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Food Alliance: Food Trends Overview

2014

AT Kearney“Ripe for Grocery: The Local Food Movement”

Sales of local food have increased an estimated 13% per year since 2008, and are now worth at least $9 billion. . . More than 40% of respondents say that they purchase local food on a weekly basis, and another 28% buy local food at least once a month. . . Seventy-five percent of consumers say that they will pay a premium for local food.

Respondents from rural and small communities, which are close to where food is grown, tend to be willing to pay more for local food than those in larger cities. High-income earners in small towns are, on average, willing to pay 10% extra for local food, compared to 5% for residents in larger cities. There are some broad regional differences when it comes to buying local food across the country, from a 5% premium in the South to a 7% premium in the West and in the Northeast. The share of local food purchased in the typical shopping basket is also highest in these regions (particularly on the West Coast), compounding the regions’ attractiveness for local food retail. The Pacific Coast region leads the pack with 27% local food in a typical basket.

2015

National Grocer’s Association “2015 Consumer Survey Report”

OFFERS LOCALLY GROWN PRODUCE & PACKAGED GOODS

Supermarkets aim to source more locally these days – some even feature area farmers on their websites – because they understand the benefits shoppers ascribe to foods grown or processed nearby: fresher, tastier, still rich in nutrition. And by supporting these sources, shoppers know they keep money within the local economy. Nearly nine out of 10 shoppers (87.0%) say this is “very/somewhat” important to their choice of a primary supermarket. Leading the “very” important component (43.4% overall) are: shoppers 24 and younger (56.3%), grocery spenders of $61-$80 per week (53.6%), and Asians (52.2%).

Overview of Recent Consumer and Product Trends 1

ORGANIC PRODUCTS

Fewer than three in 10 adults (29.7% “very” important) favor a supermarket because of organic foods. Yet an organic presence does matter to two-thirds of consumers overall (66.5%) when combining the “very/somewhat” response. Households that earn $85,001-$125,000 per year (34.7%), females (33.8%), and the heaviest grocery spenders of $101+ per week (33.6%) lead the overall 29.7% “very” important response.

GOOD SELECTION OF ETHNIC OR CULTURAL FOODS

This figure continues to hover above the two-thirds of America mark as a “very/somewhat” important factor in the selection of a primary supermarket. Attribute this measure’s influence to the growth of ethnic populations, our nation’s overall greater exposure to foods of many cultures – and a desire by most to put new, interesting foods on the dinner table at home. This seems most pivotal to: Millennials 24 and younger (43.8%), people living alone (29.8% “very” important), upper-end households (29.2% who earn $125,001-$165,000 yearly), and ethnic groups African-Americans (50.0%), Asians (39.1%) and Hispanics (33.3%).

IMPROVEMENTS CONSUMERS WANT IN THEIR PRIMARY FOOD STORES

While consumers persistently want to save, they also want a stream of fresh foods that work for the healthy, inventive meals they desire to serve at home.

(HOW OFTEN DO YOU) EAT LOCALLY GROWN FOODS?


For the fourth straight year, consumers say they eat locally grown foods more often than they eat organic foods. Local is a regular habit for nearly three-quarters of the nation; only 26.8% consume “local” once a month or less. The most committed “local” eaters – once or multiple times a day – comprise 23.8% of survey respondents.

(BUYING A NEW PRODUCT, DO YOU CHECK) WHERE THE PRODUCT WAS MADE

Place of origin could be a plus or minus for a new food item, signifying wholesomeness or a potential safety risk. Today, more than eight out of 10 consumers (80.3%) – a record level for this survey – look for where a product was made when assessing a new food product.

International Food Information Council Foundation“2015 Food & Health Survey: Consumer Attitudes toward Food Safety, Nutrition & Health”

Seven in ten millennials say they think about whether their food and beverages are produced in an environmentally sustainable way.


2016

National Grocers Association“Going to Market: A National Survey of Grocery Shoppers”

Satisfaction of Independent Grocery Shoppers

Primary DriversHigh Quality SeafoodHigh Quality Fruits and VegetablesGood Selection of Ethnic/Cultural FoodsLow Prices

Secondary DriversFresh FoodsDietician at StorePays Attention to Special RequestsLocally Grown Produce and Packaged Goods

Focus on Healthy Living Products

Dollar GrowthTotal Store – 52 weeks ending 10/24/2015: 3%Organic Claims (4-year CAGR): 14%

Top 10 Wellness Claims with Biggest Long-term Sales Growth (Change in $ Sales Billions from 2011)

Kosher $29Gluten Free $22.5Natural $13.7No Soy $13.3No Artificial Color/Flavor $11.2No Preservatives $8.4GMO Free $7.4Organic $5.9

Euromonitor International “Top 10 Global Consumer Trends for 2016”

Change Makers. Making life better through social causes is gaining mainstream priority. Younger consumers (especially millennials) are setting the lead in a crusade to embrace social causes. Consumer expectations regarding corporate environmental issues are growing; millennials especially, with recent greenwashing scandals in mind, want brands they buy to behave responsibly.


Seeking Greener Foods. This trend is no longer a niche but is going mainstream worldwide. Attributes of green foods include all-natural, organic, supported by organic certification, locally grown, vitamin rich, no additives, and no added fat or less fat, sugars, and salt.

Mintel“Global Food and Drink Trends for 2016”

1. Alternatives Everywhere. The growing appeal of novel and alternate protein sources will profoundly change the marketplace, in which what was formerly “alternative” could take over the mainstream.

2. Artificial: Public Enemy Number 1. Consumer demands for natural and “less processed” food and drink are forcing companies to remove artificial ingredients.

3. Eco Is the New Reality. Climate change is permeating consumers’ daily concerns worldwide. Drought, food waste, and natural disasters not only impact agriculture production and interrupt the food supply, but they also influence availability, preparation, and production.

4. From the Inside-Out. Consumers are recognizing that nutrition and diets can connect with the way they look and feel, as well as with quality of life and longevity.

5. Increasing Performance. Increasing promotion of fitness and athletic programs is encouraging consumers to get and stay active and presents a parallel need for food and drink that helps consumers interested in performance and sports nutrition.

6. Communicating Based on True Stories. These messages are found to be more compelling and impactful with product origin, ingredients, or inspiration stories.

2017

FMI – Accenture Strategy“The Future of Food: New Realities for the Industry”

Deep Pockets for Innovation: New entrants, traditional grocers, venture capital, established CPG brands, and private equity funds all have big war chests. In total, consumer goods companies are the third largest sector (by market cap) globally—behind only Technology and Financial Services, giving them a wide, deep base from which to experiment. With these resources, they can fund innovation and place bets on many new retail and product alternatives for years before they run low.

Even startups in this industry belie the struggling new venture stereotype. Grocery and meal delivery companies raised $781million globally midway through 2017. And, in 2016, one of the biggest meal delivery players in the global market secured a $1.25 billion investment from a major e-commerce company. Beyond these are micro-investments in thousands of small businesses experimenting with capital-light business models— in 2016, crowdfunding platforms raised more money for these startups than the venture capital community—which makes the new competitive landscape significantly wider.


The Changing Consumer: Myriad factors have shaped an evolving, changed consumer. From education rates and urbanization, to increased health consciousness and consumer technologies, consumers are more empowered than ever to vote with their pocketbooks.

Health-Enhancing Foods: Many consumers are trying to change their diets, preferring healthy food. “Food with a Function” was one of Google’s top five food related search trends in 2016. And Euromonitor estimates that global sales of healthy food products will reach $1 trillion in 2017. These trends point to a continued rise in the connection between food and our health.

Transparency and Sustainability: More than half of consumers (55 percent) are willing to pay more for products and services from companies committed to positive social and environmental justice. And nearly two-thirds of consumers agree that “large changes are needed in the way food is produced and consumed.” Transparency may become a key non-price purchase trigger: 9 in 10 consumers globally rate ingredient transparency as important or very important for companies to address.

Social Consciousness: As younger generations come into their purchasing power and start families, their preferences grow in impact. Millennials now outnumber Baby Boomers (75.4 million versus 74.9 million). Nearly 9 in 10 Millennials say they are more likely to buy from companies that support solutions to specific social issues. And overall, 73 percent of consumers would actively switch to a brand with a social purpose. It is no coincidence that the market trend toward “responsible products” is growing, capturing 15 percent of US grocery sales in 2013, representing 70 percent of all growth.

Trust: One-third of US consumers rank trust as a top-three purchase driver, for both private labels and big brands. 6 in 10 consumers refuse to buy products and services from companies they do not trust. With trust in a company increasingly becoming table stakes, brands and retailers will need to look hard at their value system and how it is communicated to the end customer.

The future of the food production system will look different in the next 10-20 years.

Supply and Demand will be Closer Together: Consumers increasingly want local food, but current methods cannot support the future production demands. Trends like urban farming brings farms closer to population centers, and experiments in “in-store farming” and local manufacturing of products are expected to grow quickly.

Hartman Group“Sustainability 2017”

Today’s consumers want to make better purchase decisions, and to do this they want to be better informed. They want to know “what’s inside” before they buy. And what they want to know extends well beyond product and packaging characteristics. Consumers today increasingly view sustainability and corporate responsibility — from organic ingredients to animal welfare to company treatment of employees and energy conservation — as aspects of quality, not just a “feel-good factor.”


The Hartman Group has been tracking consumer attitudes and behaviors surrounding sustainability and related issues in the U.S. since the 1990s. Eighty-seven percent of adult consumers are inside our World of Sustainability, meaning that sustainability-related concerns impact their values, attitudes, and actions in at least some measure.

Consumers are remarkably consistent in which sustainability attributes they value across categories, retailers, and restaurants. Their top issues — avoidance of toxins, animal welfare, fair labor practices, and minimizing pollution — show the interconnectedness of the zones of responsibility. While consumers acknowledge the importance of climate change, most are unsure how to address it. Other sustainability trends include a growing awareness of waste — especially food waste — and water issues.

National Grocer’s Association “The Independent Consumer: A National Survey of Grocery Shoppers”


National Restaurant Association“What’s Hot: 2017 Culinary Forecast”

Top 10 Concept Trends1. Hyper-local sourcing 80% 2. Chef-driven fast-casual concepts 77% 3. Natural ingredients/ clean menus 76% 4. Environmental sustainability 76% 5. Locally sourced produce 70% 6. Locally sourced meat and seafood 68% 7. Food waste reduction 67% 8. Meal kits 64% 9. Simplicity/back to basics 64% 10. Nutrition 63%

Top Trends by Category: Beverages1. Craft/artisan spirits 70%2. Onsite barrel-aged drinks 69%3. Locally produced wine/spirits/beer 68%4. Regional signature cocktails 66%

Supermarket News“Viewpoint: Top 5 Grocery Trends for 2017”

1. Grocers go local: To win spend and cut spoilage, grocers are continuing to localize their assortments.

2. Healthy ideas sprout up: Healthy food and beverage options continue to drive traffic at leading grocery chains, and are compelling grocers to find new ways to own the healthy market.

Innova, Food Ingredients First“Top Ten Trends for 2018”

1. Mindful Choices: Body-mind connections are influencing new food and beverage product introductions2. Lighter Enjoyment: Diets are out, healthy is not3. Positively Processed: Utilizing old-fashioned processing techniques4. Going Full Circle: Environmentally-responsible packaging, low-waste methods and claims

Mintel“Five Global Food and Drink Trends for 2018”

1. Full Disclosure: Transparency, clarity and simplicity2. Self-Fulfilling Practices: Focus on self-care and better-for-you eating


Forbes“10 Food Trends that will Shape 2018”

1. Mindfulness: Body-mind connections are influencing new food and beverage product introductions2. Tactile: Sense of touch3. Farming: Where food is coming from, and the drive for a more local source

2018

Supermarket News“Customers enthused for ‘better for you’ groceries”

Customer satisfaction with grocery food — including packaged foods from chocolate, baked goods and cereal to meat, cheese and frozen food — rose 1.2% year over year to a score of 82 on a 0 to 100 scale, according to the ACSI Nondurable Products Report 2018, which polled 5,315 consumers. ACSI attributed the increased satisfaction to a slower-than-expected uptick in food prices and improved food quality, notably among manufacturers responding to consumers’ escalating interest in fresh, natural and organic products. “A growing demand for healthier foods has reshuffled the playing field for grocery brands,” explained David VanAmburg, managing director at ACSI. “In 2018, we saw the sales of plant-based foods grow by 20%, and one in 10 consumers have tried a gluten-free diet. These aren’t fads; customers want to adhere to a healthier lifestyle and they’re more satisfied with brands that offer those options.”

At the same time, consumer satisfaction with breweries rose one point to 85 and is “the highest it’s ever been,” despite declining beer consumption, ACSI noted. Smaller craft beers and microbrews remain popular, with the “all others” breweries group rising one point to 86, while industry giant Anheuser-Busch InBev is right behind, up one point to 85. “It’s clear that the craft beer segment, while still small, has put enough of a scare into the big players that they’re being craftier themselves,” according to VanAmburg. “Right now, the reputation for microbrews is so strong that everybody’s stepping up their game.”

Culinary Visions“Ethics on the Go”

A Shortage of Ethical Snacks? Younger consumers are looking for fast and ethical food options. 64% of consumers ages 18-34 say there are not enough ethically produced snacks available to them, compared to 54% of adults 35-54 and 49% of seniors 55 and older.

Consumers under 35-years-old are willing to pay more for:• Ethically produced meals 67%• Ethically produced snacks 57%• Ethically produced grab-and-go foods 57%


National Grocer’s Association “Shopping Independent: A National Survey Defining Real Growth Opportunities”

When considering where to shop for groceries Independents value: low prices, quality meats and produce, friendly staff, cleanliness, and offering locally grown produce and other packaged goods.

Please indicate which of the following considerations will be most important and which will be least important when you are shopping for groceries over the next 12 months.


Culinary Concepts

1. Hyper-local 74% 2. Natural ingredients/clean menus 69% 3. Veggie-centric/vegetable-forward cuisine 67% 4. Environmental sustainability 66% 5. Locally sourced meat and seafood 66% 6. Locally sourced produce 65% 7. Simplicity/back to basics 63% 8. Farm/estate-branded items 62% 9. Grazing (e.g. small-plate sharing/snacking) 60% 10. Nose-to-tail/root-to-stalk cooking 58%

Alcoholic Beverages

1. Culinary cocktails (e.g. fresh ingredients, herb-infused) 68% 2. Locally produced spirits/wine/beer 67% 3. Craft/artisan spirits 66% 4. Onsite barrel-aged drinks 64% 5. Regional signature cocktails 59%


Supermarket Guru“6 Foodservice Trends Grocerants Need to Know”

Evolution of Healthy: Guests express interest in holistic health and demand more transparency.

Guests seek fresh, whole, simpler ingredients. Already 49% of consumers, and 58% of Millennials, believe it is important that they buy and consume foods and beverages made with ‘clean label’ ingredients. “We’ve moved on from diet and low-carb to simpler ingredients this past decade. This means fresh, whole, less processed and with fewer additives.”

Consumers want to know more about food and beverage ingredient sourcing, how environmentally and ethically responsible it is, and how meals are prepared.

Brand Authenticity: Guests seek authentic experiences and brands.

Enhanced and unique experiences can differentiate grocerants.

Consumers reward brands that have a purpose. Think the environment, ethics, communities served, and employees.

Almost half (49%) say it’s important that restaurants support local communities, found Technomic. The top reason people prefer locally sourced items is to support farms and food producers in the community.

Supermarket News“Consumers buy from companies that take a stand”

Nearly two-thirds of consumers globally (63%) prefer to buy goods and services from companies that stand for a shared purpose that reflects their personal values and beliefs, and are ditching those that don’t, according to new research from Accenture.

Sixty-two percent of consumers globally want companies to take a stand on the social, cultural, environmental and political issues close to their hearts. Moreover, 65% say their purchasing decisions are influenced by the words, values and actions of a company’s leaders. Consumers are attracted to organizations that are committed to using good quality ingredients (76%), treat employees well (65%) and believe in reducing plastics and improving the environment (62%).

Additionally, 62% of consumers say their purchasing consideration is driven by a company’s ethical values and authenticity. Three-quarters crave greater transparency in how companies source their products, ensure safe working conditions and their stance on important issues suchas animal testing.

“In this era of radical transparency, consumers are voicing their opinions, values and beliefs, scrutinizing the actions of organizations and their leadership, and holding them accountable.They can see through inauthenticity and won’t tolerate it,” said Kevin Quiring, managing director, Accenture Strategy.


Culinary Visions“2019 Trend Forecast”

Replenishing with Purpose: Consumers who want to get more out of their meals are looking for functional foods that don’t just satisfy their hunger but also pack a nutritional punch. 73% of consumers surveyed say that they enjoy eating superfoods that serve specific functional purposes.

Ethical Concerns: Today’s consumers are looking to leave a light carbon footprint behind. 83% of consumers surveyed said they wish restaurants would use more environmentally friendly practices and66% say they care about ordering protein that is sustainably raised or caught.

The Quest for World Flavors: Consumers are expanding their appetites to encompass global flavors and international ingredients.

Veg-centric Omnivores: Vegetable-centricity means that consumers are gravitating toward a plant-based diet — without cutting out the meat that they love.

The Trends in Context for Manufacturers: In the face of consumers’ high expectations for health, ethical ingredients and global flavors, manufacturers of food and beverages face an exciting time of experimentation and innovation. R&D and marketing professionals will find the natural progression of existing plant-based and clean label food trends a promising way to accommodate the demand for better-for-you snacks, grab-and-go and functional foods.

2019

Kalsec“Top Ten Food Trend Predictions for 2019”

Globally Inspired: We expect to see even more region-specific flavors going global and entering product development as consumers continue to travel the world and try new foods. Regional flavors that we are seeing show up on lists include West African, Pacific Rim and Latin American.

Fermented Flavors: As consumers become increasingly interested in ethnic foods, fermented flavors have also seen a rise in popularity. Providing probiotic properties and umami flavors, fermented foods are showing up on restaurant menus and grocery store shelves more often.

Clear Label Attributes: Consumer ideals on what should and should not be on a label is ever-changing. We are seeing more consumers prefer to see more transparency on labels. They want to know more about processing techniques, people and animal welfare, and what is being done to improve environmental impact in the production process. We call these types of information clear label attributes as they are an evolution of clean label attributes.


Plant-Based Proteins: The trend for plant-based proteins is expected to expand even more in 2019. More companies are widening their vegetarian and vegan options to attract flexitarian and other dieting consumers.

Handcrafted at a Premium: Foods that tell a story or offer additional benefits are increasingly preferred by consumers. The rise of craft products like beer, cheese, baked goods and meat has led to an artisan food movement that reaches far beyond traditional homemade products. Consumers are looking to splurge more often and want signature crafted and premium products that tell a story they can relate to.


CULINARY CONCEPTS1. Cannabis/CBD-infused food2. Zero-waste cooking (elevated cuisine using food scraps)3. Hyper-local 4. Veggie-centric/vegetable-forward cuisine5. Natural ingredients/clean menus

ALCOHOLIC BEVERAGES1. Craft/artisan/locally produced spirits2. Onsite barrel-aged drinks3. Culinary cocktails (e.g. fresh ingredients, herb infused)4. Locally produced spirits/wine/beer5. Rosé cider

Nielsen“Fresh Trends: Tracking the Four Trends Driving Growth Across the Fresh Section”

Transparency, which spans well beyond ingredient listing on products, remains one of the biggest influencers driving consumer purchase behavior today. And sustainability, which sits


within the broader topic of transparency, is becoming increasingly important to many consumers—and the sales figures prove it: we’ve seen a 20% increase in sustainable product sales since 2014.

Consumers Remain Focused on Healthy Living: Many Americans are striving for healthier lifestyles, with 37% now following a specific diet, up 8 percentage points from 2016.

Supermarket Guru“Food Trends Forecast – Hit or Miss? How our annual trend forecast fared in 2018”

Trend: Mindfulness (got it right)Mindfulness reflected a new consumer attitude, mostly led by Millennials, to truly understand everything possible about a particular food or beverage and then support the company, whether it be a brand or a retailer, by aligning with its values and supporting it with purchases.

Innova Market Insights reported that seven of 10 U.S. and U.K. consumers want to know and understand an ingredient list. Food and beverage brand introductions that feature ethical claims on their packages have increased seven-fold since 2010, and these human, environmental and animal ethical claims continue to grow in popularity.

The new leaders of food are driven by a new set of corporate values: social conscience, health and wellness, enhanced nutrition and life hacking … and yes, they do want to make money. Big money.

Trend: Farming (got it right)There is a new breed of younger farmers entering the fields; the USDA’s latest Census of Agriculture reports that the number of farmers under 35 is increasing, only the second time that’s happened since 1900. Of these new farmers, 69% have college degrees, far higher than the 40% incidence in the general population. Younger, smarter farmers are bringing us into a new era of agriculture and technology both on current and future farms.


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