An organic farmer and nutrition activist is teaching schools and daycare centers in Japan to grow their own vegetable garden using fermented compost from recycled food waste, then incorporate into school lunches those fresh vegetables with traditional Japanese fermented foods (like miso and pickles). Two years after the program’s launch, absences due to illness have dropped from an average of 5.4 days to 0.6 days per year.
Farmer Yoshida Toshimichi “is a devout believer in the power of microbes.” Using centuries of Japanese folks wisdom that is supported by modern science, Toshimichi explains that fermentation bacteria in the compost yields hardy, insect-resistance vegetables. He says the key to a healthy immune system is maintaining a diverse and balanced gut microbiota. “Lactobacilli and other friendly microbes found in naturally fermented foods can help maintain a healthy environment in the gut, just as they do in the soil,” continues the article. Microorganisms in fermented foods like miso and soy sauce will help balance gut flora. “Organic vegetables, meanwhile, provide the micronutrients and fiber on which those friendly bacteria thrive. In addition, phytochemicals found in vegetables—especially, fresh organic vegetables in season—are thought to guard against inflammation, which is associated with cancer and various chronic diseases,” the article reads.
Toshimichi has authored books on his farming and nutrition practices and is featured in the two-part documentary film “Itadakimasu,” which translates to “nourishment for the Japanese soul.”
Read more (Nippon)
Though the March Natural Products Expo West conference and trade show were cancelled this year because of the coronavirus pandemic, New Hope Network (producers of the event) hosted a virtual webinar this month to share their annual report on industry trends. Leaders from New Hope Network, SPINS and Whipstitch Capital shared insights on natural product sales trends.
“We definitely believe that this unfortunate health crisis is going to bring the bright spot of making health and wellness more mainstream,” says Kathryn Peters, executive vice president of business development at SPINS (who also are scheduled to present at TFA’s FERMENTATION 2021 conference next May).
The report typically encompasses sales numbers for the previous year, but SPINS included insights from short- and mid-term consumer behaviors during the COVID-19 crisis.
Read on for five takeaways for the fermentation industry from the data.
1. Thanks to Mass Market Saturation, Natural Sales Slow in 2019
Sales of the natural and organic industry in the United States slowed in 2019, growing 5.3% to $230.7 billion in sales.
The slowing growth signals an optimistic takeaway: mass market saturation. There are more natural products on retailer’s shelves than ever before.
“Despite the slower growth, the mass market channel – which includes big box retailers, large grocers like Walmart – that channel added 6.5 billion in new sales last year, which is very significant,” says Carlotta Mast, senior vice president for New Hope Network.
Sales data over the last decade shows the natural industry has grown from being a small player in the consumer products industry with only 11% of sales to a larger player with 20% of sales.
“We’re not a little kid anymore – we’ve kind of grown up,” says Nick McCoy, the managing director and co-founder of Whipstitch Capital.
Natural brands are getting larger, McCoy notes, experiencing an average of 10% growth two years after their start date. Growth of smaller brands is outpacing growth of larger brands. Brands in the 1,000-2,000 sales spots grew at a rate of 6.1% in 2019, while the top 1,000 selling brands grew at a rate of 5.2% in 2019.
2. Americans Want Functional, Science-Backed Products
Despite slower industry growth, the natural, functional food and beverage industry grew two times faster than conventional food and beverages in 2019. Functional products improve overall health by providing additional nutrients. Fermented food and drink fall into the functional category.
Functional food and beverage sales grew 5.3% in 2019, hitting $71.4 billion in sales.
Consumers are purchasing products with ancient wisdom, a trend defining the nutrient-dense, time-honored food that is made of simple, clean ingredients.
“This has been an underlying driver of the industry for many years,” Mast says. Consumers are “seeking science-backed health and wellness offerings positioned to address modern conditions.”
Consumers want optimized products that address eye health, stress support and, especially in today’s health climate, immunity.
The natural industry experts expect functional foods to continue to grow, fueled this year by the COVID-19 pandemic.
3. Coronavirus Outbreak Causing Big Boost in Sales
During the week America went into quarantine during the coronavirus outbreak, 15 million additional buyers bought natural products.
“At the end of the day, virtually everything sold,” Peters says. A key trend: “Natural products were still in demand; they did outsell all products.”
Peters notes some of the natural products may have sold because they were the last available product on the shelf. Time is the best indicator if these shoppers will convert to regulars. But those products are now on consumer’s shelves – and a lot product trial is happening across the country, trial that is an expensive element of product development. “It’s a huge opportunity for this industry,” Peters says.
“What we’re finding as a real highlight for the industry is the consumer values that built and grew the natural and organic industry for years and years are holding strong in the face of COVID-19,” Mast says. “One hypothesis of what the world may look like in a post-COVID era is that consumers will increasingly prioritize health and wellness…A number of long term macro forces and trends that have driven growth of the natural and organic products industry up until now position us well for a world in which consumers increasingly prioritize health and wellness.”
As unemployment soars and consumers cut back on expenses, Peters does not expect economic pressures will slow down natural product sales.
“Our bodies are our best line of defense, and consumers are realizing this,” she adds. “While comfort food is important in this phase, we are still seeing a strong influence of health and nutrient-dense food.”
A survey of consumers during the week of April 13, 2020 found that 77% say personal health is most important to them today than it was in 2019. In addition, 43% say eating healthy food is more important today than it was in 2019.
Sales of kombucha, for example, plateaued in 2019, after years of positive growth. But during the peak coronavirus grocery stock up period, refrigerated kombucha sales were up 28%, refrigerated pickle and marinated vegetables were up 58% and refrigerated yogurt sales were up 39%.
The coronavirus is increasing challenges for the industry, too. Supply chains are disrupted, there is a lack of new product development and a dearth of investment capital.
“That is slowing the flow of innovation, which we can expect to affect the flow of offerings to the market later this year and into 2021,” Mast says.
4. E-Commerce Sales Growing Fast, Driven by Natural Shoppers
In 2019, e-commerce sales accounted for only 4% of total natural product sales. In 2020 so far, e-commerce has generated almost $10 billion in sales. Estimates put total e-commerce sales at 17% in 2020.
“E-commerce is the big story for 2020 with COVID-19 and the rapid increase of consumers buying online,” Mast says.
Interestingly, natural shoppers were using e-commerce channels at a higher rate than regular shoppers.
5. Sustainability is of Greater Importance
Early consumer research indicates an aspirational trend: COVID-19 may change consumer’s viewpoints to become more sustainability focused.
During the week of April 13, 2020, a survey of consumers found that 67% said environmental health is more important to them today than it was in 2019. Purchasing behaviors that support environmental causes are also on the rise. Of more importance to consumers in 2020 verses 2019: food waste (36%), buying plant-based foods (29%), buying responsibly sourced meat, seafood and dairy (26%), buying organic (22%), and buying products with environmentally-based packaging (18%).
Sustainable packaging “which is really the Achilles heel to the natural and CPG industry,” Mast says, is becoming of greater important to consumers as single-use packaging is demonized. Brands are also looking for ways to keep their waste out of landfills, upcycle ingredients and putting byproducts back into circulation.
The new wave of protein is not plant-based — it’s fermented.
“Fermentation is really cultivating microbes,” says Thomas Jonas, CEO and co-founder of Sustainable Bioproducts. “And it’s incredibly efficient. Microbes duplicate very fast. So when you think about the double time for a cow or a pig, you’re talking about years. When you talk about microbes, you’re talking about hours. … This is nature’s technology. Nature is really the No. 1 biotech engineer in the world.”
The current agriculture system is incredibly inefficient. Livestock continues to be the world’s largest user of land resources. Pasture land consumes 80% of total agricultural land. Fermented organisms are emerging as new sources of proteins and ingredients.
Leaders in the biotech industry shared how science is looking beyond plants to create food at a panel sponsored by The Good Food Institute.
Is Microbe Fermentation the New Era of Farming?
Sustainable Bioproducts creates a 50% protein based food ingredient from a microbe cultivated in the volcanic springs at Yellowstone National Park. Jonas explains that these fungal strains, called extremophiles, naturally produce a complete protein when grown in a controlled environment. Sustainable Bioproducts will soon move to a 36,000-square foot facility in Chicago’s former meatpacking district for production. The facility will take up just 0.7 acres. Compare the amount of food Sustainable Bioproducts produces to the equivalent of cow meat and 7,000 acres of grazing land would be needed for the cows.
“It’s the next generation of very efficient farming. I think what we want to get through farming are the nutrients that we need for our food. And microbes can do this tremendously efficiently,” Jonas said.
By fermenting proteins in bioreactors versus deriving the protein from plants or raising it and slaughtering it on a feedlot, food scientists can do a lot with the health profiles.
Michele Fite, chief commercial officer for Motif FoodWorks, said they work with microbes to adjust sensory attributes, like taste, smell, flavor and texture. “We can help so we don’t have to compromise taste or nutrition when consumers are looking to access plant based foods,” she said.
Adds Anja Schwenzfeier, business development manager for Novozymes: “You want to produce specific proteins that might already exist, but you want to do that more efficiently and more sustainably. You deal with molecules you’re already familiar with.”
“It’s not so much about creating a completely new protein. Right now we’re looking into how we can improve ingredients we already work with through fermentation.”
Fermentation as a Marketing Advantage
Panel moderator Jeff Bercovici, a writer for the Los Angeles Times, asked how biotech companies are meeting consumers in the development of fermented meat alternatives.
“(There is an) evolution of consumer attitude towards their food, which in some ways are really driving them very quickly to embrace meat alternatives, but in some ways there are some counter currents in terms of people wanting to eat whole foods, natural foods, foods with shorter ingredient lists,” Bercovici said.
The panel noted fermentation has long been a stable in the history of food, from beer to yogurt to cheese. As fermentation is making a comeback, it’s a “marketing advantage,” Bercovici notes, “now it’s a net positive, it generates consumer excitement.”
Fite at Motif FoodWorks said they’ve conducted research on meat alternative users. These consumers are currently buying meat alternatives because they believe it’s healthier than red meat and even chicken. “They want to be in this space,” she said. Consumers voice that meat alternatives are more sustainable, better for the environment, better for animal welfare and equally nutritious.
“They’re open to technology helping to solve that issue for them,” she said. “These consumers are more open to technical solutions than consumers that are a lot older have been in the past…there’s a gateway for these consumers to technical advancements, because they believe it aligns with their values.”
Adds Mark Matlock, senior vice president of food research at Archer Daniels Midland Company: “To me, it’s really refreshing to have some consumers who are embracing technology to this degree, to the extent that they may lead the mainstream their direction.”
Battling Land Use Challenges
As the global population grows, the great challenge to the environment over the next decade will be making more food with less space.
The average American consumes 215 pounds of meat a year. Raising that meat uses 32 million acres of land, and produces 82 million metric tons of greenhouse emissions.
“The real challenge for the planet is not going to be ‘Are we going to have enough oil or carbohydrates?’ it’s ‘Are we going to have enough protein?’” Matlock said. “We create protein the way a cow creates protein. … we have to think: where are our rare resources going to be put?”
A third of the corn crop grown in America feeds livestock.
Sustainability isn’t just a buzzword, it’s a movement. Consumers care about the environment, and they want the brands they buy to care, too.
A recent Nielsen ratings report found that 81 percent of people around the world feel strongly that companies should help improve the environment. For proof consumers are pledging their support for companies that are Mother Nature’s advocates, look at their wallets. Nielson ratings found product sales grew twice as fast for companies with specific environmental impact claims.
“No matter what, sustainability is no longer a niche play: your bottom-line and brand growth depend on it,” the report reads.
Nielson looked at three products sustainability efforts, two which are fermented: chocolate, coffee and bath products. Chocolate was the main focus of the report.
Cocoa is grown in difficult circumstances. Of the world’s cocoa supply, 90 percent of it is grown on small family farms by about 6 million farmers. Cocoa farmers work in rough circumstances. Cocoa is a fragile crop that grows in hot, rainy, tropical environments and the trees don’t yield cocoa pods until its fifth year. Farmers work hard and profit is low.
Research drilled down to specific consumer sentiments about chocolate, from environmental claims (like ethically sourced, made with renewable energy or carbon neutral), to the absence of artificial ingredients and fair trade.
Chocolate with environmental claims account for an extremely small percent of the chocolate category, only 0.2 percent. But it grew four times the rate of sales, from 22 percent from March 2017 to March 2018. Unit growth is also huge. Chocolate with environmental claims is “flying off the shelves at a rate five times faster than the overall market.” Environmental chocolate had a 15 percent unit sales growth compared to the competition with just 3 percent sales growth.
Fair trade chocolate is performing well, too. Fair trade chocolate only makes up 0.1 percent of the total chocolate market, but dollar sales growth for fair trade chocolate doubles the rest of the category (10 percent versus 5 percent). Unit sales are five times higher for fair trade chocolate (15 percent versus 3 percent).
No artificial ingredients
Unit sales of chocolate made without artificial ingredients are growing at the same 3 percent rate as the rest of the chocolate category. But dollar sales of clean chocolate are triple the market (16 percent versus 5 percent). The report infers that, because clean chocolate is priced higher than chocolate made with artificial ingredients, consumers will pay more for a sustainable choice.
The report reads: “In many ways this space is evolving; however, what we do know is that sustainability presents an opportunity to be creative about innovative growth. Embedding consumer demand for sustainability into your company strategy and product pipeline requires data specific to your brand footprint and consumer profile.
Sustainability: “Life and Death Matter”
Consumers are empowered by evidence that “sustainability has become a life and death matter.” The World Health Organization estimates 12.6 million people die every year from environmental health risks. Air pollution and water quality are listed as top concerns for people around the world, the survey found. Increasing cases of asthma and typhoid are linked to deteriorating air and water quality.
“In light of these concerns, consumers around the world are making adjustments in their shopping habits,” the report reads. “While still juggling convenience, price and awareness along with their need to better the world, they’re looking for companies to step up as partners in their quest to do good.”
Another finding of note: though protecting Mother Earth is an important issue for survey respondents globally, consumers in developing countries are more concerned. The percentage of European and North American respondents who said they were “extremely” or “very concerned” about environmental issues was lower than respondents in third-world countries, like Latin America, Asia-Pacitic and Africa/Middle East.
Other interesting finds: environmentally advocacy is typically attributed to Millennials. Millennials are the generation most vocal advocating for corporate social responsibility. But the ratings found every generation and every gender cares deeply about the health of the planet. While 85 percent of Millenials (age 21-34) ranked a company’s environmental responsibility as “extremely” or “very” important, other generations weren’t far behind. Generation Z (15-20) was at 80 percent, Generation X (age 35-49) was at 79 percent, Baby Boomers (age 50-64) were at 72 percent and the Silent Generation (age 65+) was at 65 percent.
Forbes shares a detailed list of how companies can “champion” climate change. Their tips relevant to food producers include:
- Measure your carbon footprint annually through a third party audit.
- Develop an action plan, from reducing supply chain emissions to improving energy efficiency to cutting unnecessary transportation environmental hazards, like shipping by sea freight instead of air or using regional warehouses.
- Set emission reduction goals, then monitor your progress.
- Support environmental change politics by using lobbying influence for policymakers who are working to improve the health of the planet.
When in doubt, throw it out? Smell check? Taste test? Eyeball it? Food date labels have become so confusing that many consumers use their own sensory check to decode food expiration dates.
The food industry noticed. “Use By” dates are becoming uniform, with nine in 10 grocery store products now printing consumer-friendly labels. By 2020, all products will carry a simplified date. The 10 date-label categories will pair down to two – “Best if Used By” and “Use By.”
From Farm to Trash
Critical to food product relabeling is curbing massive amounts of food waste. A study by Harvard Law School’s Food Law and Policy Clinic and the Natural Resources Defense Council found more than 90 percent of Americans are throwing away food before it goes bad because they misinterpret the food label.
“Expiration dates are in need of some serious myth-busting because they’re leading us to waste money and throw out perfectly good food, along with all of the resources that went into growing it,” said Dana Gunders, NRDC staff scientist. “Phrases like ‘sell by,’ ‘use by,’ and ‘best before’ are poorly regulated, misinterpreted and leading to a false confidence in food safety. It is time for a well-intended but wildly ineffective food date labeling system to get a makeover.”
Over 40 percent of the American food supply doesn’t even make it to a plate. That amounts to $165 billion worth of food that’s thrown away annually. Food waste has become the single largest contributor of solid waste in U.S. landfills. The USDA and EPA set the first national food waste reduction goal in 2015: 50 percent less food waste by 2030.
The product labeling initiative was launched in 2017 by the two largest grocery trade groups – the Grocery Manufacturers Association and the Food Marketing Institute. Geoff Freeman, GMA president and CEO, called it a “proactive solution to give American families the confidence and trust they deserve in the goods they buy.”
The standardized labels are not mandatory. They are voluntary.
The USDA Food Inspection and Safety Service made the recommendation in 2016 for food manufacturers to to apply “Best if Used By” to product label. But the industrywide label standardization is not government mandated.
“Virtually every discussion included concerns regarding waste generated as a result of consumer confusion about the various date labels on foods and what they mean,” said Mike Conaway, R-Texas, the House Agriculture Committee Chairman. “I am pleased to see the grocery manufacturing and retail industries tackling this issue head on. Not every issue warrants a legislative fix, and I think this industry-led, voluntary approach to standardizing date labels is a prime example.”
Dozens of consumer packaged goods brands and retail companies voted unanimously to change expiration dates exclusively to “Use By” by January 2020. Major brands like Walmart, Campbell, Kellogg and Nestle all spearheaded the change.
The 2020 date was set to give companies time to change dates on their packaging. It also coincides with the release of the new FDA nutrition facts panel.
The old labels – which included options like “Sell By” and “Display Until” – left consumers in a guessing game. Most products don’t include an explanation of the date, like whether it’s a descriptive feature for the store or the consumer. Even grocery store workers were confused. Employees were polled and reported they, too, cannot distinguish dates on food labels.
The new labels mean:
- “Best If Used By” – quality designation. This is the date the food manufacturer thinks the product should be consumed for peak flavor.
- “Use By” – safety designation. Perishable food is no longer food after this date.
Legal Change on Horizon
Is a government mandate likely?
Currently, the only product federally regulated for expiration dates is infant formula. There is no legal definition for food expiration dates in most states. And state food labeling standards vary widely – 20 states restrict stores from selling products after the expiration date, while 30 states don’t enforce such a rule.
The Food Date Labeling Act was introduced to Congress in 2016, but no further action has happened. The act would legally require food date standardization, and require the USDA and Department of Health and Human Services to educate consumers on date label meanings.
Interesting, the proposal also questions the subjective nature of expiration dates. It states no one could “prohibit the sale, donation or use of a product after the quality date for the product has passed.”
Today’s food is packaged in so much plastic that humans now regularly consume plastic molecules in their food. A Polish design student created Scoby packaging, an edible and recyclable packaging that farmers can grow to wrap products. The zero waste biological tissue is a similar texture to animal tissue used to encapsulate sausage or salami, but Scoby is vegetarian and can be grown with a simple chemical process student Roza Janusz of the School of Form in Poznan, Poland invented. The process is similar to making kombucha, and the fermentation growth time per sheet is two weeks.
Read more (Fast Company)
The notoriously unsustainable chocolate industry is reevaluating business practices, according to a new study. As global demand increases, more companies are looking at sustainable cocoa sources. Jack fruit seeds are one growing alternative – once fermented and roasted, the flavor is similar to chocolate. Many confectionery companies are setting socially responsible policies and pledges, like Mars who is aiming for 100 percent sustainability by 2020.
Read more (Gourmet News)