The pandemic in 2020 has expedited many trends in the food and beverage industry that already were a major part of the landscape before its emergence. Few have been impacted as much as better-for-you offerings.
While better-for-you is hard to exactly define, consumers are finding their own way of doing it. From keto diets to plant-based foods and vitamins to immune-boosting ingredients, Americans have a suite of options at their disposal to improve what goes into their bodies and the long-term impact on their health. Companies have worked aggressively to meet these needs by incorporating more healthy ingredients, such as honey or ginger, into their offerings and trying to make better versions of vilified products like soda.
With millions of Americans sickened and thousands dead from the coronavirus, the outbreak has acted as a catalyst to encourage more consumers to eat healthier. Beneo, a supplier of functional ingredients, estimated 75% of consumers globally said they plan to eat and drink healthier as a result of the pandemic. This shift could have an immediate and long-lasting impact on food and beverage makers by encouraging more businesses to expedite the reformulation of existing recipes or introduce additional new products.
This report looks at several aspects of the better-for-you trend, including:
Why healthy food is on the menu as the coronavirus improves eating habits
Analysis at how consumer trends are shifting toward health and wellness
6 immunity boosting ingredients gaining popularity during the pandemic
Making soda healthier and shedding the associated stigma
Can better-for-you junk food dominate the snack segment
The use of data and technology to bring food product R&D into the 21st century
A look at AI upstart Brightseed's funding as demand for healthy offerings surges
We hope you enjoy this look at better-for-you foods and beverages.
Consumer trends shifting toward health and wellness, ADM finds
The pandemic has made more people interested in foods that benefit their immunity, metabolism and mental state, as well as solidified the plant-based sector, according to research.
By: Megan Poinski
Six months into the coronavirus pandemic, consumers are becoming more focused on eating for their health — and CPG companies are working to innovate to bring the types of products consumers are looking for to market as soon as possible, according to ingredients giant Archer Daniels Midland.
ADM, which uses ongoing research to keep tabs on consumer interests and insights, found six behavioral shifts during the pandemic. All are related to health and wellness to some degree.According to its research, consumers are more interested in the connection between gut health and immunity; focusing on metabolic health's impact on weight management; eating to improve mental health; interested in personalized nutrition; and planning to spend more money on health and wellness related items. It also states that plant-based eating is becoming mainstream.
The findings from ADM's OutsideVoice research portal showed that 77% of consumers want to do more to stay healthy in the future. Ana Ferrell, the company's vice president of marketing in North America, said that many manufacturers have stayed in tune with what consumers want. Several are having ongoing conversations with ADM about new applications and functionalities they want to bring to products — both existing favorites as well as new ideas. Ferrell said that everyone is looking for these innovations to hit the market in 2021, which is a very fast time frame for an industry that is historically slow to revamp and innovate.
"Consumers are more and more educated, and they are much more open to experimenting to try different things," she said. "And I think innovation is going to be extremely reinvigorated in the food and beverage space. The industry has been more traditionally reactive. But I feel like now there's so much opportunity to connect with consumers in new ways."
Given the steady upward trajectory for plant-based food consumption, Ferrell said she would have expected to see more consumer adoption and acceptance of plant-based food in mid-2020, even without the coronavirus pandemic. After all, consumers are getting more curious about plant-based meat in general.
The statistics, however, show more than a curiosity, but potentially a real solidification of the segment among consumers. According to ADM, 18% of U.S. consumers bought their first plant-based protein products during the pandemic. And almost all of them — 92% — say they will continue buying these products.
Eating more plant-based proteins seems to be a normal lifestyle for many now, Ferrell said. Several in the industry used to try to make products appeal more to those who adopted a flexitarian path — people who are primarily vegetarian, but occasionally eat meat or fish. Now, Ferrell said, it's becoming something that all consumers are starting to do. The reason many consumers give for wanting to eat more plant-based food is the health halo those products bring with them, Ferrell said.
"Consumers are more and more educated, and they are much more open to experimenting to try different things. And I think innovation is going to be extremely reinvigorated in the food and beverage space. The industry has been more traditionally reactive. But I feel like now there's so much opportunity to connect with consumers in new ways."
Vice president of marketing, ADM
This finding is corroborated in several other studies. The 2020 Food & Health Survey from the International Food Information Council found that nearly seven in 10 consumers said protein from plant sources are healthy, ranking it as the third most considered healthy ingredient. Also, slightly more than half of consumers said they are trying to consume more plant protein.
But plant protein isn't the only ingredient or type of food with a halo pushing its success in 2020. ADM's survey found 57% of global consumers are more concerned about their immunity because of the pandemic. Knowing more about gut health's relation to immune health is moving more consumers toward products with ingredients to help improve that. A total of 51% of consumers are looking for items that contribute to their metabolic health to promote healthy weights, which Ferrell said is especially important given the relatively sedentary lifestyles many consumers have had during the pandemic. Three in 10 are looking for and purchasing items that are tailored to helping improve specific health and wellness issues. And 48% say they will purchase more items related to health and wellness.
While all of these trends have been well documented and circulating through food and beverage in the recent past, Ferrell said consumers' new emphasis on eating for mental health has surprised her. More than a third of consumers said they were concerned about their mental health.
"Not because the context would not determine that, but because maybe this was not as top of mind: ... the rise of this importance behind self-care and emotional well-being," Ferrell said. "And I believe that with all the sheltering in place, and the anxiety and stress associated with the ambiguity of this pandemic, and the uncertainties also in the face of the economic impact of global markets, [it] has really created a much heightened concern coming from consumers."
Ferrell said that from what she can see from ADM, many products that address some of these issues are likely to be hitting the market in spring 2020.
Companies right now should be focusing on using these consumer insights to help build their brands, Ferrell said. Consumers are looking for their health, but also what they know, something of which brands should take advantage.
"What a great fascinating opportunity to reinvent, reinvigorate and refresh brands, right?" Ferrell said.
Healthy food on the menu as coronavirus improves eating habits
The pandemic has accelerated demand for plant-based meats and immunity-boosting products from companies such as Impossible Foods and Unilever.
By: Christopher Doering
Even as millions of people around the world have become ill from the coronavirus, the pandemic has simultaneously acted as a catalyst to encourage more consumers to eat healthier, with plant-based meat and immunity-boosting products among the biggest beneficiaries.
"As people kind of start building up these new behaviors, they're looking for more," said Joan Driggs, vice president of content and thought leadership at marketing research firm IRI. Consumers want "an experience around whatever it is they're adopting too, whether it's high protein, whether it's low carb, whether it's one of those specialty diets."
Driggs said early during the pandemic people sought products that boosted their immunity and flocked to vitamins, minerals and other healthy ingredients such as mushroom supplements and elderberry. They also sought items that helped relieve anxiety, including melatonin for a good night's sleep.
The better-for-you behavior extended even further into the home through food. While initial pantry stocking included a lot of staple items, such as rice and pasta, shoppers soon turned to fresh ingredients, like potatoes, fruits and vegetables, to incorporate into them, Driggs said. The push to eat healthier also has added momentum to trendy diets like Whole 30, keto or paleo.
As people strive to eat healthier, the behavior has moved into other aspects of their lives. New Hope found during the quarantine that consumers are spending more time walking, running, biking, doing yoga online or at-home exercise videos. Only 19% of those surveyed said they aren't doing any exercise. And Beneo, a supplier of functional ingredients derived from chicory roots, beet sugar, rice and wheat, estimated 75% of consumers globally said they plan to eat and drink healthier as a result of the pandemic.
“[The shift in consumption patterns amid the pandemic] is a factor that will be hard to ignore when looking into new product development," Andreas Herber, executive board member at Beneo, told FoodIngredientsFirst. "However, this also means it’s not so much about new ideas — it’s about exploring ways to strengthen and improve existing solutions, such as natural and organic products, as well as those with functional or health benefits.”
Meat industry gets grilled
The coronavirus has been particularly taxing on the country's meat industry where thousands of workers have gotten sick and dozens of processing plants have shut down, prompting shortages at grocery stores and a spike in prices.
While meat has struggled, the industry's challenges have been a boon for their plant-based counterparts like Beyond Meat and Impossible Foods. These and other faux burger makers also have benefited when grocers ran out of burgers, pork chops and steaks or quantities were limited, in some cases prompting consumers to try these products for the first time.
"We've seen a number of trends that will last and one of them clearly is a concern about personal health."
President, Unilever's foods and refreshment division
Sales of plant-based meat were already on an upward trajectory before the outbreak as more consumers cut meat out of their diet altogether or curtailed their overall consumption. According to SPINS data reported by the Good Food Institute and the Plant Based Food Association, sales of plant-based meat were up 18% last year, with the category worth more than $939 million.
Rachel Konrad, the head of communications at Impossible Foods, said while values such as sustainability, treatment of animals and impact on the environment have all played a major role in increasing demand for plant-based meat, health is playing a more meaningful role in drawing people to the category.
"Public health, individual heath is going to really start to become a growing driver of awareness and interest in the product," she said. "The fact that we're living through these extraordinary times is actually just accelerating some of the important trends that you've been seeing, that have been happening for a few years now."
"We are selling everything we can make," Konrad said. "There is pent-up demand for it."
Traditional CPG food manufactures also have seen a sizable uptick in demand for their products, including less-than-healthy nostalgic foods like soup and macaroni and cheese, especially early on during the pandemic as consumers stockpiled at home. Still, executives say a major beneficiary of the surge in sales has come in healthy foods, which they expect to linger after the current pandemic has abated.
“Even within those overall higher sales those products that specifically focus on human health, especially immunity, but also heart health in the U.S. [with products like] Lipton, have been particularly popular,”Hanneke Faber, president of Unilever's foods and refreshment division, said. She said sales of its Lipton with Immune Boost have been "flying off the shelves" during the pandemic.
"We’ve seen a number of trends that will last and one of them clearly is a concern about personal health," Faber said.
Takoua Debeche,vice president of research and innovation at Danone North America, also noted the company has seen an uptick in many of its wellness-focused products such as its probiotic offering with Activia Dailies or its lower-sugar brand Two Good.
As the pandemic was worsening, consumers were looking into its plant-based offerings like Silk or So Delicious. She said the company actually benefited from consumers looking at plant-based offerings to proactively support their health and well-being. At the same time, more consumersare trying their soy, almond or oat-based products when staples were wiped clean from shelves.
"We are seeing people are consuming more at home and are consuming in a healthy way, which I think is very relevant for the type of categories we are playing in," Debeche said. "Anything that is linked with healthy, mainly plant based, still is holding very strong, so that could have a good indication that this part of the new normal will go even further."
New health and consumption habits
At AF Ventures, a private equity firm investing in nearly three dozen better-for-you food and beverage upstarts, the coronavirus has only elevated consumer interest in functional foods produced by its companies that reduce the risk of disease and promote good health, said Jordan Gaspar, a managing partner at AF Ventures.
Gaspar said with more people working from home it has created interest among parents to not only be more mindful of the food they feed themselves but what they are giving their children during meals like lunch that may not have been as top-of-mind in the past when kids were at school. This shift has been especially beneficial for companies AF Ventures has invested in like plant-based manufacturer Alpha Foods and Kidfresh, a maker of chicken, pizza, quesadillas and other foods embedded with vegetables.
"This is sort of the beginning of what will be a period of people really adjusting to new health and consumption habits," Gaspar said.
For food companies, most notably large CPGs desperate for ways to rejuvenate sales and profits, functional foods could be a lucrative way. Zion Market Research estimated the global functional ingredients market was worth $64.9 million in 2018, and is expected to reach nearly $100 million by 2025.
“So many people are taking this time to commit to their personal wellness. People are trying to adopt new, healthier behaviors, more exercise. Trying to eat more healthy foods,” Driggs said. "It's not going to go away."
Article top image credit: Permission granted by Unilever
Coronavirus changed 85% of consumers' food habits
The International Food Information Council's annual Food & Health Survey found people still trust the safety of the food system and are turning more to plant protein for health.
By: Megan Poinski
More than four out of five consumers say the coronavirus pandemic has changed their food habits, driving them to cook, eat, shop and think about food differently, according to the annual Food & Health Survey from the International Food Information Council.
A total of 85% said they were doing something differently, with about 60% cooking at home more, the survey results said. The other changes are more varied and not quite as universal, with about a third saying they are snacking more and washing produce more.
Aside from more snacking, the pandemic has changed what people are eating, Ali Webster, IFIC's director of research and nutrition communications, said at a virtual press conference announcing the survey results.
"A higher percentage of people said that they were eating healthier than they usually do as a result of the pandemic. And this was compared to a lower percentage of people who said that they were eating less healthy than usual, as related to COVID-19," Webster said. "So I think people were really taking the opportunity to be thinking more about what they were eating, perhaps. Cooking more at home tends to be a little bit more healthy than the choices that we might make when eating out."
About one in five consumers reported making healthier choices, while about half of that said they are eating less healthy, the survey said.
IFIC, which communicates science-based information on food health, safety and nutrition, does a wide-ranging survey every year to capture consumers' pulse on the food system, how they use food for health, and the role food and labeling information play in their choices. And while this year's survey of 1,011 American adults looks at many of those issues, the impact of coronavirus has an unexpected central role in the results. The survey was done between April 8 and 16, after many consumers had spent several weeks at home. This gave IFIC the opportunity to take a look at consumers' reaction to the pandemic, and how they were keeping themselves healthy.
One thing the pandemic hasn't changed is how many consumers consider the food system safe. A total of 67% of consumers surveyed have confidence in the safety of the food system, down just one percentage point from the 68% who felt that way last year. In fact, the top food safety concern this year was not foodborne illness or chemicals, but contamination from food handling or preparation in light of the pandemic. About half of consumers said they were concerned about eating food prepared outside of their homes.
Food for health
While taste was still the top reason consumers choose food, with 88% saying it is important, three out of five said they consider how healthy items are. And compared to 10 years ago, more than half said the healthiness of food makes more of a difference to them now.
However, slightly more than half of consumers have made changes to their diets to promote healthfulness in the last six months — down from two-thirds a decade ago. This may be because many already think themselves healthy. A total of 57% respondents said they were in excellent or very good health, and nearly three in four said their diet is healthier than that of the average American.
A total of 43% said they have followed a specific diet during the last year, and those results were many and varied. Intermittent fasting, the most popular response, was only followed by 10%. Just below that were clean eating and a ketogenic or high-fat diet.
Functional and healthy ingredients are important to consumers, with about a quarter specifically seeking them out. The ingredients that consumers consider healthiest are fiber (more than 80%), whole grains (close to 80%) and plant proteins (70%). Those three ingredients are also the most sought after in products, the survey found.
More consumers say they are eating more plant-based food in general, with nearly three in 10 increasing their consumption of plant proteins in the last year. Other plant-based categories are also seeing more consumption, with almost a quarter of consumers having more plant-based dairy, and 17% eating more plant-based meat. Although these increases in consumption of plant-based alternatives are not huge, the two categories that consumers are eating much less of are red meat — with almost a third cutting consumption in the last year — and dairy — which one in five has cut back on.
What's in a label?
Food labeling continues to be important to consumers. As labeling changes are on their way to foods, IFIC asked consumers about different aspects and terminologies on the new versions.
One of the more noticeable changes on the revamped Nutrition Facts label is its breakdown of the amount of sugars in products. The new label shows a product's total sugars, as well as the amount of sugar that was added. While nearly three in four consumers said they were trying to limit sugar in their diets, four in 10 considered both naturally occurring sugars and those added to a product as equally important. A total of 37% said that added sugars have a major impact on health, while only 18% said the same about naturally occurring sugars.
When it comes to label claims, "natural" — which has no regulated definition — is the one consumers find the most important, both for items they buy at the grocery store and in foodservice. More than 40% find they are influenced by products labeled "natural" at the grocery store, while about 20% find it influential on a menu.
And the health halo of "natural" products helps them win over consumers. The survey gave consumers a hypothetical situation, where two products had the same Nutrition Facts panel, but other key differences. They were asked to choose which one would be healthier. And close to half said a product with an "all natural" claim would be healthier than one without.
As the new GMO labeling law is starting to be reflected on products, IFIC also asked questions about consumer reaction to it. The abbreviation many consumers are familiar with is not what will appear on products, which will be labeled as "Bioengineered" or "Derived from Bioengineering." Consumers were asked if they would continue purchasing a product if they saw a "bioengineered" label on it. A third said they would continue, but 35% said they would not.
In the question that asked consumers to choose influential label claims, more than three in 10 said they would be influenced by a "non-GMO" label. Fewer than 10% said the same about a "bioengineered" label.
"The big contrast that non-GMO is a label that far more people are seeking out compared to 'bioengineered' or 'contains bioengineered ingredients,' which is the the second lowest," Webster said.
6 immunity boosting ingredients gaining popularity during the pandemic
From honey and ginger to turmeric and oranges, the products that help consumers take better care of themselves are getting a lift.
By: Lillianna Byington and Christopher Doering
As the coronavirus builds fear about staying healthy, consumers are turning to immunity-boosting ingredients for comfort.
From the anti-inflammatory effects of ginger and turmeric to the gut health benefits of fermented foods, ingredients that help shoppers take better care of themselves during the pandemic are getting a boost in demand.
For years, the market for functional foods has been growing. According to Fior Markets, the global market for these ingredients is projected to grow to $117 billion by 2027 from $69 billion in 2019 — an annual increase of 6.74%. Beneo, a supplier of functional ingredients derived from chicory roots, beet sugar, rice and wheat, estimated 75% of consumers globally said they plan to eat and drink healthier as a result of the pandemic.
"So many people are taking this time to commit to their personal wellness. People are trying to adopt new, healthier behaviors, more exercise. Trying to eat more healthy foods," Joan Driggs, vice president of content and thought leadership at marketing research firm IRI, said. "It's not going to go away."
Matt Kollmorgen, founder of Bee K’onscious, remembers fostering his love of honey as a child when a fast food chain would give him some with his chicken nuggets. Today, Kollmorgen's upstart honey company is taking a decidedly healthier approach to tout the benefits of the honey he purchases from producers in California, Montana and Brazil.
Unlike most honey sold in the store — which Kollmorgen said has been adulterated, a process that removes the healthy components such as vitamins and enzymes while adding ingredients like corn syrup — the honey he sells comes straight from where it was produced. Kollmorgen sampled hundreds of varieties to settle on the ones he sells today.
"We're definitely trying to target the health-conscious person that is looking for alternative sweeteners and natural products, natural ingredients, that is certainly a target," he said.
One challenge Bee K’onscious faces is convincing retailers to carry his honey, which costs $18 a jar compared to roughly $6 for one on supermarket shelves. "It's all going to come down to we have a high-quality product that is different than anything else ... in some of these retailers," Kollmorgen said.
In recent years, honey has benefited from its reputation as a natural ingredient and as a healthier sugar substitute. Honey can be used in place of cane sugar to make baked goods such as bread and cereals when it has the same attributes like color, extended shelf life, structure development and browning. It's also rich in antioxidants and can help lower cholesterol.
Despite the increase, Chris Hiatt, vice president of the American Honey Producers Association, said the industry still hasn't done enough to effectively promote its health attributes by conducting studies to show which kinds of honey, depending on the flower, have the greatest impact on health. He pointed to one success story: Manuka honey from New Zealand that has touted its live enzymes, complex sugars and medicinal properties for treating wounds and pressure ulcers, among other attributes. A jar can go for $50, he said.
"The benefits of raw honey are there and we just need to take advantage of it and promote it better," he said.
Ginger may be most commonly associated with the popular holiday cookie, but the spice is often an additive to drinks, bars, candy, broths, tea and even cocktails.
"Ginger is experiencing unprecedented popularity for a number of reasons," Kantha Shelke, a food scientist and founder and principal of Corvus Blue, a contract food science research and product development firm, said.
Globally, ginger production has been on the rise, according to data from Statista. In 2017, 3 million metric tons of ginger were produced around the world, up from 1.72 million tons seven years earlier. With a favorable health halo, a growing number of food and beverage companies have turned to ginger for many of their seasonal products.
Shelke noted that ginger is coveted as an aid in digestion, to prevent nausea and as an anti-inflammatory, among other attributes. It also addresses the consumer's growing need for flavor and interest in natural, clean label products. The global ginger market is expected to post sales of $4.18 billion by 2022, a compound annual growth rate of 6.5% between 2017 to 2022, Transparency Market Research estimated last year.
Reed's, which uses ginger in its ales, candies, beers and shots, hasn't had any trouble getting its product on shelves because the company is one of a few to use the real ingredient in its products instead of an extract that does not contain the benefits and efficacy of fresh ginger root, CEO Norman Snyder said.
Snyder said the rate of repeat customers for the company's ginger beer and ale has steadily increased each month from March through May, a sign that shoppers are doing more than pantry loading. To capitalize on the growing popularity of ginger, it recently partnered with Full Sail Brewing in Oregon to create a naturally brewed, ready-to-drink ginger mule — its first alcoholic beverage offering.
"When this is all over and done, it's going to be a different world," Synder said. "A lot of habits are going to change and if you're not ready and can't quickly respond to your customer base, you're going to be left at the door."
The golden spice, which comes from the root of the curcuma longa plant, is long said to have antioxidants and anti-inflammatory benefits because it has the compound curcumin.
Turmeric has a storied history of use in India as a medicinal herb, and more recently, sales in the U.S. are growing. The spice's sales passed $32 million in 2017, a 46.7% increase from the year before, according to reports, and it is nowthe top selling herbal ingredient in the natural space. Its popularity is expected to continue to grow as more learn about its health benefits and companies launch additional products.
Dorot Gardens, a company that makes pre-portioned frozen herbs, garlic and onions, decided to launch Frozen Crushed Turmeric this year.
Kimberly Cassar, executive vice president of sales and marketing in the Beyond Division at Kayco,which owns Dorot Gardens, said that as it has seen consumers gravitate toward products with health benefits, now was a good time to launch. She said that because she is a vegetarian, turmeric has been on her list for a while, believing the category needed more offerings outside of powdered turmeric.
"I love the benefits of turmeric as an anti-inflammatory. It's good for your immune system, it is a great antioxidant, so I love incorporating that into my dishes, but the powder would always make my tofu scramble dry," she said. "So when we talked about this in our innovation meeting, I felt like it would be great if we can offer this ingredient. People are big on it and it's very hard to find."
Cassar said people are incorporating healthier eating into their lifestyle now and as the company rolled out their turmeric, and promoted it on social media, "people are going bananas."
"I think coming out of this, what consumers are going to at least be more mindful of is; ‘The better I treat my body, the better my body can survive things like a pandemic.’ So I think that's going to be a continued focus for a while," she said.
Consumers are turning back to a vitamin C staple during the pandemic after decades of decline.
The Office of Dietary Supplements at the National Institutes of Health said vitamin C can help boost the immune system. About three-fourths of a cup of orange juice gives 103% of the daily amount of vitamin C. High levels of vitamin C can be found in citrus fruits like oranges and grapefruits.
Natalie Sexton, VP of marketing at Natalie’s Orchid Island Juice Company, said that sales in general have been up for the company, but there was a dramatic increase in orange juice, which the company classifies as a traditional juice as opposed to some of theyounger, more functional beverages on the market today.
"We saw a dramatic increase in sales with traditional orange juice, which we thought was unique because that has been known as a juice flavor that has taken more of a backseat with the consumer because these more functional blends have offered an added value to the consumer," she said. "So it was interesting to see how families and individuals were actually going back to what they've known and what they've traditionally grown up with which is orange juice."
Around the last week of March, Natalie’s Orchid saw about a 24% increase in orange juice sales, and then into the first week of April, there was an additional 18% increase — coming out to an almost 50% overall increase in orange juice sales.
When consumers think of vitamin C, they think of orange juice, she said. "It's a traditional item that has always been known to have the highest concentration of vitamin C," she said.
With antioxidants, vitamins and fiber, mushrooms are being touted for their role in boosting immunity.
"Eating mushrooms will actually help your body's ability to produce antibodies, which is pretty amazing," William Li, scientist, physician and author of Eat to Beat Disease, said.
Li said white button mushrooms contain a natural substance called beta-d-glucan, which is a natural fiber. Li pointed to a study at the University of Western Australia where they fed a group of young people just one and a third cups of mushrooms per day. The subjects were able to get a 55% elevation in the IgA level — that's an antibody defense — after a week of eating mushrooms above the group that didn't have the mushrooms.
Although demand for mushrooms was down at restaurants as they shuttered during the pandemic, grocery store sales for mushrooms continue to increase. Retail mushroom sales increased throughout April and jumped 37% alone during the first week of May compared to last year, according to IRI data cited by UPI. In May, the American Mushroom Institute said there would be shortages of the crop for the next six to 10 weeks as demand has fluctuated throughout the pandemic.
Li said the pandemic has opened a new level of awareness about the importance of the immune system. Some foods, like mushrooms, have "evidence that they can actually not just shore up your immunity, but actually enhance it, boost it and take it to the next level," he said.
From kimchi and sauerkraut to kombucha and yogurt, more consumers have been interested in fermented foods as research and studies show the positive effects it can have on health.
The fermentation process enables bacteria to convert carbs into acids or alcohol, which then serve as a natural preservative. In recent years, fermented foods have gained more popularity and the pandemic could push that even further. Tech-based management platform Upserve analyzed data from their customers and found that fermented foods consumption jumped 149% in 2018.
Physician-scientist Li said that fermented foods are present across many ancient cultures. In the old days, fermented foods were developed in order to be able to preserve foods for long periods of time, he said.
Many ask how a food that's been around for months or longer could last because it would grow bacteria.Li saidthe growth of the beneficial bacteria overwhelms the bad bacteria in fermentation. When eating fermented foods, consumers are ingesting probiotics and feeding healthy gut bacteria, he said.
A common denominator of many fermented foods is that they actually contain a lot of lactobacillus bacteria, which is a natural bacteria in the gut.
"When we have more lactobacillus, that's a sign of a healthy gut ecosystem," he said.
During the pandemic, Li said there was a study conducted in China that looked at the gut microbiome, the diet and the immune system of people who had more serious COVID-19 symptomsversus less serious cases. The study found that the people who had a milder form and were more protected from having serious illness also had more lactobacillus in their gut.
"We're still just figuring out this disease, but interestingly, even with COVID-19, we're beginning to find some important connections between gut health and our overall health," Li said.
Article top image credit: Pixabay
Can better-for-you junk food dominate the snack segment?
Some CPG companies try to balance nostalgia for childhood treats with today's healthier trends, but critics say these products are more of a marketing ploy.
By: Cathy Siegner
Today's parents want to introduce their children to the types of junk food they ate growing up, but they may not want them consuming the artificial ingredients those nostalgic snacks contain.
Snack makers are catering to this demographic by turning out better-for-you versions of those familiar goodies. Consumers are picking up vegan and gluten-free MadeGood crispy squares instead of Rice Krispies Treats, Tree Hugger vegan, nut- and dairy-free lollipops rather than Charm Blow Pops and Annie's Organic Cheddar Bunnies with real cheese in place of Goldfish snacks.
Some manufacturers even aim for a "fake taste" while including healthier ingredients, The Wall Street Journal noted. Peatos makes its crunchy curls and rings from peas, lentils and fava beans and uses the tag line, "Junk food with benefits!" Magic Spoon's low-carb cereal, made with vegetable-based colors, turns out classic varieties such as frosted, fruity, cocoa and cinnamon.
Although snack manufacturers are making a push toward healthier options, the trend toward eating more junk food persists. According to a CivicScience survey of 772 parents with kids between 3 and 17 years cited by The Journal, almost 40% allow their children to consume junk food several times per week. And that's regardless of the industry's growing emphasis on healthier products, cleaner labels and transparency in food and beverage manufacturing.
But some nutritional experts and policy research groups aren't buying it. In a 2017 report, the Wisconsin-based Cornucopia Institute found snack bars may claim to be wholesome and nutritious, but they actually include cheap, conventional ingredients instead of organic ones. Nutritionists have said packaged snacks go through significant processing and are less healthy than fruits, vegetables and grains. Healthy junk food may be more of a marketing tactic than a definable term, but it does seem to draw in consumers.
Besides the concern about healthier ingredients, studies show children tend to eat more snack foods if they have access to a wider variety of them. Meanwhile, other studies have linked childhood allergies to consuming processed junk food and to health problems such as diabetes, obesity, heart disease and cancer. Those factors have deterred parents from buying traditional junk food and pushed them to look for alternatives.
Some of these brands may cost more — perhaps due to the indulgence or nostalgia factors — but research has found millennials in particular will pay more for higher-quality premium products. Some brands might be taking it too far for consumers to pay, though. Magic Spoon is a low-carb, low-sugar, high-protein and gluten-free breakfast food that can only be bought online and isn't cheap. The brand is looking to revamp the cereal category, which has struggled as consumers have turned to healthier options, but four 7-ounce boxes are listed at $39 on the company's website.
Not all brands are embracing the better-for-you trend. Some studies have shown food companies are not doing enough to help consumers eat healthy, and they could do more to make nutritious options affordable to consumers. Achieving genuinely healthy junk food may be a stretch, although better-for-you versions of junk food-like products clearly have an appeal — and a market. As long as they do, manufacturers will likely continue producing them to meet the growing demand.
How soda gets healthy: Remaking the classic beverage with less sugar, more benefits
The drink has long been panned for its association with diseases, but upstarts are trying to redefine the category.
By: Christopher Doering
A lifetime soda drinker, Nat Noone was chugging 12 to 14 cans of Diet Coke a day.
He would regularly stop at a 7-Eleven convenience store on his commute to and from work to buy an 64-ounce Big Gulp — only to find the beverage didn’t leave him satisfied. He loved soda and he knew it, even if the specter of how the aspartame in the drinks he was consuming might be weighing on his health.
“There is something addictiveabout soda. I’d polish the [Big Gulp] and the second I’m done, I’m like, 'Where is my refill?' ” he said. “My wife was like, ‘You got to get out of soda,' and there was no happy place for me to land.”
One day, Noone was playing around at home with his SodaStream sparkling water maker when he added a splash of orange juice. He quickly realized the only thing missing needed to make it a healthier soda for him was caffeine. He added that, too.
Soon Noone, who has been in the beverage industry since college after starting businesses in both juice and carbonated soft drink distribution,began his newest drink company called Wave Soda. It didn't take long before he was driving around San Diego, selling his soda creations to area retailers out of his newly branded Wave Soda 250 Ford Transit cargo van.
“When we first launched [Wave Soda], everyone is like, 'Don’t call it soda.' And for me, I started it for my soda addiction, it was, 'How do I get out of soda?' " Noone said. "So for me, I know it’s a polarizing word, but the way we're redefining it, or working to redefine it, is to make it this happy place again.”
Noone's product — 85% sparkling water, 15% fruit juice and 42 milligrams of natural caffeine derived from green coffee beans — has unsurprisingly become a hit among young millennials and Gen Zers flocking to healthier products. They are responsible for more than half of Wave Soda's sales.
“We’re not trying to create a category," Noone said. The category, he continued, is already there, marked by sales declines in Diet Coke and Diet Pepsi.
"There is an audience that is left. I would never try to convince someone to leave soda, but if you made that decision, our whole thing is we’ve got this new home for you to land in,” he said.
“There is something additive about soda. I’d polish the [Big Gulp] and the second I’m done, I’m like, 'Where is my refill?' ”
CEO, Wave Soda
While Wave Soda has been quick to embrace "soda," others have distanced themselves from the stigma attached to the sugar-laden beverage that is routinely under attack for its negative effects on consumer health.
In 2019, the American Heart Association released a study showing women older than 50 who drink two or more artificially sweetened beverages daily have an increased risk of heart attacks, strokes and death. In September 2019, a study published in JAMA found drinking at least two 8-ounce glasses of soda a day was linked to increased risk of death. In recent years, other studies have linked soft drink consumption to stroke, dementia, Type 2 diabetes, obesity and metabolic syndrome.
In Chicago, Limitlessexpanded in 2018 beyond its coffee and tea roots into another caffeine-rich beverage. Instead of calling the product soda, the beverage is touted as a lightly caffeinated sparking water that has 35 milligrams of the stimulant for each 12-ounce can — the same amount as the beverage it is trying to replace.
“I purposely said we are not a soda. I want to stay as far away from soda as possible,” Matt Matros, co-founder of Limitless, told Food Dive. “You’re either full of sugar, which is what soda is, or you’re full of fake chemicals, which is what diet soda is. I don’t really think there is a way to do healthy soda.”
So far, the shift into sparkling water appears to be paying off for the nearly four-year-old company. As of September 2019,Limitlesshad national distribution in places such as Walmart and Ahold Delhaize’s Giant banner.
A new definition of soda?
Andrew Henkel, senior vice president of brand growth solutions at SPINS, said while soda needs to "fundamentally change" to prevent a further shift to competing beverages from consumers, he was unsure just how farthis change could go. Soda, for better or worse, is synonymous with sugar or high fructose corn syrup, he said, so any removal of the sweeteners risks the beverage losing its defining characteristic.
“The degree to which soda needs to change is so big that I don’t even know if you’d call it soda any more,” Henkel said.
Volume sales of carbonated soft drinks in the U.S. continue to slide. According to the Beverage Marketing Corporation, they were on pace for their 15th-straight year of declines in 2019, as more beverage choices overall and a push toward health and wellness eat into consumption.
However, the segment is still popular. In terms of volume, soda is the second-biggest beverage category in the U.S. The use of higher-margin small cans and new flavor innovations by beverage makers were projected topush dollar sales of carbonated soft drinks above $76 billion in 2019, the highest on record.
Gary Hemphill, managing director of research with the Beverage Marketing Corporation, said that new, better-for-you sodas being introduced by upstart companies will carve out a presence on the market among consumers turning to healthier and premium-type products. Despite this success, these beverages will likely remain niche products, with the carbonated soft drinks category as a whole continuing to be dominated by the big brands, he said.
"Consumers are happy with the Cokes, Pepsis and Dr Peppers of the world. ... They like those brands. They like those products. They're just drinking fewer of them," Hemphill said. Soda's "still a big place, a big category and I think some of these companies ... see that and they see an opportunity in developing what they would maybe describe as a healthier soda."
The popularity of SodaStream has spawned upstart companies like Soda Press, a New Zealand maker of certified organic soda, cocktail and mixer syrups.
Cameron Romeril, who founded Soda Press more than five years ago, said his goal is to create a new category in healthier soda. To do that, Soda Press’ syrups have 50% less sugar than soda, tout the presence of probiotics and specifically note on the label that the products don’t use stevia — instead achieving sweetness through a mix of real fruit ingredients, sugar and monkfruit.
“We’re not taking drinkers from traditional soda. They’re not interested and we’re not interested in talking to them either,” Romeril told Food Dive. “We originally thought that coming to the U.S. that people would just be wanting hard-core soda, but it’s amazing how many people don’t even drink soda and how many people are coming back into this subcategory we’re trying to create, which is healthier soda.”
Even as Soda Press focuses on that category, it soon found itself closer to the very soda companies that have made their mark with these shunned sugary offerings. PepsiCo’s SodaStream acquired 51% of the company in October 2018 for an undisclosed sum, giving the startup a chance to improve its balance sheet and focus on expanding the brand’s reach.
PepsiCo found that consumers want healthier sodas and “that’s why they are kind of going down that road” with us and SodaStream, Romeril said.
“It’s a great train to be on, even if we’re a little caboose on the end” of a nearly $200 billion company, he said.
Few companies have been as far ahead of the healthiersoda trend as Zevia, which has been in stores for more than a decade. Today, the beverage manufacturer makes a line of sodas that have a similar flavor profile to many of the drinks they are trying to replace — including Dr Zevia and a drink called Cola.
Olyvia Pronin, director of marketing at Zevia, said the Los Angeles-based company doesn't need to aggressively try to poach consumers from Big Soda.
"There are just people who are happy loyal customers, and they buy soda with calories and with everything, and we get it. They love the taste and they might be addicted to it," Pronin said. "We know that many of them switch consciously from soda to Zevia. It's great that there is competition, but we also think that there should be a healthier alternative in everything."
Article top image credit: Christopher Doering
Behind the scenes: Data and technology bring food product R&D into the 21st century
With CPG companies under pressure to develop items faster and stretch their spending, Conagra, Mars Wrigley and Ferrara are rethinking the decades-old way of creating new things for consumers.
By: Christopher Doering
There was little doubt five years ago that Conagra Brands' frozen portfolio was full of iconic items that had grown tired and, according to its then-new CEO Sean Connolly, were "trapped in time."
While products such as Healthy Choice — with its heart-healthymessage — and Banquet — popular for its $2 turkey and gravy and salisbury steak entrees — were still generating revenue, the products lookedmuch the same as decades before. The result: sales sharply fell as consumers turned to trendier flavors and better-for-youoptions.
Executives realized the decades-old process used to create and test products wasn't translating into meaningful sales. Simply introducing new flavors or boosting advertising was no longer enough to entice consumers to buy. If Conagra maintained the status quo, the CPG giant only risked exacerbating the slide and putting its portfolio of brands further behind the competition.
"We were doing all this work into what I would call validation insights, and things weren't working," Bob Nolan, senior vice president of demand sciences at Conagra, said. "How it could it not work if we asked consumers what they wanted, and we made it, and then it didn't sell? ...That’s when the journey started. Is there a different way to approach this?”
Nolan and other officials at Conagra eventually decided to abandon traditional product testingand market research in favor of buying huge quantities of behavioral data. Executives were convinced the datacould do a better job of predicting eventual product success than consumers sitting in an artificial setting offering feedback.
Conagra spent about $15 million less in 2019on testing products than it did three years earlier, with the much of the money now going toward buying data in food service, natural products, consumption at home, grocery retail and loyalty cards. When Nolan started working at Conagra in 2012, he estimated 90% of his budget at the company was spent on traditional validation research such as testing potential products, TV advertisements or marketing campaigns. In 2019, money spent on those methods hadbeen cut to zero.
While most food and beverage companies have not changed how they go about testing their products as much as Conagra, CPG businesses throughout the industry are collectively making meaningful changes to their own processes.
With more data avaliable now than ever before, companies can change their testing protocol to answer questions they might have previously not had the budget or time to address. They're also turning to technology such as videos and smartphones to immediately enagage with consumers or to see firsthand how they would respond to their prototype products in real-life settings, like their own homes.
As food manufacturers scramble to remain competitive and meet the shopper's insatiable demand fornew tastes and experiences,changing how they go about testing can increase the liklihood that a product succeeds — enabling corporations to reap more revenue and avoid being one of the tens of thousands of products that fail every year.
For Conagra, the new approach already is paying off. One success story came in the development of the company's frozen Healthy Choice Korean-Inspired Beef Power Bowl. By combing data collected from the natural food channel and specialty stores like Whole Foods and Sprouts Farmers Market, the CPG giant found people were eating more of their food in bowls — a contrast to offerings in trays.
"How it could it not work if we asked consumers what they wanted, and we made it, and then it didn't sell? ...That’s when the journey started. Is there a different way to approach this?"
Senior vice president of demand sciences, Conagra
At the same time, information gathered from restaurants showed Korean was the fastest-growing cuisine. The data also indicatedthe most popularflavors within that ethnic category. Nolan said without the data it would have been hard to instill confidence at Conagra that marketing a product like that would work, and executives would have been more likely to focus on flavors the company was already familiar with.
Since then, Conagra rebranded Healthy Choice around cleaner label foods with recognizable, modern ingredients that were incorporated into innovations such as the Power Bowl. The overhaul helped rejuvenate sales for the 34-year old brand, according to the company.
Conagra has experienced similar success by innovating its other frozen brands, including Banquet and Marie Callender's. For a company where frozen sales total $5.1 billlion annually, the segment is an important barometer for success at Conagra.
A decades-old approach
For years, food companies would come up with product ideas using market research approaches that dated back to the 1950s. Executives would sit in a room and mull over ways to grow a brand. They would develop prototypes before testing and retesting a few of them to find the one that would have the best chance of resonating with consumers. Data used was largely cultivated through surveys or focus groups to support or debunk a company idea.
"It's an old industry and innovation has been talked about before but it's never been practiced, and I think now it's starting to get very serious because CPG companies are under a lot of pressure to innovate and get to market faster," said Sean Bisceglia, CEO of Curion. "I really fear the ones that aren’t embracing it and practicing it ... may damage their brand and eventaully damage their sales.”
Information on nearly every facet of a consumer's shopping habits and preferences can be easily obtained. There is data showing how often people shop and where they go. Tens of millions of loyalty cards reveal which items were purchased at what store, and even the checkout lane the person was in. Data is available on a broader level showing how products are selling, but CPGs can drill down on an even more granular level to determine the growth rate of non-GMO or organic, or even how a specific ingredient like turmeric is performing.
Market research firms such as Nielsen and Mintel collect reams of valuable data, including when people eat, where and how they consume their food, how much time they spend eating it and even how it was prepared, such as by using a microwave, oven or blender.
To help its customers who want fast results for a fraction of the cost, Bisceglia said Curion has created a platform in which a product can be tried out among a random population group — as opposed to a specifically targeted audience made up of specific attributes, like stay-at-home moms in their 30s with two kids — with the data given to the client without the traditional in-depth analysis. It can cost a few thousand dollars with results available in a few days, compared to a far more complicated and robust testing process over several months that can sometimes cost hundreds of thousands of dollars, he said.
Curion, which has tested an estimated 8,000 products on 700,000 people during the last decade, was working in 2019 on creating a database that could allow companies to avoid testing altogether.
For example, a business creating a mango-flavored yogurt could initially use data collected by a market research firm or someone else showing how the variety performed nationwide or by region. Then, as product development is in full swing, the company could use Curion's information to show how mango yogurt performed with certain ages, income levels and ethnicities, or even how certain formulations or strength of mango flavor are received by consumers.
"What's actually going to be able to predict if someone is going to buy something, and are they going to buy it again and again and again? You have to get smart on what is the payoff at the end of all of the data. And just figure out what the key measures are that you need and stop collecting, if you can, all this other ancillary stuff."
Owner, Lori Rothman Consulting
Lori Rothman, who runs her own consulting firm to advise companies with their product testing,worked much of the last 30 years at companies including Kraft and Kellogg to determine the most effective way to test a product and then design the corresponding trial. She used to have days or weeks to review data and consumer comments before plotting out the best way to move forward, she said.
In today's marketplace, there is sometimes pressure to deliver within a day or even immediately. Some companies are even reacting in real time as information comes in — a precedent Rothman warned can be dangerous because of the growing amount of data available and the inherent complexity in understanding it.
"It's continuing toward more data. It's just going to get more and more and we just have to get better at knowing what to do with it, and how to use it, and what's actually important. What's actually going to be able to predict if someone is going to buy something, and are they going to buy it again and again and again?" Rothman said. "You have to get smart on what is the payoff at the end of all of the data. And just figure out what the key measures are that you need and stop collecting, if you can, all this other ancillary stuff."
Ferrara Candy, the maker of SweeTarts, Nerds and Brach's, estimated the company considers more than 100 product ideas each year. An average of five typically make it to market.
To help whittle down the list, the candy company owned by Nutella-maker Ferrero conducts an array of tests with consumers, nearly all of them done without the customary focus group or in-person interview.
DanielHunt, director of insights and analytics for Ferrara, said rather than working with outside vendors to conduct research, like the company would have a decade ago, it now handles the majority of testing itself.
In the past, the company might havespent $20,000 to run a major test. It would have paid a market research firm to write an initial set of questions to ask consumers, then refine them, run the test and then analyze the information collected.
Today, Hunt said Ferrara's own product development team, most of whom have a research background, does most of the work creating new surveys or modifying previously used ones — all for a fraction of the cost. And what might have taken a few months to carry out in the past can sometimes be completed in as little as a few weeks.
"Now when we launch a new product, it’s not much of a surprise what it does, and how it performs, and where it does well, and where it does poorly. I think a lot of that stuff you've researched to the point where you know it pretty well," Hunt said. “Understanding what is going to happen to a product is more important — and really understanding that early in the cycle, being able to identify what are the big potential items two years ahead of launching it, so you can put your focus really where it’s most important.”
Increasingly, technology is playing a bigger part in enabling companies such as Ferrara to not only do more of their own testing, but providing them with more options of how best to carry it out.
Data can be collected from message boards, chat rooms and online communities popular with millennials and Gen Zers. But technology does have its limits. Ferrara aims to keep the time commitment for its online surveys to fewer than seven minutes because Hunt said the quality of responses tends to diminish for longer ones, especially among people who do them on their smartphones.
Other research can be far more rigorous, depending on how the company plans to use the information.
"I don’t think that (testing is) going away or becoming less prevalent, but certainly the way that we’re testing things from a product standpoint is changing and evolving. If anything we’re doing more testing and research then before but maybe just in a slightly different way than we did in the past.”
Director of insights and analytics, Ferrara
In 2018, Ferrara created an online community of 20 people to help it develop a chewy option for its SweeTarts brand. As part of a three-week program, participants submitted videos showing them opening boxes of candies with different sizes, shapes, flavors, tastes and textures sent to them by Ferrara. Some of the products were its own candies, while others came from competitors such as Mars Wrigley's Skittles or Starburst. Ferrara wanted to watch each individual's reaction as he or she tried the products.
Participants were asked what they liked or disliked, or where there were market opportunites for chewy candy to help Ferrara better hone its product development. These consumers wereasked to design their own products.
Ferrara also had people either video record themselves shopping or writing down their experience. This helped researchers get a feel for everything from when people make decisions that are impulsive or more thought out, to what would make a shopper decide not to purchase a product. As people provided feedback, Ferrara could immediately engage with them to expound on their responses.
"All of those things have really helped us get information that is more useful and helpful," Hunt said. "I don’t think that (testing is) going away or becoming less prevalent, but certainly the way that we’re testing things from a product standpoint is changing and evolving. If anything, we’re doing more testing and research than before, but maybe just in a slightly different way than we did in the past.”
Convincing people to change
Getting people to change isn't easy. To help execute on its vision, Conagra spent four years overhauling the way it went about developing and testing products — a lengthy process in which one of the biggest challenges was convincing employees used to doing things a certain way for much of their career to embrace a different way of thinking.
Conagra brought in data scientists and researchers to provide evidence to show how brands grow and what consumer behavior was connected to that increase. Nolan's team had senior management participate in training courses "so people realize this isn't just a fly-by-night" idea, but one based on science.
The CPG giant assembled a team of more than 50 individuals— many of whom had not worked with food before — to parse the complex data andfind trends. Thismarked a dramatic new way of thinking, Nolan said.
While people with food and market research backgrounds would have been picked to fill these roles in the past, Conagra knew it would be hard to retrain them in the company's new way of thinking. Instead, it turned to individuals who had experience indata technology, hospitality and food service, even if it took them time to get up to speed on Conagra-specific information, like the brands in its portfolio or how they were manufactured.
Conagra's reach extended further outside its own doors, too. The company now occasionally works with professors at the University of Chicago, just 8 miles south of its headquarters, to help assess whether it is properly interpreting how people will behave.
"In the past, we were just like everybody else," Nolan said. "There are just so many principles that we have thrown out that it is hard for people to adjust."
Mars Wrigley has taken a different approach, maintaining the customary consumer testing while incorporating new tools, technology and ways of thinking that weren't available or accepted even a few years ago.
"I have not seen a technology that replicates people actually trying the product and getting their honest reaction to it. At the end of the day, this is food."
Lisa Saxon Reed
Director of global sensory, Mars Wrigley
Lisa Saxon Reed, director of global sensory at Mars Wrigley, said the sweets maker created packaging for its Extra mega-pack with 35 pieces of gum, improving upon a version developed for its Orbit brand years before. This time around, the company — which developed more than 30 prototypes — found customers wanted a recyclable plastic container they believed would keepthe unchewed gum fresh.
Shoppers also wanted to feel and hear the packaging close securely, with an auditory "click." Saxon Reed, who was not involved with the earlier form of the package, speculated it didn't resonate with consumers because it was made of paperboard, throwing into question freshness and whether the package would survive as long as the gum did.
The new packaging, which hit shelves in 2016 after about a year of development, became the top selling gum product at Walmart within 12 months of its launch, according to Saxon Reed. Mars Wrigley also incorporated the same packaging design for a mega pack of its 5 gum brand because it was so successful.
"If we would not have made a range of packaging prototypes and had people use them in front of us, we would have absolutely missed the importance of these sensory queues and we would have potentially failed again in the marketplace," Saxon Reed said. "If I would have done that online, I'm not sure how I would have heard thoseclues. ...I don't think those would have come up and we would have missed an opportunity to win."
The new approach extends to the product itself, too. Saxon Reed said Mars Wrigley was looking to expand its Extra gum line into a cube shape in fall 2017. Early in the process, Mars Wrigley asked consumers to compile an online diary with words, pictures and collages showing how they defined refreshment. The company wanted to customize the new offering to U.S. consumers, and not just import the cube-shaped variety already in China.
After Mars Wrigley noticed people using the color blue or drawing waterfalls, showers or water to illustrate a feeling of refreshment, product developers went about incorporating those attributes into its new Extra Refreshers line through the color, flavor or characteristics thatfeel cool or fresh to the mouth.They later tested the product on consumers who liked gum, including through the age-old testing process where people were given multiple samples to try and asked which they preferred.
Extra Refreshers hit shelves earlier this year and is "off to a strong start," Saxon Reed said.
"I don't see it as an 'either-or' when it comes to technology and product testing. I really see it as a 'yes-and,' " she said. "How can technology really help us better understand the reactions that we are getting? But at this point, I have not seen a technology that replicates people actually trying the product and getting their honest reaction to it. At the end of the day, this is food."
Regardless of what process large food and beverage companies use, how much money and time they spend testing out their products, or even how heavily involved consumers are, CPG companies and product testing firms agreed that an item's success is heavily defined by one thing that hasn't and probably never will change: taste.
"Everybody can sell something once in beautiful packaging with all the data, but if it tastes terrible it's not going to sell again," Bisceglia said.
Article top image credit: Christopher Doering
AI upstart Brightseed raises $27M as demand for healthy offerings surges
By: Christopher Doering
Brightseed, a three-year-old upstart that acts as a "search engine" to find phytonutrients, or small molecules, that could have the biggest health and nutrition benefits in humans, raised $27 million in funding in September led by Lewis & Clark AgriFood.
The money will be used to scale-up its artificial intelligence platform, bring its first phytonutrient to market and fund research for partnerships it expects to strike with companies in 2020. Brightseed also announced new advisors to help on strategy, provide industry connections and offer business advice. Those individuals include Indra Nooyi, former chairman and CEO of PepsiCo; and Walter Robb, former co-CEO of Whole Foods Market.
Jim Flatt, the company's CEO, said Brightseed has seen increased demand for its business during the coronavirus outbreak as consumers look to eat healthier and businesses search for ways to quickly and more efficiently meet those needs.
"All companies are impatient and want to meet these unmet consumer needs and so, for sure, we honestly have more interest than we can handle as a development-stage company," he said.
Brightseed has had a busy 2020 as it benefits from growing demand from food, beverage and other companies who are looking to improve the health and nutritional benefits of their products. In June, Brightseed announced a partnership with Danone North Americato uncover hidden nutrients in soybeans that it could then consider incorporating into its plant-based brands.
While a lot is known about plants, Brightseed and other companies are hoping to delve into the unknown small building blocks that create coveted flavors or nutritional and functional benefits. A plant's genome can be eight times as complicated as a human one because it not only helps the plant grow, but do other life-sustaining tasks like attract bees for pollination or repel pests. The same plant also can exhibit different characteristics depending on the climate or the soil that it is grown in.
In the case of Brightseed, its work in fruits, vegetables and other plants is particularly sought after because it is taking what the plant already offers rather than making genetic modifications that are frowned upon by some consumers. It's no wonder that one reason Brightseed is raising money is to fund new partnerships that it needs to grow its young business. The team of advisors it is adding to the fold will no doubt play a major role in helping Brightseed connect with other food and beverage companies to use their service.
Flatt compared phytonutrients to plant-based meats that are increasingly popular today as a replacement for traditional animal offerings. A few years ago, the space was largely untapped, but as consumer interest in eating healthier and protecting the environment gained momentum, it attracted upstarts such as Beyond Meat and Impossible Foods as well as big food giants like Conagra Brands, Tyson Foods, Kellogg and Nestlé.
As consumer trends continue to shift, Flatt is optimistic that phytonutrients will soon be a ubiquitous term throughout the food and beverage industry. Beneo, a supplier of functional ingredients, estimated 75% of consumers globally said they plan to eat and drink healthier as a result of the pandemic. In the long run, Brightseed could be a major beneficiary.
"I fully think phytonutrients will be a common term five years from now," Flatt said. "There is a bit of missionary effort here but it's with a pretty strong tailwind."
In humans, phytonutrients support health with anti-inflammatory, cardioprotective and neuroprotective activities. Examples of phytonutrients include resveratrol in red grape skins, or lycopene, found in tomatoes. Less than 1% of the world's phytonutrients have been identified, according to Brightseed.
Much like sequencing the human genome helped in the discovery of drugs to address unmet medical needs, uncovering even a small portion of these phytonutrients could lead to major dividends later on when it comes to new food and beverage creations. As CPGs look to ditch processed ingredients in favor better-for-you ingredients and compete with nimble upstart companies, Brightseed and others in its space stand to be among the biggest beneficiaries.
Article top image credit: Courtesy of Brightseed
The latest developments in "better-for-you" food trends
With millions of Americans sickened and thousands dead from the coronavirus, the outbreak has acted as a catalyst to encourage more consumers to eat healthier. This shift could have an immediate and long-lasting impact on food and beverage makers by encouraging more businesses to expedite the reformulation of existing recipes or introduce additional new products.
included in this trendline
6 immunity boosting ingredients gaining popularity during the pandemic
The use of data and technology to bring food product R&D into the 21st century
A look at AI upstart Brightseed's funding as demand for healthy offerings surges
Our Trendlines go deep on the biggest trends. These special reports, produced by our team of award-winning journalists, help business leaders understand how their industries are changing.