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.
Humans have been baking fermented breads for at least 10,000 years, but commercial yeast and flour companies have never seen demand so high. National Geographic shares “a story for quarantined times, about extremely tiny organisms that do some of their best work by burping into uncooked dough.”
Scientists describe the microbes behind the work fermenting the bread. “It’s this wonderful living thing you’re working with,” says Anne Madden, a North Carolina State University adjunct biologist who studies microbes. She and partner scientists showed recently that when bakers in different locales use exactly the same ingredients for both starter and bread, their loaves come out smelling and tasting different. “Which I think is fantastic,” she says. “It’s evidence of the unseen. And as a microbiologist, you so rarely get to measure things about microbes with your nose and your taste buds.”
Read more (National Geographic)
Three fermentation experts weigh in on one of the most common problems in fermenting vegetables: mold prevention. The fermenters include fermentation chef David Zilber (head of fermentation at Noma) and fermented sauerkraut producers Meg Chamberlain (co-owner of Fermenti Farm) and Courtlandt Jennings, (founder and CEO of Pickled Planet and TFA advisory board member).
How do you handle prevent mold in sauerkraut?
David Zilber, Noma: That is something you are constantly trying to fight back, especially when you lacto-ferment in something like a crock. There are so many variables that go into making a successful ferment. How clean was your vessel before you put the food in there? How clean were your hands, your utensils? How much salt did you use? How old was the cabbage you were even trying to ferment in the first place? Every little detail is basically another variable in the equation that leads to a fermented product being amazing or terrible. It’s a little bit like chaos theory, it’s a little bit like a butterfly flapping its wings and Thailand and causing a tornado in Ohio. But with lots of practice, you’ll begin to understand that, if it was 30 degrees that day, maybe things were getting a little too active, maybe the fermentation was happening a little bit too quickly. Maybe I opened it a couple times more than I should of and it was open to the air instead of being covered. So there’s lots of variables. But I would say that, if you’re having a lot of trouble with mold, just up the salt percentage by a couple percent. It will make for a saltier sauerkraut, but it will actually help to keep those microbes at bay. (Science Friday)
Meg Chamberlain, Fermenti Farm: You must allow the ferment to thrive by creating a favorable environment with “Good Kitchen Practices.” So, to prevent mold in your ferment start by using only purified water, like reverse osmosis, distilled or boiled and cooled and-no tap water(municipal). Only use vegetable-based soap that is NOT anti-bacterial, like a good castile soap. Finally, only use dry fine Sea Salt, no mineral/no gourmet or iodized. Keep Fermenting and do not get discouraged! #youcanfermentthat #diyfermentation #idfermentthat
Courtlandt Jennings, Pickled Planet: Preventing mold when making sauerkraut is all about a controlled atmosphere. How well you maintain your situational cleanliness and fermenting atmosphere is my best clue for you. There are many ways to control atmosphere and every situation will be different based on many factors but be dillegent and your ferments will improve with practice.
This may not seem like an answer but it’s directional… as is most advice unless dealing with a consultant. Good luck and may the ferment force be with you!
The new innovation in vinegars is grape vinegars. Grape vinegar is made from grapes macerated and slowly allowed to ferment with their skins for a year. “The fermented juice then spends several years in small oak barrels to evolve into the delicately fruity pinkish vinegar,” according to the New York Times. The white grapes and skin contact is why the grape vinegar makers call it to the “orange wine” of vinegars. The latest grape vinegar collection comes from Sirk in Friuli, a region in northeast Italy. The grapes grown there, Ribolla Gialla white grapes, are prized for wine making.
Read more (New York Times)
In a matter of days, the novel coronavirus outbreak dramatically changed grocery shopping. Empty grocery store shelves have become a ubiquitous symbol globally of home quarantine.
Sales exploded for pantry staples like dried beans (62.9%), powdered milk (126.3%) and rice (57.5%). But another grocery quarantine must-have item is emerging – fermented food and drink. Sales are up for kombucha (10.1%), natto is selling out in Japan, yogurt is selling out in Europe and pickle and sauerkraut sales in Russia are up 79%. Fermentation brands are reporting some of their biggest sales during the month of March, as much of the nation was forced into self-isolation to prevent the spread of COVID-19.
“For fermented food, it’s an interesting time. We’re an immune boosting type of food, so our sales are skyrocketing. We’ve had the best month we’ve ever had in business,” says Drew Anderson, CEO of Cleveland Kitchen and TFA board member. Cleveland Kitchen makes sauerkraut and fermented dressings and marinades. “It is bittersweet. Obviously, we want this virus to go away. But we’re seeing the fermentation industry as a whole, the one benefit is it’s driving a lot of trial. People say ‘I heard fermented food is supposed to be good for you, I’m cooking more, why not grab a pack of kraut.’”
Though sales are high, brands are changing their operation model. Rather than running two shifts of processing at Cleveland Kitchen, they’re down to one. Employees must take daily temperature readings before work, stop for mandatory handwashing breaks and use new Purell hand sanitizing stations.
“Sales are up overall, but we have had to implement our emergency sanitation protocols to continue production,” says Meg Chamberlain, CEO of Fermenti, LLC. The North Carolina-based brand sells a variety of vegetable ferments, teaches fermenting workshops and hosts annual the annual WNC Fermenting Festival. Their staff is under voluntary home quarantine – which means staff only goes from work to home. “Overall our company is proving resilient and we are hopeful to continue to provide Fermenti to our community.”
Because food production is considered essential business, licensed fermentation companies have not been forced to stop working during the coronavirus outbreak.
Aneta Lundquist, CEO of 221 B.C. Kombucha, has been posting videos to her Instagram stories of the Florida based kombucha processing facility. Lundquist says employees are working overtime to deliver orders.
“Our orders during the global pandemic have spiked. Consumers have gone full blown ‘healthy’ food during this health crisis,” she says. “Now is the time to make a switch from over-processed and denaturalized pseudo foods to real, natural and unprocessed foods that nourish our body, mind and spirit and help building a strong immunity.”
Lundquist adds customers need to “think of kombucha, kimchi, sauerkraut and other fermented fruits and vegetables as microbiome rock stars!…Always choose wildly fermented foods.”
“Remember it is about diversity and the quality of microorganisms, not just quantity. You can only achieve this by fermenting traditionally.”
Keenan Smith, CEO of Goodwolf Kefir in Portland, agrees. He says: “The probiotic and fermented space will increase as people have an increase in health awareness and want a better functioning immune system.” They are home delivering their kefir, and donating a
Brands are getting creative with their marketing, too. Goodwolf Kefir is home delivering kefir to the Portland area and donating a proceed of sales to their local food bank. Cultured South and Golda Kombucha have setup a pick-up fridge at their Atlanta location where customers can prepay for an order online, get a secret code to unlock the fridge and grab fermented food and drinks. Wild Kombucha in Baltimore is offering free, local, “no human touch” home delivery for their 12 pack bottles. 28 Mile Vodka & Distillery in Illinois have converted their distillery to make hand sanitizer that they call “Fool’s Gin.” The CEOs of Miyoko’s Creamery and Lifeway Kefir are both using the brands Instagram accounts to share recipes using their product.
Outside the U.S., though, different government rules are restricting fermentation brands from operating during the global outbreak. In India, Mountain Bee Kombucha has halted operations during a 21-day lockdown.
“There is no question that our business is impacted immensely, one for the fact that we are still quite small-scale which supplies directly to a handful of local grocery stores. Currently those grocery stores have been working at limited capacity and/or temporarily shut,” said founder and head brewer Honey Islam. “Another reason for lesser business in these times is due to the lack of awareness in the Indian market about fermented foods, especially kombucha. We are engaged in educating our customers as well as spreading awareness in the community via workshops, classes, 101 sessions, pop-ups, all these channels are education are currently disrupted which stalled our efforts in bringing kombucha awareness to the masses.”
Mountain Bee Kombucha is focusing on educating through Instagram videos and YouTube tutorials.
As the coronavirus outbreak continues to put health on the forefront of consumer’s minds, the sales of probiotic products are rising. GlobalData, an analytics company tracking grocery sales, notes that natto (fermented soybeans) were out of stock in Japan consistently since the outbreak. Sales of yogurt are also increasing.
“Consumers are more actively buying probiotic products. There will not be natto panic buying in Europe, but probiotic products claiming to improve the immune system are likely to grab consumers’ eye,” said Mitsue Konishi, senior innovation analyst at GlobalData.
CNBC “Suddenly Obsessed” explores how kombucha went from a niche beverage to a massive fermented drink category reaching $500 million in sales. Once only popular among hardcore health enthusiasts, CNBC notes kombucha’s appeal is because of a growing consumer preference for healthier drinks. Bigger brands are entering the kombucha space, though, manipulating the brewing process. Pepsi Co. acquired Kevita kombucha, for example, and now Kevita pasteurizes their kombucha for a longer shelf life.
Read more (CNBC)
Bread sales continue to flatline as consumers grow leary of gluten and chemical preservatives. But there’s one bright spot in the market: sourdough. Preservative-free, clean ingredient, fermented sourdough bread is growing increasingly popular.
Read more (CNBC)