Our previous owner had decided to focus on “hot” industries involving electronics and the web, while divesting magazines such as Security and Prepared Foods, properties that covered more mundane topics.
This year's tragic events, the crash of the dot.coms and a downward economy now means a relatively rosy outlook for businesses involved in security and the slow, but constantly growing food industry. Who would have thought?
With the aforementioned examples in mind, predicting “what's hot and what's not” for even a year in advance is difficult. Still, it is that time of year when predictions are expected, so here's a few I believe will impact product development.
- Sharper focus on product cost. A product's life cycle usually consists of market introduction followed by maturity, accompanied by efforts to reduce cost. This does not necessarily translate into inferior quality; manufacturers also “get better” at producing a product. Offering items at a better price than competitors has always ranked fairly high as an area of opportunity by US food companies. However, 55.9% of respondents to Prepared Foods' 2002 R&D Investment survey said such a strategy provided growth potential, the highest among all areas mentioned. Does that mean “cheap” is the final word? No. A hefty 39.4% of respondents say “premium priced, 'chef' quality products” also offer market opportunities.
- Increased interest in organics. Some suppliers report much interest in their organic products while others say sales remain flat. However, despite the increased cost of formulating foods with organic ingredients, processors will use them and their end products as a way to differentiate themselves. Most processors, however, may take a “softer” approach with 54.3% of respondents to our survey saying “all natural/ clean label” products provide growth potential versus 26.6% saying the same for “products with organic claims.”
- Greater selection of “nutraceutical” ingredients. The most expensive formulas, smallest consumer market niches, yet most intriguing developments lie with new nutraceutical ingredients. GRAS self-affirmation seems to be the vehicle of choice for ingredient suppliers wishing to compete in the “functional foods” market. Backed by extensive toxicological testing, the safety of a company's particular—and sometimes proprietary—ingredient is usually substantiated by enough documentation to “choke a horse.”
“As of 1997, the FDA no longer accepts GRAS petitions,” Vasilios (Bill) Frankos, ENVIRON Corp., told me. Companies can submit a Food Additive petition for formal FDA approval; however, notification of GRAS self-affirmation is gaining popularity. Upon receipt of such notice, the FDA shows passive acceptance by not questioning the basis of the notification. Milk-derived lactoferrin, certain botanicals (chrysanthemum, licorice, jellywort), the dietary fibers arabinogalactan and fructooligosaccharide (FOS), plant sterol esters (such as those used in Benecol), trehalose and tagatose are a few of the ingredients in the marketplace that have gone through this process.
Have a happy and prosperous New Year!
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