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New Nutrition Business: Top 2016 Trends: Part 2

12 Jan 2016

Here, we publish the second half of yesterday's article in which New Nutrition Business analyses what it believes will be the 10 Key Trends for 2016. Previously, we summarised the first five - following are summaries of key trends 6 through 10.

New Nutrition Business has published an analysis of what it believes will be the 10 Key Trends for 2016, focusing on the long-term growth trends and the changes that will drive increased sales or increased prices. Yesterday, we published summaries of the first five – following are numbers 6-10.

Key Trend 6: Naturally functional – three high-growth ingredients powered by the King of Trends

King of trends: The trend with the broadest influence, naturally functional overlaps with – and strongly influences – almost every other trend. Wherever you look, naturally functional is being used to create new brands and new categories.

It is an innovation strategy: The biggest successes are coming from creating new brands and new product formats.

Naturally functional needs no health claims: When consumers can draw their own conclusions (thanks to constant positive media attention to foods with natural and intrinsic health benefits) no health claim is needed.

Proven to be the most powerful driver: Naturally Functional is behind the success of almonds, Greek yogurt and dairy products in general (Key Trend 3), coconut water, almonds and pistachios – although simply choosing ingredients with a health halo is not enough. Products must also perform in four other areas – marketing, processing technology, science and convenience.

The full report is available from New Nutrition Business.

Key Trend 7: Plant-based foods and beverages

Taste transformation: The debut of ingredients like almond and coconut, with their superior taste to soy (which was a turn-off to many people), has got consumers excited again about plant-based foods.

Innovative formats: Interesting new snack and beverage formats have made plant-based foods far more visible to consumers and easier for them to incorporate into their lives.

Aura of health and sustainability: Consumers feel good about choosing plant-based foods, believing they are better for the environment and for their health.

Meat and dairy under attack: Plant-based foods and drinks benefit from the belief – held by a small-but growing number of consumers, particularly Millennials – that meat and dairy are unhealthy.

We’re all “flexitarians” now: Consumer beliefs about plant-based foods are not necessarily consistent – they may buy almond milk for putting on their cereal but also cows’ milk for their coffee. They may be vegetarian, vegan, meat-reducers – or dabble in all of these (“flexitarians”).

The biggest opportunities: Two segments in particular offer the most opportunity – snacks, and non-dairy drinks.

Stronger marketing of plant-based protein: The view that non-dairy protein is better than animal source protein is particularly promoted for sports and exercise.

Key Trend 8: E-commerce powers the growing direct-to-consumer trend

E-commerce from the start: An effective distribution strategy for a new brand or a small brand must consider, from day one, online retailers’ web operations and e-tailers as well as a direct-to-consumer e-commerce option.

More accessible than ever: E-commerce enables companies of any size – and particularly small ones – to create a direct-to-consumer business without the high labour costs traditionally associated with direct selling. Delivering packages – even globally – has never been cheaper and thanks to technology two people can create an e-commerce business that would have required 10 people.

More power to small brands: Online shopping is becoming a way for smaller brands, new brands and experimental brands to reach consumers, avoiding the big retailers and associated costs, as well as offering several advantages. It adds to the steady trend for smaller brands to eat away the market from under the noses of established players.

Urban change: E-commerce lends itself well to dense urban centres, and the revolution in consumer buying behaviour in China may happen in major cities in other countries – potentially spelling the end of traditional giant supermarkets in big cities.

Mix it up: A direct-to-consumer strategy can be combined with selling via e-tailers and supermarkets as well as bricks-and-mortar retail.

Key Trend 9: Protein up and away in America as the rest of the world looks on

Embraced in America: US sales of a wide variety of protein-based foods and beverages in general have been rising steadily, echoing the low-fat zeal of past decades, but protein’s growth is slower in Europe and Asia.

A trend with staying power: Protein seems sure to be the focus of conscientious American dieters for some time to come, thanks to its image as a satisfying part of a healthy diet (and to the rise of low-carb ways of eating).

The source of protein may change: Consumers may turn away from added-protein products to “naturallyfunctional” protein sources – products that have a natural reason to have protein in them, such as meat.

Key Trend 10: Free-from – spotlight shifting from gluten to dairy

Gluten-free has had all the attention in recent years and has been a growth trend: But now it’s rapidly evolving into a reassurance message, carried not only by specially-formulated products, but hundreds of products of all kinds that are naturally gluten-free. Brands have learnt that adding gluten-free to the messages on the label gets the attention of the 30% of people who see it as a positive health message.

Growth opportunities of the next five years: These are likely to be in dairy-free and lactose-free, which are next in the hierarchy of consumers’ desired free-from messages.

Non-dairy the winner: The biggest, fastest-growing beneficiary of the dairy-free message at the moment – and likely to stay fast-growing for the next three-to-five years – is non-dairy milks and similar non-dairy products.

Reducers not avoiders: People who look for dairy-free and lactose-free, just like those who look for gluten free, are often not eliminating dairy from their diet, just reducing the amount they consume, when they can, because it makes them “feel better”.

Both gluten-free and dairy-free/lactose-free connect strongly to digestive health: When people have digestive disorders and turn to Google to make their diagnosis, what they are most likely to find in their search results are sources linking gluten and dairy to digestive health problems. Interestingly, when many people reduce dairy or lactose, they report feeling the benefit – and feel the benefit is one of the most important reasons for anyone to buy a healthier product.

The full report is available from New Nutrition Business.