Mixed Reality: The Future For Food And Beverage Brands

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Virtual reality and augmented reality have been two of the largest trends in technology over the past few years. Companies like Apple, LG, Samsung, and Microsoft are putting significant investments in mixed reality. They are even planning to make this technology available to the masses. However, it is not only tech giants that are looking into using augmented reality. In fact, food and beverage brands are eyeing mixed reality to improve the marketing of their products.

Brands Buy Into Mixed Reality

In the future, consumers will throw away their bulky devices for mixed reality glasses to do ordinary things like surf the internet, play games, and communicate with other people. Brands will have the opportunity to engage customers in the 3D world through packaging and point of sale displays. As a result, mixed reality technology will bridge the gap between digital and physical shopping.

In an even distant future, food manufacturers can use mixed reality to manage their inventory through eye sensors and spatial mapping. While there is still a long way for food manufacturers to go before they can fully benefit from mixed reality, some companies have already adopted the digital campaign.

Coca-Cola, for example, has offered 3D gaming to encourage more people to buy their products. Another company, Hellman, has also launched 3D recipe tutorials provided by celebrity chefs. In the future, retail industry giants will create an augmented-reality store where customers can see a digital image of the store and order their products online.

 

The Future of MR, AR, and VR for Big Brands

Many believe this technology will become mainstream in the future. Opportunities for many food and beverage brands to market their products will create an automatic analysis of the market. The challenge that manufacturers are now facing is how to index billions–even trillions–of data points to market to the right audience.

A new feature of mixed reality technology is eye tracking. Multiple tech companies have invested in this feature as it allows them to track where customers are focused. Eye tracking is an additional way to improve the analytics of the business. This feature is also used to improve machine learning over time.

Developers are also looking to integrate the internet of things (IoT) with mixed reality. This means that if you look at your fridge, for example, through the mixed reality glasses, it will generate information about your inventory and nearby grocery stores. This natural feature provides an emotional connection with the technology.

With mixed reality technology, everything will become real estate regarding brand marketing, and it will provide a better shopping experience to customers. The technology already exists and what food and beverage companies need to do is to improve the platform.

Inspired by Keith Curtin’s article on venturebeat.com

Study Shows That Consumers Do Not Understand Clean Labels

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Clean labels can be defined as an understandable declaration of what is inside the food that we eat. Jargon indicating artificial ingredients like preservatives and synthetic additives are banned from the ingredient list. As much as possible, only natural ingredients are used in making clean label foods.

This particular term has been very popular since last year, and many food manufacturers and retail distributors have joined the bandwagon of producing and selling more foods with clean labels. The purpose of clean labeling is noble, but it seems that only a few consumers understood what clean labeling is all about.

What People Think About Clean Labels?

What do people think of clean labels? Some consumers believe that products with clean labels mean “free from” products. Customers automatically believe that products that are gluten-free, fat-free, and sugar-free are synonymous with clean labeling. But this is not necessarily true. You have to take note that clean labels use natural and easily understood ingredients.

In fact, more than 30% of the American population think clean label products are free from synthetic ingredients while another 30% believes that they are made from organic and natural ingredients. The remaining population has no clue what clean label means.

The misconception about clean labeling can be dangerous. The assumption that clean label products are gluten-free, for example, can lead to severe allergic reactions especially to people who are suffering from celiac disease. Moreover, clean labeling does not protect individuals from the unknown hazards of food additives especially those used in the packaging of the food. The thing is that just because clean labeling omits the use of synthetic ingredients does not mean that the packaging is already safe. According to the Environmental Defense Fund, packaging may still contain hazardous chemicals like perchlorate and phthalates that can enter the food.

Setting A Clear Definition

Establishing a clear definition of clean labeling is imperative, and until there is an official definition from the US Department of Agriculture (USDA) or Food and Drug Administration (FDA), food manufacturers and retail distributors will continue to take advantage of the opportunity. If this continues, consumers will most likely be confused with the definition just like healthy and natural.

Unfortunately, both the USDA and FDA have not yet committed to devoting their time to giving a precise definition of the term. But although the government failed to make a definition for clean label, the Center for Science in the Public Interest (CSPI) has created its definition that clean label uses substances–even with long names– that are safe although some are not. Clean label products are also healthier than their non-clean label counterparts since they are made from real food rather than synthetic imitations. Still, the absence of artificial ingredients does not make them too healthy as they can still contain excess amounts of salt and sugar.

Inspired by www.fooddive.com

Shoppers Willing To Spend Extra For Ingredients They Recognize

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Most shoppers today are more aware of the food and beverage products they buy. They opt for products made from organic and natural ingredients, and they value the transparency of product labels more than ever before.

In a recent survey conducted by Ingredients Communications, it revealed that 52% consumers are willing to spend 10% more on food products that contain ingredients they trust and recognize. The survey interviewed 1,300 consumers from North America, Europe, and the Asia-Pacific. The survey also noted that 18% of the respondents are willing to pay more than 10% for reliable brands.

Consumers from the United States are the ones most prepared to pay extra to 44% of the respondents responding yes. This is followed by shoppers from the Asia-Pacific including the Philippines (29%) and Malaysia (26%) indicating that Asia is an emerging market for food companies who want to improve their transparency and recognizability of the ingredients they use.

Co-Branding Allows Shoppers to Recognize Reliable Products Easily

So, what does this survey imply? It simply points to the importance of having clean labeling on food and beverage products. Consumers are becoming aware that many food companies are now using synthetic or artificial ingredients to make their products. These ingredients are now known to cause negative side effects to the body. The movement of going back to basics which include buying products made from all natural ingredients is becoming popular. Food manufacturers are using this movement to their advantage by rebranding their products and co-branding with their suppliers.

Co-branding has become hugely popular in the clean labeling movement. According to the director of Ingredient Communications, Richard Clarke, co-branding has been used in the tech industry to sell products like laptops. If the food industry uses it, it will be easier for the consumers to know which brands to trust because they have partnered with other reliable brands and ingredient suppliers. This will result in higher spending, repeat purchase, and stronger loyalty to the company.

While co-branding is a great way for shoppers to easily recognize the ingredients and brand of the product that they want to buy, it may lead to higher prices. This leaves food companies to shop around from among its co-branded suppliers to find ingredients that are also cheaper. Successful branding is still resulting in more revenues because shoppers are willing to pay more for products that are made from familiar ingredients.

Shoppers Make Informed Decisions When Shopping

While co-branding is a great strategy to make ingredients more recognizable to the consumers by partnering with equally reliable companies, there are other factors that influence the product choices and decisions of consumers. Today, many consumers are very critical about the decisions that they make when it comes to buying different types of products. With their savvy abilities and increasing awareness, they are able to recognize which ingredients are good and which ones are not. The ability to distinguish the good from the bad ingredients make consumers want to pay more.

Inspired by www.groceryheadquarters.com

Why Consumers Are Filing Class Action Lawsuits with Food Manufacturers

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Today’s consumers are vigilant. In fact, cases that have been filed against the food industry have increased since 2008. The class action lawsuits filed in 2008 went from 19 to 158 in 2015. According to food litigation group Perkins Coie LLP, the food industry has compiled 114 class actions since October last year (2016).

Examples of these lawsuits include Hershey’s not putting a lot of Kisses in their bags and P.F. Chang adding an extra charge to their gluten-free products. So why are food and beverage companies facing class action lawsuits from consumers? Many attorneys are also wondering the same thing.

Food companies are now becoming the target for the plaintiff’s bar. According to Yvonne McKenzie from Pepper Hamilton LLP, a legal firm that counsels food businesses that are in trouble, there are many reasons why food companies are facing a lot of legal lawsuits.

The Food Industry Has Untapped Deep Pockets

One of the most obvious reasons is that food companies have deep pockets. They have become a lucrative target for litigations. There are a lot of gray areas regarding federal regulation. For instance, the term “natural” has no official definition from the Food and Drug Administration (FDA), and consumers use this to file against companies making erroneous claims about their food and beverage made from natural ingredients. Other examples include the class action lawsuit against KIND Snacks for using the claim “Healthy” on their packaging and website.

Some Courts Are Willing To Entertain Claims In Lawsuits

Another reason for the rise in food and beverage lawsuits recently is some courts are just willing to consider even the most frivolous claims. For instance, one of the ridiculous lawsuits the food industry experienced last year was when plaintiffs accused Starbucks of putting too much foam in their lattes and too much ice in their iced coffee. In general, courts are quiet when it comes to getting rid of the cases and grant the motion to dismiss the case. Even entertaining the lawsuit is giving class action attorneys precedent to take more cases to court.

Increasingly Health-Conscious Public

So far this article has probably sounded like the big bad consumers are taking advantage of the food business, right? It would be too unfair to say that. In fact, one of the greatest reasons for increases in lawsuits is the increasing awareness of the consumers about the food and drinks that they buy.

Today, there are more health conscious consumers than ever. They scrutinize just about anything in their food. Many consumers feel that companies are not transparent enough and mislead consumers with catchy packaging and marketing.

Many factors interplay the complexity of legal actions filed against food and beverage industries, and since there will likely be more class actions that will be lodged in the future, food companies should be prepared.

Inspired by www.forbes.com

Costco Is Focusing on Its Online Store to Improve Revenues

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Costco, an iconic membership-only warehouse club, is known for selling products for a lower price through scale. In fact, it is considered the top retailer of organic foods, prime meats, and wine in the world as it has branches in multiple countries like Japan, South Korea, Taiwan, Australia, Mexico, and the United Kingdom.

The company was the first to reach $3 billion in sales within six years. That remarkable growth has made them somewhat of a cult retailer. However, recently, the company delivered negative earnings of 1.7% in the first quarter of 2017, which means the company totally missed the expectations of Wall Street in terms of growth. Analysts have adjusted its earnings to $1.19 since it fell short of what was expected. Aside from the stock prices, the company only logged in a net sales of $27.47 billion last year, which fell short of the expected $28.38 billion.

Reasons for The Shortfall

Costco’s CFO Richard Galanti noted that the shortfall of revenue is attributed to low profits from gas sales and deflationary prices of their goods. The effects of volatile gas prices, as well as the foreign exchange rate, have affected the total revenue of the company. Costco is looking for other solutions to solve its financial setbacks. The company has recently switched from American Express to Citigroup Visa as its co-branded card since the latter credit card company offers lower merchant fees and higher rewards for their members.

Online Store to Boost Its Sales

Aside from changing its co-branding, Costco is also looking into improving its online retail store to improve the shopping experience for its customers. They are developing the marketing, search, return process, and tracking of orders. The store also considers increasing the number of depots by making them closer to customers so that they can deliver faster with less expense on shipping.

The company has also partnered with different delivery service companies like Google Express and Instacart particularly for customers located in the Bay Area so that they can get their purchases immediately.

While some critics say that the giant retail company might be shifting more towards online retail, the company still wants to encourage its consumers to go to their warehouse stores.  After all, they became well-known for their warehouse to begin with. The thing is that warehouse stores will never be replaced by online stores. In fact, Costco is just using the online platform to encourage people to visit its stores as the company noticed that loyal members bought less if they shop online compared to when they go to the actual store.

Inspired by www.seattletimes.com

PepsiCo Pushed Zero Sugar for Super Bowl

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PepsiCo is one of the major sponsors for the Super Bowl and the highlight for this year’s game was its premium bottled water brand called Lifewtr and Pepsi Zero Sugar.  The company announced that it would use the halftime show sponsorship to promote its zero-sugar line of products. But the company did not rely only on its healthy drink, but it also enlisted the help of Lady Gaga.

While PepsiCo is no longer new when it comes to halftime sponsorship during the Super Bowl, what makes this year’s sponsorship unique is that it ditched its traditional soda and pushed for something healthy with its zero-calorie and zero-sugar Lifewtr. But what drove the company to stay off course from tradition?

Super Bowl Showcases PepsiCo’s Brand to Millions

The company’s decision was geared towards the increasing number of Super Bowl fans who are also health advocates. Chief Marketing Officer Seth Kaufman noted that the firm was happy to feature its zero-calorie products on such a unique sporting event. He also indicated that the corporation is actively transforming its products so that they can meet the needs of every consumer following different lifestyles.

It may be surprising to some consumers to know that PepsiCo is now producing premium bottled water. This new product is the result of the company’s aim to catch up on the premium bottled water trend led by Coca Cola’s SmartWater. While the company is still earning profits from its traditional full-calorie drinks, they are still losing revenue as more and more consumers are becoming health-conscious. It is not only PepsiCo that is suffering from sales of traditional soda brands.

Soda Giants Adapting to Meet New Consumer Needs

One of the reasons that have likely resulted in the decline of the sales of the company is the shift by consumers to buying healthier options.  In fact, the company has lost a significant bulk of its millennial consumers who now prefer drinks with little sugar and calories.  PepsiCo used the Super Bowl opportunity to get more attention from people all over the world

The company is designing its drinks to provide more benefits to consumers. The Lifewtr, for instance, is not just premium bottled water but it is concocted with balanced electrolytes and pH level to provide more hydration. But aside from the premium bottled water, the company has also rebranded its product as part of their healthy drinks lineup. They recently rebranded Pepsi Max as Pepsi Zero Sugar.

So, was the decision to push a healthy Super Bowl efficient for PepsiCo? For now, it is hard to tell.

Inspired by adage.com

Private Label Innovation: Connecting To Millennials

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Private label brands are manufactured by a particular company under another company’s brands. Over the past few years, private labels have seen a growth in market share. In fact, during the Private Label Manufacturer Association show last year in Chicago, the association indicated that the business continues to grow by 5%.

Private labels are available in different types of industries from cosmetics to food. They are mostly lower cost alternatives to other types of brands. Nielsen noted that the store sales of private labels are estimated to be at $120 billion. Private label company giants like Aldi and Save-A-Lot have catered to retail store companies like Trader Joes and Whole Foods. According to the National Bureau of Economic Research, most consumers tend to patronize private label brands because they are cheaper than others.

Why Private Label Is Innovating

The popularity of private labels has presented opportunities to manufacturers of major brands to create products that appeal to private label shoppers. For example, Hormel Foods is launching its latest commercial retail team to help partners grow their private label strategies.

Private labels also need to take a step further to meet the demands of their customers. Private label brands are also venturing into healthier products. For instance, Ohio-based SmithFoods have started producing almond milk aside from traditionally manufacturing milk and other dairy products.  On the other hand, Perrysburg from Ohio manufactures not only private label frozen pizza and snacks but also “better for you” products with organic and gluten-free ingredients.

Millennials Are The Future Consumers

Neil Stern, a senior partner from McMillanDoolittle, noted that most food retailers in the United States are updating their private label offerings to meet the demands of their customers. For now, these private label brands are focusing on producing organic and natural products.

The direction towards healthier options is being driven by younger consumers in the market. Younger or millennial shoppers are now warming up to startup brands especially those that offer healthier choices. Millennials are considered the most aggressive of all types of consumers.

 

In a recent survey conducted by the PLMA, millennials agreed that they have the knack to try food created in different ways. Meaning that they opt for healthier options that are prepared in the most sustainable way. Their food choices have also reflected their eating habits. However, Millennials do not like to spend an exorbitant amount of money to buy their food. According to the same survey, 75% of millennials tend to shop in the supermarket, where bakery goods and dairy items top their list.

With this data, supermarkets can experience big payoffs by innovating their private labels to meet the eating habits of Millennials.  Store brands have the opportunity to compete with the well-recognized national brands and in some cases, win.

Inspired by www.foodbusinessnews.net

Dr. Pepper Snapple Ventures Into Antioxidant Drinks

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Many soft drink makers are now venturing into healthier drinks. Aside from PepsiCo, another large soda maker is investing in “better-for-you” products. The Dr. Pepper Snapple Group, the maker of 7UP and Schweppes, plans to buy the entire Chinese brand Bai Brands for $1.7 billion to meet the demands of consumers who are looking for healthier beverages.

The Bai brand is popular in Mainland China for using plant-based sweeteners and ingredients that are infused with antioxidants. Unlike traditional fizzy drinks, the Bai beverage is naturally sweetened, contains only five (5) calories, and one (1) gram of sugar per recommended serving. This is something that popular drinks manufacturers cannot beat.

Why The Shift To Healthier Drinks?

There is a general change for healthier drinks after countless studies have revealed that added sugar is the culprit of different metabolic diseases like obesity, diabetes, and fatty liver disease. As a result, various cities across the United States and the world have imposed higher taxes on sugary beverages to address the alarming issue. This new fiscal policy has caused financial strain to well-known beverage companies.

Companies have decided to invest in healthier brands to get around the taxes and reach the consumer looking for better products. When Dr. Pepper Snapple bought a small stake in Bai Brands the previous year, Bai became an allied brand for Dr. Pepper Snapple that distributes healthy drinks to its clients.  This move was expected to earn $425 million in net sales by 2017. Dr. Pepper Snapple is expected to buy the entire company and close the deal in the first quarter of 2017 and is projected to earn more after. 

The Future Of Healthy Beverages

The beverage industry is always evolving, and this is the reason why there are thousands of different drinks created for consumers to choose from. While the market is divided into confusing beverage categories, one thing remains certain, and that is people are shifting towards healthy drinks.

Consumers are aware of the dangers of pollution, toxic waste, and many other environmental concerns. In fact, 76 million baby boomers all over the United States have consumed unhealthy products in the past but are now finding ways to amend their ways and improve their vitality. It is the fear of mortality caused by chronic health issues that have pushed consumers to find healthier products to sustain their health and lifestyle.

Aside from protecting the health of individuals, the consumption of healthy beverages is also more sustainable for the economy, the agriculture community, and the environment. Many companies that have shifted to work directly with farmers to get the supplies that they need. Companies have also raised their awareness of opting for products that are organic.

The thing is that healthier drinks are here to stay and businesses like Dr. Pepper Snapple are embarking on this trend to gain more economic leverage. The future of healthy drinks is now. Building a brand experience with innovative ingredients is key to winning in today’s beverage market.

Inspired by fortune.com