Archive for category: Beverages & Drinks

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

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

Clean Labels: From Trend To Movement

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Today’s consumer is more interested in eating fresher and cleaner foods. Industry experts have noticed that many food companies have adopted the movement for cleaner foods.  Companies like Campbell’s Soup and PepsiCo have implemented food transparency through clean labeling. There is also a rise in food start-ups applying clean labels with their new products.

Chief Marketing and Innovation Officer, Suzanne Ginestro from Campbell Soup, noted that modern consumers are moving towards cleaner labels, transparency, as well as opting for products that are healthier and have ingredients that are easier to understand. People want transparency on all kinds of products from household cleaning supplies to electronics. Consumers just want to know what is inside the products they are using.

Why Transparency And Clean Labeling? 

So why are people so particular about clean labeling and transparency? Becky Frankiewicz from Quaker Foods North America indicated that consumers want to have more choices and this can only be achieved if they know the ingredients of the products they are buying.

While clean labels promote companies to indicate all ingredients on their labels, it does not mean that they should only focus on healthy ingredients yet. Companies have adopted the clean label movement to prove that they care about their consumers and their products. It also enables consumers to make informed decisions about their purchases.

Some food manufacturers still include ingredients that will make their products more palatable and that means using fat and sugar. The clean label is there to educate consumers about the types of ingredients utilized in the product. It is all about giving customers access to different food choices.

Clean Label: Trend or Movement?

What started out as a fad has become a movement that will surely stay. Today, many food startups have found success in introducing healthier foods and beverages to consumers. Large food companies are also capitalizing on the opportunity by introducing healthier product choices to their customers. Executives from large food manufacturing companies noted that the clean label movement had pushed brands to go back to their old business practices.

For instance, the 140-year old company Quaker Foods first started using fresh ingredients and developed ways to package their products so that it is easier for the consumers who live in urban places to enjoy healthy foods—similar to those living on the farm.

From trend to movement, clean labels are here to stay. Brands that focus on delivering healthy food with simple ingredients will win, plain and simple. Don’t be surprised to see more acquisitions of small, successful brands over the next five years as large companies like PepsiCo try to a secure a competitive advantage in this evolving space.

Inspired by fortune.com

Vegetables Can Improve The Nutrition Content Of Kid’s Juices

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Fruit juices are perceived as healthy beverages, but the media has reported that many smoothies and kid’s juices contain higher amounts of sugar than carbonated drinks like soda. Sugar is now well researched as the culprit to different metabolic disorders like obesity and diabetes. The fruit juice market has been hit hard by the negative aspects of sugar with a decline in sales over the past few years.  Juice producers have a new opportunity to bring back the healthy image that they present to their customers by adding more vegetables to their juices in turn lowering the sugar and calorie content.

The Trend Of Juicing Vegetables

In recent years, many consumers have developed an interest for vegetable juices for health reasons. With public campaigns encouraging people to consume more vegetables daily and more celebrity chefs preparing vegetable recipes, consumption of vegetables have been glamorized.

The vegetable trend has led to the rise of different diet movements like flexitarians (semi-vegetarians), vegetarians, and vegans. It has also opened many opportunities for restaurants and the food industry to provide products that meet these new needs of consumers. We are starting to see products like vegetable spiralizers, cold-pressed juicers, and ready-made vegetable juices on market shelves.

Brands Have Joined In The Vegetable Bandwagon

Multiple brands have acceded to the bandwagon of incorporating vegetables into their fruit juices. One such company is a Japanese corporation, Kagome. The Japanese consumer demands healthy options and new flavors in their fruit juices and what better way to provide it to the customers than putting vegetables into their fruit juices.

Another company that has incorporated vegetables in its juice products is Coldpress Ltd. The fruit juices are not heat-pasteurized to retain the taste and nutrients of the finished product. Sugar is no longer added to their juices as they rely on the natural sweetness of the fruits for the sugar content.

Newer Trends In Fruit Juices

Aside from fruit juices, some trends are being adopted by beverage brands. As vegetables have been incorporated to add more health value to fruit juices, other trends have also sprung to improve the nutritional profile of fruit juices. Below are the new trends that have taken the fruit juice industry by storm.

  • More Superfoods in Juices: The fruit juice industry predicts that there will be a rise in super-fruit juices into 2020. For example, some companies have already added superfood chia seeds to their fruit juice products since 2015. Other superfoods that have been incorporated in fruit juices include Aloe Vera, coconut water, and maple water.
  • Fresher Fruit Juices: While bottled fruit juices have already been sterilized to increase their shelf-life, more fruit juice producers are developing more refreshing fruit juices to provide more nutritional value to their customers. Using cold-pressed juicing is a method that allows juice companies to create fresher and more nutritious juices. Moreover, juice bars have also become popular to provide juices from kitchen to mouth
  • Natural Vitamins in Juices: Companies like NutriFusion are helping beverage and drink brands add real vitamins from whole fruits and vegetables to their products. Since most juices are going through pasteurization, their nutrients are lost in the process. NutriFusion products are stable in heat and allow juice companies to quickly add back plant-based nutrition that is typically lost in processing.

Inspired by blog.euromonitor.com

Beverage Manufacturers Leaning Towards More Natural Ingredients

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With the continuing rise of “better-for-you” products, beverage companies have incorporated healthy ingredients to their new drinks. Today, the latest trend in the industry is functional beverages.  Functional beverages are defined as refreshing drinks that come with a multitude of health benefits. To incorporate these benefits into their products, beverage brands have used herbal extracts and natural sugars to amplify the nutritional value of the drinks and improve the natural flavor of the beverage.

Diversity in Natural Beverages

Although the use of natural ingredients is on the rise for many beverage companies, the challenge lies on how companies should reinvent flavors. With many fruits and vegetables in their arsenal, it is quite challenging to find great matches for vegetables like cucumber, beets, and carrots. Traditionally, they have worked with different fruits and spices like berries, apples, mint, and ginger.

In today’s society, where modern consumers are empowered with tons of new information connecting their health to the food they eat, consumers have a high affinity towards a healthy diet and a good quality of life. It is the reason why they are not hesitant to spend extra for nutritious foods and beverages. There are also many people who have shifted their diets to vegan and vegetarian. These people follow a particular diet with many restrictions. In the United States alone, the number of vegans and vegetarians continues to rise.

The healthy drink industry has diversified to meet the demands of many clients. Today, you can find healthy energy drinks that are not laden with caffeine, artificial sugar, and other derivatives. Healthy energy drinks are now made up of natural ingredients that are much cleaner and better fo you than traditional energy drink ingredients. Examples of ingredients that are used in creating healthy energy drinks include tea, guarana, and other natural sweeteners. 

healthy beverage fruits vegetables fruve 15 nutrifusion grandfusionThe Effects of  Healthy Beverage Development

So, what is the effect of this shift observed in beverage companies? The use of healthy fruits and vegetables has triggered new impulses regarding drinking such beverages. For instance, beverage companies would never dare to use vegetables in making their drinks. But now, vegetables are the main ingredients in creating healthy drinks and, surprisingly, it provides a harmonious complement with fruits. A fantastic example is a fast growing company called Fruve, with a variety of fruit and vegetable based ingredients, Fruve is developing 15 servings of fruits and vegetables per bottle.

Clean Labeling Trend

As mentioned earlier, the other trend that beverage manufacturers are keen to implementing is clean labeling. Clean labeling encourages companies to become transparent with the ingredients that they use to make their drinks. It emphasizes the customers’ demands to choose products that are made from natural sources. Significant growth is possible in healthy and natural beverage development. It will be interesting to see how the industry players strategize to win this new market share.

Inspired by http://www.foodingredientsfirst.com

PepsiCo Adding to Healthy Options Portfolio With KeVita Acquisition

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The trend continues for big beverage companies to purchase smaller companies that manufacture healthier drinks. PepsiCo is no different. Recently, it revealed its intention to buy KeVita. This California-based company makes probiotic drinks and is famous for making kombucha, apple cider vinegar, and other healthy beverages.

KeVita offers nutritious drinks and it is known for its three product lines – Master Brew Kombucha, Apple Cider Vinegar Tonic, and Sparkling Probiotic Drink. These drinks contain live cultures of organic probiotics that can improve the condition of the gut microbiota. Healthy gut microbiota is crucial for stronger immunity and overall health. The company serves not only the health-conscious individuals but also those who follow dietary restrictions like vegans and celiacs (those who consume gluten-free products).

The Benefits Of The KeVita Acquisition

It is not only PepsiCo that has acquired smaller companies that cater to the health niche. Large corporations all over North America have seen the opportunity for mergers and acquisitions. PepsiCo’s acquisition of KeVita will help expand the food giant’s wellness and health offerings and also provide scale to a growing business.

 

Will this change the natural products offered by KeVita? Bill Moses, KeVita’s CEO,  noted that the company is transforming the industry of functional beverages and its acquisition by PepsiCo will still deliver the same products to KeVita’s loyal customers. The company will also be able to continue to operate its bottling facilities independently.

Reasons For Acquisition

Big food companies are always on the lookout for small, innovative businesses that are attracting an untapped market segment.  Smaller food companies better understand the needs of millennial consumers, so they are the faster to innovate. Many of these businesses are focused on the quality of higher margin products made from whole food, simple, and organic ingredients. These small businesses tend to have stable followers so that the bigger companies can absorb the clientele of the acquired smaller companies.

Small brands offer a sense of intimacy that larger companies do not have. KeVita, for instance, is popular among its customers as it delivers high-quality probiotics without any compromises. The small size of the group makes it easier to follow the highest standards in making their products. This is in contrast with the situation in most food manufacturer giants.

A Win-Win Situation

Aside from big business getting an advantage with the acquisition, the purchased company can still enjoy many benefits. Bill Moss added that joining the giant food and beverage corporation will give KeVita the opportunity also to reach PepsiCo’s broader audience. PepsiCo has the power to introduce KeVita to the global market. This action can put leverage on both companies regarding their marketing and distribution capacities. The acquisition is a win-win situation for both companies.

Inspired by www.foodbusinessnews.net