Leaders of the wine industry are asking the community to rally and appeal tax hikes. As the industry continues reeling from losses related to COVID-19, a new round of potential tariff hikes threatens the industry. In 2020, a 25% tariff imposed on certain European wines and cheeses was described by some as the greatest threat to the wine and spirit industry since the prohibition era. U.S. President Donald Trump imposed the tariffs in retaliation for a tax imposed in France on several large American tech ferns, such as Facebook, Google and Airbus.
Read more (Vinepair)
When consumers buy beverages today, they want drinks that go beyond simply quenching thirst. Drinks today need to meet consumer’s health needs, too — improving sleep habits, aiding gut health, lowering stress levels and boosting energy.
“There’s this real explosion of outcome-based beverages in the industry at the moment,” says Howard Telford, head of soft drinks for Euromonitor International. “Ten years ago, it was easy to identify what was an energy drink. That’s no longer the case, clearly. Because every category now has some form of products on the shelf with a functional proposition. These ingredients-based category lines are blurring. Consumers are rethinking what’s our morning option, what’s our late afternoon option, what’s our evening beverage.”
Clean ingredient lists with functional appeal will differentiate brands. In a beverage trends webinar hosted by FoodNavigator, brand leaders in the beverage industry shared their insight. Here are six beverage trends for 2020:
1. More Consumer Need States for Different Ingredients
Modern beverages straddle between food and dietary supplements.
“Every time (consumers) spend a dollar on a drink or a food item, they want that food or drink item to do more for them,” says Chris Fanucchi, co-founder of drink brands Limitless and Koia. “Brands are starting to put more marketing on the front of their labels, that say ‘Hey, we help you with calming you or with inflammation or with pain or anxiety.’ As consumers start to see that more and more, they’re going to start to expect that. And the second they start to expect that is when the consumers are going to be demanding that their beverages have more and more function to them. So a functional beverage right now I think is definitely about identifying those need states that are more relevant to consumers today.”
2. Mindfully Purchasing Natural Health Products
Consumers are looking for ingredient lists without artificial ingredients (33%) and with limited or no sugar (35%), according to research by Euromonitor International. Sixty percent are following diets – lowering carbs and saturated fat, monitoring weight and tracking calories.
Holly McHugh, marketing associate with Imbide, thinks consumers will seek out healthier products at the end of the coronavirus pandemic. “Like a detox that you see in January because people have overindulgences over the holidays…I do think there will be a bump when people go back to their normal lives.”
“There’s absolutely a stigma against sugary products for your overall health. And people are really concerned about their health right now,” McHugh says.
However, McHugh doesn’t think brands will completely abandon sugar. Instead she hypothesizes brands will provide more options. Like a full-sugar, low-sugar and no-sugar drink, then drinks with alternative sweetener like stevia and natural sweetener like honey.
3. Rise of Cannabis/Hemp in Beverages
Consumers are experiencing mounting stress due to the pandemic and are seeking drinks with stress-reducing ingredients.
Estimates show legal cannabis sales will rise to $150-170 billion by 2023 according to Euromonitor International, mostly from North America. Huge innovations in CBD industry as proving hemp-derived drinks is a growing market. CBD-infused beverages grew by 500% last year.
“I think CBD is going to be a very big category,” adds Thomas Hicks, chief growth officer for Ojai Energetics, which produces various CBD products, including a CBD drink. “The consumer demand is phenomenal and you can see that online. About 90% of our business is direct to consumers.”
Ojai Energetics has seen sales increase 20% during the pandemic.
CBD is poised to become as big of a category as energy drinks. However, more clarity around CBD needs to be provided by the Food & Drug Administration. Thomas notes the FDA has not yet defined the different elements of CBD.
“It’s a race to the bottom if you don’t have really good branding and, quite honestly, a patented process,” says Hicks, who has formerly worked with big drink giants like Hansens and Coca-Cola.
4. Cost Major Factor During Health, Economic Crisis
Brands looking to add more premium ingredients to their drinks need to note consumer’s pocketbooks. Howard Telford, head of soft drinks for Euromonitor International, said he predicts certain drink categories will decline because of cost in a COVID-19 era.
“This event (coronavirus pandemic) is translating to an economic crisis more than a public health crisis, I think we have to be very cognizant of price,” he says.
Comparing sales during the 2008 Great Recession, Telford says consumers will trade down premium products. “Affordable luxury” needs to be the focus of new drink launches, adds McHugh.
“I think cost will be a really important consideration given the uncertainty of the economy right now,” McHugh says. “Brands will need to introduce products that are affordable and meet those clean, quality, functional qualities during this time.”
5. Brands Need to Better Educate Consumers
As more consumers routines are impacting during the outbreak and they turn to healthy eating during, will they turn to kombucha over Coke? Telford believes so. Long-term, consumer’s beverage choices will change because of COVID-19. They’re reducing sugar, trusting health ingredients.
“When we decide to indulge, we’re conscious of the ingredients in those products,” he adds.
“There’s still so much education around CBD with the general public,” Hicks adds.
Research provides CBD helps regulate the immune system, and consumers are becoming savvier and seeking out that research, Thomas says. Key, he adds, is researching the specifics behind CBD brands. Brands should publish their lot number certification online. Consumers should easily be able to research CBD batches should go through two different labels to make sure they are acceptable and organic, he advises.
6. Shelf Brand Launch Until Post Pandemic
Faccuchi, who sold Limitless to Pepsi/Keurig last year, said smaller companies are struggling securing capital to launch. An entrepreneur, Faccuchi invests in beverage companies.
“Lots of clients, especially in the energy category, are having zero luck with retail meetings, confirmation of placement on shelves,” Faccuchi says. “They’re seeing around waiting for those opportunities. It makes it all the more difficult when there’s really no light at the end of the tunnel. These brands could lose a lot of cash over the next several months, they could go belly up.”
His advice to people wanting to launch a new beverage company: “Make sure the category you’re jumping into actually has a need. I run into a lot of entrepreneurs who build this awesome product out of different ingredients that you’d never hear of, and the unfortunate truth is some of those ingredients are just not supply chain ready. So you can’t get the price point necessary for consumer to actually try the brand, which is the No. 1 thing when you’re launching a new company. So make sure you’re identifying a need space that people actually have. Your best way to test that is online marketing.”
Find people in food and beverage industry that are looking to champion brands, he advices. “Those people do exist.”
Hops used to be the biggest thing in beer to create a powerful flavor — now it’s yeast strains. Brewers are using yeast strains from around the globe for the best flavor.
According to the New York Times: “For some time, it’s been a hopped-up arms race as breweries regularly double or triple the amount of hops to create stronger aromas. With breweries using the same hops, many beers are starting to smell alike. … In search of distinct aromas, brewers are embracing yeast and bacteria strains from across the globe. They’re creating beers that let each type of microbe speak its unique language, and drinkers are listening.”
DeWayne Schaaf, owner of @ebbandflowfermentations Ebb & Flow Fermentations brewery in Missouri, calls himself a “yeast nerd.” He does not use commercial yeasts in his drinks, instead fermenting with yeast strains from Scandinavian farms, bottles of Spanish natural wine and Colorado dandelions. Few hops are required in his drinks as, during fermentation, the yeast converts sugars into alcohol for the flavors.
Other fermenters featured in the article include: @omegayeast Omega Yeast (supplier of yeast strains in Chicago), Berg’n (a beer hall in New York), @alvaradostreetbrewery Alvarado Street Brewery (brewery in California), @yeastofeden Yeast of Eden (brew pub in California), @bootlegbiology Bootleg Biology (yeast lab in Tennessee), @whitelabsyeast White Labs (yeast supplier in North Carolina and California) and Lars Marius Garshol (Norwegian author of “Historical Brewing Techniques: The Lost Art of Farmhouse Brewing
Read more (New York Times)
The world’s most famous fermentation restaurant is serving diners once again during the coronavirus pandemic. But Noma’s reservation-only tables and $400-500 world-class meal has radically changed. Noma is now serving wine and burgers in a walk-up, outdoor patio.
“It’s definitely new territory,” says Rene Redzepi, Noma founder. “I like this thing that it’s doing to us. We’ve become this place where you book, you plan your travels six months ahead of time. The spontaneity of going to a restaurant has completely disappeared for us. I like that people now can say ‘Let’s go to Noma for a glass of wine.’ So who knows, maybe this is part of our future in the long run.”
Redzepi spoke with Denmark-based food bloggers Anders Husa and Kaitlin Orr on Noma’s reopening.
The Noma burger is either a meat patty made with beef ferment, beef garum and smoked beef fat or a veggie burger made with quinoa tempeh patty with fermentation liquids.
Noma’s Nordic cuisine features fermented and foraged food that have earned Noma the World’s Best Restaurant award four times. Noma has been closed since March 14 because of the coronavirus.
Redzepi is one of the first chefs of his caliber to reopen a fine-dining restaurant during the coronavirus pandemic. The burger and wine menu is intended to transition Noma to the July summer season, when the restaurant hopes to again serve diners in the restaurant.
When the coronavirus first shutdown countries all over the globe, Redzepi said “it was really, really scary.” Would Noma have to wait six months to open? A year? About 3-4 weeks in, though, the atmosphere turned.
“There was a little positivity coming through,” Redzepi said. “I started asking myself ‘What do I want to do? What am I missing in my life?’ And the funny thing is I wasn’t at all missing going to a fine-dining restaurant, sitting for 3-4 hours. That was not on my mind at first. I wanted to be with people, I want to be out. … So when you have that feeling, it was just like, there was no way we can open Noma as it was before COVID-19.”
It’s an unusual sight at the exclusive restaurant – Noma is serving burgers in paper wrappers and chefs are wearing disposable gloves.
A burger was picked because Redzepi says: “I have yet to meet anybody that doesn’t like a burger.” In the future, Noma will add a deep-fried chicken burger to the menu as well as oysters and shrimp.
As tourism is still closed in Denmark, Redzepi envisions the new Noma bar as a place where Copenhagen locals can eat and visit with friends again.
“It’s not about us showing what we can do, it’s just about cooking the best we can so people feel great and feel alive again.”
Weathered Souls Brewing Co., a black-owned brewery in Texas, has launched the Black is Beautiful initiative to bring awareness to racial injustice and “show that the brewing community is an inclusive place for everyone of any color.” They are encouraging breweries to develop their own Black is Beautiful stout. Weathered Souls has shared a stout base recipe, and ask breweries to develop their own creative spin on the drink. A free label has been provided on their website, and the campaign encourages breweries to donate a portion of sales of the stout go to local foundations that support police reform and legal defenses.
Stout is a top-fermented beer that ranges in color from dark brown to almost black.
Marcus Baskerville, founder and head brewer at Weathered Souls, told the San Antonio Current: “The brewing industry is pretty eclectic, with all kinds of different people in it. Why wouldn’t this community be one to join together to support a message of equality and purpose to support the concept of general respect for everybody?”
Read more (San Antonio Current)
People are turning to acidic dishes like sauerkraut and kimchi to protect themselves from the COVID-19 virus. Though there is no scientific evidence that foods like kimchi and sauerkraut will prevent spread of the virus, sales are booming. Health experts say it’s because cabbage is a superfood filled with antioxidants and vitamin C, and the fermented condiments are filled with probiotics that support the gut microbiome. Consumers are hypothesizing that coronavirus death rates in Germany and South Korea because sauerkraut and kimchi are traditional food staples in the two countries. In January, South Korea’s national health ministry issued a press release stressing that kimchi offers no protection against the virus. That hasn’t stopped Americans from buying it – sauerkraut sales surged 960% in March, while kimchi sales jumped 952% in February.
Doctors emphasize that the best way to prevent coronavirus infection is to avoid becoming exposed. Hand washing, social distancing and mask wearing are encouraged.
Read more (New York Post)
The current global health and economic situation is a far cry from business as usual. “Pivot” will be the new buzzword in the food and beverage industry, as fermentation brands and food service institutions must implement creative manufacturing and marketing solutions to maintain sales during the coronavirus pandemic.
“We are in a real-time focus group situation. …We’ve seen an acceleration of trends,” says Emmanuel LaRoche, vice president of marketing and consumer insights for Symrise, an international producer of flavors and fragrances. “This current situation will lead to new, large structural trends that are going to impact the next 15 years.”
Solving economic challenges posed by the coronavirus outbreak will be the “new normal” in the food and beverage industry. Here are six ways to adapt.
- Create More Online Instruction
As a brand, are you helping your consumer cook with your product? And what about the products you don’t sell. Canned goods and frozen foods are flying off grocery store shelves. Can consumers pair your product to create a meal with the pack of canned beans they panic bought or the pound of frozen berries?
“Consumers may be stockpiling shelf stable products, but it doesn’t mean that they know how to use them,” says Melanie Bartelme, global food analyst at Mintel. “Brands have an opportunity to help consumers who suddenly find themselves surrounded by dried foods and frozen foods. Direction and support, in the way of webinars, YouTube videos or Pinterest links, will help them feel confident cooking meals with these staples.”
2. Position Your Product into Consumer’s Home Routines
Though some states are lifting stay-at-home orders, allowing businesses to reopen, social distancing will alter regular business through 2020 – and likely beyond. Many people view dining in a restaurant, working in an office and exercising in a gym as too risky. Consumers are now eating, working and exercising at home. They’re also spending more time on self-care routines and home cleaning. How can businesses join the home-based routine?
“The formation of routine, it’s an action that typically takes 60 days to form. If we repeat something on a daily basis, we turn it into this new habit,” Laroche says. “So the question here is how quickly, if ever, will consumer behavior return to pre pandemic levels or are we at the beginning at a shift of how we spend our time?”
It’s unknown whether the affects likely becoming permanent. But brands should adapt to home living. Product delivery and e-commerce sales are essential to fermented food and beverage brands. But brands should also think outside the box. Marketing must pivot from “on the go” to “staying at home.” More than ever, consumers want their products to be convenient.
“The new normal at home may create many opportunities for companies and brands to provide a new and exciting product connected directly to what consumers are experience,” says Dylan Thompson, marketing and consumer insights manager with Symrise.
3. Create Business Opportunities for Consumer’s Shift in Spending
Many of the new consumer spending trends mirror what happened during the 2008 recession. During the Great Recession, consumers shifted their spending habits in the food and beverage industry. Consumers:
- Valued cost more than convenience.
- Switched from mainstream to value brands. There was a big increase in private label purchases especially, as consumers searched for better deals. Premium and top brands were more insulated as consumers sought affordable luxuries.
- Bought smaller, lower-priced food and beverage packages. Manufacturers switched to smaller packages as they downsized to improve margins.
- Shifted to purchasing at value channels, like big club stores (Costco, Sam’s Club).
- Stopping shopping frequently at gas station stores, correlating with dropping gas prices.
- Declined eating at restaurants, increasing eating at home.
Already, new shopping trends are emerging during the COVID-19 outbreak. These include:
- Decreasing brand loyalty. Consumers buy whatever brand is available when their favorites are out of stock.
- Revival of the center store. As consumers stock up and try to keep their pantry full of shelf-stable items, they’re shopping in the center of the store again.
- Stock up behavior. Sales at mass and club stores are increasing while sales at restaurants are decreasing.
- Increased sale of comfort items. Consumers are indulging in purchasing things they can enjoy from home.
- Greater shift to ecommerce. Online shopping and “click and collect” pick-up have become a popular option during the pandemic, especially in urban areas.
“There are opportunities for retailers to fill the void of what consumers are missing out on,” adds Thompson.
4. Restaurants Must Create a New Business Model
Restaurants have been dramatically hurt by the pandemic, especially non-chain restaurants. Estimates by Technomic show that, at the end of the pandemic, restaurants sales will decrease by 14-29%.
For comparison, at the end of the Great Recession from 2008-2009, restaurant sales only failed by 1.2%.
“We know that social distancing will have a long-lasting impact on food service,” Laroche says. “Social distancing has been particularly disastrous for on-premise beverage, alcohol sales as the dining, drinking side of the business has essentially disappeared.”
At the end of the pandemic, Technomic estimates 15% of restaurants will not reopen.
Restaurants must reformat their business model to allow takeout, curbside pickup, no contact delivery, cashless pickups and alcohol to-go. Some restaurants are even offering DIY kits, selling materials to recreate favorite restaurant dishes at home. Others have decreased dining space to expand the kitchen.
5. Capitalize on what People are Already Buying.
Shopping trends are falling into two categories: survival and sanity. There’s been explosive growth in the food and beverage category during the pandemic (74%), especially for alcoholic beverages (24%), according to IRI. Fermented products like foods like coffee (60.6%), spirits/liquor (37.3%), beer ale/cider (37.8%), chocolate (21.2%) are all top purchases. There are bigger trending categories where a fermented food or drink could get creative, like pasta (229.8%), soup (212.7%), salty snacks (51.5%) and cookies (50.3%).
Increased “beer and liquor at home is one of those sanity categories, and it’s always been well-known that it’s recession proof,” Thompson says. Alcohol flies off shelves during recessions. Consumers are looking for comfort and want a way to cope with uncertainty.”
Alcoholic drinks like hard seltzers and craft brew were not popular enough to track in 2008, but in 2020, are not proving to be a permanent part of consumer alcoholic beverage purchases.
6. Consider Consumer’s Storage Space
Storage at home has become a premium, especially for consumers in densely populated areas that have been hit the hardest by the pandemic. Think of younger, Millennial and Generation Z shoppers living in urban areas with limited storage space.
“The Propensity to stockpile food is a challenge to those without a place to store such products. There is an opportunity for condensed, dried foods, like bone broth soup and contemporary bouillon cubes, to be positioned as more viable alternatives,” says Dasha Short, a global food analyst with Mintel.
Fermented food and drink brands should consider selling items in single-service packages and snack sizes.
Fermentation was the No. 2 trend on the North America Flavor Trend Report for 2020, but with a twist: sweet foods are the new star of fermentation. The trend report was released by Symrise, an international producer of flavors and fragrances.
“Over the past few years, we’ve seen fermentation has really come to dominate the condiment category with foods like kimchi, that have really led the charge,” says Julia Gorman, Symrise digital marketing specialist. Now, “fruit is getting funky.”
Pickling berries, fermenting tropical fruits, using sour fruits and incorporating pulp byproduct into fermented dishes are some of the key flavor trends among chefs. Adds Dylan Thompson, Symrise marketing and consumer insights manager: “It’s all about the evolution of fermentation.”
Fermentation was particularly high on the list because of gut health components. Fermentation encompasses some of the mega trends Symrise is seeing this year. Consumers are buying simple foods that benefit a healthy lifestyle. Fermentation’s “health benefits remain a huge bonus,” Gorman says.
Symrise polled chefs and mixologists for their survey, and found four fermented fruit flavor trends:
- Pickled Berries. Made popular through the cookbook “Noma’s Guide to Fermentation,” Scandinavian cuisine is making a major impact on America’s acceptance of fermented fruit.
- Tropical Fermentation. Mixologists have been particularly experimenting with tropical fruits in drinks. Fermented pineapple, for example, is used to “add flavor funk to what is otherwise a classic beach cocktail,” Gorman adds.
- Ume (and Ume Boshi). More chefs are using Ume, the salty, sour Japanese plum. It can be pickled, brined or traditionally served with rice.
- Fermented Cacao Pulp. Usually a wasted byproduct of cacao bean production, the pulp has an array of health benefits. Chefs are salvaging the pulp to use in a variety of dishes.
In the weeks since the coronavirus pandemic forced restaurants around the world to remain open only for takeout or to close until stay-at-home restrictions are lifted, food icon David Chang has emerged as an advocate for the industry.
The founder of the Momofuku restaurant group says government intervention is desperately needed for food service to survive — without it, only big chains will remain. “I have a hard time seeing [smaller establishments and even chef-driven eateries] survive and making it through the end of this.”
“Telling restaurants they should close or only do delivery or just be 50% open was a death sentence,” Chang says. “And I think all restaurants would have happily have done so if we were given some type of safety net.”
The restaurant industry has suffered significant job losses since the outbreak of COVID-19. The Momofuku Group laid off 800 employees during the pandemic. According to the National Restaurant Association, 8 million restaurant employees have been laid off or furloughed.
Chang and Marguerite Mariscal, CEO of Momofuku group, shared their thoughts on what can be done to save the restaurant industry in Vice Media’s new “Shelter in Place series.”
“Right now, any small business owner in New York is put in a very precarious position where they either are closing, which means they can’t financially afford to pay their staff, or they’re trying to stay open to get any sort of income that will then allow them to keep people have,” Mariscal says.
Though restaurants have business interruption insurance, that only covers physical business damage. Restaurants can still remain open for takeout, but with great risks.
“I think we’re all looking for a little guidance,” Mariscal says. “If restaurants are going to be deemed an essential business, then treat it that way, right? Like, what are the protocols or safety procedures that we should be using to make sure that we’re operating in the, you know, safest, best light? But instead, you have business-to-business everyone making these calls. And I don’t think we feel were the best equipped to make them.”
Like who is regulating proper PPE use among restaurant workers? Should staff all be wearing gloves? Is a cloth mask good enough or should cooks wear a N95 mask? Where is the supply chain for restaurants to get this gear that wouldn’t hurt the medical supply chain? Chang says the lack of guidance from government leadership “it was so bad, it was embarrassing.”
“We need the state-level authorities, because it’s not going to happen from a federal level to say, ‘Hey, it’s dangerous to make food, in a COVID-19 world, this is what you need to do,’” he says. “There are a lot of people serving food in maybe not a safe situation.”
Government aid to help the restaurant industry is only short-sighted, Chang adds, because it’s not covering beyond summer. Unemployment will only cover a few months. There is no unemployment coverage for undocumented workers. Businesses can only receive money from the economic stimulus bill, CARES Act, if they rehire 100% of their workforce by June 30. Chang points to the aftermath of September 11 as an example. Restaurants closed for only a few days, but it took years for the New York tourism industry took years to recover.
The restaurants that will survive the pandemic will be large chain restaurants with big pocketbooks and corporate power – like McDonald’s and Taco Bell.
“That’s unfortunately the future that I feel we’re headed to unless we can have proper intervention and guidance and support and leadership from the government,” Chang says. “There’s a good chance Momofuku may never reopen again. Or the restaurant that you loved to go to so much in your neighborhood may never reopen again. If we don’t support the supply chain and the purveyors and the farmers and the workers all surrounding it, there may not be a new restaurant that’s going to be delicious, that’s going to have the vibrancy that you want, for a considerable amount of time. People are going to realize just how important the food industry is and the workers that have been neglected for so long, I think they’re going to realize, holy shit, we didn’t realize how much we depend on the food industry.”
What will restaurants look like, after the pandemic? Sanitation standards will be increased, there will be greater oversight from the FDA and CDC. But the future “is going to be predicated on something that we have no preparation for,” Chang says. Ghost kitchens, delivery and e-commerce will become the driving force of restaurants, operations most restaurants are not set-up to implement.
“What you’re going to see is maybe there’s less of a restaurant industry and it’s more of a food industry,” Mariscal says. “Everyone’s going to have to reimagine how they make money.”
Chang says big corporate, quick-service restaurants are prepared. Large chains “they’re never touching the food, it’s just an assembly process,” Chang says. Smaller restaurants, independent diners and even upscale chef-driven eateries rely on culinary touches, though. Chefs taste the food and experiment with dishes.
“It would be hard to live in that world where there isn’t variety,” Chang says. But “in terms of food, I think there’s going to be less choice.”
Craft breweries, which were heading into their second decade of a major boom, are now shuttering during the coronavirus pandemic. “There’s going to be a lot of dead distilleries coming out of this,” said Paul Hletko, the founder and distiller of FEW Spirits, in Evanston, Ill. “Even if you survive, the new normal is going to be punishing for small brands.” Craft distilling relies on bars, tasting rooms, face-to-face sales and customers willing to pay a higher price for a premium product — all factors dramatically changing with social distancing and a global recession.
Read more (The New York Times)