Brisk’ Future for Functional Beverages

Several converging attributes suggest sales growth for the category: report

Published in CSP Daily News

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LONDON -- The functional-beverage market is "poised to grow at a brisk [rate] through 2020,” according to a new report from Future Market Insights.

Functional beverages—those fortified with a range of ingredients such as herbs, vitamins, minerals and amino acids—purport to address a variety of health issues, from simple hydration to overall nutritional well-being.

The market can be segmented based on type into energy drinks, sports drinks, nutraceutical drinks, dairy-based beverages, juices, enhanced water and others. Energy drinks is the largest segment in functional beverages followed by sports drinks and nutraceutical drinks. Another segmentation based on the ingredients used can be as follows: antioxidants, minerals, amino acids, prebiotics, probiotics, vitamins, super fruit extracts and botanicals.

North America is the largest market for functional beverages, according to “Functional Beverages Market: Global Industry Analysis and Opportunity Assessment 2014-2020,” as it contains innovative varieties of drinks that are customized for all age groups and strata.

Growing health concerns and changing lifestyles are some of the major drivers of an inflated demand for functional beverages. An increasing number of health-conscious consumer is another growth engine for functional beverages, according to the report.

“Advancement in product development practices coupled with technology upgrades would drive the market for functional beverages in the forecast period,” the report said. “Ingredient formulation technologies such as micro-encapsulation and particle size reduction techniques have widened product offerings by manufacturers. Development of various ingredients to mask the unpleasant taste of certain amino acids and omega-3 fatty acids has revolutionized the market for functional beverages. Thus, the market is poised to grow at a brisk CAGR between 2014 and 2020.”

It continued, “Innovation is the key to success in the beverage industry. Utilizing ingredients such as natural food/beverage colors, low-calorie natural sweeteners and kosher ingredients are in vogue. Manufacturers are constantly embracing open innovation to gain cost-leadership and fixed suppliers in early development stage. One of the major advantages of a functional beverage is that consumers are ready to pay a premium price for its various functional advantages. Manufacturers and retailers market these drinks in several ways to attract different strata of consumers. For instance, ready-to-drink tea and fruit/vegetable juices are targeted toward obese people who are looking to lose weight. Retailers, as well as wellness centers, play an important role in promoting these products.”

Diet trends forecast: Kale out, clean eating in

12/30/2015 - by Monica Watrous

Trending superfoods for the coming year include seeds, avocados and ancient grains.

NEW YORK — Health-conscious consumers will opt for seafood and seeds over beef and bacon in the New Year, according to a diet and nutrition trends forecast from Today’s Dietitian and Pollock Communications. The report, which is based on a survey of 450 registered dietitian nutritionists, also suggests more shoppers may seek such claims as “G.M.O.-free,” “antibiotic-free” and “additive-free” in 2016. Gluten-free and Paleo diets will remain popular, but clean eating is expected to eclipse these trends, according to the report.

Mara Honicker, publisher of Today's Dietitian

“When it comes to forecasting nutrition trends, there are no better experts than registered dietitian nutritionists,” said Mara Honicker, publisher of Today's Dietitian. “They are at the forefront of everyday eating habits and purchasing decisions of people from all regional and economic environments. With almost two decades of working on behalf of dietitians, we know they have their finger on the pulse.”

Trending superfoods for the coming year include seeds, avocados and ancient grains, according to more than half of registered dietitians surveyed. Kale has lost its luster, and green tea is gaining steam.

Kale has lost its luster, and green tea is gaining steam.

Technology is another top trend in terms of health and wellness. Seventy-one per cent of registered dietitians predict more consumers will track food intake or activity with mobile apps or wearable devices. Survey participants also cited blogs, social media and television as popular sources of nutrition information for consumers; however, two-thirds of dietitians fear consumers may glean harmful or inaccurate information from these sources.

Regardless of diet trends, taste and convenience remain the primary drivers of purchasing decisions, according to 93% and 97% of respondents, respectively.

Jenna Bell, Ph.D., RDN, senior v.p. and director of food and wellness for Pollock Communications

“Even when you’re making healthy choices, RDNs know that taste and convenience are deal breakers if not satisfied,” said Jenna Bell, Ph.D., RDN, senior vice-president and director of food and wellness for Pollock Communications.

Dr. Bell also noted foods perceived as healthier by consumers may not necessarily be better choices.

“While consumers may look for G.M.O.-free or other ‘free-from’ claims on the label, it doesn’t mean that it has always led to healthier, more nutritious options,” she said “Make decisions based on the quality of the whole food and the variety and quality of your overall diet.”

Plants will continue to take over the plate in 2016

By Tricia Contreras on December 28th, 2015 | Comments (0)

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(Image: miikkahoo/Flickr/Wikimedia Commons)

Vegetables continued to take over moremenu categories and replace meat at some meals for a growing number of consumers this year, and the trend is predicted to grow even bigger in 2016.

Rising interest in healthy eating, the movement towards local foods and a growing acceptance of meals that don’t center around animal protein are all driving vegetables’ prominence and popularity.

Locally grown produce ranked third on the National Restaurant Association’s annualWhat’s Hot culinary forecast for 2016, and NRA director of research communications Annika Stensson said the coming year is expected to bring more restaurants featuring vegetables at the center of the plate. As more consumers warm to the idea of meals without meat, we will see more chefs “celebrating produce in and of itself — everything from staple items like carrots and beets, to less familiar items like watermelon radishes, fiddleheads and kohlrabi,” Stensson told The Packer.

Vegetarian offerings are becoming increasingly popular, with 35.4% of menus offering a vegetarian item, according to data from Datassential Menu Trends. As the trend toward vegetable-centric dining grows, these offerings are growing outside the typical salads and side dishes to include more entrees that put vegetable at the center of the meal. Datassential reports that 36.6% of all restaurants feature a veggie main entree, and that figure has grown 6.3% over the past four years.

If the rise of meatless entrees at traditional restaurants is a subtle indicator that our view of vegetables is changing, a bigger sign can be found in the steady stream of new eateries and food producers that take typically meat-centric concepts and make them fully vegetarian. One such eatery, the buzzed-about Superiority Burger in New York’s East Village, offers plant-based takes on classic hamburgers and sloppy joes. GQ named the restaurant’s tofu-based burger its Burger of the Year.

Even butcheries, which have always been a meat-only operation, are getting a vegetarian makeover. Concepts such as Minnesota’s The Herbivorous Butcher and YamChopslocated in Ontario, Canada, are offering meat-free versions of sausage, deli meats and cheese that could fool even a seasoned meat-eater at first glance. Rising star startup Beyond Meathas garnered plenty of press and capital from its mission to make plant-based proteins that it hopes will help reduce global meat consumption by 25% by 2020.

As the number of meat-free options increases, more diners are choosing plant-based meals, with younger diners leading the pack.

Millennials are the most likely demographic to choose plant-based proteins when dining in restaurants, and 14% of millennial diners said they would be most likely to order a 100% plant-based meal when dining out, according to a 2014 survey from The Hartman Group. Members of Generation X were second most likely to order a plant-based option, with 10% saying they would choose a meatless meal, and Baby Boomers followed slightly behind at 9%.

Across the board, 18% of diners said they are ordering more plant-based foods than they were one year ago, according to The Hartman Group’s report, “Diners’ Changing Behaviors: Sustainability, Wellness & Where to Eat.” The rise in plant-based food orders corresponds with the 42% of diners who said they are trying to order healthier options when dining out.

The rise in vegetable-focused offerings also points to consumers’ growing concern for sustainability when dining out, according to the report. In a group of consumers who identify themselves as “receptive to sustainability,” eight out of 10 surveyed said they would choose a sustainable meal option, especially a plant-based option.

Tapping into this desire for plant-based options can help restaurants appeal to consumers looking to make sustainable food choices, and it can also benefit the bottom line by helping restaurants more accurately predict food costs, since “menus and concepts that rely extensively on animal proteins are exposed to increasing food cost volatility, making it more difficult to forecast financial performance,” the report said.

Top trends in grocery shopping for 2016

December 28, 2015

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By John Karolefski

It won’t be your mother’s shopping trip in 2016. Get ready for some creative changes as more grocers digitize their stores, while ramping up promotions and dining options to enliven what traditionally has been a mundane shopping trip.

And for homebodies or those too busy with their exciting lives to visit a grocery store, more food retailers will offer the option of ordering groceries online and having them delivered. An alternative is having ordered purchases waiting at the store’s curbside for pick-up.

Here are the top trends for 2016 that indicate traditional shopping patterns continue to evolve:

Shopping Online: Ordering groceries online has been growing steadily for a few years, but will surge in 2016. Many supermarkets that have not offered such an option will jump aboard. It has been estimated that 10% of grocery sales in the U.S. will be online by 2025.

H-E-B is ready for the future. The San Antonio-based operator of more than 370 supermarkets in Texas and Mexico just opened an online store. Hy-Vee's Aisles Online grocery service is now available in all 240 stores across its eight-state region in the Midwest.

More than 65 other grocers have partnered with Instacart, which lets consumers order groceries online and pairs them with a Personal Shopper who hand picks items at customers’ favorite stores and delivers to the home. Also, there will be more testing of curbside pick-up of groceries for those shoppers who may want to hop into the store for a forgotten item or to hand-pick produce.

Digitizing the Supermarket: Retailers will look to engage smartphone-carrying shoppers, especially Millennials who will account for most grocery purchases as they start families. Many grocers such as Marsh Supermarkets and others have equipped stores with beacons. These Bluetooth-enabled devices connect with smartphones nearby. Beacons rely on apps to receive their signal, which then triggers ads, coupons or product information to be sent to shoppers, who opt to receive the signal. More grocers will test beacons in 2016.

Also, more grocers will install Electronic Shelf Labels (ESLs) that display prices and sometimes ads and nutritional information. Some two thousand digital Shelf Edge devices are installed in the packaged food aisles of a Kroger store in cold spring, Kentucky. Plans call for rolling out the system after a successful test. Meanwhile, all of Kroger’s stores are being equipped with temperature monitor sensors in the refrigerated and frozen food cases to ensure product quality and safety.

Shrinking the Supermarket: Singles and smaller families will learn that less is more as grocers continue to open smaller supermarkets to cater to their needs, especially in growing urban areas. These shoppers will cruise the perimeter of the store for prepared food, dairy, bakery and produce. Less space is needed for packaged food and ingredients in the Center Store because cooking from scratch is declining and more of those products are ordered online and delivered to shoppers if they need them.

The case for smaller formats has been proven by Aldi and Trader Joe’s whose stores average 15,000 sq. ft. and 10,000 sq. ft. respectively. Meanwhile, Hy-Vee now operates four 14,000 sq. ft. Mainsteet stores, Ahold has opened the first of its 10,000 sq. ft. “bfresh” grocery stores in Boston, and further north near Portland, Maine, Hannaford opened a 20,000 sq. ft. store with a focus on fresh foods.

Entertaining in Stores: While online grocery ordering and smaller stores are trending, more operators of traditionally large supermarkets will take advantage of their space to lure customers with special events. More product sampling, cooking demos and nutritional tours will take place.

For example, Jungle Jim’s, the massive food emporium in Columbus, Ohio, stages wine and cheese festivals. Chefs at H-E-B stores in San Antonio prepare a variety of recipes every day as part of the Cooking Connection demos. At Giant Eagle’s Market District store in Solon, Ohio, it is Food and Wine Friday every week. For six dollars, shoppers get tickets for sampling six wines and eating hors d’oeuvres at serving stations throughout the store (wine samples are third of a glass). Live music is provided as customers sip, nosh and grocery shop.

Dining in Stores: Before they go about their grocery shopping, customers can have a bite to eat or something to drink in the store. Operators of many new large supermarkets are including a café with a light menu to nourish customers.

For example, the lunch crowd at Mariano’s in Wheaton, Ill. can enjoy pizza and other edibles in the café. Giant Eagle’s Market District also has a large café with a full-sized bar nearby. Starbucks are being added to the perimeter of more supermarkets for a quick coffee break while shopping.

Which grocery brands do Millennials like the most?

December 16, 2015

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By John Karolefski

Makers of food and beverage brands are feverishly trying to figure out the best way to market to Millennials. After all, this demographic group – defined as those born between 1980 and 2002 – will be buying a lot of groceries when they start families, if they haven’t done so already. The idea is to make them brand loyal to a can, bag, box or bottle of certain edibles and drinkables.

   

Which brands do Millennials like the most today, and why?

A survey from ad agency Moosylvania set out to find some answers. For the past three years, they asked about 3,500 Millennial to name their favorite brands. The results was a list of 100 brands from such areas as clothing, technology and retail, as well as food and beverage. The research rounded up the usual suspects: Apple (selected as number one), Nike (2), Samsung (3), Sony (4), Microsoft (5), and other cool and engaging brands.

What about food and beverages sold in grocery stores? There were ten of these brands on the list of 100: Coca-Cola (10), Pepsi (15), Frito-Lay (34), Kellogg's (44), Hershey (47), Dr Pepper (50), Kraft (58), Mountain Dew (60), General Mills (88), and Nestle (98).

Millennials were asked what brands were doing to gain their loyalty. They said -- get ready for this -- they liked being entertained with apps, videos, games and contests online. They study found that by a margin of six to one, Millennials prefer fun and entertaining content to news and information in their social feeds with brands. "Entertainment provides a natural opportunity for a brand to connect as shareable content," said Norty Cohen, CEO of Mooslvania. "When a brand doesn't take itself too seriously, but instead provides fun that can be shared, it works."

Here's how some grocery brands on the list are offering fun in an attempt to snag the interest of Millennials:

• Nestlé’s Nescafe created “social art” in Croatia by locking their iconic red mugs all over the city on bridges, walkways, park benches, etc.  Consumers were driven to the brand’s Facebook page for a four-digit code to unlock the mugs. This, Moosylvania says, appealed to Millennials. This, I say, is what passes for fun in Croatia. 
• Frito-Lay encouraged fans of Lay’s potato chips to make customizable potato chip bags. Chippers (my word, not theirs) could upload and caption a photo to receive a digital version of a personalized Lay’s potato chip bag. The resulting photo could then be shared via social media with friends, family and stalkers.
• Hershey’s took a simple approach. The chocolate maker encouraged Millennials to comment on Facebook with #FeedYourFancy. That would give them a chance to win a $300 Visa card, with which they presumably could buy chocolate bars and give them bragging rights on social media.  

The selection of brands on the list provides clues about what motivates Millennials and what they are interested in. It would be easy to say these survey takers probably don’t have jobs or families, or they have too much time on their hands. So I won’t say that.

But I will say what the grocery brands on the list really tell us about Millennials. The brands fall into four groups: snacks (Frito-Lay, Hershey, Nestle), beverages (Coca-Cola, Pepsi, Dr Pepper, and Mountain Dew), and other (Kraft, General Mills and Kellogg’s).

All of these brands are what I call fun food, with the exception of Kraft and cereal (even though I consider Count Chocula a fun food). While Millennials are playing games, they nosh on chips and chocolate, and wash all of it down with soda. Not that there’s anything wrong with that – except the food police don’t like it. For them, carbonated soft drinks, chips and candy are the Axis of Evil. They lead to obesity, diabetes and other awful discomforts of the body. Since Millennials engage with these brands online, I can only assume they eat and drink these products because they like them.  

How can the supposed good-for-you foods get involved? Easy. Develop even better games for Millennials. Some of these brands could be Chiquita and Dole (fruit), Dannon and Yoplait (yogurt), Kretschmer and Bob’s Red Mill (wheat germ), and others.

Maybe Dole could post a crate of oranges on their website. Millennials have to guess how many total pits are in all of the oranges. The person who comes the closest – without going over the actual number – wins their choice of an orange t-shirt or a crate of oranges. Maybe Kretschmer can ask Millennials to email the names of people they know who actually eat wheat germ. Each person submitting more than three names wins wheat germ for life.    
 

With the right game or contest, these brands will be on the Favorites List next survey.