the store that they could try. The playing field is quite open, and the one brand that can incorporate great taste and health is more than likely going to take over the market.

Inspired by mintel.com

Bottled Water is Top Beverage Among Generation Z

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For more than a few decades, carbonated drinks and sodas have remained as the number one beverage. In fact in 1998, an average American drank 54 gallons of soda and only 30 gallons of water a year. However, the excessive consumption of soda fueled the country’s rising rates of obesity and type 2 diabetes, and as a result many have shifted to other healthier beverage options. But with the age of Generation Z and Millennials at hand, soda is now being replaced by a pure and unadulterated drink–water.

Bottled Water and Beverage InfographicGen Z and Millennials have been taught to make healthy choices. This is especially true when it comes to choosing beverages. A recent survey conducted by the Beverage Marketing Corporation and Fluent indicated that most Millennials and Gen Z prefer natural drinks like water.

It is important to take note that these generations grew up knowing that soda and sugary beverages are bad for you. This is the reason why many opt to drink water. However, this also creates an opportunity for beverage companies to create healthy drinks to fill in the niche.

 

Bottled Water Tops the List

It is interesting to know that bottled water tops the list of beverages that gen z and millennials prefer. In the survey, 43% of the correspondents consume water seven times per week while 22% consume it with coffee, milk or tea.

The popularity of bottled water as the healthiest alternative to soda and other flavored drinks is the reason why it became the second most popular drink in the United States. Soda companies are shaking in their boots.

What makes it perplexing is that tap water is also available, but respondents still prefer bottled water. In fact, 20% indicated that they solely drink bottled water instead of tap water due to safety concerns (Flint, Michigan). However, more are willing to drink from the tap as long as it has been filtered with an efficient filtering system.

As more and more people have become conscious about their health, water has become the most favored beverage in the country. Unlike other drinks, water does not contain any calories. It makes sense since we need it to survive.

What’s Next for Bottled Water?

The bottled water industry has fast-tracked since people started drinking more water than soda. In fact, an average American today drinks 58 gallons of water compared to two decades ago. That’s a 20-gallon increase since 1998. So what’s next for bottled water?

Industry experts suggest that the bottled water will surely hold on to the top spot for many years to come. But the question whether people will start drinking from the tap is still uncertain unless they are sure about the source of their water.

The popularity of water as the number one beverage allowed companies to develop their line of flavored water as well as enhanced water to appease the market’s growing need for innovation. However, the concerns for plastic can cause a backlash in the industry, and this is something that water bottling companies need to address.

Inspired by beveragemarketing.com