Investments in alternative protein hit their highest level in 2020: $3.1 billion, double the amount invested from 2010-2019. Over $1 billion of that was in fermentation-powered protein alternatives.
It’s a time of huge growth for the industry — the alternative protein market is projected to reach $290 billion by 2035 — but it represents only a tiny segment of the larger meat and dairy industries.
Approximately 350 million metric tons of meat are produced globally every year. For reference, that’s about 1 million Volkswagen Beetles of meat a day. Meat consumption is expected to increase to 500 million metric tons by 2050 — but alternative proteins are expected to account for just 1 million.
“The world has a very large demand for meat and that meat demand is expected to go up,” says Zak Weston, foodservice and supply chain manager for the Good Food Institute (GFI). Weston shared details on fermented alternative proteins during the GFI presentation The State of the Industry: Fermentation for Alternative Proteins. “We think the solution lies in creating alternatives that are competitive with animal-based meat and dairy.”
Why is Alternative Protein Growing?
Animal meat is environmentally inefficient. It requires significant resources, from the amount of agricultural land needed to raise animals, to the fertilizers, pesticides and hormones used for feed, to the carbon emissions from the animals.
Globally, 83% of agricultural land is used to produce animal-based meat, dairy or eggs. Two-thirds of the global supply of protein comes from traditional animal protein.
The caloric conversion ratios — the calories it takes to grow an animal versus the calories that the animal provides when consumed — is extremely unbalanced. It takes 8 calories in to get 1 calorie out of a chicken, 11 calories to get 1 calorie out of a pig and 34 calories to get 1 calorie out of a cow. Alternative protein sources, on the other hand, have an average of a 1:1 calorie conversion. It takes years to grow animals but only hours to grow microbes.
“This is the underlying weakness in the animal protein system that leads to a lot of the negative externalities that we focus on and really need to be solved as part of our protein system,” Weston says. “We have to ameliorate these effects, we have to find ways to mitigate these risks and avoid some of these negative externalities associated with the way in which we currently produce industrialized animal proteins.”
What are Fermented Alternative Proteins?
Alternative proteins are either plant-based and fermented using microbes or cultivated directly from animal cells. Fermented proteins are made using one of three production types: traditional fermentation, biomass fermentation or precision fermentation.
“Fermentation is something familiar to most of us, it’s been used for thousands and thousands of years across a wide variety of cultures for a wide variety of foods,” Weston says, citing foods like cheese, bread, beer, wine and kimchi. “That indeed is one of the benefits for this technology, it’s relatively familiar and well known to a lot of different consumers globally.”
- Traditional fermentation refers to the ancient practice of using microbes in food. To make protein alternatives, this process uses “live microorganisms to modulate and process plant-derived ingredients.” Examples are fermenting soybeans for tempeh or Miyoko’s Creamery using lactic acid bacteria to make cheese.
- Biomass fermentation involves growing naturally occurring, protein-dense, fast-growing organisms. Microorganisms like algae or fungi are often used. For example, Nature’s Fynd and Quorn …mycelium-based steak.
- Precision fermentation uses microbial hosts as “cell factories” to produce specific ingredients. It is a type of biology that allows DNA sequences from a mammal to create alternative proteins. Examples are the heme protein in an Impossible Foods’ burger or the whey protein in Perfect Day’s vegan dairy products.
Despite fermentation’s roots in ancient food processing traditions, using it to create alternative proteins is a relatively new activity. About 80% of the new companies in the fermented alternative protein space have formed since 2015. New startups have focused on precision fermentation (45%) and biomass fermentation (41%). Traditional fermentation accounts for a smaller piece of the category (14%). There were more than 260 investors in the category in 2020 alone.
“It’s really coming onto the radar for a lot of folks in the food and beverage industry and within the alternative protein industry in a very big way, particularly over the past couple of years,” Weston says. “This is an area that the industry is paying attention too. They’re starting to modify working some of its products that have traditionally maybe been focused on dairy animal-based dairy substrates to work with plant protein substrates.”
Can Alternative Protein Help the Food System?
Fermentation has been so appealing, he adds, because “it’s a mature technology that’s been proven at different scales. It’s maybe different microbes or different processes, but there’s a proof of concept that gives us a reason to think that that there’s a lot of hope for this to be a viable technology that makes economic sense.”
GFI predicts more companies will experiment with a hybrid approach to fermented alternative proteins, using different production methods.
Though plant-based is still the more popular alternative protein source, plant-based meat has some barriers that fermentation resolves. Plant-based meat products can be dry, lacking the juiciness of meat; the flavor can be bean-like and leave an unpleasant aftertaste; and the texture can be off, either too compact or too mushy.
Fermented alternative proteins, though, have been more successful at mimicking a meat-like texture and imparting a robust flavor profile. Weston says taste, price, accessibility and convenience all drive consumer behavior — and fermented alternative proteins deliver in these regards.
And, compared to animal meat, alternative proteins are customizable and easily controlled from start to finish. Though the category is still in its early days, Weston sees improvements coming quickly in nutritional profiles, sensory attributes, shelf life, food safety and price points coming quickly.
“What excites us about the category is that we’ve seen a very strong consumer response, in spite of the fact that this is a very novel category for a lot of consumers,” Weston says. “We are fundamentally reassembling meat and dairy products from the ground up.”
The Covid-19 pandemic powered strong food and beverage sales last year. But natural and organic brands grew even faster than conventional ones, with sales growing 12.7% to $259 billion.
“Natural products throughout the last year have really been outpacing all product growth. Natural and clean products are now about $1 out of every $10 spent, which is really significant,” says Kathryn Peters, executive vice president of SPINS, a retail data provider. Peters presented sales trends at the virtual Natural Products Expo West.
Data from SPINS and Nutrition Business Journal documents that there was a “dramatic shift” in consumer behavior during the pandemic, as more people cooked at home and bought healthier foods.
“2020 was a record year for the U.S. natural and organic product industry,” says Carlotta Mast, senior vice president and market leader for New Hope Network, producers of the Natural Products Expos. “The industry has so much to celebrate, despite the very challenging time we’ve been through the past 14 months.”
Natural and organic sales are expected to pass the $300 billion mark by 2023.
Food as Medicine
Functional food and beverage sales grew 9.4% to $78 billion in 2020, a surprisingly high figure since grab-n-go offerings — the category in which many functional products are tracked — were reduced significantly during the pandemic.
“And yet that strong growth, nearly 10% experienced in that category, demonstrates that people continue to embrace the food as medicine trend,” Mast says.
Products that claim to offer immune-boosting, functional ingredients are selling well. Consumers are “shifting from reactive to preventative and from cold and flu season to year-round protection.” Ingredients and supplements like elderberry, vitamins C and D, antioxidants, collagen and cider vinegar are increasing in sales.
Sales of animal welfare-positioned products grew 17% in 2020, and sales of grass-fed and free-range products increased more than 13%. Other key wellness attributes that appeared to drive significant dollar growth included paleo (up 32%), plant-based (21%) and grain-free (18%).
“Consumers are expecting more from the products they buy,” Peters said. “Whether it’s because of a limited budget or health and wellness considerations to build a stronger body, people are seeking nutritional benefits.”
Consumers are seeking to buy from brands with a purpose. These are products that, for example, want to save the environment, create a sustainable food system, champion a social justice cause or support a minority group.
Nick McCoy, co-founder and managing director at Whipstitch Capital, a food-focused investment bank, calls these brands “better for people and the planet” and says they are “doing good while making money at the same time.” The amount of ESG (Environmental Social Governance) investment funds has increased tenfold over the past two years.
Brands that are mission- and community-minded are experiencing the strongest sales growth.
“This demonstrates that our industry is home to brands that do a lot more than just sell a product — they’re a force for better, better health and better outcomes for humans, animals and the environment,” Mast says. “Our industry shoppers expect more than a transaction from the brands they do business with.”
In a SPINS survey, consumers said they want to support brands that are LGBTQ owned (19%), BIPOC owned (28%) and/or woman owned (18%).
Vegetarian and vegan products are also increasing in sales. Plant-based and meat alternatives grew 21% last year, at a rate of two-times their mainstream counterparts.
“In many cases, plant-based is bringing more nutrient density than the original animal-based analog,” Peters says . “Plant-based support is growing beyond just health benefits to earth-based benefits like lower greenhouse gas emissions, water conservation and biodiversity.”
Not surprisingly, e-commerce sales fast-tracked during the pandemic, accounting for 58% of natural and organic sales last year. E-commerce also became the main channel where new brands were launched. Though sales in brick-and-mortar stores are not predicted to return to pre-pandemic levels, physical retail locations are still expected to account for 30% of all natural and organic products sales in 2023.
Speakers at the event advised brands to take an omnichannel approach, tackling marketing through brick-and-mortar stores as well as e-commerce channels. Sashee Chandran, founder and CEO of Tea Drops (a producer of organic tea pressed and preserved in different shapes), spoke at the conference about her experience following this marketing approach.
“Even though things are opening up, consumers still want that flexibility to be able to shop online but also in store,” she says.
From pickling foraged plants to experimenting with koji to vacuum-sealing tempeh, more chefs are experimenting with fermentation. Insights “for menu developers seeking unique concepts and ingredients” were shared during a session at the Research Chefs Association’s RCA+ virtual conference.
Sandor Katz, noted author and educator, discussed how research kitchens can increase their fermentation activities, from creating interesting flavors to expanding food preservation.
“[Fermentation] can elevate the plainest of foods into flavor sensations,” Katz said. “Its uses in culinary traditions around the world are incredibly diverse, and yet visionary chefs are experimenting with exciting new applications of fermentation.”
Read more (Food Business News)
Behind every fermented food or beverage is intriguing science that creates a pleasantly tangy taste. Customers want to know all about that chemical process, right?
No. Stop geeking out and appeal to the foodie instead.
“This is about the joy of eating, and so when you over-science me and you over-gut me, I forget the joy of eating. Remind yourself that your most important message is how pleasant, how tasty, how engaging, that’s the pleasure of eating, and then you can tell me how you make that pleasure,” says Sasha Strauss, managing director at Innovation Protocol (a marketing consulting & design agency). Strauss shared his brand strategy tips in the TFA webinar Building a Fermented Brand. He stressed fermented brands need to avoid getting stuck in the “scientific nuance of how you make your products. I’m not saying delete the science, just don’t make it the marquee.”
Alex Corsini, founder of frozen pizza company Alex’s Awesome Sourdough (and TFA Advisory Board member) agrees. Corsini, who moderated the webinar, says he began his brand with a heavy emphasis on the science of fermenting sourdough.
“Our customer didn’t really respond to that. And that’s something I see in fermentation all too often, is people aren’t selling the actual benefit. They want to understand the benefit, so that’s what you lead with,” Corsini advises.
If you’re selling kombucha, for example, share that it’s a feel-good product that will make you feel better than a soda, Corsini says. Don’t make your selling pitch the SCOBY’s technical specifications.
Teach, Don’t Sell
“I don’t understand fermentation. I don’t understand the health benefits. I don’t understand its cultural origins. I don’t understand what section to buy it in. I don’t understand what to eat it with or who to serve it too. Your first duty as a brand is to help me make sense of this, help me understand it,” Strauss says. “It’s not your job to be the sexiest, raciest, the most innovative, it’s your job to help me understand. And where understanding sits in the consumer’s mind is where buying behaviors originate. So the first and most important duty of your brand is to simply help me not feel alone, help me not feel confused, help me not feel overwhelmed.”
By educating the consumer, by inspiring them to learn about fermentation, “they will be indelibly connected to you,” Strauss continues. “They will prefer you. They won’t wonder if your price is a penny cheaper, they’ll prefer you because you’re who they learned from. We buy who we learn from.”
There’s not enough room on a label to detail all the health benefits or the scientific details of a product. But this information can go on a brand’s website, social media page or table-top display at a trade show or farmer’s market.
“I hope that your audience doesn’t hear from you just once,” Strauss says. They should find a video of your product on Instagram, find recipes on your website and see an ad in the local paper. Brands need to create multiple opportunities to engage, “don’t try to cram all of your value in a single channel.”
A New Economy
The COVID-19 pandemic has permanently changed the economy. Consumer lifestyles have changed, too, and these new behaviors create opportunities, especially for fermented products that are healthy and flavorful.
“Historically, if you were trying to build a consumer packaged goods brand, it was really about your resume, your long list of accomplishments , your heritage in farming, your understanding of the chemistry and that was what marked the person, the business, the brand,” Strauss says. “But actually now, it’s really about how you resonate, how I connect with you, how you inspire me, and that doesn’t require a long history, that requires a contemporary participation.”
“In a world where the audience is starting and ending their search digitally, each of the things that you share, post, write about, blog about, video dialogue about, those things are little breadcrumbs that will never go away,” Sasha says. “They’re little trails that lead to your brand, lead to your resources, lead to your understanding and this is powerful.”
Consumers rejected traditional brand loyalties this past year. They’re increasingly open to new brands, curious about new cultural flavors and want healthy food. Critically, Strauss points out, they want to purchase from socially responsible brands. “In a post-covid era, we want a brant to also do good,” he says.
Producers must make conscious choices about the farmers they use — how are they improving soil health? What is the environmental impact of their distribution line?
“Understand you have to make an impact, somehow do good for the world while building business,” Strauss says.
Don’t expect people immediately to dump their sourdough starters and crowd restaurants when the Covid-19 pandemic is over. In a U.S. consumer trends survey, 42% of people said they plan to cook more at home post-pandemic. This news is great for Consumer Packaged Goods (CPG) brands.
From record sales to supply shortages to new safety regulations, the retail grocery business was changed dramatically by the pandemic in 2020. But CPG companies experienced phenomenal growth: sales rose over 10% — more growth in one year than in the four-year period from 2016 to 2019. Though pandemic stockpiling (fingers crossed) likely will not recur in 2021 , CPG sales show no signs of slowing down. A mere 7% of Americans said they’d cook less after the pandemic than before. Consumers are buying CPGs more than ever. And they’re not staying loyal to their favorite brands — over 50% of respondents said that they are willing to try different products, and 66% of them stuck with those new brands.
Fermented CPG brands are in a great spot to take advantage of these trends. Healthy foods gained significant share in the food market in 2020. The pandemic propelled fermented food and beverage into the spotlight. More Americans began experimenting with healthier eating during the pandemic, and now they’ve adopted it as a habit.
What does this mean for the future of CPG brands? Here are four ways they must adapt to the “new normal”:
- Sales via Multiple Channels
Consumers won’t be shopping for your products only in brick-and-mortar stores. More consumers than ever are buying through ecommerce. Digital grocery sales were a niche category before the pandemic — now, CPG food and beverage sales are estimated to top $100 billion in 2021.
Food and beverage sales became the largest CPG online segment in 2020.
Direct-to-consumer (DTC) sales also shifted into high gear. Consumers turned to DTC during the pandemic to get their favorite products straight from the manufacturer. Good examples are kombucha producers selling bottles directly from the brewery and a sauerkraut maker shipping to consumers from their kitchen. An analysis by Retail Dive found direct-to-consumer businesses during the pandemic fared better than did traditional brick-and-mortar retailers.
But this doesn’t mean CPG brands should abandon selling in grocery stores.
According to Deloitte’s 2021 Consumer Product Industry Outlook, four out of five companies say “resetting their go-to-market strategy is critical to meeting their objectives; however, only half rated the current maturity of their related capabilities as high.” A majority of CPG companies surveyed say a bigger online and omnichannel presence will be a means of reaching consumers in 2021.
- Conscious Consumption
Consumers want to buy from brands that care about social and environmental issues. Societal inequality and environmental impact are big concerns to many consumers, and they are spending their dollars on ethical brands willing to put their money where their mouth is.
Deloitte found nine in 10 consumers say the pandemic is “an opportunity for large companies to hit ‘reset’ and focus on doing right by their workers, consumers, communities and the environment.” The CPG companies surveyed agree — three in four say establishing such initiatives in 2021 are a “strategy to place purpose alongside profit, express corporate values, and address heightened consumer attention to sustainability, social justice, equality, and environmental consciousness.”
Authenticity is key for proper brand activism. CPG companies need to be transparent with their consumers, integrating their social and environmental purposes into all parts of their business and organization. A brand that acts inconsistently will quickly lose trust with a consumer.
- Preference for Small Producers
CPG sales during the pandemic showed an interesting dichotomy: large companies had the highest dollar growth, but small companies – taken as a whole – gained meaningful share of market. A report by business consulting firm McKinsey & Company found market share of small companies during the pandemic increased from 18.2% in 2019 to 19.2% in 2020, while midsize businesses were flat and large companies fell from 51.2% to 50.5%.
More consumers did switch to new brands during the pandemic, but their primary reason was availability. This area is one where large brands have an advantage, as their greater resources should help them keep products on grocery store shelves.
- Supply Chain Improvements
Whether implementing new safety rules, finding sources with available products or switching packaging materials, every CPG brand had to adjust their supply chain in 2020. They are acting quickly to fix weaknesses exposed by the pandemic, and nine in 10 say they’re making significant progress.
CPG companies used to be praised for holding minimal inventories, but 2020 tested their resilience. Deloitte’s report explains: “Resilience is how companies keep their supply chains from breaking and restore them quickly when they do. It is also how they can gain the nimbleness and scalability to power new go-to-market approaches and innovative business models.”
Barb Renner, Deloitte’s vice chairman and U.S. leader of consumer products, says one of the biggest problems identified in their survey was an over-reliance on a small number of vendors. Most companies didn’t have backup plans. “If they were getting their product from a handful of vendors and one of those vendors had to close down, did they try to find an alternative source?” she asked.
CPG executives indicated supply chain resilience is important or very important for the company in 2021, with nine in 10 saying they are investing in improvements. Beyond creating reliable supply chains that can support their production, CPG companies need to be able to respond to demand and shift supply to new locations.
Shelf-stable fermented sauces are growing tremendously. In the past year, fermented sauces grew 41%, with sales reaching $275 million. Soy sauce still dominates with 70% of the market share, but sales of both fish sauce and gochujang increased over 50%.
“I think a lot of brands are thinking ‘Are we going to hang onto this new [normal], this new baseline?’ This is a segment of products that’s really having its baseline reset,” says Kevin Snodgrass, solutions architect for SPINS. Snodgrass shared insights in a TFA webinar, Retail Trends for Fermented Sauces. “Brands are going to continue to experience this great growth in the months and years ahead.”
The increase is significant — sales growth in the one year from 2019 to 2020 was 5.7%. This improvement is attributable to multiple trends across the food industry — more people are buying healthy food and cooking at home, the American kitchen is becoming more globalized, and more consumers are embracing the unique flavors of fermented sauces, especially those from Asia.
“It definitely coattails a lot on the acceptance and growth of the fermentation market as a whole,” says Jared Schwartz, a TFA Advisory Board member who moderated the webinar. Schwartz is the founder of fermented sauce producer Poor Devil Pepper Co., and director of operations and quality for Farm Ferments, a facility in Hudson, N.Y., that is home to Hawthorne Valley Farm. “As consumers are becoming more open to reaching for fermented foods, kind of the next step is adding a flavorful, fermented hot sauce.”
Brands Growing, but Room for More
The top 10 selling fermented sauce brands in both natural retail grocers (like Whole Foods) and traditional (MULO) outlets (like Wal-Mart and regional grocery chains) are all experiencing double-digit growth. “That’s a great sign,” Snodgrass notes.
Kikkoman, Bragg, San-J, Coconut Kitchen, Lee Kum Kee and Big Tree are among the top 10 brands in both the natural and MULO channels. Smaller brands like Red Boat, Mother-In-Law’s, Ohsawa and Yamasa thrive in the natural channel,; La Choy, BetterBody Foods and Chung Jung One are strong in MULO.
The category is ripe for continued innovation, Snodgrass says. Smaller brands can emerge, even with competition from larger, established brands, so it can be worthwhile to start a fermented sauce brand.
Label Claims & Consumer Education
SPINS found certain product attributes on fermented sauces help sales.. Certified gluten-free fermented sauces grew 40.8%; USDA organic, up 40% and non-GMO increased 33.8%.
Since many sauces don’t put “fermented” on their label, many consumers may not be aware they are, notes Snodgrass. He says that these products could benefit from using “fermented,” as it would suggest that there may be health benefits to the sauces.
Schwartz agrees. He points out Tabasco as a fermented hot sauce, even though producer McIlhenny Company doesn’t market it as such. Educating the consumer would also help the category. Probiotics are a selling point but they confuse buyers. And there’s a clear difference in health benefits between shelf-stable and refrigerated fermented sauces. Refrigerated sauces may have live, beneficial bacteria; shelf-stable ones are pasteurized, killing any good bacteria in the process.
“At the end of the day, I think it comes down to flavor,” Schwartz says. Fermented sauces are “funky and vinegar-free. It’s got this like natural layers of complexity that you can’t really achieve without fermentation.”
Leaders in the biotechnology industry are calling fermentation “Agricultural 2.0.” As consumers continue to seek alternative protein and dairy options, more biotech companies are using fermentation to produce alt-proteins. Ricky Cassini, co-founder and CEO of natural food colourant start-up Michroma, says: “The fermentation space is thriving and there is a lot of progress around this technology.”
Here are three expected developments in fermentation processing this year:
- More dairy-free cheese products will enter the market.
- Price points for alternative proteins will drop as more players enter the market.
- Regulatory issues and naming conventions will gain in significance.
Read more (Food Navigator)
Fermented foods are still the top dog amongst nutritionists. For the fourth year in a row, fermented foods are No. 1 on Today’s Dietitian list of the year’s top superfoods.
The 9th annual What’s Trending in Nutrition survey, conducted by Pollock Communications for the magazine, polled more than 1,165 registered dietitian nutritionists (RDNs). They were asked for insight into consumers’ diets and, particularly, how food and beverage choices have changed during the pandemic.
“A year full of staying home and cooking more has influenced consumers to rethink their food and nutrition choices. In 2020, the food and beverage industry saw sales increases in products like green tea, as well as renewed attention on comforting, tried-and-true foods like dairy milk and healthy, fermented foods like yogurt,” says Louise Pollock, President of Pollock Communications. “The plant-forward trend continues to grow, as does demand for clean labels. Our trends survey findings reflect these significant changes caused by COVID-19 that will continue to affect eating habits and the food industry for years to come.”
Cookbook author Susan Jane White calls fermented foods the “celebrity superfood.”
“One of the many benefits of eating fermented foods is their gut-supporting role,” White says. “Of course, being uncooked, ferments have their goodness locked into a tango with all those beneficial bacteria. You’re left with a crisp tang that is both bewitching and nourishing.”
Changes to the top 10 superfood list reveals that consumers want more plant-based food. For the first time, nutrient-rich spinach and leafy greens made the list. Green tea jumped from No. 10 to No. 3. Superfoods, Today’s Dietitian notes, “have become dominant in consumer choices to help support immunity. From boosting gut health with fermented foods to reaping the benefits of antioxidants with blueberries and blunting inflammation with green tea.”
“We are witnessing unprecedented times in the world of nutrition, health and wellness,” says Mara Honicker, publisher of Today’s Dietitian. “As the world grapples with how to best manage health and longevity, consumer awareness of beneficial diets and ingredients is growing, and they will be looking to RDNs and the food industry to help navigate these shifting needs.”
Despite a year when cideries around the world were forced to close down taprooms and cancel restaurant sales due to the pandemic, cider sales grew 9% in 2020.
“I know some of you are barely hanging on — but you are hanging on,” said Michelle McGrath, executive director of the American Cider Association (ACA). “We did not waver, we held our shares and we kept growing.”
McGrath presented industry statistics at CiderCon 2021, the ACA’s annual global cider conference. Because of the ongoing coronavirus pandemic, the conference was virtual this year. Nearly 800 people from 18 countries and 41 states attended the three-day conference.
Smaller, local cider brands sparked consumer interest in 2020. Sales of regional cider brands grew 33%, while national brands declined 6%.
The impact of the pandemic, though, has been severe on certain sectors of the industry. On-premise cider sales (in restaurants, breweries and taprooms) declined nearly 70% from 2019.
“We’re resilient, we’re tough, we’re savvy. You couldn’t have predicted how your business would have stood up to a once-in-a-lifetime pandemic,” said Anna Nadasdy, director of customer success at Fintech, a data company for the alcohol industry.
Nadasdy’s keynote on expected consumer trends in 2021 cited the key drivers influencing consumer behavior — the economy, politics and natural disasters. Here are seven of her takeaways for cideries:
- Consumers Buying all Alcohol Types
Though consumers have long been loyal to one type of alcohol — beer, wine or spirits — the “beer guy or wine gal” label is disappearing. Over one-third of consumers are purchasing from all three major categories.
Hard seltzer is the third largest beer segment (16% of dollar share, behind domestic premium and imported beers), but it’s the fastest growing. This is exciting for cider makers, Nadasdy notes — hard seltzer in 2018 was the size of the cider market today.
- Fruit-Flavored Cider is Growing
Though apple cider still dominates the cider market with 52% of sales, fruit-flavored cider grew three points in the past year to 12% of sales. The top three fruit-flavored products are: Ace Pineapple Craft Cider, Incline Scout Hopped Marionberry Cider and 2 Towns Ciderhouse Pacific Pineapple Cider.
(Other products in the cider category include: mixed flavors, dry cider, seasonal cider/perry, herb/spice cider.)
- Cider is Making Waves in Craft Beer
Cider — tracked as part of the overall craft beer category — is proving a worthy participant.Cider has 11% of the dollar share, second only to the category leader, India Pale Ale (41% of the market).
“That’s really impressive for such a small base,” Nadasdy says. “Even though you guys are a smaller segment, you still have a lot to contribute to the overall beer category. And I think it’s important when you’re having these conversations with retailers that you are able to point out these wins.”
- Hard Kombucha is Gaining Ground
Cideries are competing with hard kombucha. Though hard kombucha is a fermented tea and not a cider, retailers consider hard kombucha and cider comparable drinks. And hard kombucha sales are growing quickly.
“Although small now, keep an eye on (hard) kombucha,” Nadasdy said.
- Prepare for Changed On-Premise Sales
Once wide-spread vaccination is in place and on-premise dining returns, expect fundamental changes such as more online ordering, healthier menu choices and a rise in food tech like tablet menus. The National Restaurant Association listed other significant changes that will impact cideries:
- Streamlined menus. There will be fewer menu items, with 63% of fine dining operators and half of casual and family dining operators saying they will reduce their offerings.
- Alcohol-to-go. Seven in 10 full-service restaurants added alcohol-to-go during the pandemic. Thirty-five percent of customers say they are more likely to choose a restaurant that offers alcoholic beverages to-go.
- Rosé-Flavored Cider is Out
Every brand of rosé-flavored cider is losing sales. The top three brands showing the most significant losses in this category are: Angry Orchard, Bold Rock and Virtue.
- Cans Are King
Cans are leading the dollar share of the market, growing at 1.5 times the rate of bottles. Six-pack (11-13 ounce) cans are now the top share item with 29% of total cider sales. This is followed by six-pack (11-13 ounce) bottles and 4-pack (18-ounce) cans. (These figures do remove shares of Angry Orchard, which sells in bottles. Because Angry Orchard dominates 40% of the cider market, they skew the data.)
The health attributes and unique flavors of fermented food and drink are becoming increasingly more important to consumers. But, for fermentation brands to succeed in the food industry, they must prioritize their labeling and marketing, and focus on their environmental impact, says international food industry expert Lisa Moeller.
“Hopefully, it will be as advantageous to attach ‘Fermented’ as it is ‘Fresh Pack’ to shelf stable pickle products at some point in time,” says Moeller, speaking at a recent TFA webinar: Global Fermentation: Today & Tomorrow. “Never in our history has the power of positive change been more possible and necessary. I think there is an inherent history with fermented vegetables and a trajectory that can only take them higher going forward.”
After receiving her master’s degree in food science, Moeller spent 25 years working with Mount Olive Pickle Company in North Carolina. She later started her own company, Fashionably Pickled, where she consults to food brands on methods – such as assisting with traditional fermentation technology – for crafting better products.
Fred Breidt, microbiologist with USDA-ARS and a TFA advisory board member, called Moeller “one of the premiere pickle people in the United States,” and praised her for working around the world on a variety of fermentations.
Moeller shared three forecasts for fermented foods.
- Health Concerns Become More Important
Consumers are more concerned about their health during the COVID-19 pandemic. “Folks are looking to boost immunity, reduce their weight and they’re looking for nutritious options,” Moeller says.
People are also cooking more at home during the pandemic. Restaurant dining had continually increased over the previous two decades and, in recent years, only half the food eaten in the U.S. was purchased from a grocery store. But when COVID-19 hit, “this 23 year trend was blown out of the water,” says Moeller. By April 2020, 65% of the food consumed came from a grocery store, with less than 35% from restaurants.
“I think this trend gives the fermented vegetable arena great potential,” Moeller says. “Fermented vegetables can increase the shelf life of produce, they’re nutritious, and they can be turned into a wide variety of flavors. And I think for a time, people are going to be more interested in having a supply of things in their pantry when they don’t feel comfortable going to a grocery store.”
Increased research will help promote fermentation as a viable health food. There are still consumers who are off-put by fermentation, leaving room for brands to educate.
“Though a large part of the pickle industry is still involved with fermented cucumbers, it is not the leader in the retail category at this time,” Moeller says. “We don’t label ‘fermented’ in America. Lots of times with the cucumber industry, the fermented kind of becomes the offshoot. It’s kind of the have-to-do so you can produce all the fresh pack that you want and still have a home for others.”
- Labelling and Marketing Are Crucial
Food product labels and marketing must adapt to their local markets. Brands must create different labelling, packaging and marketing plans, depending on the country.
“There truly is no such thing as global tastebuds. But there are successful product adaptations,” Moeller says.
Consider Kentucky Fried Chicken (KFC) as an example. There are over 23,000 KFC locations in 140 countries, and the restaurants adapt to regional flavor preferences, selling different styles of food depending on the location. Coca-Cola is another example. With 500 brands in 200 countries, a can of Coke will taste different depending on the country where it was sold.
“Labelling is even more important when selling your brand. Know what is important to the folks that are going to make the decision to add you products to their store shelves. Whole Foods is different than Walmart,” Moeller adds.
She advises to never make a label too complicated. Yogurt sales are projected to drop by 10% by 2024 “and this is partially because there are too many choices and the category has gotten too complicated.”
- Environmental Concerns Lead to Upcycllng
The environment is a big topic of concern worldwide, Moeller says.The global food system accounts for 26% of greenhouse gas emissions, 40% of the food produced is never consumed and 78% of global consumers are concerned about the environment.
Upcycling will be the new food trend. Brands like Toast Ale (beer made from old bread) and RISE + WIN Brewing Co. (who recycle grain scraps to make granola and sweets) are already making waves in the industry. During the pandemic, chefs reported using fermentation more than ever before to make use of uneaten produce.
“There’s not a vegetable out there that could be turned into something else,” Moeller says. “Turning food waste into alternative products…I think it’s one of the most wonderful ideas, (brands) need to partner with the folks that they want to get these byproducts from.”