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Ten Key Trends 2015 NNB

10 Key Trends in Food, Nutrition & Health 2016

Every year London-based New Nutrition Business aims to entertain and inform its customers with its annual analysis of the key trends in the business of food, nutrition and health. Its long-term focus enables companies to formulate their plans, innovation and strategy around durable trends, not fads. This NNB report offers brilliant insights, so well written and presented – a must for any company active in this arena.

Here’s a synopsis of its 10 Key Trends for 2016

There are three big evolutions in consumer behaviour that underly most of the trends says the preamble to this extensive 115-page report:

1. Food explorers. Once upon a time, long ago, people found a brand or product they liked, made it their favourite and stuck with it loyally for many years. But today, not only the much sought-after Millenials but all age groups embrace variety and like to try new products. In most countries in most major cities people every day choose between eating Thai, Italian, Japanese or any one of about 30 other cuisines. They are open to new tastes and textures and experiences and that makes them open to new healthier products of all kinds.

2. Technology. A host of websites, apps and social media platforms enable consumers to do their own research about food and health. With this steadily increasing knowledge people feel more confi dent to create personalised healthy eating patterns and dietary choices and conduct their own personal eating experiments to fi nd what works for them.

3. Loss of trust in expert health advice. Frequent changes in dietary advice have created consumer scepticism about the “expert opinions” of dietitians and nutrition researchers, just at the moment when technology has made it easier for people to fi nd the answers for themselves.

Key Trend 1

Beverages redefined – new opportunities lie in the flourishing world of healthy niches

Beverage aisles are undergoing a massive redefi nition around the world, leaving many companies unsure about the new rules of a game in which the biggest loser seems to be the longtime giants of the category, carbonated soft drinks and even fruit juices.

Meanwhile smaller, healthier brands and start-ups are prospering, creating new categories, targeting niches and stealing ground from their bigger rivals.

Summary:

• Sea change in beverages: Soft drink brands like PepsiCo and Coca-Cola have long been the defining brands of the beverage market but they have reached the high water mark and the tide is now going out on their businesses.

They are being replaced with a host of brands with a variety of health benefits, from fruit waters to plant waters. A few of these thousands of start-ups will succeed, but 90% will fail, usually because of poor taste performance and/or inability to secure distribution (because partnership with a big company is still necessary in many countries to get access to distribution).

• The future is niche: As we’ve said for every trend, beverage companies will increasingly find themselves managing a portfolio of niche brands, catering for a range of tastes and preferences, some niche, some bigger.

• Sugar suspicions: Increasing consumer concerns about sugar, coupled with a turning away from non-calorific sweeteners of all kinds, mean that even diet versions of traditional brands are collapsing.

• Fruit beverages in decline: Fruit juice is also suffering from consumer concerns about sugar and despite the surfacing of new premium niches such as HPP, fruit juice is in long-term decline. Leading children’s brands such as Heinz have removed juice and replaced it with flavoured water and a whole generation is growing up without the fruit juice habit – their changed tastes will transform the beverage category in ways negative for carbonated soft drinks and fruit juice and positive for all other lower-sugar types such as plant waters.

• Weird now, but watch this space: Anything that industry perceives as too weird or too niche tends to succeed success (as with energy drinks such as Red Bull). The naturally-sweet, naturally low-calorie nature of plant waters means that even juice giants Pom and Innocent are launching coconut waters or coconut water-and-juice-blends.

Key Trend 2

Snackification – from cheese to bugs, there are no limits

What’s driving snacking? Although the amount of snacking varies between countries, the forces of change are the same. The drivers are the now-established consumer beliefs that:

Any and every category is a potential source of snacks.

As a study by Nielsen pointed out in 2014, in the mind of the consumer, anything can be considered a snack – chocolate, chips, yoghurt, fruit, dairy desserts, cheese, cookies, nuts, instant noodles and many, many others.

Any time of day can be a snack occasion and the boundaries between meals and snacks are disappearing.

Consumers consider any time of day a snack occasion. Snacking is no longer about consuming between meals, it is becoming meals.

Summary

• Target the right consumers: Begun by targeting young adults (aged 18-30). In most countries they are the heaviest consumers of snacks.

• Be open to the many new product opportunities: Fragmentation of markets and a variety of consumer preferences means opportunities abound. Consumers are very willing to buy new and innovative healthy snacks.

• Reinvent “old” snacks: Snacking companies are shaking up old categories and markets – such as the reinvention of meat snacks as a premium, tasty and healthy product.

• Give consumers permission to indulge: Giving people permission to enjoy an indulgent snack is one of the most effective marketing strategies. This is usually best achieved by:

a) using ingredients with a positive “naturally healthy” halo (such as nuts, fruit, good grains)

b) in addition, using chocolate

• Make your snack premium: In healthy snacking premiumisation is normal – the degree of premium that convenient snacks can command is impressive, even in price-sensitive markets. 

Key Trend 3

Dairy 2.0 – reborn as a natural whole food

The original nutritional food category – has a positive future filled with opportunities. For the next five years the opportunities for growth in dairy will primarily come from:

1. Dairy makeover: this is the strategy of reinventing traditional products with a new and modern twist, and/or taking traditional regional dairy products from one geography and launching them into new geographies where they are “new and exciting” but adapted to suit the tastes of the new markets. Huge scope exists to create new brands as well as to re-position and reinvent traditional dairy foods for new markets and new consumers.

2. Unashamed indulgence: this is all about taste and texture and pleasure

3. Snacking: legitimising spoonable dairy as an anytime healthy and pleasurable snack – not only as part of breakfast or as a healthy dessert.

Summary

The future for dairy is positive: There is enormous scope to reposition and reinvent traditional dairy foods. Just don’t expect to have a huge mass-market success – so fragmented is the market becoming that a niche or “big niche”product is far more likely.

Rethink on dairy fat opens up possibilities: As new science wipes away health concerns around dairy fat, many consumers – particularly younger people – are turning back to full fat and the better taste it offers. Products that offer good-tasting indulgence are more likely to succeed.

However, it will be some time – perhaps 10 years – before dairy companies can communicate that dairy fat has cardiovascular and other benefits because the “low fat paradigm” is so well-entrenched in consumers’ minds – particularly older consumers. Younger consumers will change faster, but change will nevertheless take time, because across the world there are health professionals and government bodies who cling fast to the advice to consume low-fat dairy.

That means it’s up to dairy companies to do two things:

a) Start educating consumers and dietitians about the intrinsic health benefi ts of full fat dairy and overturn the low-fat myths.

b) Aim for unashamed indulgence, launch full-fat products and market them for pleasure and taste.

Snackification: Savoury yoghurt, dairy-plus-grains and in particular cheese have potential as any-time-of-day snack foods in single serve formats.

• Sugar suspicions could hasten move away from low-fat: The demonisation of sugar means that low-fat yoghurts, which are typically higher in sugar than full-fat yoghurts, will lose their health halo over the next 5 years and consumers will slowly switch to whole milk yoghurts with a lower sugar content.

Key Trend 4

Redefining sweetness

Sugar has become the most vilified food and beverage ingredient on the globe, thanks to its suspected role in obesity and resulting diseases,

Not only have non-calorific sweeteners failed to provide a solution, sugar is going to come under even more pressure. Sugar taxes are a very real threat and lobbying for their introduction – led by nutrition scientists and by celebrity chefs – can only increase thanks to the success of sugar taxes in Mexico, which resulted in a 12% reduction in purchases of sugar-added drinks in its first year.

Summary

• Sugar is the new fat: Sugar has replaced fat as a key consumer concern – they associate it with obesity and diabetes. Increasingly, sugar may be associated with inflammation.

• Tide has turned against sugar: Although in some cases consumers prefer the “honesty” of natural sugar, for the most part the tide has turned against sugar. But this is a challenge that can’t be solved with artificial sweeteners any more – people don’t want those either – and so far there are no realistic natural sugar alternatives.

• Losing our sweet tooth? Consumers appear to be turning away from sweetness altogether, as the rise of flavoured waters, plant waters and savoury snacks suggests.

• Embrace less-sweet: The decades-long search for non-caloric sweeteners – both natural and artificial – now looks like barking up the wrong tree. Industry investments in sweetener alternatives may never yield a good return.

Companies should be looking for ways to market less-sweet products that still taste good. In the case of juice companies, for example, this means launching plant waters or plant waters blended with juice.

Key Trend 5

The fragmentation of the consumers’ mind

The fragmented, individualised view of health that was emerging back in 2003 has in 2016 become the defining force of food and beverage markets. People’s ideas about food and health have also become a menu of choices from which they select – or completely change – as new information becomes available.

Summary

• Wider culture of fragmentation: Just as consumers have diverse musical tastes – they no longer feel they have to commit to a certain style – there is also a culture of dipping in and out when it comes to food and drink.

• Fragmentation is now a defining force of food and beverage markets: Consumers create their own definition of what is a healthy diet – mixing health and indulgence, or vegan and meat-eating – and experimenting with new tastes at a pace that larger companies struggle to keep up with.

• Technology enables choice: Easy access to information has enabled consumers to become their own experts on matters of healthy eating – and pretty pictures on social media of interesting new dishes from other cultures have expanded their horizons and fostered a culture of experimentation. E-commerce means they can easily order and try what catches their eye.

• Making their own decisions about health: Having seen “set in stone” dietary advice about dairy fat and eggs overturned, consumers are sceptical about the “expert opinions” of dietitians and nutrition researchers, and that means they allow themselves more freedom to create their own health rules (while at the same time using the internet to decide for themselves what is healthy and what is not, and even to self-diagnose).

• Willingness to experiment: From the US to France, consumers are discovering that experimenting – mixing up your diet from a variety of cultures and cuisines – can be fun. This is something the Millennials have learnt from their baby boomer parents, who were the first generation to do this back in the 1970s.

Key Trend 6

Naturally functional – three high-growth ingredients powered by the King of Trends

What people want, more than anything else, is for their foods and beverages to be naturally functional – to provide a benefit that’s intrinsic to the food.

Given the choice, they will always select a product they perceive as naturally functional over one with an added, science-based ingredient. Consumers’ desire for naturally functional foods is in fact the biggest trend across all food and drink.

Summary

• King of trends: The trend with the broadest influence, naturally functional overlaps with – and strongly influences – almost every other trend. Wherever you look, naturally functional is being used to create new brands and new categories.

• It is an innovation strategy: The biggest successes are coming from creating new brands and new product formats.

• Naturally functional needs no health claims: When consumers can draw their own conclusions (thanks to constant positive media attention to foods with natural and intrinsic health benefits) no health claim is needed.

• Proven to be the most powerful driver: Naturally Functional is behind the success of almonds, Greek yogurt and dairy products in general (Key Trend 3), coconut water, almonds and pistachios – although simply choosing ingredients with a health halo is not enough. Products must also perform in four other areas – marketing, processing technology, science and convenience.

Key Trend 7

Plant-based foods and beverages

At the same time that meat is enjoying a fresh image as a healthy food, plant-based foods and beverages are also having a moment. Consumers like the idea of “plant power”, with its connotations of health and sustainability. And if the plants come in a tasty form (unlike the drab nut and sprout creations of the 1980s) all the better.

Innovations such as hummus, bean chips and almond milk are transforming plants into delicious and exciting fare. The trend is driven by the most powerful trend of all, Naturally Functional.

People everywhere like the idea that their foods and food ingredients are as natural as possible and have some natural and intrinsic health benefi t. It is one of the most compelling selling messages.

Summary

• Taste transformation: The debut of ingredients like almond and coconut, with their superior taste to soy (which was a turn-off to many people), has got consumers excited again about plant-based foods.

• Innovative formats: Interesting new snack and beverage formats have made plant-based foods far more visible to consumers and easier for them to incorporate into their lives.

• Aura of health and sustainability: Consumers feel good about choosing plant-based foods, believing they are better for the environment and for their health.

• Meat and dairy under attack: Plant-based foods and drinks benefit from the belief – held by a small-butgrowing number of consumers, particularly Millennials – that meat and dairy are unhealthy.

• We’re all “flexitarians” now: Consumer beliefs about plant-based foods are not necessarily consistent – they may buy almond milk for putting on their cereal but also cows’ milk for their coffee. They may be vegetarian, vegan, meat-reducers – or dabble in all of these (“flexitarians”).

• The biggest opportunities: Two segments in particular offer the most opportunity – snacks, and non-dairy drinks.

• Stronger marketing of plant-based protein: The view that non-dairy protein is better than animal source protein is particularly promoted for sports and exercise.

Key Trend 8

E-commerce powers the growing direct-to-consumer trend

Selling direct-to-consumers is not new. It’s a long-established business model but in a very short space of time, e-commerce has become an important channel to market in its own right. As yet, it’s a small part of the market – complimenting traditional retail, not replacing it – but it is growing fast.

Millenials, “food explorers” of all ages and the health-conscious lifestyle consumers all like small brands and the idea of getting something “authentic” from a small company rather than a global giant. They are also totally accustomed to online shopping. The confluence of these beliefs and that habit open the door to a wealth of opportunities for small brands and new brands.

Summary

• E-commerce from the start: An effective distribution strategy for a new brand or a small brand must consider, from day one, online retailers’ web operations and e-tailers as well as a direct-to-consumer e-commerce option.

• More accessible than ever: E-commerce enables companies of any size – and particularly small ones – to create a direct-to-consumer business without the high labour costs traditionally associated with direct selling. Delivering packages – even globally – has never been cheaper and thanks to technology two people can create an e-commerce business that would have required 10 people.

• More power to small brands: Online shopping is becoming a way for smaller brands, new brands and experimental brands to reach consumers, avoiding the big retailers and associated costs, as well as offering several advantages. It adds to the steady trend for smaller brands to eat away the market from under the noses of established players.

• Urban change: E-commerce lends itself well to dense urban centres, and the revolution in consumer buying behavior in China may happen in major cities in other countries – potentially spelling the end of traditional giant supermarkets in big cities.

• Mix it up: A direct-to-consumer strategy can be combined with selling via e-tailers and supermarkets as well as bricks-and-mortar retail.

Key Trend 9

Protein up and away in America as the rest of the world looks on

Many trends in food and health emerge first in the US and then migrate to the rest of the world. Americans have turned their protein craze into an era-defining dietary trend, close in importance to the low-fat fixation of a generation ago. American consumers exhibit a significantly greater interest in boosting protein than their counterparts in other western markets, thanks to historic and cultural influences.

Protein has the benefit of being a nutrient that’s easily recognised and whose benefits are readily understood – and even better, are underpinned by a growing body of good science.

Summary

• Embraced in America: US sales of a wide variety of protein-based foods and beverages in general have been rising steadily, echoing the low-fat zeal of past decades, but protein’s growth is slower in Europe and Asia.

• A trend with staying power: Protein seems sure to be the focus of conscientious American dieters for some time to come, thanks to its image as a satisfying part of a healthy diet (and to the rise of low-carb ways of eating).

• The source of protein may change: Consumers may turn away from added-protein products to “naturally functional” protein sources – products that have a natural reason to have protein in them, such as meat.

Key Trend 10

Free-from – spotlight shifting from gluten to dairy

If you are looking at trends and trying to work out the difference between a trend and a fad, the free-from market – and specifically the gluten-free market – shows how difficult that can be.

From about 2001 up to 2010, the slowly-emerging gluten-free market was regarded by many in the industry as a fad, likely to fall away when consumers wised-up to the ‘fact’ that gluten-free wasn’t doing anything for their health. But a rational analysis left out of the equation all the soft data, such as:

• how much conversation there is on social media

• how much attention the subject is getting on mainstream media

• how many celebrity chefs are paying the subject attention

• how frequently the products were showing up in foodservice, not only in major cities but in out-of-the-way places

• and much else besides It also left out an analysis of how gluten-free connects to other trends such as digestive health, cutting down on carbs and cutting down on bad ingredients

Summary

• Gluten-free has had all the attention in recent years and has been a growth trend. But now it’s rapidly evolving into a reassurance message, carried not only by specially-formulated products, but hundreds of products of all kinds that are naturally gluten-free. Brands have learnt that adding gluten-free to the messages on the label gets the attention of the 30% of people who see it as a positive health message.

• Growth opportunities of the next five years: These are likely to be in dairy-free and lactose-free, which are next in the hierarchy of consumers’ desired free-from messages.

• Non-dairy the winner: The biggest, fastest-growing beneficiary of the dairy-free message at the moment – and likely to stay fast-growing for the next three-to-five years – is non-dairy milks and similar non-dairy products.

• Reducers not avoiders: People who look for dairy-free and lactose-free, just like those who look for gluten free, are often not eliminating dairy from their diet, just reducing the amount they consume, when they can, because it makes them “feel better”.

• Both gluten-free and dairy-free/lactose-free connect strongly to digestive health. When people have digestive disorders and turn to Google to make their diagnosis, what they are most likely to find in their search results are sources linking gluten and dairy to digestive health problems. Interestingly, when many people reduce dairy or lactose, they report feeling the benefit – and feel the benefit is one of the most important reasons for anyone to buy a healthier product.

About this report

Julian Mellentin is one of the world’s few international specialists in the business of food, nutrition and health. He is director of New Nutrition Business which provides case studies and analysis of success and failure in the global nutrition business and is used by more than 1,700 corporate subscribers in 42 countries.

10 Key Trends in Food, Nutrition and Health 2016 is available from www.new-nutrition.com.

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