Archive for category: Food Retail

Growing Demand for Organic Ingredients Leads to Supply Challenges

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The need for fresh ingredients by consumers has led many farmers to go into organic farming. According to data provided by the USDA, the number of organic farmers in the US has increased by almost 300% since 2002. This growth is to meet the demands of consumers who prefer organic foods more than those grown in conventional methods.

Why Is It Difficult to Completely Go Organic?

Although there is a rapid increase of organic operators in the country, it is crucial to take note that only about 0.7% of the total operable farms within the country are classified as organic.  Many farmers pointed out that the main reason why converting their conventional farmland to organic is difficult because it is expensive as well as time-consuming. In general, farmers have to wait for at least three years to be able to convert their farms. Unfortunately, during the first year of turning their land using organic practices, the produce that they grow is not sold at organic prices. Meaning, they are still paid cheap even when they are spending more on organic practices. This is leading to the supply challenges in the market.

Solutions to The Supply Challenge

To solve the supply challenges, farmers are given several incentives to make the necessary switch. These include the Environmental Quality Incentives Program (EQIP) that offers first-timer organic operators the right technical assistance to grow food the organic way. But, it is not only the government that provides support. Even food manufacturers, as well as retailers, have supported and implemented programs just to encourage farmers to boost their harvest. In fact, companies like Nature’s Path Foods, Whole Foods, Organic Valley, and Stonyfield Farms have provided grants to organic farmers to boost their production.

While organic farmers can supply the needs of food retailers and manufacturers, another problem is where to source specialty ingredients that are not grown in the United States. The solution proposed by the government was to get into digital platforms like Mercaris Auction Platform or GreenTrade.net to trade tons of organic products into the market.

All stakeholders are doing their best to provide the resources needed by the consumers. For instance, the Organic Trade Association was set up to provide suppliers and manufacturers the necessary information about their produce such as where to source their supplies, market data, and real-time pricing.

On the other hand, retailers like restaurants and grocery stores have also worked closely with organic farm operators to give them the idea of how much they will need to sustain their businesses. For instance, retail giant Walmart has worked with local organic farmers by giving them the outline of how much they need for the entire year so that the farmers can strategize on how they will be able to deliver the demands and needs of the end users.

The truth of the matter is that, while organic farming is prevalent, the number of organic operators is still not enough to be able to create a sustainable supply of products to the retailers and consumer product companies.

Inspired by www.fooddive.com/news

Top 10 Food Trends to Watch at IFT 2017

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In April, Food Technology magazine editor, Elizabeth Sloan, published an extensive article on the top 10 trends in the food industry. IFT 2017 in Las Vegas will be a great opportunity to see how ingredient companies are trying to meet the new priorities on healthy, natural, and nutritional focused offerings.

Here is a look at the top 10 trends to watch at IFT 2017 Las Vegas.

1. Prep It

Partially prepared foods are winning in-home supper preparation. According to FMI, 53% of shoppers used some semi-prepared foods versus on 35% that cooked from scratch. In 2016, sales of clean/preservative-free frozen meals reached $2.3 billion. Convenience continues to drive brands to develop quickly prepared foods and meals to meet the consumer’s lifestyle.

2. Lifestyle Foods

46% of the time Americans are eating alone with single adults making up 28% of all U.S. households. It’s no wonder that single-serve packaging and individual multi-packs are seeing increased demand. According to Accosta, 74% of people agree that frozen snacks are convenient at work which highlights that single-serve, on-the-go packaging could increase frozen snack sales substantially. People are now eating more early morning meals, and they are focused on nutrients and protein. Brands have to take a look at how lifestyles are changing to make effective decisions with new product development going forward.

3. Kid-Specific

Baby, toddler, and kid-focused products will grow rapidly as Millennials start to settle down over the next few years. According to Euromonitor, sales of infant formula are expected to grow to over $50 billion worldwide in 2017. Vitamin and mineral fortified, digestive health, eye health, organic, non-GMO, and all natural are top claims on leading formulas. In a report from IRI, they concluded that 40% of all snack sales are from households with kids. Packaged Facts found that 49% of all moms say that nutrition is the top food selection factor with 23% wanting to see more foods with hidden veggies. Bottom line, kid-focused products that appeal to the health conscious parents are winning.

4. Nationalism

A new pride in products made in America will drive increased sales for American cuisine, ingredients, and comfort food. Southerners and households with kids are most likely to buy and eat American made products. Another trend driving this new nationalism is local sourcing for grocery stores and restaurants. According to FMI, 66% of all U.S. shoppers are interested in meats raised in the United States with 60% believing that foods from China pose health risks. American pride is at a high again, and it’s a significant trend for natural products companies to look at carefully.

5. Nutrition

Consumer demand for a healthy lifestyle with simple application continues to gain steam. According to Nielsen, nutritional/supplement bars, drinks, and meal replacements with among the top 10 fastest growing food and beverage categories in the U.S. IFIC reported that 64% of adults tried to get more protein in their diet with 56% looking for more vitamins and minerals. CRN found that 75% of adults take a multi-vitamin daily. The protein gold mine has been most successful in the healthy snacks and frozen entrees categories according to Nielsen. The biggest missed opportunity according to IRI is in snack nutritionals with 60% of consumers looking for energy boosting snacks and 57% seeking snacks with more vitamins and minerals. Nutrition is easily the hottest trend to look out for at IFT 2017.

6. Dinner Redesigned

80% of all households prepare meals based on alternative proteins to meat/poultry at least once a week with the main reason being health according to FMI. Vegetable based “carb substitutes” are a fast growing trend at the dinner table with vegetable noodles and fries at the top of the list. New dinner trends will be important to look at as companies develop new entrees for this meal.

7. Ag Alternatives

 

Americans are currently experimenting with more plant-based meals. According to NRA, 40% of chefs still cite vegetarian and vegan cuisines as hot culinary trends in 2017. SPINS data showed sales of plant-based food and beverages increased to over $4.9 billion in 2016. Over past 4 years, claims around chia, quinoa, and kamut have been among fastest growing grain-based wellness claims. According to Nielsen, 62% of shoppers bought a food product because it contained fruits and/or vegetables. The new superfood on the block is the mushroom, especially for immune-boosting benefits. New plant alternatives are leading innovation in one of the fastest growing segments of the industry.

8. Upgrading

For the first time in 2016, men were more likely to buy specialty products than women. According to Anon, Sushi is outpacing bakery snacks and breakfast wraps. However, cheese remains the largest specialty category as usual. NPD found that more people are eating meals at another person’s home which is leading to explosive growth in home entertaining specialty foods. Gourmet foods are growing and will be a category to keep your eye on going forward.

9. Claim It

The best marketers and package designers are using claims and copy to convey benefits more quickly to consumers. According to Mintel, the number of “on-the-go” claims increased by 54% over the past six years. The fixation on a clean label has led to more free from, natural, and nutrient content claims. Nielsen found that 70% of all shelf-stable products will most likely be impacted by the new US FDA added sugar labeling requirements. Many sustainable claims around grass fed, free range, etc. are being perceived as healthy. Claims are crucial to attracting consumer attention and closing the deal at the shelf.

10. Natural Living

Consumers are intrigued by living a more natural, chemical-free, sustainable lifestyle. According to Nielsen, products with an organic claim saw a compound annual growth rate of 14.8% over the past 4 years. Natural claims drove growth in natural snacks like candy and cookies. Consumers want minimally processed foods with fewer ingredients, which is somewhat a headache for manufacturers.

Artificially Sweetened Soda Can Increase Risk Of Stroke And Dementia

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Drinking artificially sweetened soda and drinks have many health risks including stroke and dementia. In a study published in the journal Stroke and Alzheimer’s & Dementia, researchers linked the consumption of sodas to the increased risk of dementia and stroke.

The Validity Of The Study On Artificially Sweetened Soda

The long-term observation study involved 2,888 people who provided data since the survey started in 1971.  The researchers found out that those who drank at least one can of diet soda daily are three times more likely to develop Alzheimer’s disease or suffer from an ischemic stroke.

Although the statistics suggest the possible link, many experts still caution people who interpret the results of the study. They noted that while there is an association between soda drinking and such diseases, it does not mean that drinking can cause these conditions to develop.

Other Factors That Can Increase The Risk For Stroke And Alzheimer’s

Some critics have highlighted several flaws in the study citing that if factors such as weight, genes, and diabetes were taken into account, the association with stroke and dementia would disappear. The thing is that defects in the genes, obesity, and diabetes are more likely causes of stroke and dementia than drinking a can of diet soda.  So why arrive at such a correlation? Critics point out that it is probable that the people involved in the study are already suffering from ill health such as diabetes. These patients are more likely to opt for zero-calorie drinks thus influencing the result of the survey.

Experts still suggest that drinking fizzy drinks should be in moderation as drinking too much is attributed to weight gain–a more plausible cause for stroke and Alzheimer’s.

Is It Safe?

Studies involving the harmful effects of soda on health hurt the beverage industry all over the world. In response to the bad publicity, the American Beverage Association issued a statement regarding the safety status of artificial sweeteners as highlighted by international organizations like the World Health Organization, US Food and Drug Administration, and the European Food Safety Authority. Beverage companies claim that the amount of artificial sweetener or any sweeteners for that matter that they use on their products do not go beyond the established limit set by these agencies.

But whether artificially sweetened drinks has some health risks or not, the sales have still declined as consumers are looking for healthier alternatives such as low-calorie and naturally sweetened drinks as well as bottled water.  Surprisingly, the sales of bottled water overtook the sales of fizzy drinks in the United States last year making bottled water the largest beverage category regarding volume consumed per capita.

Another reason why the sales of the sugary drinks industry have declined is the taxes imposed on them discouraged people from buying them. Last year, sales decreased by 21% due to higher tax rates. So regardless of the result of the study linking soda with stroke and Alzheimer’s disease, the industry is struggling with selling a product does have some adverse effects on your health.

Inspired by www.fooddive.com

Healthy Snack Bars Driving Category Sales

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The healthy snack bar category grew by 2.08% from 2016 to 2017. This equated to $6 billion of sales in all snack bar categories. The growth of the snack bar industry is attributed to manufacturers offering a broad range of products to cater to the needs of different consumers.

According to culinary scientist Kyle Stuart, snack bars that feature all-natural ingredients are becoming too generic, and they fail to differentiate with customers these days. Consumers no longer want labels saying “all-natural” on their products. They want more specifications, so niche differentiation is a dominating trend in the snack bar market right now. This is the reason why snack bars are categorized depending on their purpose – energy provision, weight loss, meal replacement, snack, and so on.

Niche Differentiation Is Evident In The Snack Bar Industry

Niche differentiation of snack bars has resulted in category differentiation. There are now snack bars intended for daytime and evening consumption as well as those formulated with diet restrictions such as gluten-free, vegan, paleo, sugar-free, and much more.

The reason for niche differentiation is attributed to the growing needs of different consumers. For instance, some consumers buy a particular brand of snack bar because they opt for clean-label offerings while others buy because the ingredients used are simple and better for them.

Clean labeling is an important trend in the snack bar industry as many consumers value transparency. According to Carol Lowry, a senior food scientist at Cargill, product transparency is one of the biggest challenges food manufacturers, in general, are facing today. How can companies innovate while still using simple ingredients? It is something that’s hard to do especially if companies are after mass producing products that have longer shelf-lives.

Food Companies Are Starting To Innovate

Although challenging, this has presented an avenue for food manufacturers to explore and discover interesting combinations. For instance, the National Honey Board is now using natural sweeteners such as honey to make their breakfast biscuits and other products. Lowry and Cargill are looking into the use of vegetables and spices to provide savory flavors on their products instead of using artificial ingredients.

Food manufacturers are also looking into fortifying their products by using plant-based proteins sourced from beans, lentils, soy, nuts and many others. Food manufacturers see the need to incorporate such ingredients to their products to improve the nutrition profile and value of their snack bars.

And since it has been a long-standing issue that using clean ingredients produces products with lower shelf-life, food manufacturers are now using natural antioxidants like tocopherols instead of artificial preservatives to extend the shelf life of their products.

The Future Of The Snack Bar Category

The production of different kinds of snack bars has led to increased category innovation. While innovation involving the nutrition profile is the primary trend today, food scientists explain that there will be more changes in the future to improve the selling point of snack bars. Such innovations will tackle the texture and calorie count of products. Until then, consumers have a lot of things to look forward to when it comes to the snack bar industry.

Inspired by www.snackandbakery.com

Evolving Views of Healthy Eating Strain CPG Sales

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The consumer packaged goods industry sky-rocketed after World War II when people suddenly realized that it takes a fraction of a time to prepare meals with processed foods than with whole foods. Consumer packaged goods (CPG) are sold quickly because they are convenient and useful for a variety of household jobs. Fast-forward today, the popularity of consumer packaged goods is starting to dwindle as more consumers are becoming conscious about their health and the environment.

Corporations Are Suffering In Sales Decline

In fact, the sales of consumer packaged goods have started to decline as observed during the first quarter of 2017. But this isn’t news and brands knew that consumers shifted to using healthy and environmentally-friendly products. Giant CPG manufacturers have reported a decline in their sales. Companies like PepsiCo, Procter & Gamble, and Nestle have all reported lower CPG sales but are still expecting things to pick up soon.

In a survey conducted by Nielsen, the purchase of consumer packaged goods in the United States has dropped by 2.5% in unit sales in the first quarter. Most of the companies blame the dip in sales to the changing mindset of their customers.

Reason For The Sales Decline

Customers these days demand fresh and healthy foods, which most CPG companies are not experts in manufacturing. The changing mindset of consumers forced major food manufacturers to reformulate their products to contain less salt, preservatives, and sugar. Aside from reformulating their products, they also rebranded their image by offering more health-focused products.

While such initiatives will help big manufacturers pick up their sales, analysts notice that more major brands still find it difficult to gain back traction as smaller startups are emerging and filling the needs of consumers. Startups are in better position to adapt to the changing requirements of the customers. According to Nielsen, startups are growing at a steady rate of 2.4% annually. This is probably the reason why many big brands are also looking into investing in smaller companies.

Startups Taking The Lead

So why is it difficult for major manufacturers to rebrand their image? These big companies have always been known for their products, and that is their legacy. Changing the reformulation of their products may lead to the alienation of their core customers who might not like the new taste and appearance of the new product.

For instance, Coca-Cola experienced a rebranding disaster during the 1980s when it revamped its formula and offered Diet Coke, but they were still able to pick up their sales and move forward soon after. Still, consumers have a mindset that if the product from a smaller startup has similar nutrition profile than its counterpart produced by giant companies, then they will opt for new things. Most consumers believe that startup companies can offer new things better than well-known CPG brands.

Inspired by www.fooddive.com

Effective Packaging Design Is Key To A Successful Start-Up Brand

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In today’s social media-driven world, the competition of food and beverage brands can be tough. No longer should companies settle on traditional commercials on TV, print ads, and radio. Brands are now placing importance on effective communication through design.

Packaging design is an important element in getting a particular brand into people’s minds and hearts. An effective packaging design can catch the attention of the consumers encouraging them to engage and buy new products.

Why Is Effective Packaging Design Beneficial?

Packaging design is beneficial for start-up companies, and they don’t need to enlist the help of a million-dollar advertising firm to get their message across their clients. Never underestimate the power of an effective packaging design because coupled with social media advertising, it can catch the attention of people from around the globe.

Startup companies who wish to make their brand well-known should seek the help of an active brand designer. Startups need to communicate with the brand designer to incorporate the potential of the product in the branding and also make it appealing to its intended target market. Knowing the target market is crucial in designing the packaging that will conform to the preferences of the targeted consumers.

For instance, the company Bear produces kid’s snacks, and it went to great lengths to create an effective packaging design while incorporating collectible cards and codes to make it look fun for children. By the end of 2015, the company became the largest children’s fruit snack company in the United Kingdom.

 

Adding Personality Is Important In Packaging

Every brand needs to show people the company’s unique personality. It is important to take note that packaging is the unspoken way of making introductions. A package design that is unpretentious is considered more appealing for everyone. In most cases, using humor and wit is very useful in branding, which can be evident in the logo, type of fonts used and other elements used in the brand. It is important to take note that none of this wit and humor will be useful if the product isn’t also good. Simply put, effective branding should conform to the quality of the product being represented by the packaging.

Effective branding due to package design always works best if the product is made out of passion. If a product is conceived out of passion, everyone–the creator, brand designer, and consumers–will all believe in the product that is being promoted. Without passion, startup companies find it hard to sell their products even if the packaging designs are appealing.

The success of a startup relies so much on the brand designer and how he or she can turn words and visions into reality–a real brand. A brand designer does not only understand the market, but they also know the product and the company. With an effective packaging design, everything is balanced.

Inspired by www.foodbev.com

More Than 82% of Americans Bought Organic Food in 2016

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Organic food has become more popular over recent years. In fact, more than 82% of American consumers have bought certified organic foods since last year, and the growth is increasing by 3.4% each year.

According to the survey conducted by the Nielsen company and released by the Organic Trade Association (OTA), more than 100,000 households indicated that they had bought organic foods recently. Out of these families, 14.2% of the respondents hail from North Dakota followed by Rhode Island at 12.3%.

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There is a growing trend when it comes to the consumption of organic foods. In fact, according to the OTA, the sales of organic produce rose to a record $43.3 billion in 2015 with an estimated growth of 11% annually. This increase has led to the proposal of different research and promotion of more organic products.

In fact, the USDA released a plan to create an industry-funded program called the check-off program that would certify many agricultural products as organic. This program imposes a small fee on each sale made by the producers. The funds generated can be used for research and promotion of organic products.

The Popularity Of  Organic Food

So why are people opting for organic foods? The reason why 60% of American consumers opt for organic foods is for health reasons.  One of the biggest shares of the organic market is organic milk as more and more people are concerned about getting bovine growth hormones from milk obtained from conventional dairy farming practices. Aside from milk, the sale of organic baby food is also increasing.

But what does it take for a product to be considered organic? Aside from being grown in organic means, organic products should also be made without the use of chemicals like fertilizers, pesticides, and hormones.  They should also not contain any preservatives.

The Future Of Organic Foods

While the organic food market is increasing, it still occupies a small segment of the food industry. In fact, it only consumes 2% of the pie in the entire food industry.  Speaking on the future of organic food, even large-scale supermarket chains like Safeway and Target are now providing organic food offerings to their customers.

Aside from supermarket chains supplying organic foods to consumers, there are also many large-scale organic farms in the country. The advantage of such a large agricultural setting is that it tends to decrease the price of organic products as well as improve distribution to consumers. Aside from the benefits for customers, large-scale farmers earn competitive returns from their products.

There is indeed an increasing demand for organic products in the United States, but the market is lagging behind European countries where all supermarkets carry organic brands. Although this may be the case, the United States is off to a good start.

Inspired by www.bna.com

Kale: The Most Popular Ingredient In Your Pantry

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Many types of superfoods are available for consumers and kale is one of them. Kale is considered as the hottest superfood over the past few years.

You can find it in your baby food, vitamins, supplements, and tons of new clean label food and beverage products. The popularity of the green plant has even gone past food. For example, even some nail polish brands are infused with kale essence to strengthen nails supposedly.

Kale-Infused Products Show Increase In Sales

According to a market analysis conducted by Nielsen for MarketWatch, kale is being infused into snacks, pasta sauce, sausages, and even pet food. You can also find it in your favorite desserts like frozen yogurt and even cakes. The sales of kale-infused vitamins and supplements, for instance, grew by as much as 125% over the last year.

kale marketwatch nielsen study products superfood

While kale-infused products are very popular, consumers should not be too swayed. For example, many companies add a small amount of kale in their products even if they are obviously junk foods to look like they are healthy. Unfortunately, kale is used as a marketing ploy to give unhealthy food a health halo.

Marketers Using It To Their Full Advantage

It is not only junk foods that use the green plant as a marketing ploy. Many supplements appear to use kale as ornaments in marketing their products. Kale powders, for example, encourage people to get kale in powder form thus defeating the purpose of eating the real thing.

The idea of taking it in powder or pill form might be enticing to people who are not a big fan of this leafy green. However, they are devoid of fiber resulting in a lot of missing nutrition.

Should You Eat The Real Thing Or Not?

According to Kristin Kirkpatrick from the Cleveland Clinic Wellness Institute, the addition of kale in food products does not mean that you are getting a full serving of this leafy green. Most of these kale-infused products are often processed with a lot of oil, salt, and sugar to make them taste better than the unadulterated ones.

In conclusion, the best way to get your fix of this superfood is to eat the green vegetable itself. While kale-infused products are an excellent way to slightly supplement your daily needs, they are not enough to meet your daily requirements. Prepare kale in salads, stir-fry, and slaws to get the most out of it.

Inspired by www.marketwatch.com