Mazars’ Food and Beverage Industry Study Indicates Increased Sales

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Mazars, a leading accounting, tax, and consulting services firm, released its annual Food & Beverage Industry Study Results Report. The report indicates that food and beverage companies are predicting a significant sales increase in 2017 for the second year in a row. Study participants included manufacturers, distributors, restaurateurs, and retailers with sales between $1 million or less and $500 million or more.

What are Companies Projecting for 2017?

Participants in the survey are expecting some significant increases in sales and profits for 2017 with an increase of 21% over 2016 sales numbers and a 16% increase in net profits. Of the 200 companies surveyed, most attributed growth to industry trends favoring private label and healthy/nutritious foods.

 

The study provides executives in the industry with a ton of information on performance, planning, and challenges facing food and beverage companies. The study also took a deep look at changing consumer trends, proposed regulations, emerging companies,  and new products.

Mazars Report Projects Increased Sales Due to Changing Consumer Trends

One of the biggest drivers of increased sales in 2017 is changing consumer trends. Consumers are starting to settle into a more healthy lifestyle, so nutritious foods are going to be critical for growth. Companies have been adapting to these changes over the past few years, and believe they have finally caught up.

It will be interesting to see if sales meet the expectations that executives are projecting in the Mazars Report.

Inspired by www.prnewswire.com

27% of People in the U.K. Use Sports Nutrition Products

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Sports drinks were once reserved for bodybuilders and athletes, but the recent Mintel report on sports nutrition revealed a different story in the U.K. Published in the Attitudes Towards Sports Nutrition 2017 report, results showed that 3 out of 10 or 27% of Brits use sports nutrition products. The report also noted that 2 out of 5 (39%) of the UK’s population exercise more than once a week.

Men Are the Main Users of Sports Nutrition Products

Young men in Britain have the strongest affinity to sports nutrition products. Around 61% of men between 16 and 34 confessed that they use sports nutrition products and also follow a rigid exercise program. In fact, 35% of this demographic say they exercise four times a week.

While men showed a high propensity for sports nutrition products, there is also a growing demand from the females.  The study indicated that 40% of women between 16 and 34 years old consume sports nutrition products. There is also an increase of intake of protein powders among young women from 7% in 2015 to 18% in 2017.

Popular Sports Nutrition Products in the United Kingdom

The top three products according to the reports include protein bars at 11%, protein powders at 10%, and energy bars at 9%. According to Anita Winther, research analyst at Mintel, the sports nutrition industry is proliferating.  The reason for this is that people are changing their perception of beauty. In fact, even the fashion industry is embracing the mantra “strong is the new skinny” thus models are often required to have athletic and toned bodies.

The embrace of these nutrition products among Brits is good news for manufacturers. But while the demand is high for these products, 63% of consumers find it difficult to determine whether a particular product is right for them or not. 72% of the customers demand industry-wide certification to ensure the quality of the ingredients used.

 

Consumers are more critical with the types of foods that they consume, and this scrutinizing behavior extends to sports nutrition. Around 64% of the users read the ingredients list before deciding to buy a particular product while 46% avoid those that contain sugar. With this consumer behavior, the industry can benefit by revamping their products to include more natural and sugar-free products to meet the demands of people.

Current Problem

While the sports nutrition industry is growing, it is facing fierce competition from mainstream food companies that are also embracing the high-protein trend. It seems that there is an overlap between the two and that mainstream food companies are providing products that have more competitive prices and more beneficial ingredients.

The thing is that there is a booming interest in health and sports products in the United Kingdom and the broad aspect of healthy living. The trend gives manufacturers opportunities to develop new products to cater to different types of consumers.

Inspired by www.mintel.com

CPG Brands Experiencing Growth in New Retail Platforms

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The primary theme of the consumer packaged goods (CPG) industry is growing sales. In the IRI Channel Performance Report, growth is present but limited. According to Vice President of Thought Leadership for IRI, Susan Viamiri, the reason for this is that shoppers are now more demanding and are spending their money on products that can deliver on their needs and expectations.

In the previous year, the industry amassed total sales of $760 billion where 41% was accounted for in the grocery channel. Another platform where consumer packaged goods are doing well is online. Most people still purchase the items that they need in grocery stores. The reason why grocery stores accounted for higher sales than any other platforms is that many people make quick trips to purchase their items. In 2016 alone, the number of grocery trips rose by 1.3%.

Strategies to Stay Ahead of Competition

As a result, many grocery stores have experimented with their store format to increase margins and survive the stiff competition with other retailers. Other strategies that they are using include subscription-based programs and promoting their CPG brands to millennials. The new formats embraced by CPG retailers will continue to transform the retail market for years to come.

As mentioned previously, e-commerce stores are also instrumental in driving the sales today. E-commerce is responsible for 8% of all CPG revenue. Market analysts are forecasting that the sale is faster because of the convenience it provides to consumers. This has many brick-and-mortar retailers scrambling to become more competitive.

The consumer packaged goods industry is eyeing different types of shoppers. The generational shoppers include the Millennials, Generation X, and Baby Boomers. These kinds of generational shoppers have different shopping attitudes. For instance, both millennials and generation Xs shop in mass markets and look into the price of goods more than anything else. Baby boomers, on the other hand, spend on convenience while seniors often pay more in bulk for drugstore purchases.

Social Media: How it Helps CPG Brands and Retailers

Too much competition is one of the biggest problems right now. Even big retailers find it hard to infiltrate densely-populated areas, so they create a downsized version of their retail stores. To be able to attract more people, they use loyalty programs and technology to let their customers know about their different offerings. They go to social media to interact with their customers and attract more potential clients.

The consumer packaged goods industry is fast-paced, and personalization is essential in breaking through the tough marketplace. By offering customization, customers feel important as they know that retailers can deliver their needs using the best solution possible.

Inspired by www.iriworldwide.com

Germany Takes Second Lead in Superfood Market Launches

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Consumers all over the world are fueling the growth of superfoods. In new market research released by global agency Mintel, Germany has overtaken Australia and UK regarding the superfood market launches. In the Global New Products Database published by Mintel, it revealed that 9% of new superfood launches in 2017 occurred in Germany.

The UK’s market launches dropped from 9% to 7% from June 2016 until the end of the year. Australia has fallen in third place with only 5% launches since June 2016. While Germany’s love of superfoods has grown, the United States still tops the list. But recent statistics show that the superfood launches in the US fell to 19% this year. This is a far cry lower from last year’s, 25%.

Why Is Germany Shifting to More Superfoods?

According to Katya Witham, senior analyst for Germany at Mintel, noted that the country is moving up in its ranks due to the growing demand of superfoods from consumers. The country is experiencing an increasing number of consumers who are interested in health and wellness.

So, what pushed Germany to have this huge embrace for superfood? The growing aging population and rise of health-related problems have driven the demand for the consumption of healthy superfoods. The country is experiencing health issues like heart disease and obesity. As a result, it is also increasing the health-care costs in the country.

 

Initially, superfood launches in Germany included a simple line of products from quinoa, chia, and amaranth. Recently, there is a growing demand of lesser-known superfoods, and this has led food manufacturers to harness the whole food goodness of other superfood ingredients to boost the quality of their food products.

The Launch of Supergrains

Specifically, Germans are interested in ancient grains such as millet and spelt.  In fact, 30% of German adults aged between 25 and 34 want to consume baked goods that are made from these grains. Also called super grains, spelt and millet appeal to the German market because they are deemed healthier than other grains. These ancient grains have a special place in the German kitchen as people have been using them in a variety of home-baked products over the years.

Today, German food manufacturers have incorporated the supergrains in products like breakfast cereals, energy bars, and snacks to boost the nutritional value of their products. Supergrains contain high amounts of fiber, omega-3 fatty acids, protein, and antioxidants.

The Future of German Superfoods

The agency also forecasted a stable future for superfoods in Germany.  In fact, retail sales of superfoods have amounted to €3.2 billion since 2016. The rising consumption of super grains and other healthy foods will result in a growth of 20% within the next five years.

Inspired by www.mintel.com

Brick-And-Mortar Stores Still Here to Stay Amid Online Grocery Platforms

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In the digital age, people have the luxury of buying whatever they need online. However, there are still many consumers who prefer to shop the traditional way. In a report released by The NPD Group, only 7% of consumers in the United States shop online for their groceries.

The Rise of Online Shopping Platforms

Consumers are not willing to adopt the online grocery shopping platform for various reasons, and one of them is that they want to pick out fresh items by themselves. There remains a significant number of the US population who prefer shopping in brick-and-mortar stores.

 

For instance, Amazon recently purchased the popular grocery chain Whole Foods to extend the online shopping experience of their Amazon Prime members. The acquisition is a big step for online shoppers including young professionals and urban consumers. The NPD Group predicts that online shopping will also expand faster due to the convenience factor appreciated by most shoppers.

In the same study, around 20 million of consumers who are new to online grocery shopping increased their virtual shopping activities, particularly on foods and beverages. The reason for this is that many online groceries offer a variety of unique products that traditional grocery stores do not carry. The diversity of products is another selling point of online grocery stores. But even if this is the case, it is a far cry to the hundreds of millions who still prefer to shop at brick-and-mortar grocery stores.

Why Are Traditional Grocery Stores Still Popular?

So why are brick-and-mortar stores here to stay? While one of the strongest points of online shopping is the convenience, there are still many barriers that they need to address. Aside from the fact that many people want to check and pick out food themselves, many people report the nostalgia that shopping in brick-and-mortar grocery stores provides. Another barrier to shopping for food online is higher costs.

amazon online grocery shopping

Most consumers believe that online stores do not maintain high overhead costs so they can offer lower prices. However,  it is the consumers who have to suffer from paying delivery charges or even membership fees. Consumers, in a nutshell, simply want to get their food fresh and now!

What Should Brick & Mortar Grocery Do?

While online grocery stores are becoming popular among the millennials, brick-and-mortar stores are here to stay. But to improve the shopping experience for their customers, they need to step up their strategies. According to Darren Seifer, industry analyst of the NPD Group, B&Ms need to market unique needs of consumers so that they can compete with online groceries that are offering a wider variety of products that brick-and-mortar stores do not usually carry.  By doing so, they can keep up with the pressure of time and the demands of their customers.

Inspired by www.npd.com

Farmers Globally Use Untreated Wastewater to Irrigate Crops

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Irrigation is a necessity of farmers. But important news revealed recently that farmers all over the world are using untreated wastewater to irrigate their crops. In a study published in the journal, Environmental Research Letters, found out that 50% of farmers globally use untreated municipal wastewater to grow food.

The Use of Untreated Wastewater in Agriculture

This frightening statistic indicated that around 36 million hectares of croplands in urban areas rely on heavily polluted water for growing crops. In the study, five countries were identified that use 85% downstream wastewater to irrigate their crops, and these include China, India, Mexico, Pakistan, and Iran. This was a far cry from the 2004 study that noted only 20 million hectares of agricultural lands reuse wastewater.

The reuse of wastewater for agricultural purposes is caused by the increasing problem of water pollution as well as the declining availability of fresh water. According to the lead author of the study, Anne Thebo, the problem is very evident in many developing countries where many places lack wastewater treatment facilities.

To make matters worse, poor farmers who cannot afford to get commercial inputs like fertilizers rely on wastewater to provide nutrients to their plants. In a report released by Associated Press, several farmers in Mexico used wastewater as they produce bigger crop yields compared with treated water.  After all, sewage effluence may contain high amounts of human excrements but, while containing high amounts of nitrogen, also carry pathogens that can be transferred to food.

The Dangers of Farmers Using Untreated Wastewater

The use of untreated wastewater does not only pose threats to local farmers but also to the consumers. Consumers who unknowingly eat raw vegetables and fruits that are grown using wastewater may suffer from food poisoning. Food safety is a pressing issue in the food industry, and the use of untreated wastewater puts people at risk to the exposure of roundworms and pathogens like E. coli and Salmonella. In fact, there have been numerous instances when produce coming from Mexico has led to outbreaks.

 

Vegetables and fruits from Mexico, for example, were found to have been contaminated with Salmonella, hepatitis A, and Cyclospora (an intestinal parasite) include cantaloupes, basil, salad greens, and cilantro.  In 2013, consumption of these products had resulted in hundreds of people all over the United States to experience severe food poisoning while some people died from it.

The Implications of The Study

The published study aims to reveal what is happening in many agricultural lands all over the world. The result of the survey also indicates that considerable strides should be made all over the world regarding improving sanitation in urban areas by investing more in wastewater treatment plants. The thing is that further effort is necessary aside from developing wastewater treatment facilities but also implementing better sanitation policies to address not only the recycling of wastewater in agriculture but also for the protection of surface water and its quality.

Inspired by www.modernfarmer.com

Infographic: 7 Trends Disrupting the Food Industry

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Check out these seven trends disrupting the Austrailian and New Zealand food industry in 2017!

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Ingredients and Formats adapts for Healthier, Portable Candy and Snacks

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Snacking is popular among consumers, but with increased health awareness and wellness education, snack companies are now changing their format to adapt to the needs of shoppers. Brands are focused on clean-label snacks, organic, gluten-free, and non-GMO products to meet these new requirements.

Emphasis For Healthy Snacks

With the rise of health-conscious consumers, it is no wonder why snack companies are clamoring to fill this new niche. For instance, aside from using clean labels, companies are designing snacks made from fewer natural ingredients without the use of artificial coloring and flavors.

Consumers are now following different diet restrictions. People who suffer from celiac disease, for example, can now find snacks that are made without the presence of gluten. Other companies have specialized in making healthy snacks without the use of genetically modified ingredients.

Why Focus on Candy Bars and Snacks?

So why are companies focused on making healthy candies and snacks? The smaller serving size is perfect for people who are always on the go. According to Millennial, a US-based research company, consumers are looking for bite-sized snacks that are not only easy to consume but that offer portion control in a re-sealable format. This format is being adopted by food brands like Snickers, Milky Way, and Twix by producing 100 calorie sticks.

 

Aside from the portion sizes, the packaging of candies and snacks is changing. The change in the packaging is aimed at improving the shopping experience for consumers. Candy companies are also focused on changing the ingredient list. For instance, the infamous Mars bar uses gluten-free ingredients such as whole nuts, fruits, and dark chocolate for those who have gluten restrictions.

Better Opportunities for Snacking Companies

The strategies implemented by snack companies have resulted in a huge revenue of $13.7 billion this year, which is a 2.4% increase compared to the previous year. The increase provides real motivation to snack companies when it comes to innovating their products.

Most consumers are actively shopping for healthier food items, so the merchandising of healthy snacks often involve placing the snacks near the produce section. This is to give the consumers the idea that the snacks are healthy. On the other hand, the store that receives a high amount of traffic can also place their snack products on visual shipper displays to provide appealing storage.

The thing is that the snacking industry will be big given a few years’ time as more people demand products that contain healthier ingredients. With the steady increase in revenue as well as popularity, the category of healthy snacks will continue to grow.

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