Oregon Public Broadcasting featured Southern Oregon’s fermented food pioneers in their latest segment. Kristen and Christopher Shockey moved to Applegate Valley years ago with hopes of getting their 40-acre homestead to pay for itself. They began selling sauerkraut “before it was cool.” OPB said: “They saw the process that makes sauerkraut, called fermentation, as a way to literally bottle and beauty and the landscape around them.” The Shockey’s started fermenting any and every vegetable their neighbors were growing in surplus. They wrote the book “Fermented Vegetables” in 2014, “helping to propel the fermentation wave that swept things like kimchi, kombucha and kefir into mass culinary consciousness,” OPB added. Today the Shockey’s are teaching fermentation classes and releasing another book.
Read more (Oregon Public Broadcasting)
Craft brewers are catering to a new beer drinker: healthy, active lifestyle drinkers. Though craft brewers are thriving, it’s a smart adaption to add low calorie beers to their products. A study found 52 percent of beer drinkers want to reduce their alcohol consumption this year, the top reason being: “opting for healthier lifestyle.” Beer brands have often ignored the development of watery, light beers. But as millennials – who drove craft brewery growth – enter their 30s and focus on health and wellness, lower calorie beers are becoming an important part of breweries flavor lineup.
Read more (New York Times)
Fermentation-based Impossible Foods — which makes a meat alternative with its own heme from yeast fermentation — is now a $2 billion company. The company behind the Impossible Burger raised an additional $300 million in funding, reflecting investor demand for meat alternatives. The meat-free burger cooks and tastes like meat — many consumers say they can’t tell the difference between Impossible Burger and ground beef. Impossible Foods partnered with Burger Kind earlier this year for the launch of the Impossible Whopper, a meatless burger that received rave reviews.
Read more (Vox)
Craft cheese sales lag behind craft beer sales, despite the similarities in the two industries. Craft beer sales in America totaled $27.6 billion in 2018, while craft cheese sales totaled $4 billion. Experts tell VinePair why cheese doesn’t keep up with beer’s growth: cheese’s short lifespan (less than two months), greater risk of cheese mishandling by a distributor during the supply chain and the high price of artisan cheese. What can a cheese brand do? Experts advise increasing social media promotion. Craft beer has thrived on social media because people love seeing the hops being picked, brewers experimenting near the fermentation tank and the beer displayed in glassware. Craft cheese brands don’t self promote the same creation process, like a goat that made the milk or a family that runs the dairy farm. Cheese brands could also benefit from better merchandising, experts say. Beer labels are constantly and creatively changed and updated, but cheese labels remain the same for years.
Read more (VinePair)
Snacks are a huge $1.2 trillion category, and it’s continuing to grow. Seventy-five percent of the global population snacks every day, while millennials snack four times a day. But consumers are looking for nutritious snacks. They want snacks with functional ingredients, great taste and low sugar.
Fermentation brands looking to grow need to transform their product into snackable sizes. Research by Mondeléz International’s new venture, Snack Futures, found that fruit and vegetables are the most popular snack item, but consumers want more than just a fresh apple. Innovation is key.
“Consumer obsession is driving a new model of snacking,” said Laura Shulman, founder and president of Food Future Strategies, Inc. From beverages to bars and bags to bites, “We’ve become this culture of serial snackers.”
At Natural Products Expo West, Shulman encouraged brands to be “snack innovators,” converting ideas to business.
Snacking’s Staying Power
The snacking surge is attributed to busier lifestyles – commute times are longer, more mothers are working and fewer people eat traditional three meals a day at home.
“Snacking is different than food. Snacking is a behavior. That behavior around the world is growing rapidly, and it’s growing much faster than center store [grocery aisle] food,” said Tim Coffer, chief growth officer at Mondeléz International. “We’re very bullish on snacking, and I think all of you should be, too, as you look for opportunities for growth.”
Snacking is disrupting the food industry, evident on the Expo West show floor where brands are seeing big returns on convenient, healthy food and drink products.
“The movement is more nutrient-dense snacks,” said Rohan Oza, co-founder and managing partner of Cavu Venture Partners. “Every company out there needs to be focused on how they create greater nutritional value on snacks that allow people to feel better about themselves.”
Brands as Health Warriors
Snacking of yesteryear evokes images of bags of potato chips or cans of soda. Those items are a far cry from modern snacking trends. Snacking must be nutritious because consumers are snacking with intention. They want snacks to be natural, simple, authentic and functional.
Brigette Wolf, global head of Snack Futures at Mondeléz International, said brands need to be “health warriors.” She encouraged brands to use medical and scientific studies and consumer research to “actively be the snacks of tomorrow.”
Growing Preference: Prebiotics & Probiotics
Consumers are also focusing on gut health. Research by New Hope Network found that sales of food and beverage with functional ingredients grew 7.5% in 2018 to $68 billion in sales. Probiotics and prebiotics are one of the fastest growing functional ingredients.
Kara Landau, founder of Uplift Food, was an Australian nutrition expert before starting her food company. Known as the world’s first dietitian created functional food, Uplift Food products are gut healthy, prebiotic snacks. The food brand was her dram, as Landau specializes in gut health. The connection between gut health and mood is especially important to her.
“I feel like there was this gaping hole in the market for someone to take that stance,” Landau said.
“Ultimately, I think the science is going to continue to catch up and help in terms of the claims that are being made,” Landau said about food with prebiotics and probiotics. “There’s only going to be benefits to consumer’s diets to getting more of that nutrition into their diet.”
8 Tips to Growing a Snack Product
Food industry leaders stressed that the brands of yesterday will not be the brands of tomorrow. Major food corporations are struggling to maintain sales as modern consumers search for healthier food, sustainable brands and startups with purpose.
Tips from Expo West “How Consumer Obsession is Driving A New Model of Snacking Innovation” panelists:
- Be consumer obsessed. Coffer with Mondeléz declared: “We are very clear who our boss is. … If you take care of the consumer, the rest of the stuff will fall right into place.”
- Reinvent testing. “The old model of how to innovate, how to test with consumers, that’s yesterday’s news,” Coffer continued. “Get with consumers – not in controlled environments.” Prototyping and testing needs to be at a much more rapid pace.
- Build a brand with a mission. Successful brands create a lifestyle around their product. “Build a culture out of it,” said Oza with Cavu Venture Partners.
- Don’t be cheap. Brands that have good ideas but aren’t spending the right budget amount to execute their plans are going to fail, said Oza.
- Remember: taste is king. “It’s America, we will not sacrifice on taste. In Japan, they certainly will. [But in America], you have to make it taste good,” Oza said.
- Experiment with ancient ingredients. From ashwagandha to turmeric, the ingredients of our forefathers are coming back into our food. “I think there’s room particularly in the states for taste buds to expand,” said Janet Planet, head of ideas at Fahrenheit 212.
- Start super small. Wolf of Snack Futures suggested putting a new product in a local yoga studio and see how people react. Give it to family and friends to test for feedback. Start with a small attraction, then go bigger.
- Convenience stores are ready for a disruption. Convenience stores are arguably the worst places today in terms of health food, but they’re still a hot spot for snacks.
On the cusp of an announcement from KBI on standards defining kombucha, GT Dave — founder of GT’s Kombucha — gave KBI a $1 million endowment to protect authentic kombucha. Speaking to attendees at the annual KombuchaKon, GT said: “Kombucha is now being mass produced by some newer brands that have entered the market and they are positioning them for a mainstream palate. These barely fermented products are missing the heart and soul of what the industry of kombucha should be, and it’s looking more like a new age soft drink.” GT believes kombucha brands need to be upfront about what techniques they’re using to make their kombucha, like pasteurization, hyper-filtration, artificial carbonation, concentrate use and/or spinning cone technology.
Read more (Food Navigator)
Consumers are in favor of allowing plant-based food to use traditional dairy terms on their labels — but dairy farmers are strongly opposed to it. Last year, the U.S. FDA issued a public comment period to examine if plant-based foods and beverages should use the traditional dairy names: milk, cheese and yogurt. The results are out. Of those comments, 76 percent were in favor of using dairy terms on plant-based products, 13.5 percent were against and the remaining 10.5 percent were inconclusive. Of the commenters that identified themselves as dairy farmers, nearly all were opposed. Dairy farmers are concerned consumers will believe plant-based foods are nutritionally similar to cow’s milk (94 percent) and that consumers are being misled with a dairy term on a plant-based item (91 percent).
Read more (Linkage Research)
The kombucha industry is exploding – sales were up 21 percent to $728.8 million last year. Kombucha and non-alcoholic fermented beverages are now the third largest beverage category, representing 10 percent of total refreshment beverage sales.
Distribution is high at conventional, natural and convenience stores. But velocities (sales) are declining.
“A word of caution – there’s going to be a reckoning,” said Bobbi Leahy, director of sales at SPINS, a natural products market research group. “All these retailers are taking all these lovely kombuchas … they will be evaluating you, probably far soon than you think is warranted. There will be some slashing going on.”
Leahy spoke at KombuchaKon, the Kombucha Brewers International (KBI) annual trade conference in Long Beach. The year’s KombuchaKon was the industry’s largest since the first conference six years ago, with 424 attendees from 17 countries.
“I applaud you all on the growth. I think that’s wonderful,” Leahy said. But “I would be ready with some materials to go in and defend your spaces.”
In her presentation on the kombucha market analysis and future trends, Leahy emphasized that refrigerated beverage shelves are expensive retail space. She shared advice with kombucha brands on how to survive the current high distribution wave. The SPINS analysis is based off 52 weeks of sales ending in February 2019. Her tips:
- Prepare with Sales Materials. If kombucha sales can’t keep up with distribution, retailers will have to answer to their higher-ups. Why is there so much kombucha on the shelf that isn’t selling? Leahy warned brands to be the ones educating retailers, advising brands to share data points and score cards. She added: “I encourage you to go and get ahead of that, be the one talking that message. You tell them what the right set is, you tell them what they should do, you know this industry. If they’re overstocked on something, then let them know. They’re looking to you to be the experts.”
- Conventional supermarkets reign. The bulk of kombucha and fermented beverage sales are coming from conventional supermarkets. “If you succeed in the conventional channel, you’ll have success overall because they represent 70 percent of sales,” Leahy said.
- Don’t ignore convenience stores. Convenience store (like 7-11 and gas stations) sales of kombucha and fermented beverage sales are growing 55 percent. “You have to make it a task to go after convenience,” Leahy noted. “You probably wouldn’t have said ‘That’s my low-hanging fruit, I’m going to go in there.’ But they’re certainly getting the message now … It’s certainly worth having a plan to go after convenience.”
- Craft different sales messages for each channel. Don’t go in to retailers with the same message. Between conventional, convenience, natural and specialty stores, each channel will care about different things.
- Know region’s sales trends. The west coast – especially California – has high kombucha sales. The south central, mid-south and Great Lakes regions are under-indexing in kombucha sales. Leahy pointed out that the west is a ready audience and a great spot to experiment with new flavors. The south and Great Lakes regions, though, need an education focus. Demos are a great idea in the area.
- Highlight brand’s best attributes. Boast about characteristics beyond the label. Features like: clean label, sustainability, brand mission, wellness goals, social impact and great ingredient sources.
- Top selling flavors are solid. Ginger and berry are the two top flavors across all channels. The “fruit – other” is also a top selling flavor and growing (135 percent), which is defined as unique fruit flavors like watermelon, guava and melon. The past year, there has been the strongest growth in flavors: apple (172 percent), grapefruit (155 percent), pomegranate (104 percent) and orange (98 percent).
- Tread lightly with unique flavors. Leahy pointed out, if a unique flavor only appeals to a small audience, a conventional retailer will notice only a small number of customers are buying it. “That small and that low is going to be kind of a perfect storm,” she said. “You really want to be careful.”
- Smaller size bottles sell best. The 14- to 17-ounce size kombucha make up the majority of sales.
- Start sales promotions. Coupons, mailers and sales are great options to get products off shelves.
- Use your social network. Let people know which stores you’re at.
- Maintain a good store locator. Brand’s websites should feature a good store locator detailing which stores carry which flavors of kombucha.
- Top kombucha brands dominate the market. GT Kombucha, Kevita, Health Ade, Humm Kombucha and Brew Dr. account for 88 percent of kombucha sales at conventional retailers and 89 percent of kombucha sales at convenience stores. GT Kombucha, Kevita, Health Ade and Brew Dr. account for 77 percent of kombucha sales at natural stores and 82 percent of kombucha sales at specialty gourmet stores. Those same top brands likely will not change, Leahy noted.
- Know beverage trends. “The trends you are seeing in kombucha are special and unique,” Leahy said. “…as you’re sitting across a buyer or a category manager or retailer, you want to be well-versed in what other beverages are on the shelf and which ones they’re probably going to protect.”
- Natural beverages are contributing more to the growth of the refreshment beverage category than non-natural. The conventional, shelf-stable beverages (like Coke and Pepsi products) account for 63 percent of the refreshment beverage industry, but only 53 percent of growth. Diet soda is especially losing favor among consumers. Specialty and wellness beverages (like energy drinks and Gatorade) make up 29 percent of sales and 35 percent of growth, especially driven by energy drinks. Natural drinks (like kombucha and La Croix) make up 8 percent of sales, but natural is driving 13 percent of growth.
- Of the natural beverage subcategories, shelf-stable performance beverages (like Body Armor) are experiencing the biggest growth at 87 percent. Declining categories include shelf-stable coconut water (-12 percent) and juices (-3 percent).
- Emphasize growth of natural products industry. Natural products are no longer a niche market. The natural products industry is estimated to reach $140 billion in sales in 2019. In 2003, natural products were a $52 billion industry.
When SPINS began tracking kombucha sales years ago, Leahy noted kombucha was “barely a blip on the map.” Current Kombucha sales numbers are also likely higher than noted – major retailers Costco and Whole Foods do not share sales data with SPINS.
“In a way, it’s a good problem to have – you can’t sell if you’re not on the shelf,” Leahy said. “ou’re on the shelf – now it’s time to sell.”
Fermented foods are making a comeback, but an education gap needs addressing for fermentation to move “from fashionable buzzword to become a sustainable long-term trend.” A group of panelists spoke at the UK The Ingredients Show on what’s driving and developing the fermentation market. The panel agreed there is a disconnect — people want fermented foods, but few understand what they are. Tom Lee, editor of Food Spark, said fermented food producers should look at supermarkets as part of the solution. Supermarkets are “keen to explore fermented products.” Lee said: “A lot of developers and buyers we speak to at the supermarkets are looking for products around things like plant-based fermentation. They are constantly on the look out for exciting products in this area because they are emerging trends and therefore maybe less affected than more traditional items by range trimmings.”