New Research: Food Shopping Habits of Millennials

The food landscape is ever changing, and so does the behavior of people. Watershed Communications, a national brand strategy agency, conducted a study regarding the food shopping habits of Millennials. The participants, aged 18 to 35 years old, were asked to describe a food brand that they found authentic. They also had to answer questions related to their food shopping habits.

Millennials are considered the most highly engaged shoppers in all demographics. They are also the ones who have more shopping demands and higher capacities. With this study, companies will be able to understand the food shopping habits of Millennials so that they can apply the information in developing new products to meet their desires.

Food Shopping Habits Among Millennials Shows Branding Wins

Studies have found out that 84% of millennials can describe a particular brand or product that they have just discovered. They learn about brands by reading magazines, but they are keen on finding new brands through the internet. Once they have heard of a particular brand, 61% of millennials will share the information with their friends, family, and acquaintances while 63% plan to buy the product.

Millennials are consistent with the brands and products that they use. According to US food analyst Alexia Howard from the Stanford C. Bernstein, most millennials opt for products that are authentic, simple and consistent.

Millennials habits food shopping

The Need for Authenticity

Millennials have a constant need for authenticity in their products. Authenticity of a brand can be difficult to define, but five characteristics determine the authenticity of a particular product as follows:

  • The use of clean ingredients: Clean ingredients refer to ingredients that are real, natural, organic, and fresh. Clean ingredients are expected and demanded by millennials to ensure that safety and quality of the product that they are buying.
  • High-quality products: Quality products use top-of-the-line ingredients. Quality food products should also have great flavor.
  • True to its mission:  Authentic brands should stay true to its mission. They should stick to their claims.
  • Culturally accurate: A lot of millennials are exposed to global brands, but many of them feel that brands that honor their cultural heritage are more authentic than those that try to appeal to a market audience that are thousands of miles away from them.
  • Transparent: Transparency is imperative in defining the authenticity of products. Transparency divulges the origin of the product and the processes that it has to go through before landing on your table.

Millennials make decisions instantaneously. They are also the most influential. For instance, a 35-year-old mother can make decisions for her children to purchase a particularly healthy snack or she can encourage her parents to buy a product that she has already tried and tested.  It is, therefore, necessary for companies to use this information to create products and a marketing strategy to attract them.

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Simple Ingredients are Attracting Consumers to Natural Products

Many consumers are not only more health conscious but are also becoming more careful shoppers. While many consumers still don’t look at the label, a growing group is focused on natural food and beverage products with simple ingredients.

The Clean Label Trend

There is an increasing number of people opting for clean labels. A clean label is simplifying the list of ingredients in a particular food and beverage product. It is a guiding purchasing behavior for future consumers, but it is a challenging call for food manufacturers.

This particular trend follows the five-ingredient rule which means that products should contain fewer and more recognizable ingredients to become attractive to many consumers. As this trend has evolved over time, efforts have also been made by many food and beverage manufacturers to use simple ingredients, and ensure that the ingredients used are as natural as possible.

Natural Ingredients are Simple Ingredients in Consumer Minds

With a lot of food products marketed as containing natural ingredients, many consumers find it difficult to define what “natural ingredients” means. Unfortunately, many food products claiming to be natural either have legitimate claims or just use buzzwords. The agency responsible for the ingredients’ definitions is the Food and Drug Agency (FDA).

So what are natural ingredients? Food writer Michael Pollan defines such ingredients as those that consumers can easily pronounce and recognize. These ingredients should be as close to their natural form and should not be overly processed nor should they contain additives like dyes or artificial preservatives.

The Demand for Natural Food Products

Clean labels are very popular throughout the industry and the demand for simple ingredients is influencing the sales of many food and beverage products. Many believe this trend is the leading reason for the organic & natural foods industry projected growth to experience a 14% rise in its total sales by 2020.

Unfortunately, this trend has also produced a lot of confusion among the consumers. According to global consumer research firm Mintel, more than 37% of the consumers remains confused about the information indicated in food labels, while 38% are skeptical of the information provided by these companies.

The solution to this confusion is to uphold transparency within the food industry so that this trend will resonate with all consumers. But how do food companies maintain transparency? Aside from making food labels comprehensible by using simple language, companies must reformulate their products using natural ingredients. Instead of using artificial sweeteners, natural alternatives may be employed. Food manufacturing companies can also look into their packaging and opt for a more sustainable look, instead of using plastic or foil packs.

This trend provides a tremendous opportunity for brands to increase revenue but also to connect with consumers. The cherry on top is brands will be seen as more trustworthy if they adopt simple ingredients and create clean labels for their products.

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Small Rivals Assaulting Big CPG Brands for Market Dominance

Gone are the days when owners of traditional consumer packaged goods (CPG) brands can sleep well at night. With small brands gaining traction today, brands like Nestle, Procter & Gamble, General Mills and Unilever are experiencing problems they didn’t see coming. The rise and dominance of small brands between 2011 and 2015 caused large conglomerate food companies to lose nearly 3% of their market share in the United States.  In the study conducted by data provider IRI and Boston Consulting Group, emerging local competitors are now being considered as threats to big multinational companies.

The Rise of Smaller Competitors

Why are large CPG companies suffering from decline? Marketing experts believe that size has something to do with it. One of the challenges of giant companies is their centralized decision-making processes and their consolidation of manufacturing processes. With the popularity of the brands themselves, companies have to spend millions of dollars in advertising and shelf placements at retailers.

On the other hand, advertising is also changing through time. TV advertising is no longer effective according to Nik Modi from RBC Capital Markets. With the rise and relevance of social media, it has provided an avenue for small brands to market their products to many people. In fact, hundreds of small brands have benefited from the rise of e-commerce as online sales have increased over the past five years.

Fast-Changing Market for CPG Brands

Many multinational giants find it hard to keep up with the fast-changing market trends. For instance, many people tend to patronize local companies producing essential products.  Ali Dibadj of Sanford C. Bernstein research firm pointed out that in many developing countries, middle-income consumers assume that Western products are superior therefore expensive; instead, they opt for local products that are cheaper but are just as effective.

In China, for instance, the sale of a local toothpaste manufacturer Yunnan Baiyao Group rose from 10% to 45% which indicated that the small local brands are being patronized instead of the branded consumer packaged goods (CPG).

Another interesting thing about small brands is that most consumers trust small brands more than the established ones. In the survey conducted by consultancy firm Deloitte, 10% of the respondents said that they are willing to pay more for the “craft” or “artisan” version of products than the mass-produced ones from large enterprises. This is one of the reasons why there is a rise of small companies that market the idea of “artisan,” “craft,” and “organic.”

Small Brands Remain Competitive

The market situation has provided an excellent opportunity for smaller brands.  These brands have contributed to the introduction of new products in the market. In America, for instance, more than 4,000 craft brewers have emerged over the last ten years as well as thousands of small brands using real, organic, and non-GMO ingredients.

What are big companies doing to address the problem? Aside from merging with other big companies to create better versions of their products, many are also backing smaller rivals. For instance, companies like Campbell Soup and Hain Celestial have helped small consumer packaged goods companies to manufacture organic baby foods.

The market remains strong for giant CPG companies, but they will have to pay closer attention to their nimbler, smaller counterparts. We will see more and more companies acquire small brands to fill their voids in market trends.

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Nestlé Creates Medical Foods for Growing Market

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.

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

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

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.

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Food Product Transparency Impacts Purchase Behavior

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.

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What’s Next for Probiotics in Sports Nutrition?

There is a high demand for healthy beverages all over the world, which has given rise to probiotics, cold-pressed, organic, and plant-based beverages. This is the reason why food and beverage manufacturers have started developing sports nutrition drinks that are not only natural but also contain probiotic ingredients to attract a new market of health-conscious athletes and individuals.

Defining Probiotics

Probiotics are live bacteria that are good for the digestive system. In fact, we naturally have probiotics inside us.  The gut is where millions of bacteria live and if the population of your gut microflora is made up of good bacteria, you reap the benefits by having proper digestion as well as a healthy well-being.

So why should you drink probiotics if you already have them inside your body? Unfortunately, abusive lifestyles such as being stressed and eating processed foods can affect the number of good bacteria in your body. Moreover, if you have been taking antibiotics, your good bacteria are also eradicated as antibiotics are not selective when it comes to killing bacteria in the body. Adding probiotics to your diet is an excellent way to replace the population of good bacteria in your body.

Adding Probiotics in Sports Nutrition

Probiotics are already found in many fermented products that we consume. These include sauerkraut, vinegar, kimchi, yogurt, and many others. But many market innovators want to add probiotics to boost foods that do not traditionally contain them.

The use of probiotics as a primary ingredient in sports nutrition is becoming a popular trend and is expected to reach a global market value of $46.55 billion in the next four years.  For instance, companies like Ingredion, GoodBelly, and NextFoods Inc. are aiming to tap into the sports drink market by improving their product using probiotics. Soon, many companies will also join this trend and will create probiotic product lines that are not only limited to beverages but also protein bars and snacks.

The Rising Demand of Probiotics

In a recent survey conducted by Ganeden, it was noted that 70% of the consumers are open to consuming probiotics in food instead of supplements. The respondents also mentioned that they are willing to pay more for healthy foods especially those containing probiotics.

More and more people are becoming health conscious. They are aware and picky when it comes to what they are eating. People are now interested in looking for food that can give them more health benefits. The increasing demand for healthy and functional foods is the reason why food and beverage manufacturers are developing ways to incorporate probiotics into their products.

For now, probiotics are seen primarily as a potential ingredient for sports drinks, but manufacturers are innovating for the future use of probiotics in fruit beverages, baking mixes, granola bars and much more. It is forecasted that probiotics are set to make appearances in different types of products not only in sports nutrition but also in functional day to day products.

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