Three "Macro" Trends Driving Food & Beverage Innovation
Eyes on the Prize: Mattson eyes "macro" trends driving food and drink innovation for 2018.
Each year Mattson identifies a number of macro trends. Our goal is to think beyond “the next kale.” We choose lifestyle trends that have the power to influence food and beverage purchases, behavior, and beliefs. And of course, innovation, since that’s the business we’re in. We translate trends to viable business opportunities.
Here’s a short list of our 2018 picks.
Changing Attitudes Around Cannabis Consumption
For most of my life, marijuana was an illegal drug. Smoking it was risky and looked upon with suspicion. And smoking was—if not the only—the most common way it was consumed.
I live in San Francisco, seen as a beacon of foresight for national trends. Here in Northern California, marijuana (now more commonly referred to as cannabis) is seen as a functional food, with purported health benefits far outnumbering what consumers can get from kale, turmeric, or kombucha. Most importantly, it’s legal for consumption by adults for recreational use January 1, 2018.
Learn more about recent product releases in the growing edibles market in our Cannabis Foods & Beverages Product Gallery
A new generation is growing up in states where pot is legal (currently about 20% of the US population) and thus, have different attitudes towards its use. Today cannabis is consumed often in the absence of smoking: a huge reason it’s no longer seen as wrong. Most dispensaries in San Francisco or Denver (or coming soon: your state?) carry a wide range of edible or drinkable options. And some of them are formulated, packaged, and marketed with savvy.
The biggest challenge is monumental, though, as cannabis remains illegal at the federal level. This makes scaling a food or beverage difficult, if not cost-prohibitive. Imagine having to duplicate production in every single state in which you operate, or having to pay your taxes in cash! And only time will tell if non-dispensary retailers in legal states will put these products on their shelves.
There is no question this will influence the food and beverage industry, because it already has. Alcoholic beverage consumption per capita is down, and many correlate this with increasing use of cannabis for the same occasions: relaxing at home, at parties with friends, to manage anxiety associated with crowds or flying… you name it.
The huge risks inherent in the cannabis space are not stopping true pioneers. And if you think they’re all little guys, reeking of pot in a clandestine warehouse in Oakland, you must be high.
Constellation Brands, owner of the Corona and Robert Mondavi brands, recently announced a $200 million investment in a marijuana grower, with plans to develop cannabis drinks. And the former CMO of Anheuser-Busch InBev just anointed weed the new craft beer. He also co-founded a company that sells ready-to-smoke joints, which San Franciscans will be able to order online for delivery to their home in about an hour. This gives new meaning to the budding space of keyboard convenience.
Keyboard Convenience: Center Store Goes Online
For years, we’ve been hearing predictions around the ultimate demise of the center-store, where staples like mac-and-cheese, cereal, and bars are on their way to extinction. Although consumers are excited about the fresh perimeter, we think center-store has staying power.
What’s going to happen, though, is that center-store purchases will move online. And why not? With the convenience of shelf-stability, these categories have the benefit of being easy to buy in bulk, ship, and store indefinitely. Why wouldn’t a time-strapped household with two working parents and multiple kids trade an inconvenient trip to the store for keyboard convenience?
Center store is not going away. It’s moving to the keyboard.
From the manufacturer/marketer perspective, we have seen a shift in what our entrepreneurial clients are looking for. No longer are they coming to us with dreams of selling their product line at traditional retail. They want to launch and learn online. And some of them don’t even have a long-term desire to end up at the Safeways and Krogers of the world. These Millennial entrepreneurs are changing the food industry as much as Millennial consumers.
There are unique challenges that come with e-commerce. We develop product lines specifically for this channel of distribution. I can tell you (from learning the hard way!), not every product works in e-comm in the traditional ways it used to work: from formulation to packaging to branding to marketing. But sometimes the old tried and true comes around to being relevant again. Our home use testing methodology is perfect for working out bugs before launch. But the ultimate benefit of e-comm is that you don’t have to test your product ad nauseam. It’s easy and cheap to launch into the channel. No slotting, no huge inventory investment, no buyer meetings. It’s the best way to get consumer insights: from real consumers paying real money for real products.
The Meteoric Rise in Flexitarian Eating
What if you could tap into a growing group of consumers that make up about a third of the population? Have I got your attention? Meet the Flexitarian.
From a proprietary online consumer study we conducted in July, 2017 we’ve learned a lot about these people. There is no official definition of Flexitarian, but we consider them to self-define in two ways. First, there are those actively trying to eat less beef, chicken, pork, and dairy. And second, there’s a group that already eats a “mostly vegetarian” diet, with the occasional consumption of beef, chicken, pork, and dairy. Together, these consumers make up about one-third of the population.
It gets even more interesting when you ask all consumers—no matter what their current diet—what they plan to eat in the year ahead. A full 50% of the population claims they’ll be actively trying to eat more plant-based foods next year. The combination of these two stats indicates a growing opportunity to make plant-based eating easier for both the Flexitarian and the beef-eating carnivore.
While many assume that vegetarians and vegans are the ones driving the growth in plant-based foods such as plant-based milks and meat, it’s simply not true. They only make up about 5 to 7% of the population and that number has remained fairly flat. It’s the Flexitarians that are driving growth, and will continue to do so in 2018 and beyond.
Originally appeared in the December, 2017 issue of Prepared Foods as Eyes on the Prize.