Watch These 3 Food Industry Trends Q2-Q4
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Each January, articles on food industry trends fill in-boxes and social media feeds. By the second quarter, they fade, overshadowed by new issues and events.
However, from dramatic shifts in consumer buying habits to new government regulations, trends signal change that can affect how food distributors, manufacturers, and processors operate.
That’s particularly important for inventory management. As trends alter product demand, customers may cancel ingredient orders, leaving businesses with costly, excess inventory.
To keep ahead of industry changes, here are three prominent trends to watch in the upcoming quarters:
1. Sustainability: the new and improved version
Sustainability is expanding to include the entire product life cycle — from reducing food and packaging waste to regenerating depleted farmland. This affects how food businesses source ingredients or seek out packaging alternatives.
According to Mintel, governments, manufacturers, and packaging industry councils have pledged to improve packaging waste. That includes bio-based packaging materials made from renewable sources, as well as being recyclable or compostable.
Next-level “Organic”
Additionally, a new version of sustainability is emerging: regenerative agriculture. This next-level organic agriculture focuses on regenerating the land.
The science-centered Savory Institute is leading the regenerative movement. The institute qualifies food producers with an Ecological Outcome Verification (EOV) seal, based on their farmland restoration outcomes.
Food brands then display the EOV seal on their packaging, demonstrating that their ingredients come from land that is improving soil health, water quality, and biodiversity
What the sustainability trend means for food industry businesses:
Consumer awareness is going through a dramatic shift. Millennials, in particular, are changing the food industry. They are more aware of food labeling and product claims.
Moreover, that will influence every level of food production — from how ingredients are sourced to how products are packaged.
2. Longevity foods and the overlooked Perennial generation
According to Mintel, food and beverage manufacturers have a new market opportunity: wellness food products for the large, perennial population (baby boomers and their parents).
After years of millennial focus, this 50-plus demographic is ripe for longevity foods. In general, they are living longer, are more active, and are interested in food-as-medicine.
That includes natural ingredients such as ginger, turmeric, and green tea.
Also, one startup (whose co-founder created the plant-based Beyond Meat brand) found that older consumers are attracted to plant-based products. However, the beverage industry had largely overlooked them in a frenzy to capture the millennial and gen-z demographics.
Their newly released plant-based, nutrient-rich health drink focuses on improving gut, bone and brain health.
What the longevity food trend means for food industry businesses:
As new products come on the market targeting this significant, growing demographic, ingredient preferences and demand may shift.
That list includes a need for holistic-medicine ingredients, non-dairy and plant-protein products, as well as products free of cholesterol, gluten, GMOs and artificial additives.
3. Cannabis curiosity growing with consumers
It’s hard to ignore the billion-dollar cannabis industry and the cannabis derivative cannabidiol (CBD). CBD (which comes from the hemp plant and “by itself does not cause a ‘high’”) is gaining traction for its medical and health benefits.
Currently, under U.S. federal law, CBD is prohibited in food products. However, Wholefoods notes that there’s a growing interest surrounding CBD products at “food industry trade shows, food innovators conferences or even local farmers markets.”
Additionally, the World Health Organization (WHO) has found “…no evidence of…health-related problems associated with the use of CBD.”
What the cannabis trend means for the food industry:
As with the other trends in this article, consumer demand will drive change. Currently, cannabis derivatives are getting significant consumer attention — especially from younger groups who are open to trying new ingredients. (Even burgers are getting a CBD infusion.)
And that has the Federal Drug Administration’s attention. The FDA continues to evaluate potential cannabis-related and derived products for future regulation. The current concern is CBD product marketing that makes “egregious and unfounded claims.”
However, recent policy changes indicate that cannabis-related product approval is moving forward. The 2018 Farm Bill took hemp off the controlled-substance list.
That said, the FDA still has full control over regulating products containing cannabis derivatives.
Surefire trends. Unpredictable timelines
These three trends have the potential to create demand for new food ingredients while making others obsolete. Ultimately, consumers will steer the outcomes.
For the remaining 2019 quarters, businesses that monitor and adjust to the trends will certainly be a step ahead of any surprises.
At Ingredient Exchange, we see how trends affect food inventory. Whether your product becomes obsolete or an order is canceled, we can help rescue your profits. Get in touch today to learn more: 314-872-8850
