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Top 10 trends for 2016

Top 10 trends for 2016


January 2016

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Top 10 trends for 2016

Top 10 trends for 2016 ........................................................... 05


"Clean eating" trend inspires a back to basics approach............... 05
The waste debate ................................................................... 07
Sustainability concerns ............................................................ 09
Regulatory pressure ................................................................ 10
1. Organic growth for clear label............................................... 13
Clean product activity surge ..................................................... 15
Growing consumer demand ..................................................... 18
Colorful concerns .................................................................... 19
Strong organic growth............................................................. 20
Organic supply challenges ....................................................... 22
Cost and efficiency concerns .................................................... 24
A GM-free surge ..................................................................... 25
2. Free from all ...................................................................... 27
The mainstreaming of gluten free ............................................. 28
Very active sectors for gluten free ............................................ 30
Ingredient development .......................................................... 33
The gluten free backlash ......................................................... 35
Paleo for cleaner eating ........................................................... 35
Dairy free platforms ................................................................ 37
3. The "Flexitarian" effect ........................................................ 41
The cancer link ....................................................................... 42
The dent in trust .................................................................... 43
Welfare and waste concerns..................................................... 44
The flexitarian rise .................................................................. 45
Technology as the answer ....................................................... 46
Shaping NPD .......................................................................... 48
A surge in vegan claims .......................................................... 50
A key NPD trend at Anuga ....................................................... 52
Beyond the "meat" category .................................................... 55
Supply side developments ....................................................... 56
The growing need for new proteins ........................................... 58
4. Processing the natural way .................................................. 62
A fermented advantage ........................................................... 63
The role fore enzymes ............................................................. 65
Dehydration benefit ................................................................ 66
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Top 10 trends for 2016

Cold-brewed coffee ................................................................. 67


A rise in cold pressing ............................................................. 68
The acceptance issue .............................................................. 69
Fear of the new ...................................................................... 70
5. Green light for vegetables .................................................... 72
A broadening of focus ............................................................. 73
Smoothies are on trend ........................................................... 74
Hidden vegetables .................................................................. 74
A pasta applications rise .......................................................... 75
Trending vegetables................................................................ 76
Value added fruit .................................................................... 78
6. Creating a "Real" link .......................................................... 81
A sense of real marketing ........................................................ 85
Back to reality ........................................................................ 86
A fresh look at old ingredients .................................................. 86
Heritage as a defense strategy ................................................. 89
Going retro for reality ............................................................. 89
The use of real ingredients ...................................................... 90
7. Small players, big ideas ....................................................... 92
Small players in growing niches................................................ 93
Filling a specific need state ...................................................... 95
A foodservice shift .................................................................. 95
If you can’t beat ‘em ............................................................... 97
8. Beyond the athlete.............................................................. 99
An ongoing sporting boom ..................................................... 101
A protein need for all ............................................................ 102
The ingredient response ........................................................ 104
9. The indulgence alibi .......................................................... 107
The power of indulgence........................................................ 108
Overcoming the guilt element ................................................ 110
A coconut surge ................................................................... 110
A wholesome experience ....................................................... 112
10. Tastes for new experiences .............................................. 113
More than a flavor experience ................................................ 115
Impactful taste profiles ......................................................... 116
Feeling hot, hot, hot ............................................................. 118
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Top 10 trends for 2016

A renewed focus on Brazil ...................................................... 119


Supplier innovation ............................................................... 120
3D printing for the unusual .................................................... 120

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Top 10 trends for 2016

Top 10 trends for 2016


“Clean eating” trend inspires a back to basics approach
With 2016 on the horizon, many would say that things are generally
looking up economically, after several years of downturn decline and
quantitative easing. In the food industry, the apparent success of Anuga
2015 in Cologne, both in innovation and attendance terms, supports a
growing confidence in the industry as a whole.

But these are complex times, and the dairy farmer protests at Anuga 2015
illustrated the growing discontent at the supply level. 2015 was a year
dominated by geopolitical turbulence, with increased uncertainty in the
Middle East and Ukraine, and the political stand-offs that have occurred
between Russia and the West as a result. The ongoing trade embargo with
Russia, coupled with the ending of milk quotas have meant a complete
oversupply of milk in the EU, with prices falling off a cliff.

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Top 10 trends for 2016

But the issue is not limited to dairy products, with commodity food prices
hitting low levels in most staple categories. While prices rose a bit towards
the end of the year on weather concerns for palm oil in particular,
commodity prices are still very low when compared to more standard
times. With little opportunity available in terms of margin, suppliers and
manufacturers are instead looking towards adding value in traditionally
staple categories – with a focus on the artisanal nature of certain goods or
a highlighting of the sourcing, which is a running theme throughout our
2016 trends, as well meeting the demands of millennial consumers and
“free from” foods. “Marketing to Millennials” was a key trend in our 2015
list and has now become part of a comprehensive strategy for
manufacturers.

As Christian Schreiner, Head of Market Intelligence at Döhler notes:


“Consumers are very interested in the food they eat. They want to get the
full transparency of the processing, the ingredients and the quality of their
products combined with an extraordinary nutritional benefit for
themselves. These attitudes will further lead to a rising number of free
from product solutions in the market. New topics will be free from animal
ingredients (beyond meat and dairy), GMO-Free, allergen-free or fructose-
free. They will further drive the market besides already established topics
like gluten free or lactose free. Additionally these fields will create
completely new product solutions/categories and will become more
mainstream, due to a changed consumer consumption behavior.”

Again for this year’s trends, there is less of a focus on health per se, as
this is such an overarching theme, that it rightly or wrongly holds
marketing grounds on anything from an “organic” positioning through to a
focus on “high protein.” Other key areas that the industry is heavily
involved in are perhaps more driven by policy and red tape than
consumers, which is why they don’t appear specifically on the list. But
reducing waste, sustainability in general and cutting down on sugar and
partially hydrogenated oils do deserve some attention, before discussing in
depth the trends themselves.

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Top 10 trends for 2016

The waste debate


Food prices may be low now, but they will not remain there forever, as the
debate about how to feed 9 billion people by 2050 only intensifies. One
topic of high debate has been the issue of food waste. This was our top
trend in 2014, but is now truly gathering momentum, as concerns are
raised across the board about the need to tackle the issue. Policy debate is
intensifying in the EU, with special focus on the fact that most consumers
do not understand the difference between best before dates and use by
dates in the first place. This has led many groups to argue that best before
dates should be scrapped on products, for example like pasta anyway.

The European Commission recently published the results of the first Flash
Eurobarometer survey on food waste and date marking. Key findings
confirm that date marking (“use by” and “best before”) is poorly
understood by Europeans. Just under half (47%) of Europeans understand
the meaning of “best before” labeling and somewhat fewer (40%) are
aware of the meaning of “use by.” The study confirms the need to pursue
targeted information and educational initiatives on date marking taking
into account the level of understanding and information needs of different
consumer groups in EU countries. The Commission will propose initiatives
against food waste as part of the new circular economy package to be
presented by the end of 2015.

Strategies are underway at both a policy and industry level. For example,
a new EU funded multinational research project that will help reduce food
waste by 30% by 2025 has also been initiated, including the UK’s Institute
of Food Research (IFR) as a key partner. Resource Efficient Food and Drink
for the Entire Supply Chain (REFRESH) is an EU Horizon 2020 project,
which runs from 2015 to 2019, involving partners across the EU, as well as
in China. “With 100 million tons of food waste each year, it’s imperative
that we take an EU-wide, comprehensive approach to reducing avoidable
waste, and finding better uses for what can’t be avoided,” says Prof. Keith
Waldron, Director of the IFR Biorefinery Centre.

In the summer of 2015, the Consumer Goods Forum (the CGF), which
includes major manufacturers Nestlé and Unilever, announced its
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commitment to tackling the global food waste challenge by agreeing to


halve food waste within the operations of its 400 retailer and
manufacturers members by 2025.

Even at a supplier level, solutions are being marketed on an anti-waste


platform. For example, Arla Foods Ingredients has developed a protein
solution that enables manufacturers to make high protein low fat dips
using the acid whey they have left over after making Greek yogurt. It is
estimated that Greek yogurt manufacturers in the US generate about 1
million tons of acid whey every year. But simply by adding Arla Foods
Ingredient’s unique Nutrilac whey protein to a mixture of acid whey, water
and cream, dairy companies can create a high quality dip that is typically
only 6% fat and contains 4% protein.

Retailers are being criticized for waste too, with Morrison’s supermarket
coming under attack on a recent BBC program about tackling food waste,
for claiming that its consumers were unwilling to buy “wonky” looking
vegetables; leading to their disposal. In an apparent move to save face,
the retailer has now rolled out an initiative that aims to end the waste of
edible food in its 500 supermarkets. Across the UK, unsold food that is still
safe to eat will be made available and donated to local community
organizations.

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Sustainability concerns
The discussion around food waste comes as part of another key theme
around sustainability, which does make business sense, if cleverly
employed. A recent Nielsen global online survey of 30,000 consumers in
60 countries across the globe, found that consumers are increasingly
willing to pay more for socially responsible products. In fact, 66% of
respondents say they’re willing to pay more for products and services that
come from companies who are committed to positive social and
environmental impact, up from 55% in 2014 and 50% in 2013. As
concerns about the environment and corporate sustainability continue to
build momentum around the world, understanding the connection between
sentiment and purchasing actions has never been more important. In fact,
a 2014 Nielsen retail sales analysis showed that brands with a
demonstrated commitment to sustainability grew over 4%, while those
without experienced less than 1% growth.

But a reliable message is required, as skepticism about sustainability


claims is high. Only 10% of global respondents say they purchased a new
product because it was from a brand that cares about the environment.
Even fewer (7%) cite corporate social responsibility as a reason for making
a new product purchase. But insincerity may not be driving this gap. In
fact, product availability, or rather, unavailability may be partly to blame.
Twenty-six percent of global respondents say they wish more ecologically
friendly products were available, and 16% wish more products were
committed to positive social impact – a 16- and nine-percentage-point
gap, respectively, from those who say they purchased a product because
of its environmental or social benefits.

Manufacturers are increasingly showing their green colors. Nine months


after achieving zero non-hazardous waste to landfill across its global
network of 242 factories – believed to be a world first – Unilever has now
announced that it has become a zero landfill company in Europe. This
means that in addition to manufacturing facilities, no waste from Unilever
owned or fully operated premises, logistic operations, distribution centers
or offices goes to landfill in Europe.

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Innovation is also helping manufacturers to operate more sustainably. The


winner of the 2015 Food Valley Award in the Netherlands is a compostable
single-serve coffee capsule filled with fairtrade Arabica coffee. This
innovative capsule was developed through a unique partnership between
various companies. It is a product with great market potential, as coffee
drinkers worldwide use 14 billion capsules per year. The capsule developed
by Peeze Coffee Roasters and ATI (Advanced Technology Innovations) is a
sustainable alternative for existing single-serve coffee capsules. The entire
capsule and the foil used to seal it are made of polylactic acid (PLA), a bio
based compostable material. The capsules contain premium Arabica coffee
that is certified climate-neutral, organic and fair trade.

Regulatory pressure
Sugar intake has been an important topic for years, but 2015 was yet
another major year with anti-sugar movements increasing.

In March 2015, a new WHO guideline recommended adults and children


reduce their daily intake of free sugars to less than 10% of their total
energy intake. A further reduction to below 5% or roughly 25 grams (6
teaspoons) per day would provide additional health benefits, according to
the body. The recommendations have drawn criticism from industry, but
nowhere near as much controversy as the debate about implementing a
sugar tax, which continues to roll on in the UK. In October 2015, the UK’s
Department of Health was presented with a petition signed by over
140,000 people in support of sugar a tax, which was recently promoted by
celebrity chef Jamie Oliver. While the British Department of Health (DoH)
was quick to stress that it has no plans to introduce a tax on sugar-
sweetened beverages, public pressure is likely to follow. Many industry
specialists support a tax on sugary foods as a method to curb obesity,
however failed schemes in Mexico, Denmark and France, illustrate the
complexity of the issue. The argument is that many consumers revert to
cheaper versions of sugary foods and drinks but continue to consume
them in large amounts.

In the US, the big regulatory news of 2015 was the FDA’s final
determination on partially hydrogenated oils (PHOs), which requires
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manufacturers to stop using them by June 18, 2018, or submit a food


additive petition for the safe use of PHOs. Despite the fall in trans-fat use,
since mandatory labeling was imposed in January 2006, The Centers for
Disease Control and Prevention (CDC) still estimates that PHO elimination
could prevent 10,000-20,000 coronary events and 3,000-7,000 coronary
deaths annually. The regulatory changes have led to an opportunity for
suppliers, with Corbion Caravan and IOI Loders Croklaan among the
companies offering trans-fat free solutions at this year’s IFT Food Expo, for
example. The US Food & Drug Administration (FDA) has however,
accepted for review an industry food additive petition that seeks approval
for a specified set of low level uses of partially hydrogenated oil (PHOs) in
food products.

Trans-fats are also on the agenda in Europe, where Denmark was the first
to outlaw them in 2003. Major international food companies and health
NGOs have joined forces with EU consumer watchdog BEUC in a letter
calling on the European Commission to act and bridle the use of harmful
industrial trans fats. Committed companies are Nestlé, Mars, Kellogg’s and
Mondelez. Pastries, fries and margarine are among the foodstuffs most
loaded with these artery-clogging fats. BEUC applauded the co-signing
companies’ move to echo its call for an EU-wide legal limit of 2 grams of
trans fat per 100 grams of fat and encourages others to follow suit.

Jo Bruce, Research & Development Manager at ADM Oils & Fats also notes
the rise of this trend towards removal of hydrogenated vegetable fats.
“Although a number of major European retailers were early adopters and
have already eliminated trans fats from all their home brand ingredient
lists, we can see this trend gaining further momentum over the next year
as the European Commission reviews intakes of trans-fatty acid and
evaluates possible ways to reduce intake levels in the EU food supply.
Although, so far only Austria, Denmark, Norway, Iceland, Switzerland and
Hungary have taken legislative measures to reduce trans-fat consumption,
an increasing number of countries are adopting self-regulatory
mechanisms,” Bruce notes.

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While policy around food waste, sustainability, sugar and trans fat are not
listed in our top ten trends, these are themes that product developers are
keeping in mind and do form part of their new product development
strategies. The mainstreaming of sports nutrition could be seen to be the
only health related trend per se that we have listed for 2016, but it is
important to note that health is a running theme throughout this list. You
could even argue that the concept of permissible indulgence is a health
trend, in the creation of an “indulgence alibi.” What is clear from our list is
that clear label and free from foods have now truly entered the
mainstream, while consumers who are regularly reduce their meat
consumption rather than forgoing it altogether are also shaping new
product development efforts.

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1. Organic growth for clear label


Clear label products, which include platforms in transparency and
origin, while utilizing clean label ingredients “from grandma’s
cupboard,” continue to top the agenda. But within the clear label
platform, it is products with an “organic” or “GMO-free”
positioning that are showing the strongest growth
in terms of NPD. The debate about the actual
health benefits and sustainability advantage of
organic products will continue, as will discussions
around the benefits of GM technology. Consumers
will likely make up their minds with their wallets.

 Clear label cemented itself as a positioning


platform in 2015.
 Organic is the fastest growing platform within
clear label, with a focus on origin and quality.
 Both consumer and policy moves are pushing
manufacturers to clean up their portfolio.
 Manufacturers must be careful with
reformulating classic products, as taste is still
king.

“From Clean to Clear Label” was identified by Innova Market Insights as


the number one trend for 2015, recognizing that it is no longer a niche
area for the food and drinks industry. “Clear label” focuses on greater
transparency, both through the increased use of ingredient origin claims,
and indeed through the adoption
of transparent packaging in the
aftermath of major supply chain
scandals.

“Clean label” is an integral part


of the general theme towards
“clear label” products; an
established trend in Europe, but
a rapidly growing one in the US.
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Innova Market Insights research shows


that 68% of European consumers (73% in
the US) will look for recognizable
ingredients on product labeling before
buying.

Data presented at the IFT Food Expo in


Chicago, showed that 28% of US
consumers claim that clean label is a factor
that influences their purchasing decision
when shopping for foods or beverages
across all categories. Ingredients on decline
in new products (2014 vs. 2013) as a
result of this trend include carmine
(cochineal extract) (-5%) and azodicarbonamide (-16%) in North America.
The leading clean label ingredients on the rise over this period globally
included monk fruit (+80%), spirulina (+60%) and stevia (+56%).

US food and beverage product launches with monk fruit have nearly
doubled in the first four months of 2015 compared to the same period last
year, and this builds on strong growth in 2014 when new product launches
increased by 75% from 2013. Monk fruit
has recently been included as an ingredient
in product launches from a number of
global brands including Starbucks, Yoplait,
and Nestlé. Monk Fruit Corp., the world’s
leading monk fruit company, announced
plans to double its supply of monk fruit
from the 2015 harvest, in order to meet
rapidly growing demand for natural fruit
sweeteners.

The traction gained by the clean label


revolution across Europe, coupled with the
emergence of clear label as a new trend, is
likely to lead to further market
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segmentation in the food sector, says Adrian Short, director of supplier


Ulrick & Short. “Clear label is not just about the ingredients, it’s also about
the packaging and any claims made to be free from, organic or even
vegan or vegetarian. Some foodstuffs, such as dairy, are naturally gluten
free, but manufacturers are now including the claim clearly on the
packaging in order to add value for the consumer who may be selecting on
the basis of health or lifestyle – or both.”

“There is still growing demand for cheaper foods, targeting consumers who
pay less attention to the ingredient list and health claims than to the price
ticket. As clear label grows as a category in its own right it may well lead
to greater fragmentation of the sector and polarization of clean/clear label
and cheaper, often own brand lines designed for smaller budgets,” Short
added.

Clean product activity surge


Manufacturers have responded to the clean label demand. According to
Innova Market Insights data, 20.7% of US products tracked in 2014
featured a “no additives/preservatives,” “natural” or “organic” positioning;
up from 16.7% in 2013. But there has been a steady rise in clean label
launches for years, with just 7.9% of products tracked in 2008, featuring
one of these positionings.

In mid-2015, Nestlé announced the reformulation of


many of its US products to reflect increasing consumer
pressure for clean label products and reduced salt. The
company will reduce salt levels by 10 percent in more
than 250 US frozen pizza and snack products, and
remove all artificial flavors from these foods by the end
of the year. It followed the news that fast food chains
Pizza Hut and Taco Bell would reformulate their products
to reflect the growing trend for natural foods and
transparent ingredients.

In early May, US bakery chain Panera Bread published a


so-called “no no” list of list of 150+ artificial colors,
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flavors, sweeteners and preservatives, which it has eliminated or intends


to remove from its US Panera Bread and St. Louis Bread Co. bakery-cafe
food menus by the end of 2016.

An Innova Market Insights analysis of new tracked North American


breakfast cereal launches found a very high penetration of products with a
clean label positioning (i.e. “GMO-free,” “organic,” “natural” or “no
additives/preservatives”). In fact over 55% of new cereals tracked in the
first 6 months of 2015, featured one or more of these claims.

The major manufacturers are involved in this charge. General Mills plans
to have more than 90 percent of its portfolio free of artificial flavors and
colors by the end of 2016. Reports suggest that it will be the first major
cereals company to replace artificial colors with natural fruits, vegetables
and spices such as tomatoes, purple carrots and turmeric.

Kellogg’s also announced plans to cut out artificial colors and flavors from
some of its range. The announcement confirmed that 75% of its cereals in
North America were already being made without artificial colors and more
than half without artificial flavors, but that by the end of 2018, all artificial
ingredients would be removed. A Kellogg’s spokesperson told Innova
Market Insights in a statement: “Our new colors and flavors will come from
a variety of sources, including fruits, vegetables and spices, such as
turmeric and paprika. Some recipe changes may take longer to complete
than others because we will not sacrifice the great taste and quality
consumers expect from their favorite Kellogg’s products.”

Making an “aspartame free” claim is a growing trend, with Innova Market


Insights tracking almost 500 products with this claim globally in 2014, a
significant rise from 2013 (340), but a four-fold increase from 2011 (120).
In the US, there has also been a consumer backlash against beverages
artificially sweetened using aspartame, due to research that suggests that
the sweetener can cause health problems, including cancer. Advocates of
aspartame maintain the ingredient’s safety and the FDA approves its use
in food and beverages, but consumer demands clearly set the product
development agenda. In the US, PepsiCo launched a new Diet Pepsi
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formula without aspartame during the summer, the first time the drink,
which has been available for over 30 years, has been sold without the
artificial sweetener. Aspartame has been replaced with sucralose and
acesulfame potassium, also artificial sweeteners, but with less controversy
surrounding them. The product has faced waves of consumer complaints
about the taste, however.

Even in the supplements sector, which has not traditionally been


associated with clean label at all, the clean label trend is having an impact,
with supplement manufacturers focusing on inherent health benefits and
promoting cleaner and more transparent labels. An analysis of product
prices, found a 26% price premium on EU supplement products launched
with a clean label claim in 2014 versus non-clean label supplements. From
2009-2014, a total of 35 percent of dietary supplements launched in
Western Europe had a clean label claim. Catherine Lehmann, Senior
Marketing Manager at Capsugel noted: “With the globalization of the
supply chain, today’s consumers are becoming more and more concerned
about what is in their food and how it is made. They want to ensure that
what they put in their bodies is sourced from the highest quality
ingredients. They also desire additional information about the origin and
safety of the food products they purchase.”

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Growing consumer demand


Various consumer studies conducted for
suppliers have highlighted the growing
potential for a natural/clean label positioning
in diverse regions of the world. A study for
Ingredion that was reported in March 2015
showed how clean label is as much on the
radar for consumers in Asia Pacific, as it is in
many other parts of the world. A key finding
was that globally, as high as 80% of
consumers feel that it is important that they
recognize all ingredients listed on their food
and drink packaging. Equally, consumers
feel that a short and simple ingredient list is
important, with Chinese consumers being the fourth most likely to read
ingredient lists, of the 17 countries surveyed around the world. Globally,
the top 3 most appealing claims or descriptions are “natural/all natural,”
“no artificial ingredients” and “low or reduced fat/sugar/salt.”

A recent independent study carried out for Puratos among 11,000


consumers in 25 countries, showed that consumers fear that food in the
future will be less healthy, less fresh and less natural. As far as food
quality is concerned, Europeans are the most worried: only 25% of them
expect food to be of higher quality in the future, against 33% in America
and 38% in Asia. Pascale Jantcheff, Puratos Group Marketing Services
Director: “Transparency and authenticity play a key role in the sourcing,
development and production process of food products. There is an
opportunity and a role for the industry to communicate and act in a clear
way to compensate for the limited amount of consumer trust we observe
today.”

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Colorful concerns
The food colors space is a key area of
concern, particularly due to the perceived
link between several artificial colors and
hyperactivity in children. A Kalsec
consumer study presented at IFT 15 in
Chicago, found that more than 80 percent
of UK and US parents with a child
between the ages of 3 and 12, indicated
they are more likely to purchase a food
product for their children, if it contains a
naturally-sourced color instead of a
synthetic color. Seven of every 10 parents surveyed would be willing to
pay a premium for food products containing naturally-sourced colors
instead of synthetic colors.
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The trend towards formulating with natural colors has


steadily increased over recent years. During 2014,
Europe had the highest global percentage of natural
color vs. synthetic color use (83% vs. 17%) in
children’s new product launches. Asia Pacific, Latin
America and the Middle East also formulated more
frequently with natural versus synthetic colors. In North
America, synthetic color use slightly exceeded natural
colors (51% vs. 49%) in children’s new product
introductions for the same time period.

Regulation is having an impact on product development


in this area too, with the transition period for the
implementation of the European Guidance notes on the
classification of food extracts with coloring properties
about to end, at the time of writing. After November 29, 2015, all food and
drinks available on the European market, should comply with the
requirements of the new guidelines. For the first time, these define precise
criteria for the differentiation between “coloring foods” and “colorants.”
The new EU Guidance Notes support consumers’ demand for clear labeling,
claims Guido de Jager at supplier GNT. “The guidelines define exact criteria
for the differentiation between Coloring Foods and additive
colors and thus close the remaining legislative gap in this
area. GNT’s Coloring Foods, sold worldwide under the brand
name EXBERRY, meet all the requirements of the EU
Guidance Notes and labeled clearly as e.g. ‘coloring foods
(black carrot, pumpkin),’ they help consumers with their
buying decision,” he says.

Strong organic growth


There are several platforms within clean and clear label and
ways in which to communicate them to consumers. At a
product level, the “natural” platform is still suffering from a
lack of definition, resulting in a stabilization of “natural”
claims at around 7% of total F&B new product launches
tracked since 2013. “No additives/preservatives” claims have
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also stabilized, going from 13.4% in H1 2013 to 14.2% in H1 2015. This is


a substantial contrast with the recent surge of products with an “organic”
claim, which went up from 6.3% in 2013 H1 to 9.5% in 2015 H1.

In terms of actual tracked products, Innova Market Insights reported over


20,000 new organic products (excluding pet foods & supplements) with an
organic positioning in 2014, a doubling from the numbers tracked in 2011.
Product launch activity was led by the US (21%), Germany (14%), France
(8%) and the UK (5%). Juice & juice drinks (7%), baby meals (7%) and
tea (6%) were the leading categories that featured an organic claim.
Interestingly, it was brands that dominated NPD activity, accounting for
85% of new products tracked in 2014 with an organic positioning,
compared to 15% for private label.

But organic is no longer a platform reserved for the smaller players.


Recently, Coca-Cola launched ViO BiO Limo in Germany, the company’s
first certified organic lemonade for this key market. The lemonade is
promoted as having a particularly high juice content, and is created by
using fruit from organic farming and natural mineral water from the
Lüneburg region.

Organic is regularly an issue of marketing over substance,


exemplified by Christinen’s launch of a new range of
organic mineral waters, following an appearance in the
catering space in October 2014, which has led to the
product line succeeding in becoming one of the most
successful launches in the mineral water segment. “The
decision to use the organic label, which paid off
immediately, in terms of sales, was taken deliberately to
honor the brand promise of Christinen. In the mind of
consumers, the organic label is associated with an
especially pure mineral water from a company which acts
authentically,” explains CEO Carsten Thomas Hess.

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Organic supply challenges


But there are many challenges involved with “organic” too. In fact the
category could be seen as having a glass ceiling in itself, with only so
much land available to fulfill supply demands. According to the European
Union, in 2013, a total area of 10.2 million hectares was cultivated as
“organic,” up from 5.7 million in 2002. During the last decade, the organic
area in the EU grew by about 500,000 hectares per year. This is a big
increase, but to put this into perspective, the whole organic area still only
represents 5.4% of total utilized agricultural land in Europe. Pasture
represents the biggest share of the organic land (about 45%), followed by
cereals (around 15%) and permanent crops (about 13%).

Certainly for some, organic has become a way of living. Some people see
these products as being tastier or healthier than those coming from
conventional agriculture, while others appreciate them because of the
good practices towards the environment or the labor force employed on
organic farms. Honorary professor Donald Otter from the University of
Auckland, New Zealand says: “When you talk to people who choose
organic products, they do so for different reasons. For one group, the
hormones and pesticides play a major role, whereas for others, animal
welfare is key.”

Prof. Dr. Ir. Saskia van Ruth from the University of Wageningen in the
Netherlands agrees, but notes: “It is true that perception plays a big role,
however, it is questionable whether organic is better or safer.”

Organic farming performs


much better than
conventional farming, with
respect to floral and faunal
diversity. Synthetic
pesticides and nitrous-
fertilizers are banned,
leading to positive effects on
wildlife conservation and
landscape.
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“Letting cattle graze on a specific patch of land for a limited amount of


time, before replacing them to another spot conserves soil fertility and
system stability better than conventional farming systems. Plants then for
example restore themselves better,” says Otter. “It also results in lower or
similar nitrate leaching rates than conventional agriculture, and does not
pose any risk of ground and surface water pollution from synthetic
pesticides.”

But an Oxford meta-analysis of 71 studies proved that organic farming


requires 84% more land; mainly due to lack of nutrients, but sometimes
due to weeds, diseases or pest, or lower yielding animals. On a per
hectare scale, CH4, NO2 and CO2 emissions are 40-60% lower in organic
farming systems than in conventional ones. However, on a per unit output
scale, the emissions tend to be higher.

“It’s not feasible to feed the whole world using organic farming,” says van
Ruth. “Non-organic farming is still needed to meet the demands for
enough food. Animal welfare will improve and less synthetic fertilizer will
be used, however.” Organic farming delivers just 5 percent less yield in
rain watered legume crops, such as beans, and in perennial crops, such as
fruit trees. But when it comes to major cereal crops, like corn,
conventional methods delivered more than 25 percent more yield.

Consumers believe that organic produce is more nutritious than


conventionally grown produce, but the research to support that belief is
not definitive. Otter says: “When you compare the nutritional value of
milk, for example, there is absolutely no difference.” Many studies have
demonstrated no important differences in carbohydrate or vitamin and
mineral content. Some studies have found lower nitrate content in organic
foods versus conventionally grown foods, which is potentially desirable
because of the association of nitrates with increased risk of gastrointestinal
cancer.

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Cost and efficiency concerns


The main drawback to organic food
is clearly the issue of cost. Organic
products often take longer to
produce, sometimes need more
work and have to be separated from
conventional products.

They are processed and distributed


on a smaller scale and subject to
specific controls and certifications.
These extra production costs often
have to be passed on to consumers
for organic operations to be
financially viable.

The big US retail player in organic is Whole Foods, but the company is now
coming under more pressure, due to its high prices and organic
competition from other retailers, with stock reportedly down 41 percent
this year. Whole Foods has announced it will be opening a chain of lower-
priced organic stores under a new brand, “365,” likely aimed at competing
with Trader Joe's. But the move doesn't address the
image problem that Whole Foods is currently fighting
over its high prices. “365” effectively just provides a
new potential competitor from within, leading to
cannibalization which could lower future Whole Foods
earnings even more. The high cost of “Whole Foods”
products is regularly mocked in the US media as
being “whole pay packet.”

Another challenge is simply whether consumers


understand what organic is in the first place. A
recent online research study of 1,005 US consumers
conducted by Natural Marketing Institute (NMI)
found that one in three consumers do not make a
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quality distinction between the terms


“natural” and “organic” and/or government
regulation for products with such labels.
Other findings from the study confirmed
more confusion in the marketplace with the
term “natural.” Common misconceptions
include the belief that most vitamins come
from natural sources and that “natural”
means no pesticides are used. And while
three-fourths of consumers perceive that
organic foods must be at least 95 percent
free from synthetic additives, almost two-
thirds of consumers expect the same
standard from “natural” foods.

While some consumers may regard organic as more sustainable, the


opposite may well be true in terms of resource efficiency. With the
continued surge in the global population, the debate about the benefits of
going organic will undergo heavy debate and be listed as a so-called “First
World Concern,” rather than a sustainable long term solution. There may
be far more important considerations in clear label than organic, but for
now it is leading NPD activity.

A GM-free surge
Another clean/clear label trend that is clearly on the rise is “GM-free,” the
benefits of which are again a topic for debate. In terms of product activity,
launches featuring GMO-free claims and labeling remain relatively limited
on a global scale. Just 4% of launches recorded by Innova Market Insights
in the 12 months to the end of June 2015 used GMO-free labeling,
although this was a significant rise year-on-year, driven mainly by rising
levels of interest in the US. Over the 12-month period, the US accounted
for 43% of global launches using GMO-free claims, moving ahead of the
EU on 39%, despite the much larger number of countries involved in the
latter region.

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Bakery products and snacks lead in terms of numbers of global GMO-free


introductions, accounting for 12% and 11%, respectively, reflecting the
significance of GM ingredients in sectors using
high levels of cereals for food. While these two
product categories led in terms of introductions
overall, cereals led in terms of share, with over
13% of launches of breakfast cereals and cereal
bars featuring this type of labeling.

There has also been relatively strong interest in


non-GMO labeling in the dairy industry, where a
natural image has traditionally been important
and there is already ongoing activity in organic
and pasture milks. There is a strong link
between organic and GMO-free certification, with
many products using both types of positioning.

But again, while GM foods continue to face demonization from green


campaigners and lobby groups, there can be major benefits in terms of
agricultural yield. With a growing global population that needs to be fed,
the debate about ridding the world of a promising technology, due to social
concerns rather than hard facts, will rage on.

“Organic” and “GMO-free” are both clearly on the rise – the biggest
question will be just how high the glass ceiling is for expansion and
whether major manufacturers can source enough ingredients in order to
make them plausible mainstream propositions. More likely is that many
manufacturers will instead opt for high cost/high margin organic lines, as
one part of a diverse product portfolio. Clear label is clearly here to stay
however, and consumer calls for transparency will only rise.

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2. Free from all


Some recent product launches have become
advertising boards for ingredients that they
do not contain, rather than highlighting the
actual positives of the product themselves.
Most consumers don’t actually need products
that are free from gluten, wheat and dairy,
but are demanding them anyway. Industry
has little choice but to respond and the recent
surge in mainstream gluten free products has
been incredible. As a result, other “free from”
platforms are gaining traction.

 Most major manufacturers are now launching gluten free


options whenever possible.
 Other common allergens, such as corn, wheat and egg are
also being heavily marketed, along with lactose free.
 There is high consumer confusion about the actual benefits
and industry is also struggling to educate consumers about
the negative aspect of self-diagnosis of intolerance
 The trend has led to the use of alternative ingredients such as
ancient grains and dairy alternatives.

The rise of organic and GM-free foods comes


amid a growing trend in this direction
anyway, with 2015 being the year in which
“free from” truly became mainstream.
Organic and free from trends often go hand
in hand and the latest trend in free from
foods is so full of claims, that you could be
forgiven for wondering whether certain food
products contain any ingredients at all.

For example, Living Now Foods recently


launched an organic gluten free pasta line
that is based on one of three simple organic
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ingredients: rice, quinoa and amaranth. The


products are made without the 8 common
allergens and promoted as: “corn-free, wheat-
free and egg-free.”

Particularly in the US, some recent product


launches have become advertising boards for
ingredients that they do not contain, rather than
highlighting the actual positives of the product
themselves.

This trend has led to Enjoy Life Foods, for


example, to recently extend its gluten free and
allergy-friendly line to include functional, ready-to-use baking mixes and
all-purpose flour. The baking mix features a whole host of free from
claims, being free from: gluten, peanut, soy, wheat, tree nut, fish, dairy,
egg, shellfish, casein, sesame, sulfites and potato. In the UK, Yumsh
Snacks Ltd. claims to offer “Free From+” snacks
through the Ten Acre crisps and popcorn brand. Ten
Acre popcorn is marketed as “Free From+”, as they
are gluten, dairy and MSG free as well as vegan,
halal and kosher.

One consumer trend that is profound within the “free


from” space is that consumers want to limit any
perceived health risk. For example, with some
negative media attention existing around the GM
sourcing of soy, other alternatives to cow’s milk are
being proposed, such as almond milk. In 2015-H1
21% of milk alternatives carried an explicit “soy
free” claim, 14% more than in the first half of 2011.

The mainstreaming of gluten free


Gluten free has been the big platform in “free from” foods so far, but the
options are expanding and there is contention about whether other

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platforms such as dairy free or egg free will be other major platforms to
watch, as well as vegan [see trend #3].

The interesting issue with gluten free is how consumers with a gluten
intolerance or sensitivity are no longer the only target group. A large
proportion of consumers buys gluten free because it is “better for me”
(US: 13%) or for weight management (US: 6%), according to HealthFocus
data. While there is still virtually no evidence that gluten free is actually
better for you, consumer perception is the manufacturer’s reality, and
many have simply jumped on the bandwagon. Of course there is a
potential market for entire households, whereby
one family member suffers from celiac disease,
and other family members will also eat gluten
free.

A recent survey for bakery ingredient supplier


Puratos taken among 11,000 consumers in 25
countries, noted how consumers are being
bombarded by all kinds of messages about what
is and is not good for them. The amount of
information is confusing and leads to the
creation of food myths. For instance, 40% of
Europeans, 42% of Asians and 45% of
Americans believe that gluten can cause
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digestive problems for the majority of


consumers. This figure is in strong contrast with
scientific research that estimates the proportion
of the population suffering from gluten related
disorders to be in the 6-10% range (Brouns et
al., Journal of Cereal Science 58 (2013) 209-
215).

There have always been gluten free options in


the specialist aisle, but if we look at “gluten free”
launches attributed to “big” companies in 2014,
they accounted for an 11% share. This is up
significantly from 7.6% in 2010. The share of
gluten free positioned products jumped from 5.2% to 9.4% of global food
& beverage launches from 2010 to 2014. North America (19.7%) and Latin
America (19.8%) dominated for products featuring a gluten free claim in
2014, with Australasia just behind (18.4%). It is important to note that
the large number of Latin American launches is influenced by Brazilian
regulation around listing of allergens and is not entirely down to
innovation.

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Very active sectors for gluten free


Key areas for gluten free activity in recent years
have been in bakery & cereal products and snack
foods, largely because of rising demand for
alternatives to the relatively high number of
gluten-containing lines in these sectors, or
because of the availability of alternative gluten
free ingredients. In fact, nowhere is the gluten
free trend more visible than in the cereals
category. With 5 times as many products tracked
in 2015-H1 (compared to 2011-H1), the
penetration increased from 7% to 23%.

The cereal products market, encompassing breakfast cereals and cereal


bars, is relatively well set up to cater to the gluten free trend, with
numerous non-gluten cereal options already available. As a result of this
and the relatively concentrated nature of the market, it is perhaps not
surprising that the share of gluten free launches in the cereals market is
much higher than the average of the food and drinks market as a whole at
21%, rising to an incredible 43%
in the US. But the interesting
trend has been the proliferation
of launches from major players.
Recently, as part of a $712
million capital investment,
General Mills announced it is
adding the “gluten free” label to
five of its Cheerios varieties this
summer, in addition to the
marshmallow cereal Lucky
Charms later this year.

Interestingly, despite being one


of the product categories most strongly associated with wheat and thus
gluten, the bakery products sector has a slightly lower than average share
of gluten free launches recorded, at 9%, perhaps partly reflecting the
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diversity of the sector and the high levels of


new product activity overall. The actual
number of gluten free bakery launches has
nonetheless risen consistently in recent years.
Biscuits account for the largest number of
gluten free bakery launches, with over 40%,
equivalent to 8% of total biscuit introductions,
while bread has less than 16% of gluten free
bakery launches, but this is equivalent to 9%
of total bread introductions.

The gluten free bakery trend shows no signs


of slowing down and some ingredients to
watch will include: rice, corn, sorghum,
buckwheat, millet, pea, oats, quinoa, amaranth and teff. An analysis of the
penetration of new bakery products with a gluten free positioning found
that 9.3% of global launches tracked in the second quarter of 2015 had a
gluten free positioning. This is up
from 4.5% in the first quarter of
2012. In North America, where books
such as “Wheat Belly” and “Grain
Brain” have had a role to play in the
recent gluten free hype, the
penetration level of gluten free is
even more significant [22.1% in Q2
2015], while in West Europe, it has
grown from 5.4% in Q1 2012 to
10.5% in Q2 2015; an effective
doubling in tracked gluten free
launches.

The snacks market is also seeing a relatively high proportion of launches


featuring gluten free claims, averaging 13% globally, but rising to over
42% in the US. In terms of product and market development, the snacks
market benefits particularly from the fact that many basic snacks
ingredients, such as potatoes, corn, soy and nuts, are naturally gluten
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free, so it is a claim that is relatively easy to achieve in many instances.


Ingredients used to replace wheat or other cereals and offer a gluten free
formulation over the past few years have included lentils, black beans,
navy beans, cassava, brown rice, nuts, sweet potatoes and a wide variety
of other vegetables.

Many other areas of the food and drinks market are also seeing rising
levels of interest in gluten free reformulations, or just in emphasizing the
gluten free nature of existing lines.

Ingredient development
Gluten free bakery solutions were a key trend at IBA 2015 in Munich,
where Bakels presented its first consumer brand – Gluten Free Multiseed
Bread Mix. Aimed at celiacs, who like to bake, along with health conscious
consumers, looking to cut down on gluten, the product line is now
available to the UK baker through national wholesalers BAKO and BFP
Wholesale. The company has launched a standard white bread, a gluten
free version of multiseed and an artisan product, which allows for the
creation of ciabatta style products and crusty breads.

France-based yeast supplier Lesaffre has been offering the VitaSafe


ingredient since 2007, but has enjoyed strong recent interest in the
solution. VitaSafe is a range of healthy free mixes and premixes which can
be used to make gluten free breads, pizzas, cakes and pastries with a
taste and texture similar to “classic” bread products. VitaSafe is claimed to

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guarantee “real food safety for people who have to follow a gluten free
diet.”

Currently trending as an ingredient is chia. The seed from South America


has health-promoting properties, makes dough processing easier and
presents great potential for bakers. It is not only used in refinement of
bread and other bakery products, but can also be processed as a
substitute for wheat flour or eggs and is therefore ideal for vegans and
persons who are allergic to gluten. At IBA, IREKS launched Rex Chia,
which is aimed at taking this powerful grain into the bakery via a special
mix with flexible applications.

Most recently, Ingredion extended its range of specialty ingredients for


gluten-free baking with the launch of PRECISA Bake GF texturizing system.
This highly functional gluten-free texturizing system consists of three
components, perfectly balanced to enable manufacturers to optimize the
texture of their products. Labeled as modified tapioca starch, maize starch
and potato starch, the gluten free starch system is ideal for manufacturers
looking to create soft and resilient gluten free baked goods such as
sandwich breads, buns, muffins and cakes. Cathrin Kurz, Marketing
Manager, Bakery at Ingredion Europe, commented: “Over the last year the
range of free from products on the market has risen dramatically. As many
as 65% of consumers who adopt a gluten free diet do so because they
think it’s healthier. In addition to this the number of diagnosed celiac is
steadily increasing. As consumer demand continues to rise, manufacturers
and retailers are under increasing pressure to bring high quality
differentiated gluten free products to market.”

Other innovation is evident allowing celiac sufferers to break down gluten,


so they can consume gluten containing foods. DSM claims to have
launched the first and the only digestive enzyme demonstrated to
effectively break down residual gluten in the stomach to the US dietary
supplement market. Tolerase G – or Aspergillus Niger prolyl endoprotease
(AN-PEP) – is ideal for the growing number of gluten sensitive consumers
following a gluten free diet who want help digesting hidden or residual
gluten that may be found in a broad range of foods.
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The gluten free backlash


There is a backlash against unnecessary gluten free positioning, both from
industry and academics. Prof. Fred Brouns of Maastricht University, who is
involved in the EU HEALTH GRAIN program around the nutritional
properties of grains recently wrote in The World of Food Ingredients
(September, 2015): “Celiac disease affects only 1% (range 0.5-3%) of the
population, whereas true wheat allergy is very rare, affecting only <0.2%
of the population. Accordingly, the question arises why so many
individuals (in some countries > 30%) say to feel more comfortable on a
gluten free or wheat free diet or when consuming ancient wheat.”

Brouns noted how several popular nutritional plans, such


as the Paleolithic diet and diets more recently proposed by
Davis, in “Wheat Belly” and Perlmutter in “Grain Brain,”
have suggested that wheat consumption has many adverse
health effects, leading to numerous chronic diseases,
ranging from obesity, diabetes and cardiovascular disease
to epilepsia, Alzheimer’s and hyperactivity syndrome.
“Such suggestions are based on different hypotheses
relating adverse health effects to wheat gluten, wheat
lectins and wheat protein digestion-derived opioid like
peptides, including impacts on eating behavior. With this,
the authors of these books follow a recent trend to relate
the cause of certain diseases, such as for example obesity,
to one specific type of food or food component, rather than
to multi-factorial causes including food overconsumption
and inactive lifestyle in general,” he added.

Paleo for cleaner eating


It is also important to note how the trend towards “cleaner eating” is
driving free from, with a back to basics approach. The Paleo Diet, which
has become the newest diet craze to hit the market, is inspired by how our
ancestors ate millions of years ago. More or less, their diet comprised of
the things that they can hunt and harvest. They consumed meat, seafood,
fruit, vegetables and nuts. Paleo diet holds the same principle. In general,

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it pushes that we eat like what our ancestors did,


also excluding dairy or cereal products and
processed foods.

“Paleo” has become a new gluten free platform in


the US and Australia in particular, where diverse
categories are sometimes being positioned on a
big paleo platform instead of being marketed as
“gluten free.” In fact a search for the word “paleo”
found 265 new products featuring the word in the
first 10 months of 2015, compared to 141 in the
whole of 2014, which in itself was up from just 21
in 2013. The US accounted for 68% of all launches
tracked featuring the word “paleo,” well ahead of
Australia (12%) and the UK 6%.

At the recent Fine Foods Australia Show, Maximum Protein was launched
as new a protein jerky-style snack with the tagline "steak in a bag,"
backed up by its high protein content (64.4/ 100g), and is low carb, low
fat, salt reduced, soy free, wheat free & gluten free. With special appeal
for Paleo diet followers, Maximum Protein is available in 3 flavors: Original
Paleo, Cracked Pepper Paleo and Mild Chilli Paleo.

Also positioned for Paleo diet followers, The Goods Bone Broths are full of
amino acids and are cooked long and slow to develop maximum depth of
flavor. These products are fresh, carry a “perfect for paleo” claim and
come in Free Range Chicken and Grass Fed Free Range Beef flavors.

Another product adhering to Paleo diet principles, isBlue Dinosaur’s Paleo


bars whichare made with just five completely natural ingredients,
containing lots of good fats and natural energy. “There are absolutely no
added sweeteners, flavors, colors or preservatives, just real, good food,”
the company writes. The Original tastes like a rich, dark chocolate brownie
and contains walnuts, dates, pecans, raw organic cacao and organic
coconut oil. Other flavor variants include Ginger Nut, Cacao Mint, the
Brazilian and Mac’ Lemon.
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Dairy free platforms


Despite the dominance for gluten free thus far,
there are a number of other platforms in free from
too, including milk free, lactose free, egg free and
gelatin free, with the next big battle ground in the
free from arena will be lactose and dairy free.
Lactose intolerance/sensitivity and dairy digestion
concerns have resulted in the birth of the
dairy/lactose free market, a fast growing niche. An
average annual growth of +15% has been reported
for global product launches with a “dairy free” claim
(2010-2014), while an average annual growth for
global product launches with a “lactose free” claim
(2010-2014) has been tracked at +29%. In the US,
7% of dairy launches in the US in 2014 had a
“lactose free,” claim. This claim had a +27%
average annual growth rate (2010-2014).

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In the dairy category, lactose free jumped 1.5% in the first half of 2015
reaching 5.9%, and it is not only small players filling this segment. Coca-
Cola’s Fairlife is lactose-free, while at the recent Anuga Show in Cologne,
Valio launched a full range of lactose free alternatives, from powder to
barista milk.

The use of lactose free claims has also been rising, if


more steadily, in recent years. The claim features on
6.7% of global dairy introductions, rising to nearly
11% in the US and 8% in the EU. Interest in dairy
alternatives, improved labeling, growing awareness of
the problems associated with lactose intolerance and
technical developments are allowing for the production
of better-tasting products, have combined to boost
availability and popularity in recent years, and the
sector is now trying to emerge from its specialist niche
positioning to increase its appeal to a wider audience
in the mass market.

The highest share of lactose free products tends to be in sectors where


there are already established dairy alternatives, particularly drinks, where
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the share of products marketed as lactose free was over 40%. Creamers,
many of which also have non-dairy ingredients, such as vegetable fats,
can also relatively easily be formulated as lactose free. This type of
product accounted for over 10% of introductions in the creams and
creamers sub-sector. In more traditional dairy markets, such as milk
drinks, the penetration of lactose free launches was 5.5%, while in cheese
it was just over 4% and in yogurts 3.7%.

Other major manufacturers entering this space


include from Germany, Campina’s Landliebe
brand which recently launched an extensive line
of lactose free dairy products to meet this
growing demand. Many of the products feature
strong “GMO-free” front-of-pack claims. Arla
claims to be launching genuine lactose-free milk,
without compromising on taste, through the use
of a special patented filtration process, where the
milk lactose is removed, without affecting the
fresh milk flavor. The process also means that
Arla Lactose Free contains significantly less
lactose (<0.03g/100ml) than conventional
lactose free milk (<0.1g/100ml).

Alternatives to cow’s milk are


also on the rise. Goat’s milk is
increasingly considered as a
viable alternative. It contains less
lactose and is therefore easier to
digest for some consumers. A2
milk is cow’s milk, but only
contains the A2 type of beta-
casein protein. It is free from the
A1 protein that is commonly
found in regular milk. Dairy
alternatives are also continuing to diversify in terms of ingredients such as
almond milk, coconut milk, rice milk, quinoa milk etc. In fact there has
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been a +17% US average annual growth reported in dairy alternatives


(2010-2014).

“Free from” has entered the mainstream and for clever industry players,
the opportunity offers a true free for all. Just how far things go before
consumers become highly skeptical of the claims being made remains to
be seen.

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3. The “Flexitarian” effect


Vegetarians still account for a fraction of the population in western
markets. But average consumers who are regularly cutting back on
their meat intake on health, sustainability or animal welfare
grounds, are on the rise. These flexible vegetarians can be more
discerning than vegetarians or vegans, and want better tasting
products that are more reminiscent of meat, further driving
innovation.

 A major health study on processed meat is just part of the


wider trend in reducing meat consumption.
 Fake meats that are very close to the real thing are allowing
for strong product development.
 Consumer pressure is forcing manufacturers to adopt more
animal friendly processes.
 Alternative protein sources are emerging to deal with the
world’s growing population.

There are a number of widespread reasons


that are encouraging consumers to cut back
on meat, or rule it out together. These
include health & sustainability reasons, but
also concerns about animal welfare and
practices being employed by the meat
industry.

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The cancer link


The latest big hit for the meat industry was a high profile study by the
WHO’s International Agency for Research on Cancer, which concluded that
each 50 gram portion of processed meat eaten daily, increases the risk of
colorectal cancer by 18%. The study drew widespread news coverage, with
meat groups stressing that no single food causes cancer and that the
health benefits have not been taken into consideration.

If history repeats itself, the study will have little impact on the
consumption of these foods, according to a report from The NPD Group.
The report found that a 2002 American Cancer Society report
recommending a limiting of processed and red meats made no discernible
long term difference in consumption. But it somehow seems a bit different
this time, also because of the mainstream headlines that the study has
attracted. For example, a Time magazine cover in November 2015,
following the study featured the headline “The War on Delicious,” with two
strips of bacon laid down in an “X,” in the similar form that the magazine
has famously used in the past, following the removal of the likes of Adolf
Hitler, Saddam Hussein and Osama Bin Laden. The report was balanced,
calling for moderation, but it also noted the confusion that subsequent
newspaper headlines like “Hot Dogs as Bad for you as Cigarettes” has
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caused. But it did warn: “the link between meat and cancer has always
been hedged, but it’s growing more certain.”

There was a further


study reported in
early November
2015, which found
that diets high in
meat may lead to an
increased risk of
developing renal cell
carcinoma (RCC)
through intake of
carcinogenic
compounds created
by certain cooking
techniques, such as
barbecuing and pan-frying. As part of a new study from The University of
Texas MD Anderson Cancer Center, published online in the journal Cancer,
researchers also discovered that individuals with specific genetic mutations
are more susceptible to the harmful compounds created when cooking at
high temperatures.

The dent in trust


Beyond health, distrust is another ongoing reason for consumers may cut
back on meat. The 2013 European horsemeat scandal dented consumer
confidence in the meat industry, but the issue of deceptive labeling has not
entirely disappeared either, as a new report from EU consumer watchdog
BEUC shows. Based on tests carried out by seven BEUC member
organizations over the past months, the report revealed that meat-based
foods might not always live up to consumers’ expectations, when labels
are not deliberately misleading them. Shortcomings were brought to light
by seven European consumer organizations, through tests carried out
between April 2014 and August 2015. The findings revealed frequent cases
of:

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 Confusing product names.


 Incomplete labels which fail to highlight added water for example, or
which fail to declare the percentage of meat in the product.
 Use of illegal food additives.
 Use of undeclared mechanically-separated meat.
 Fraudulent use of other species as a substitute, e.g. Turkey kebab
sold as veal.

“With the 2013


horsemeat scandal still
fresh in many minds,
European consumers
should be able to trust
the labels on the meat
they buy. But if they
are to be able to do so,
public authorities must
tighten their checks to
guarantee that food
manufacturers abide by
EU food laws,” the
group stated.

Welfare and waste concerns


Animal welfare concerns are another reason to forgo meat consumption,
with some common industrial practices drawing widespread consumer
disgust. For example, in October 2015, Germany became the first country
to outlaw the controversial practice of “chick shredding.” With around half
of all chicks born into the egg industry are male, and end up being
“shredded” right after hatching. The practice is commonplace across both
caged and free range egg producers all over the world, and around 45
million chicks are killed after birth in Germany alone. But after pressure
from animal rights activists, the German government teamed up with
scientists to come up with an alternative. From now on, new technology
will be used to determine the sex of each fertilized egg before the chick
inside develops.
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Sustainability from
an animal welfare
perspective is a
key message being
pushed by
manufacturers in
recent months. For
example, as part of
its ongoing
dedication to
corporate
responsibility,
Kellogg Company
recently announced
that it plans to
build on its commitment to animal welfare by sourcing only cage free eggs
for its foods and eliminating gestation stalls from its pork supply chain by
the end of 2025. In addition, Kellogg will consider the “Five Freedoms” of
animal welfare, an internationally recognized set of humane treatment
principles: “as part of its process to continuously improve its supply chain
in the future.”

The flexitarian rise


The WHO meat and cancer report came amid a rising trend towards
consumers who are cutting back on meat consumption, whether for health
or sustainability reasons. This publication and following media coverage, is
expected to further grow the size of the so-called “flexitarian” segment
(i.e. a flexible/part-time vegetarian) and also affect their meat
consumption in terms of frequency and quantity. This will drive the
development and launches of new products, which is showing strong
growth already. Meat substitute product launches accounted for almost
14% of all new “meat” launches tracked in West Europe by Innova Market
Insights in Q3 2015, compared to 6.3% tracked in Q3 2011.

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Jo Bruce, Research & Development Manager, ADM Oils & Fats says: “The
rise of flexitarian, vegetarian and vegan diets and the recent spotlight on
food security has certainly increased interest in sustainable plant-based
protein sources. More and more consumers are seeking alternative protein
sources which put significantly less demand on the environment and which
can also cater to the needs of vegetarian or vegan diets. Responsibly-
sourced, plant-based protein is now seen as a viable alternative, creating
new opportunities for product innovation and helping manufacturers to
boost their ‘green’ credentials.”

Classic vegetarians are well aware that they must


still consume a high intake of protein from non-
animal sources and are willing to compromise with
meat substitutes that may never convince in blind
taste tests against meat. After all, many
vegetarians simply do not like the taste of meat in
the first place. But “flexitarians” still consume
meat several days a week, despite their obvious
qualms about the sustainability and animal welfare
issues that come from eating animal proteins.
They are therefore more demanding of substitute
meat products and food scientists are now helping
them to slowly cut it out altogether. The biggest
commercial news yet comes from California
startup Impossible Foods. The company is set to introduce a plant-derived
burger that releases a blood-like substance as it cooks to the US market in
2016, before rolling it out elsewhere.

Technology as the answer


Impossible Foods looked at animal products at the molecular level, before
selecting specific proteins and nutrients from greens, seeds, and grains, to
recreate the experience of meats and dairy products. The concept seeks to
feed the world in different ways. It makes sense. Rather than feeding
animals plants, and using vast volumes of resources while animals grow
and develop, why not just eat the plants? “Our first product is raw burger
meat made entirely from plants. We are in the final stage of perfecting it
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and expect to introduce it to the


US market next year,” a
spokesperson told Innova
Market Insights. “We are still
establishing our initial
distribution channels so we
can’t say yet where we will
introduce the Impossible
Burger. We plan to launch the
Impossible Burger in North
America and eventually offer
this and other plant-based
foods worldwide through a
variety of distribution
channels,” they continued. The team said at launch, the Impossible Burger
will likely be more expensive than regular ground beef. “We expect it to
end up costing the same as or less than conventional, commercial-grade
ground beef after we scale up production.”

“Replacing animal-derived meats with nutritionally equivalent foods made


from plants would require a small fraction of the land and water required
to make an equivalent amount of conventional beef from cattle, with far
lower net greenhouse gas emissions.” Impossible argue the key to this
transformation is to make plant-based meats that are just as tasty and
satisfying as the ones made from animals. “That’s why we are creating
familiar, delicious foods for people who love the taste of meat, who don’t
want to sacrifice any of the pleasure of eating meat, and have no desire to
reduce or eliminate meat or cheese from their diet.”

But even these products may still not trick the true meat eater, who will
still opt for the “real” thing anyway, despite their internal struggle about
the impact of their continued meat consumption on the environment. Just
two years after his team’s US$250,000 artificial meat hamburger was
presented to the world’s media to much hype, the technology has entered
a new stage, with commercial viability moving significantly closer. In fact,

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the commercial sale of lab grown hamburgers to affluent and adventurous


consumers could be just 5 years away.

Speaking before the 1st International


Symposium on Cultured Meat in October
2015, Prof. Mark Post of Maastricht
University revealed the launch of a new
company to initially be called MosaMeat,
which will be founded as a spin-off company
at the university. “We target that within 5
years we will have a product on the market
that is both approved and the result of
large-scale production. We think that we
can have that scale in place in 1-2 years
and then have that regulatory approval, so
that we can have the first product on the
market in 4-5 years.” The company expects to be able to sell a kilo of
artificial beef product that would be suitable for hamburgers, could be
produced for about $65 per kilo. This is a 30x factor on conventional beef,
which has a current market level of $2.50 per kilo. So it is still highly
expensive, but no longer ridiculous.

The process for creating cultured beef relies on taking muscle cells from a
cow, which are cultured in a laboratory by scientists, who place them in a
nutrient solution to create muscle tissue. The tissue is grown by placing
the cells in a ring, like a donut, around a hub of gel. The muscle cells grow
into small strands of meat. Some 20,000 such strands are need to make
one 140g (approx. five ounce) burger.

Shaping NPD
The “flexitarian” is shaping NPD and the meat products that we eat/won’t
eat in the future will be created with this burgeoning demographic in mind.
In terms of meat substitutes specifically, what is most interesting is the
breadth of products now available, providing consumers with a lot more
choice and convenience.

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Most recently Daiya Foods, a manufacturer of dairy free products that:


“melt, taste and stretch like dairy-based cheese,” teamed up with Beyond
Meat to extend its frozen pizza lineup. The new “Supreme Pizza” offering
combines Daiya’s dairy free Mozzarella Style Shreds with Beyond Meat’s
gourmet meatless sausage on a gluten free crust.

“With over 22 million vegetarians, a third of the population who is dairy


sensitive, and an ever increasing number of people now following a plant-
based diet, we are fortunate to cook up our latest creation with industry
leader Beyond Meat, who is well known for revolutionary and great-
tasting, plant-based products that offer the same taste and texture of
meat. This enhances the taste appeal of our latest Supreme Pizza offering
and helps us truly deliver on Daiya’s goal of providing healthier versions of
everyday foods people love to eat,” said Michael Lynch, vice president of
marketing at Daiya.

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A surge in vegan claims


The vegan way of living, which revolves
around a plant-based diet avoiding all
animal foods such as meat, dairy, eggs
and honey, as well as products such as
leather and any tested on animals, is also
gaining traction worldwide. Interestingly,
in early November, it was reported that
Guinness was going vegan. The company
announced that starting at the end of
2016; its beer will no longer contain trace
amounts of fish bladder, an integral part
of its filtration process. It is quite common
for cask beers to be filtered using
isinglass, a gelatin like substance derived from the dried swim bladders of
fish that is used to separate out unwanted solids like yeast particles from a
brew.

Claims such as “vegan friendly” or “suitable for vegans” are being used to
differentiate from regular vegetarian product lines. Innova Market Insights
reports a 60% increase in product launches with a vegan claim in 2013
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from 2012, and a further 52% increase in 2014 from 2013, indicating that
food manufacturers are indeed accommodating this lifestyle trend. In
2008, 1.1% of all tracked global launches featured this word, while in
2014 this had more than doubled, with 2.6% of all launches tracked
carrying a claim such as “suitable for vegans.” The leading market sub-
categories in 2014 for vegan claims on a global basis were juice & juice
drinks (5.4%), cereal & energy bars (5%) and savory/salty snacks (4.9%).
Veganism could also be considered to be a driver for the increase in other
animal friendly “free from” claims, such as gelatin free, dairy free and egg
free.

Also, a 22% increase was reported in global product launches with a


vegetarian positioning from 2013 to 2014, and further growth is
anticipated.

But it is important to note how vegan diets partly became recently trendy
on the back of endorsement by Hollywood celebrities. But many, including
Angelina Jolie switched back, with one headline reading: “The Vegan Diet
that Almost Killed Her.” There is a likely natural tipping point for this
extreme eating trend, with only the most dedicated consumers actually
sticking to it.

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A key NPD trend at Anuga


At Anuga 2015 in Cologne, Germany, the biggest food fair in the world,
vegan products were highly prevalent, with many traditional meat
companies venturing into the vegetarian/vegan space; effectively
admitting that a growing market exists that can no longer be ignored. Pea
and egg protein were among the ingredients being adopted to meet the
demands of both vegetarians and the growing “flexitarian” market.

German meat company Windau noted that in Germany there are already
nearly 8 million vegetarians, nearly 1 million vegans and approximately
9.6 million flexitarians, with the trend only rising. The majorities of these
consumers appreciate the familiar taste of sausage and do not want to go
without. To address these demands, the company has created a wide
range of vegetarian [with pea protein and egg protein from organic eggs]
and vegan products [with pea protein), where pork protein is substituted
with vegetarian alternatives.

Poultry Group Wiesenhof introduced vegan products for the first time, with
the launch of: “Veggie Crispy Cutlet,” “Crispy Veggie Sticks” and “Veggie
Sticks,” which are pure vegetable meat alternatives, based on vegetables
and wheat protein. The latest additions to the company’s range are deli
meat alternatives, including a vegetarian mortadella sausage.
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Meat producer Zwanenberg Food Group launched a new line of vegetarian


burgers that truly resemble the color of the vegetable being used, rather
than aiming to look like meat. The line features: Beetroot With Honey,
Yellow Carrot & Maize With Curry and Green Bea & Pea With Black Pepper
products, which are offered in two packs, and shaped in a burger style. A
newly established company was launched in the first quarter of 2015
[Purple Beehive] with products for foodservice available. Now the products
have just started being listed in the Dutch retail [Jumbo supermarket
chain] and foodservice [Ikea] spaces.

Landhof highlighted the launch of Vienna Sausages, which have been


completely made without soy and gluten, and are claimed to taste like
their original counterparts. By introducing the first vegetarian sausage
without soy to the market, the taste of which appeals to vegetarians as
well as flexitarians, the company claims to have set a milestone and
essentially contributed to the growth of a new category in the food trade in
2012.

LikeMeat, a young start-up from Lower Saxony in Germany, exhibited its


vegan range. The company has been in business since the beginning of
2014, and now has a total of 19 products on offer. The deep-frozen
products are the first vegan meat products in the deep-frozen segment. A
new Juicy Burger is the latest addition to the range. Its main ingredients
are legumes and selected spices.

Some of the recent launches in the German market include a new line of
frozen pizzas from Dr. Oetker called Veggie Pizza; a new frozen pizza,
topped with vegetarian meat alternatives to offer: “full, juicy pizza
pleasure.” The innovative range, which was launched in September 2015,
includes three different flavors.

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Vegetaria is a new line of vegetarian products from meat brand Lutz,


which mainly targets trendy Millennial consumers, through its stylish and
modern design. Each
of the 8 products in
the range features an
illustration of a
consumer on the front
of the pack, with a
consumer comment
e.g. “I stand by
young vegetables
from the south” for a
Mediterranean style
vegetarian schnitzel.
The range is made
with soy, wheat and
egg protein
ingredients.

Rügenwalder Mühle is a traditional meat company looking to grow outside


of its base. A soon to be released frozen vegetarian line, will include
schnitzels and nuggets and cordon bleus. Rügenwalder Mühle launched a
variety of its hams and spicy meatballs in a vegetarian format in early
2015. Instead of meat, the company uses egg protein from free range
hens and high quality rapeseed oil. The vegetarian meatballs feature soy.
Heirler now offers a line of vegetarian alternatives to meat and sausages,
through the use of alternative proteins, including pea protein. The product
line is aimed at addressing the demands of those who like to eat meat,
“but are looking for a healthy and safe alternative, or have ethical or moral
reasons to no longer eat meat.”

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Beyond the “meat” category


But even in confectionery, vegetarian/vegan claims are on the rise, as
manufacturers look to alternatives to
gelatin. Some starch and pectin
suppliers are positioning their
ingredients on a gelatin free platform
and a few manufacturers have seized
this opportunity. It is important to note
however, that less than 0.5% of 2014
global dairy & confectionery products
featured a gelatin free claim. But while
it is still a very small niche, a few big
brands did launch products with this
claim in 2014, including Yoplait, Jelly
Belly and Skittles in the US.

In Germany, Katjes is one confectionery brand pushing the vegetarian


agenda, with the “Be Veggie” branding. Katzen Pfötchen [cat’s paws] has
been part of the Katjes portfolio since 1960, as a soft and spicy licorice
option. Now the brand, which has been expanding its vegetarian “Be
Veggie” line for several years, has begun
offering this licorice with a soft consistency,
without using any animal gelatin. Products
that are free from animal gelatin, now account
for 80% of its business, and the company also
launched a new product called Glücks-gefühle
(feeling lucky) in Germany in early 2015.
Katjes competitor Trolli entered the
vegetarian space for the first time with Trolli
Bunte Kuh, a cow head shaped gummy with a
“Go Veggie” claim and the same certification
stamp. Produced without animal-based
gelatin, these soft marshmallow fruit-gum
cows are promoted as a fruity treat for
vegetarians, too.

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Vegan launches were a key trend on display at the 2015 ISM trade show in
Cologne, where three innovative vegan milk chocolate creations were
presented [dark chocolate is inherently vegan]. iChoc (Vivina) is promoted
for responsibility, naturalness and taste, united in an 80g dairy free
chocolate that has been created with rice milk. “Each variety is a small,
vegan gem, with which you can reward yourself with a clear conscience.”

Supply side developments


There has also been high development on the supply side in addressing
the potential for vegetarian foods. Frutarom Savory Solutions recently
launched a new range of vegetarian and vegan options to provide new
solutions for the meat industry, butchers and catering businesses. The cold
cuts compound enables manufacturers to produce vegetarian alternatives.
Based on high-quality egg white powder, Frutarom’s experts have
combined it with natural vegetable and spice extracts to achieve a meat-
like color.

New and innovative potato-based starch solutions that KMC have


developed at their Application Centre in Denmark are claimed to match the

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functional properties of dairy proteins. This will result in imitation cheese


that has a cheese-like appearance and texture. The CheeseMaker CF series
contains products for semi-hard block cheese, such as pizza cheese or
sliced cheese. CheeseMaker CF75 is claimed to have excellent melting
characteristics. Dr. Matthias Moser, Managing Director of Hydrosol notes
how the company has all-in-functional systems that let customers address
the rising demand for meatless foods. They make it possible to produce
vegetarian and vegan cold cuts and alternatives to HotDog sausages. “The
systems contain all the components of the overall formulation, including a
mild basic seasoning that can be enhanced as desired,” he notes. “The
texture of the meatless cold cuts is absolutely comparable with bologna or
mortadella, and allows for problem-free slicing with conventional slicers.
The vegetarian alternatives to wieners and currywurst also compare
favorably with their traditional meat counterparts,” Moser explains. The
company has also developed an alternative sausage casing that offers
several advantages. The
solution is based on a co-
extrudable casing, made of
water-soluble fiber and is ideal
for meatless cooked sausage
alternatives, giving customers
the complete vegan package.
But he stresses that that’s
only a small niche market
right now.

Heiko Zipp, Director Business Team Nutrition at Wacker Biosolutions says:


“The number of people who deliberately want to dispense with animal-
based ingredients is growing globally, both because of ethical or religious
as well as health reasons, such as avoiding allergies or cholesterol, and
social and environmental responsibility. We expect this trend to continue.
And as we see a strong increase in processed foods, the demand for
vegetarian solutions for ‘hidden’ animal products in ready-made meals is
growing, too.” WACKERS has been focusing on novel solutions to replace,
for example, egg white in diverse confectionary and dessert products, or
dispense with animal-based proteins as an emulsifier for mayonnaise or
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salad dressings, and instead use purely vegetarian cyclodextrins as a


stabilizer. Their fermentation-generated cysteine can be used as a
vegetarian-grade raw material for savory flavors and processing aids in
bakery applications.

The growing need for new proteins


But the vegetarian trend is also relevant due to the world’s growing
demand for protein in general, which has been a key trend on our Top Ten
Trends list for several
years. As is often noted,
the world’s population is
estimated to reach 9.6
billion by 2050, according
to the World Health
Organization, leading to
increased demand for
proteins. 22% of the
world’s population is
estimated to be older than
60 years by 2050, so
protein is also required to
combat concerns about
gradual muscle decline
through sarcopenia.

Migue DeJong, Director of Marketing at TIC Gums says: “The shift to


higher protein products started over 15 years ago, with main focus on bars
and beverages and levels around 20 and 10% respectively. The trend has
moved to higher and higher levels of proteins, reaching targets of 40%
protein in the finished product. On top of that, the source of protein has
become more diversified beyond that of dairy. Pea, almond, oat and
walnut, are just some of the various sources which pose new formulation
challenges.”

At the 2015 IFT Food Expo, Innova Market Insights reported the progress
of protein on four different platforms:
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 Dairy proteins are the most established and researched group of


proteins. They are now entering new categories. Spreads, ready
meals and purees are among the categories being fortified with whey
protein. 5.2% of global launches in 2014 contained a milk or whey
protein, up from 4.8% in 2013.
 Although soy protein is the leading plant protein used, alternative
plant proteins are demonstrating significant potential. Pea protein
applications have surged, with potato protein among the newcomers.
Benefits of plant proteins include easier digestibility, their rich micro-
nutrient content and that they can often be used in “free-from”
formulations. There was +24% growth reported in global high
protein launches with plant-based proteins (2014 vs. 2013).
 Marine sourced proteins have high potential for
mass application in the food industry, with the
main advantages including a high protein
content, sustainability and scalability. While
microalgae are still niche, the first suppliers
have entered the marketplace. New research
also shows a promising future for duckweed as a
feasible protein source.
 The first commercial products made with insect
protein have hit the shelves. However, there is
some way to go before the majority of Western
consumers can overcome the “yuck” factor.
Insects are sustainable and high in important
nutrients, but cost, texture and consumer
acceptance pose a challenge for mass
production.

Two of the most innovative ingredients on display at this year’s IFT Food
Expo were based on duckweed, from suppliers Parabel (US) and Hinoman
(Israel).

Parabel’s LENTEIN is an innovative plant protein ingredient that is 100


percent sustainable. The new ingredient is extracted from a water lentil,
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Lemnoideae, which, with its high levels of protein combined with other
macro and micro nutrients, has been described as the world’s most
sustainable and complete food source. Hinoman recently launched Mankai,
a vegetable whole-protein ingredient with high nutritional value. The
company was recently granted self-affirmed GRAS (Generally Recognized
as Safe). Mankai is an aqua cultured source of vegetable protein with
exceptional nutritional value.

One of the other new sources that is worth looking out for is fruit protein,
which is extracted from byproducts such as seeds, shells/hulls or stems.
For Henk Hoogenkamp, the author of the new
book “Plant Protein Vision: Rice Bran Protein, Pea
Protein, Soy Protein,” this category has all the
necessary elements to become the “poster child”
of all plant protein ingredients. “For starters, the
name association with the word ‘fruit’ can launch
this protein straight to the top of the protein
pyramid. The mild nutty aromas of the fruit seeds
and well-balanced essential amino acid profile has
good market potential to position ‘fruitein’ for a
variety of culinary applications. Additionally, this
would facilitate formulation of texturized fruit-only
foods, such as breakfast cereals and calorie
restricted fruit protein diets,” he claims.

Another interesting story highlighted in 2015, was the news that a Mexican
researcher is working on a project that seeks to exploit the oil and protein
of insects. PhD Daylan Tzompa-Sosa, postdoctoral fellow at the University
of Wageningen in the Netherlands, says that this particular research has
turned the team into a world leader on the field. The idea of such
companies, she adds, was to produce protein alternatives to red meat,
because cattle breeding generates a lot of pollutants, while insects can be
grown in a responsible manner with the environment.

But while duckweed, microalgae, insect and above all cultured meat
protein sources are still quite forward looking, the biggest rise in actual
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product development is occurring in pea protein and wheat protein. In


fact, Innova Market Insights has reported an almost quadrupling in new
products featuring pea protein from 2010-2014 (+361% from a 2010
base). This market opportunity led pea protein supplier Cosucra to
announce a €30 million investment in the construction of a second
production unit at its Warcoing site (Belgium) at the end of 2013. This
type of increase in production highlights the diversification of proteins,
with some also being used together with meat, in the creation of hybrid
concepts with a lower meat content and higher health perception.

New sources of protein will continue to be demanded in order to close the


protein gap. The “flexitarian” is shaping the NPD agenda and the meat
products that we eat/won’t eat in the future will be created with this
enormous demographic in mind.

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4. Processing the natural way


Age-old processes, such as fermentation, are being
given a new lease of life. They are natural and
easier to understand than modern processes, which
are perceived as artificial. In order to achieve
consumer acceptance for a new process, education
that purports the benefit will be key, otherwise
scaremongering “Franken food” style headlines will
follow.

 Clever marketing around the traditional and


artisanal nature for processing has consumer
appeal.
 A renaissance is occurring in fermented foods; in anything
from sourdough to kimchi.
 Cold pressing is one new technology that has performed well
to date and has an understandable benefit.
 The marketing battle may already be lost for the benefits of
GM foods and animal cloning.

Food processes that have been


around for centuries or even
millennia are in the spotlight, as
they bring with them a natural and
authentic image that counteracts
some of the negative perceptions
that come about with heavily
processed food. Think of
fermentation, which has
demonstrated increased product
launch activity in the soft drinks
category. The health benefits of
fermented foods are being
purported on an ever increasing
level, with western eyes opening up to exotic concepts, such as the on-
trend tea variant kombucha, or by merely taking a fresh look at the health
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benefits of sourdough bread and sauerkraut. Take kefir, for example, a


fermented dairy drink which has been around for centuries in Eastern
Europe, now gaining popularity in Western Europe and North America
(albeit with the necessary flavors added), as it is regarded as a healthy
dairy drink. There has also been resurgence in malt beverages, as an
alcohol free adult soft drink alternative.

Consumers are demanding the use of clean label ingredients [see trend
#1] and this means new opportunities for fermented ingredients with a
natural perception, such as vinegar. For example, Corbion has launched a
new range of natural, multifunctional ingredients for meat and poultry
based on vinegar that ensures food safety and enhances shelf life, yield,
taste, texture and appearance. Available as a convenient powder, these
new vinegar blends are ready to use, easy to dose and have been
developed to respond to specific challenges, including listeria control in
cured meats and shelf life extension in fresh sausages. Corbion’s Verdad
N8 and Verdad N9 ingredients can be labeled simply as “vinegar” and are
produced by the fermentation of corn sugar with specifically selected food
cultures.

A fermented advantage
Suppliers are eyeing new opportunities in
fermented foods, including Lesaffre, who as
part of its ongoing expansion strategy in
nutrition and health, announced a majority
participation in Gnosis, an Italian company
specializing in the development, production
and sale of fermentation ingredients for the
pharmaceutical, nutraceutical, cosmetic and
veterinary industries. “In Human Nutrition &
Health, we have been developing yeast and
bacteria based ingredients for nutritional
supplements and also for some drug
products. The acquisition of Gnosis fits
exactly within this strategy. It is a
manufacturer of fermentation based
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nutritionals for supplements and pharma,” Lesaffre CEO, Antoine Baule


told The World of Food Ingredients. “Our Human Care business will grow
significantly as a result of this and it is a good addition to our business.
They have a lot of complementary products derived from fermentation like
vitamins. They are also a probiotic manufacturer and it is a very good
complement with our own probiotics, or with our yeast products, using
nutritional supplements,” he added.

Sourdough techniques may also allow the creation of gluten free


alternatives to address the “free from” trend [see trend #2]. At the IFT 15
conference in Chicago, Carlo Giuseppe Rizzello, Ph.D., a researcher at the
University of Bari, Italy, presented findings that show baking bread and
other products with wheat flour rendered gluten free by sourdough
fermentation can be digested by people with celiac disease and other
gluten sensitivities. In addition, bread made this way tastes more like
regular bread than the typical gluten free breads, has an extended shelf
life, and contains more minerals, vitamins, amino acids and fiber. The
process Rizzello studied uses water, wheat flour, fungal proteases and
sourdough lactic acid, to produce hydrolyzed wheat flour that is suitable
for baking and reacts like gluten flour.

Another growing category in beverage fueled


by fermentation and sour flavors is kombucha.
This beverage has health attributes, a bold
taste and a personality of its own. Years ago,
western consumers would have thought that
this type of product was off flavored, but now
it is becoming a desired beverage seen in
most markets. Not only will you see a wide
variety of flavored kombucha beverages, now
dressings, sauces and marinades are also
using kombucha. Fruits, vegetables, herbs and
spices can be added for additional flavor.

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Asia is also serving as an


inspiration source for vast
flavors, aromas, textures and
natural craveable sensations.
Today you will see kimchi made
with a selection of vegetables
such as; radishes, napa
cabbage, carrots, celery, bok
choy, chayote and head
cabbage. This is an example of
a preservation technique being
in vogue that is applies to a
large variety of non-traditional
products; all with the traditional
and functional kimchi fermentation method as the inspiration. Sake is used
in many sauces, marinades and cocktails that are right on trend. A bahn
mi sandwich has made it to the US too. The fresh taste of pickled
vegetables can be seen in many forms and styles now. The trend of
pickling is another preservation method has gone mainstream. The added
benefit is the fresh flavors and mouthwatering combinations that provide
texture, flavor, color and balance to savory dishes and sandwiches alike.

While the probiotic market has struggled, particularly in


Europe, on the back of health claim regulation issues, an
adoption of the fermented food platform could be a
successful new route to follow, as the concept of the
benefits of healthy bacteria becomes increasingly evident to
the consumer. Clever wording around the artisanal nature of
products will be key to maximizing the marketing
advantages of natural processes.

The role for enzymes


The benefits of utilizing natural ingredients, such as
enzymes, rather than their artificial counterparts are being
promoted by suppliers and adopted by manufacturers as
another alternative. For example, acrylamide is a major
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health concern, due to its identification as a carcinogen. Novozymes


launched their Acrylaway solution globally in August 2007, initially
targeting the biscuits and snacks market, and food manufacturers around
the globe have since showed an active interest in the solution. There has
been scientific support for the ingredients potential in reducing acrylamide
in French fries and coffee too.

The main mechanism for acrylamide formation involves the amino acid
asparagine. Through a cascade of reactions, the amino acid asparagine is
converted into acrylamide during a process called the Maillard reaction
that is responsible for color and flavor developments. As Acrylaway
specifically modifies asparagine, the other amino acids and sugars remain
active to contribute to the Maillard reaction, preserving the great taste and
appearance of the final product.

Dehydration benefit
There is a clear resurgence in improved freeze-dried
snacks, while healthier products are being creating by
baking rather than frying. There is also a return to basics
with popped snacks and popcorn on the rise. New
technologies are helping the development of this trend.
One new technology on the rise where the benefit is clear
is Radiant Energy Vacuum (REV) dehydration technology.
EnWave claims to be introducing REV technology as a
new dehydration standard in the food and biological
material sectors, with benefits including, but not limited
to, a faster and cheaper method compared to freeze
drying, with better end product quality than air drying or
spray drying. To date, EnWave Corporation has signed
fifteen royalty-bearing commercial licenses with various
companies, thereby opening up eight distinct market sectors for
commercialization. In addition to these fifteen licenses, EnWave has
formed a Limited Liability Partnership, NutraDried LLP, to develop,
manufacture, market and sell all-natural cheese snack products within the
United States of America under the Moon Cheese brand. EnWave
Corporation recently confirmed that the company has extended the
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Technology Evaluation and License Option Agreement that has been in


place with Jack Link’s Protein Snacks since August 2014.

Paula (Poland) offers the Crispy Natural range of dried fruit snacks, which
are produced in an innovative drying technology, in which no added fats or
salt are added it happens during frying or baking. The technology is based
on the use of low temperature (below 40°C), thanks to which Crispy
Natural retain high levels of nutrients. The products are promoted as
crunchy and tasty, and do not contain preservatives.

Cold-brewed coffee
The use of cold-brewed coffee or cold-brewed coffee concentrate is an
increasingly popular way of distinguishing a brand in the category of RTD
coffee. Innova Market Insights tracked 35 “cold brewed coffee” products in
the first 10 months of 2015, with 38 tracked in 2014. Just 2 launches with
these words were tracked in the whole of 2012. Also known as cold press,
cold-brewed coffee is brewed without heat for a long period of time. Cold
brewing, at a local, often artisan level, is paving the way for an entire new
category within the RTD coffee beverage segment.

Starbucks notes how traditional iced coffee is made by brewing hot coffee
at double-strength and pouring over ice, while iced espresso beverages
such as an Iced Americano are made by combining espresso shots with
water and ice. The Cold Brew crafting method – which never comes in
contact with heat – creates a naturally sweet, smooth iced coffee. Just
before summer, Starbucks expanded its popular small-batch Cold Brew
iced coffee as a core menu item in participating stores across the US and
Canada. Starbucks baristas freshly grind Starbucks Cold Brew Blend
coffee, created specifically for the cold brewing method, and then steep it
in a container of cool water for 20 hours. This artisanal process results in
cold coffee concentrate that baristas measure and top with water and ice
and serve unsweetened.

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A rise in cold pressing


Newer technologies, such as high pressure processing (HPP)
and pulsed electric fields, may succeed in the consumer
mindset, as it maintains most of a product’s valuable
nutrients, while avoiding fast degradation. HPP is an example
of a technology that is beginning to gather momentum,
particularly in the juices space. The challenge is unfamiliarity,
explaining the technology and benefits to consumers.

But HPP has already been proven to be popular in the juice


drink category, where launch activity multiplied seven-fold
from H1 2011 to H1 2015. “Cold pressed” is the marketing
term being applied for these juice products. Cold pressing,
which involves chopping then crushing produce without the
use of heat yields very nutritious, natural, and delicious juice. The
dilemma is that unpasteurized juice without preservatives has a minimal
shelf life of up to 3 to 5 days. To increase shelf life and maintain nutritional
value, some juice brands are utilizing HPP to replace pasteurization and
preservatives to make these healthy beverages last a full month and
sometimes longer.

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When assessing the global picture, cold pressed juice


product launch activity tracked increased by 84% in 2014
from 2013. The compound annual growth rate for product
launch activity for the last 5 years is 62.6%. While fruit
features in over three quarters of global cold press juice
product launches tracked in 2014, vegetables are also
found in over 40% of products, which appears indicative of
an overarching trend towards adding vegetables [see trend
#5].

North America is the largest market in terms of new cold


pressed juice drinks. This is down to innovation from some
major players such as Starbucks, who have been involved
in projects such as Evolution Fresh and have somewhat
taken it into the mainstream as a result. Europe has emerged as the
second largest market and accounted for more than one quarter of global
launches in 2014.

Errol Raghubeer of leading high pressure processing


(HPP) supplier Avure Technologies noted at Anuga
FoodTec in April 2015, that with its expanded shelf life
capabilities, HPP can help prevent costly waste and food
loss that squander the planet’s valuable resources, and
cost food producers, retailers and consumers billions each
year. And, its reduced energy requirements lessen HPP’s
impact on global warming – up to 20% lower than
thermal processing. On the food side, healthy, nutrient-
rich HPP foods and beverages help avoid negative health
impacts and associated medical costs.

The acceptance issue


New technologies will be an issue for marketing. Beyond the scientific
challenges involved in creating cultured meat [see trend #3], the key
issue will be consumer acceptance.

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Wim Verbeke, professor of Agro-Food Marketing and Consumer Behavior in


the Department of Agricultural Economics at Ghent University led a team
that looked at the opinions of 400 representative consumers in the
Flanders area of Belgium into artificial meat, in December 2013, but only
recently analyzed that data at a detailed level. He stressed that the
consumer studies are hypothetical, considering that the product does not
exist yet at a consumer level. Verbeke explained that responses varied,
depending on how much information was given about the
technology and the product; with an acceptance band
ranging between 20-50%. “For example, if we really
stress the environmental and animal welfare benefits, up
to 50% of a sample of consumers indicates that they
would be willing to accept this type of product. If we give
people very basic information, where we explain that we
are referring to ‘meat that has been grown from animal
cells without involving the killing of the animal,’ we see
that only about 20% of the sample say that they are
willing to consider eating it,” says Verbeke. In one of the
first consumer focus group studies, Verbeke’s team
conducted interviews and discussions in Belgium, Portugal
and UK, where commonplace responses included barriers
such as “playing god” and “messing with nature.”

The technology will of course also come with obvious comparisons to


genetic modification, on the part of consumers. “We also see that when we
discuss this technology with consumers, they rapidly draw comparisons
with biotechnology. We all know that the debate around this has gone
completely wrong, especially if you compare the European and American
markets. One of the key issues here will be to clearly demonstrate the
benefits of this cultured meat compared to what’s out there,” Verbeke
noted.

Fear of the new


As is very clear, particularly in the EU, concerns about new technologies
that are not well understood are huge, and animal cloning for food was
recently given major thumbs down. In September 2015, the European
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Parliament extended the Commission’s initial proposal


to ban animal cloning to include the cloning of all farm
animals, their descendants and products derived from
them, including imports into the EU, in a vote. The
legislative report was adopted by 529 votes to 120,
with 57 abstentions. The EP points to findings by the
European Food Safety Authority (EFSA) from 2008 that
the health and welfare of clones are adversely affected,
often severely and with a fatal outcome. The resulting
low efficiency rates in cloning (6 to 15% for bovine and
6% for porcine species) make it necessary to implant
embryo clones into several dams to obtain one cloned
animal. Furthermore, clone abnormalities and
unusually large offspring result in difficult births and
neonatal deaths. Monique Goyens, Director General of The European
Consumer Organisation welcomed the news. “MEPs have fixed the flaws in
the inadequate draft law, which failed to ban the import of clones’
descendants or food deriving from these animals. Banning food from
clones whilst allowing food from their descendants to reach consumers’
plates would be fooling the 70% of Europeans who discourage cloning for
food supply,” she commented.

Cloning for food purposes will likely be off the agenda for years, but
consumers and regulators hold a much greater preference for age-old
technologies with tradition and clearly recognizable benefits. Fermented
foods will be one platform to look out for in NPD in the months ahead.

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5. Green light for vegetables


The low consumer intake of vegetables,
despite continuous policy
recommendations, can be seen as an
exciting opportunity for creative
manufacturers. Consumers know that
they need to eat more greens, but shy
away because of bland taste
expectations. Children can be
encouraged to eat more through hidden
vegetable products, while the rise of
fusion smoothies and high vegetable
pastas, indicates that adults can also be
encouraged to increase their intake.

 Strong increase in vegetable applications for non-typical food


& beverage products.
 Creative fusion with fruits is allowing for good tasting high-
vegetable content products.
 Renewed interest in specific vegetables such as kale and
cauliflower, for flavor or health reasons.
 Strong innovation in fruit products and a look at more exotic
options.

Vegetables are beginning to appear in diverse products, particularly in the


beverage aisle, where vegetable smoothies no longer seem to be products
for the niche new-age consumer. In fact, the number of smoothies tracked
with vegetables is growing significantly, with just 35 global launches
recorded in the first half of 2011 and 170 tracked in the first half of 2015,
following several years of strong growth. Innova Market Insights reported
a +29% increase in vegetables in 2014 from 2013. The leading vegetables
for 2014 were: carrot (37%), vegetables not specified (20%), tomato
(17%), beetroot (12%), cucumber (7%), celery (6%) and kale (5%).

If we look at the increase in US product launch activity tracked with


vegetable flavors for selected sub-categories (2014 vs. 2013), we can find
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the following: +74% juice & juice drinks +32% savory biscuits/crackers
+29% main dishes +20% pizza and +13% ready meals.

A broadening of focus
Initiatives in recent years have mainly
focused on getting more vegetables into
our children’s diets, but this is now
broadening out to focus on adults and the
whole family.

The percentage of total F&B new product


launches tracked with one or more
vegetables in the ingredient list has
increased from 25% in 2011 to 30% in
2015YTD, and NPD seems to be speeding
up in terms of number and variety of
launches.

Some of the stats for growth in vegetable applications for sub-categories


are truly astonishing, although growth is often coming from a small base.
If we look at the increase in global product launches with vegetable flavors
for selected sub-categories (2014 vs. 2013), we can see the following:
juice & juice drinks (+330%), yogurt (+200%),
bread & bread products (+45%), savory
biscuits/crackers (+24%) and chocolate (+22%).

As mentioned earlier [see trend #4], cold pressed


juices are often made with vegetables. For example,
recent launches have included Innocent Easy Greens
Fruit And Veg Juice, which contains cucumber, celery
and spinach juices, as well as apple. Other new
launches with vegetables include Savse Super Green
Smoothie, also from the UK and Antidote Juice
Liquid Salad Juice from Germany, which contains
fresh kale, romaine lettuce, celery, apple, spinach,
parsley, ginger and cucumber.
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Smoothies are on trend


The trend in vegetable smoothies was particularly
pronounced at this year’s Anuga in Cologne.

Through the introduction of mySmoothie Veggie, the Danish


beverage company has chosen to go green, aiming for a
good natural approach in bringing vegetables into their
classics range. mySmoothie VEGGIE – made in Sweden –
contains a strong base of natural quality ingredients and is
offered in either Kale or Beetroot variants.

John Wohlk, CEO of myGoodness says: “Our end consumer is


not the hardcore who wants to typically make vegetable
drinks at home, but rather the second movers. So we have to
really take care of the taste. Kale is really bitter and many do not like it in
a drink, so you have to work around the flavor. So we have added
peppermint, just to take the top off the kale. We have been working
closely with our food suppliers in how to get the best mainstream taste in
a vegetable smoothie and still have a high content of vegetables inside.”

Also at Anuga, McCarter extended its Rio Fresh cold aseptic juice range,
with the launch of new vegetable products in 200ml and 500ml PET
packaging. From April 2015, Rio Fresh
Green Smoothie Spinach has been offered in
200ml PET and 500ml PET and in August
2015, two new SKUs were added: Violet
Carrot and Green Smoothie with Broccoli.

Hidden vegetables
Children can be very resistant to eating their
vegetables, and there is now a wide range
of children’s meals featuring “hidden
vegetables,” where they are pureed and
blended with other ingredients, so that their
inclusion is not immediately obvious. Some

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of the smaller specialist baby and


children’s food brands have been highly
active in this area, including Annabel
Karmel in a number of countries and Little
Dish in the UK, which introduced a “hidden
veg” tomato sauce containing vegetables.
This has been sold on its own in a pot as
well as used in selected recipes, most
recently what is claimed to be the UK’s first
“healthy” chilled pizza range aimed at
toddlers.

Specialist children’s brand Kidfresh has


also adopted the concept for all its recipes
in the US, while mainstream frozen foods company Birds Eye launched its
Lil Fishes Hoki & Hidden Veggies fish and vegetable nuggets in Australia.

But moving away from the children’s market, Orkla of Denmark launched
its Pastella Vegetable Pasta range of fresh pasta with a 40% vegetable
content, featuring Carrot, Broccoli & Peas and Cauliflower options. Claimed
to be a category innovation, the three styles of pasta feature the taste and
texture of standard fresh pasta, but with the high vegetable content.

A pasta applications rise


While fresh pasta with a “hidden”
vegetable content may be an
innovation, a review of new
product activity recorded by
Innova Market Insights reveals
that the dried pasta market has
been seeing this type of launch for
some years, led by the US, where
ConAgra’s leading pasta brands,
including Golden Grain, Mueller
and Ronco, all feature a range of
Hidden Veggie options with the
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color, texture and taste of standard lines. Muellers, for example, has a
range of spaghetti and pasta shapes with added vegetables such as
carrots, sweetcorn and squash, making up one full serving of the daily
requirement of vegetables per portion.

To accompany pasta, there has also been


ongoing activity in hidden vegetables in pasta
sauces, particularly using a tomato base with
additional vegetables mixed in. In the UK,
Mars’ Dolmio and Mizkan’s Ragu (formerly
owned by Unilever) both have Smooth Hidden
Vegetable options in their glass jars ranges,
featuring at least one portion of the
recommended 5-a-day in a smooth tomato-
based sauce with added vegetables.

Trending vegetables
One vegetable that is certainly on the rise is cauliflower; with a 22%
increase reported in global product launch activity tracked containing it
(2014 vs. 2013). Recently tracked products with cauliflower include Cauli
Rice Mediterranean Lower Calorie
Rice Alternative (UK), a lower
calorie rice alternative made
from fresh cauliflower grains with
sun dried tomatoes, green olives,
Mediterranean vegetables, herbs
and spices, in a microwaveable
plastic pouch. Woolworths
Carbclever Cauliflower Salad
(South Africa) is made with
cauliflower instead of potato, and
is tangy and creamy with a
pleasant crunch. The product is
promoted as: “a great potato
salad substitute.”

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Sometimes snacks are just being offered as


healthier alternatives, with a clear rise
reported in kale chips in recent times, with
new products being promoted at events such
as the US Fancy Foods shows.

In Germany, Kuehne is set to launch a new


line of vegetable chip products, based on a
blend of different vegetables in a bag. A
variety with herbs features a blend of
beetroot, parsnip and sweet potato. Paprika
and sea salt variants are also available. The
product line, which is being launched in
November, features gluten free and vegan
claims.

Of course ingredient suppliers have responded to the vegetable trend too.


For example, fruit and vegetable ingredient supplier SVZ has launched a
premium quality, clear carrot juice range. Colorless and with minimal
taste, the new juice helps reduce sugar and boost the nutrient content in
beverages, without impacting on overall flavor and color. Mia Schellekens,
product development manager at SVZ said: “There is a notable increase in
demand for healthier ingredients with manufacturers turning towards
vegetables for use within their formulations.

However, while the nutritional profile of a


vegetable in a drink will appeal to the
consumer, the associated flavor or color may
not. SVZ developed the clear carrot juice and
concentrate with customers to enable them to
stay ahead of the latest market trends and still
produce a flavorsome beverage that looks as
good as it tastes.”

To complement its extremely broad and


detailed portfolio of fruit ingredients, Döhler
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now also offers a comprehensive and application-specific portfolio of new


vegetable ingredients, including options as diverse as tomato, pumpkin,
sweet potato, cucumber, black carrot, sweet pepper, rhubarb and
beetroot. As well as premium chunky purees and cloudy and clear juice
concentrates, Döhler also offers a large portfolio of natural vegetable
flavors.

Value added fruit


While there are ongoing issues with
persuading children and adults to eat
more veggies, this does not seem to be
such a problem with regard to fruit
consumption. On the contrary, the use of
fruit in food products is often seen as
adding value or giving a more indulgent
image, as well as providing health
benefits. Fruit is increasingly featuring in
product formulations in sectors such as
breakfast cereals, snack bars,
confectionery and even yogurts; while
fruit snacks and fruit smoothies are also
becoming increasingly popular and sophisticated.

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In the relatively mature breakfast cereals


market, the use of added-value
ingredients particularly fruit, but also nuts,
chocolate and grains, has been key to
driving sales in the dynamic adult
premium sector, promoting a healthy,
indulgent image.

The cereal bars market is also seeing an


increasing range of premium and indulgent
inclusions, led by fruit. The number of
global cereal bar launches recorded by
Innova Market Insights has nearly doubled
over a 5-year period and is continuing to see double-digit growth. Fruit is
helping to drive this growth; with 55% of US cereal bar launches featuring
fruit in the 12 months to the end of June 2015, for example, led by
summer fruits and berries. There has been a growth in the use of berries
in recent years, with cranberries, blueberries and cherries now all
particularly popular in terms of adding value in both the health and
indulgence arenas.

In beverages, there has been resurgence in


tropical flavors, with the recent launch of Red
Bull Yellow Edition with tropical fruits, following a
successful limited edition launch in July and
August of 2014. The introduction comes as the
number of soft drinks products with a tropical
flavor continues to rise steadily. Innova Market
Insights tracked 468 products with this flavor in
2014, compared with 202 in 2008.

While fruit consumption appears to be rising and


the addition of fruit to a whole range of foods
seems to be adding a treat image, as well as
health benefits, moves to encourage vegetable
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consumption appear to be more problematic. Vegetables do seem to


perhaps be more acceptable when included in products such as snacks,
compotes and smoothies in combination with fruits, but activity for this
type of product remains relatively limited. Manufacturers are clearly
interested and this is helping NPD activity.

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6. Creating a “Real” link


The rise of the Millennial consumer as a key
product development target group, has led to
the rise of marketing a story behind a brand.
In turn, there are growing calls for a back to
basics approach to reestablish links with
“real” food. “Real” is about telling a story
about where the product comes from and
goes beyond certification alone. Consumers
want to know that the product is local,
sustainably sourced, or created by well
treated and well-paid workers, if it comes
from a distant land. Staple foods from a
specific region have a marketing advantage
over generic staples.

 Well-connected Millennial consumers are sensitive to cause


related marketing, as they look for the stories at the other
end of the value chain.
 An increase in marketing words such as “real,” “local” and
“artisanal,” are evident on products with an interesting story.
 Focus on products that come from a very specific region, with
a highly authentic flavor.
 Belief among consumers that products that are as close as
possible to nature are preferable or
healthier.

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One of the biggest consumer learnings


from the 2014 horsemeat scandal was
just how far removed we have become
from the food that we consume.
Supply chains have become dizzyingly
long and complex, with rising concerns
about a new generation of children
growing up, without any concept of
where their meat or milk actually
comes from. A link to “real” food
needs to be reestablished in the
mindset of the consumer, with a
return to high quality, locally sourced
food. It is about creating a real
connection to the source. Consumers want to know where the product
comes from in terms of origin, processing, who made it and who delivers
the product.

The key target group for these types of products is Millennials, i.e. those
consumers born between the early 1980s and 2000s. Paul Janthial, Food &
Beverage Business unit director at Naturex notes that millennials are
expected to account for more than 75% of growth within the food market
over the next decade
(Source: Goldman
Sachs equity
research, April 19,
2015).

According to AC
Nielsen, Millennials
comprise about one-
third of “Opinion
Elites,” an influential
subset of the public
who are highly
informed, engaged
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and active when it comes to social and business issues. Around the world,
Opinion Elites of all ages are increasingly inquisitive and knowledgeable
about the companies they choose to buy from. However, just as
Millennials' shopping, dietary and financial decisions differ from those of
older generations, younger Opinion Elites (aged 18-34) focus on different
qualities than their older peers when assessing a corporate reputation. The
good news for organizations, is that these Millennials are more receptive
toward and give greater credit to companies across different locations and
industries – provided their other priorities are met.

Janthial notes: “Millennial consumers are increasingly drawn to


‘homemade,’ natural products and are looking for products backed by
stories and authentic flavors. To capture this category of consumers,
products must convey the key messages of health, transparency and
authenticity. The emerging trend for craft sodas, made with more natural
ingredients like colors, flavors, and botanicals is a good illustration on how
soft drink manufacturers have adapted their products to better fit with the
demands of millennials.”

Regine Lueghausen, Marketing Director Flavors EAME, International


Flavors & Fragrances notes how being a Millennial is more than just a
simple demographic, it’s a mindset. Many of these men and women in
their 20s or early 30s, choose to delay marrying,
buying a house or having children. They prefer
sharing a car instead of owning it and invite
strangers to their homes via online food or home
sharing platforms. “As they grow older, they
consider ‘growing up’ a choice rather than a fact
of life – ‘adulthood optional.’

Nevertheless Millennials take responsibility for


social causes, build communities and don’t shy
away from start-up entrepreneurship. As
consumers they prefer ‘products with a story,’
e.g. on pack details explaining where ingredients
were farmed or when donations to a social cause
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are made. So truthful, easy to understand storytelling linked to their


brands is a new tool for manufacturers,” she notes. A story can mean that
foods are sourced in a sustainable way without the exploitation of the
farmers or workers at the source.

In fact, new product launches tracked with an “environmental


friendly”/”sustainable” positioning have increased by +85% in the first
semester of 2015, compared to the same period in 2012. Environmental
and human well-being claims are hot topics in categories such as chocolate
and coffee. In the first half of 2015, 38% of chocolate blocks launches
tracked had some sort of “ethical” positioning. There were also high
numbers reported in coffee (23%) and tea (23%). Fairtrade and UTZ
certification platforms were particularly common among these categories.

The downside of the excessive use of such certifications is that they lose
their power of differentiation, but also criticism on the institute behind the
certification can damage the credibility of all brands. This is an opportunity
for brands that have a unique ethical story that goes beyond certification
alone and gets to the heart of the product’s creation. For example, the
“slave-free” chocolate brand Tony Chocolonely, which has enjoyed strong
success in the Netherlands, is not only creative in new product concepts,
but its core identity and story of origin makes them stand-out among
other chocolate brands.

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A sense of real marketing


Particular marketing words matching the topic are on-trend: with the word
“real” itself up +60% in 2014 compared to 2011, in terms of new product
activity. To either play into the trend of local food, create trust among
consumers, or simply place the product as more premium, “origin” claims
are up +185% in the first half of 2015, compared to 2011. Since 2012,
there has been a clear surge in the number of global NPLs tracked,
positioned as authentic, hand or homemade/brewed, craft (especially in
beers). Sauces and seasonings, alcoholic drinks, ready meals are top
categories for the usage of such claims.

Campbell’s (Australia) specifically focuses on the word “real” in its naming.


Campbell’s Real Soup Bases are claimed to allow consumers to create a:
“tasty and authentic soup in less than 30 minutes.” “Nothing beats a
warming soup on a cold night and the special mix of stock, herbs and
spices in Campbell’s Real Soup Bases takes the hard work out of making
flavorsome soup,” the company writes.

Guampa Refreshing Energy, which was launched at Anuga 2015, is


exclusively sweetened with Real Stevia from Paraguay, which is grown in a
sustainable and environmentally friendly way.

According to the
company: “It is the first
energy drink in the
world that contains no
sugar and no artificial
sweeteners.” Guampa is
enriched with vitamin B
and caffeine, but this
“Real Stevia” marketing
is interesting, as it
offers some marketing
benefit over the use of a
generic stevia product
from China.
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Back to reality
There is a belief among consumers that products that are as close as
possible to nature are preferable or healthier. We noted in our 2015 trends
list, how products such as natural butter are enjoying resurgence as a
result, at the expense of industrially created products like margarine.
Consumers want a real link with the past – in terms of diets/eating habits,
with the type of products that grandma would have made.

The issue of real food is also about reestablishing a link to old staples like
pasta that have fallen out of favor through the rise of modern trends, such
as “free from” [see trend #2]. Consumers are increasingly perceiving
pasta to be a low nutrient, high calorie carrier for tasty sauces and are
replacing it by spiralizing vegetables at home (e.g. sweet potato, zucchini),
which has been a clear trend in markets like the UK.

The Guardian recently reported how Massimo Bottura, the chef behind the
three Michelin starred Osteria Francescana in Modena, is an active part of
a campaign aimed at rehabilitating the Italian favorite. Bottura is teaming
up with food experts to hail a sensibly-sized portion of pasta as a
sustainable and healthy meal. The effort is part of a drive to counter the
messages of paleo and gluten free diets. Bottura advocates a new way of
thinking about pasta which calls on chefs to work with farmers and the
industry to make good-tasting pasta using alternative grains such as
quinoa. Bottura said the key to maintaining a healthy lifestyle was not only
to eat pasta, but also to eliminate as many animal fats as possible and to
use more olive oil, fresh herbs and seasonal fruit and vegetables.

A fresh look at old ingredients


The “real” trend has created opportunities for other age-old ingredients,
such as oat beta-glucan, which is one of the few ingredients to have an
approved European Food Safety Authority (EFSA) health claim. “High fiber”
products are one category on the rise in the midst of a sleepy functional
foods sector as a whole that can benefit from this “real” link, as consumers
do tend to understand the presence of fiber in grain-based foods and the
benefits. High-fiber, source-of-fiber or added-fiber claims were used on
nearly 3.6% of global food and drinks launches recorded by Innova Market
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Insights in the 12 months to the end of June 2015, rising to 4.8% in North
America and over 9% in Australia/New Zealand, but falling to about 2% in
Asia.

As manufacturers
launch new
products to meet
demand in the
functional
beverage
category, fiber is
rising to the top
of their ingredient
lists, notes Heidi
Cullip, Marketing
Manager, EMEA,
Innovation & Commercial Development, Tate & Lyle PLC, which offers
adverse fiber portfolio. “In fact, there was a 56% increase in beverages
launched containing fiber globally from 2010 to 2014. And while there are
many fiber ingredients that may be appropriate for this category, oat beta
glucan is an ideal option because of the many nutritional benefits it
provides,” she explains.

Fazer Mill & Mixes announced plans to present new


oat ingredients at FiE in Paris in December 2015. The
newly available product ingredients include oat beta-
glucan, oat protein and oat oil, which are all natural,
plant based and good for the heart are positioned as
excellent ingredients for a wide range of products.
“Our healthy and tasty oats, both conventional and
organic, are natural superfoods with four health
claims approved by EFSA. They enable boosting
nutritional contents in food applications and can
significantly improve the positive health effects in
them,” the company claims.

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Clearly fiber claims can be associated with many types of food and drinks
products, but two-thirds of US launches featuring this type of positioning
were in one of four categories – cereals, bakery products, snacks and
ready meals/prepared foods. Cereals used the highest number of fiber
related claims overall with about a quarter of the total and, as a result of
the relatively low numbers of launches in the category, these accounted
for over one-third of total cereals introductions, featuring both breakfast
cereals and cereal bars, many of which are also marketed on a
wholegrains platform.

Amid the real and high fiber trend, one of the most interesting launches of
2015 was the introduction of Kellogg’s Origins; a line of six cereals,
granolas and muesli. The lineup features blends of ancient and traditional
grains – oats, barley, spelt, quinoa, and KAMUT Brand Khorasan wheat.
Their ingredient supplier Kamut International notes how KAMUT wheat is
an organic, non-GMO ancient grain that has never been modified or
altered in any way. It is high in fiber, protein and lipids, and offers higher
amounts of nutrients compared to modern wheat, including a high content
of antioxidants. It has been found to reduce inflammation and improve
conditions of those suffering from IBS (irritable bowel syndrome) and
heart disease.

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Heritage as a defense strategy


“Real” can also be about marketing, by highlighting the heritage of a
product. This can be a very necessary strategy in the wake of a food
scandal. Nestlé had a very difficult year in India, where it pulled hundreds
of millions of packets of its Maggi noodles from store shelves, after
regulators alleged the product contained levels of lead above permissible
limits. Nestlé maintained its noodles were safe to eat and that is own tests
hadn’t detected illegally high-levels of the toxic metal. Confronting fears
about its Maggi 2-Minute Noodles head on, the company posted a series of
online ads on YouTube, in which actors playing mothers talk of the guilt
they felt for feeding their children the popular product. “When questions
were raised about Maggi on TV, in newspapers, by the neighbors, I
thought, ‘How could this be possible?’ My mother fed me Maggi as a child.
And I’ve also fed Maggi to my children. Were both mothers wrong?” one
woman asks in the first of Nestlé’s three online spots. Commenting on the
roll out of MAGGI Noodles, Mr. Suresh Narayanan, Chairman and Managing
Director of Nestlé India said: “MAGGI Noodles has very special
relationships and strong emotional bonds with its consumers across the
country and I am confident that our bonds will grow even stronger.”

Going retro for reality


Playing into consumer’s nostalgic
sentiments, big brands are bringing back
old products that were in popular demand.
General Mills relaunched French Toast
Crunch to the US market, whereas Coca
Cola has brought back Surge soda. Big
brands are also playing off the strengths of
long existing brands and products,
leveraging the brands into new products
and categories. In the Netherlands, Mars’
Twix bar was known as “Raider” until
1991, and in an example of retro
marketing, the company has brought back
the original brand name for a limited time.
Going back to the roots can also be done
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by presenting products in classic packaging, to illustrate heritage. For


example, 7UP has been offered in a retro pack in many markets
throughout 2015, where some of the classic packages for the brand over
the years are being used once more.

In the US, Pepsi launched a new brand called Caleb's Kola in late 2014,
which is made from cane sugar, kola nuts from Africa, spices and a hint of
citrus. The cola is named for Pepsi inventor Caleb Bradham. Now the
company is set to launch a new soda brand called 1893, which is an
apparent reference to the birth year of a predecessor to Pepsi-Cola known
as “Brad's Drink.” Few details about the launch are available so far, but
the company filed a trademark application for the phrase “1893 From the
makers of Pepsi-Cola” in August 2015.

In the UK, Walkers held a vote to revive a retro flavor from their back
catalogue of favorite crisps, called the “Bring It Back” campaign.
Consumers could vote to bring back one of five retired flavors, which were
all returned for a period: Beef and Onion, Cheese and Chive, Barbecue,
Lamb and Mint and Toasted Cheese. Walkers unveiled Beef and Onion as
the winner, receiving almost 480,000 votes from a staggering 1.3 million
in total.

The use of real ingredients


The “real” trend has also inspired innovation at the supply
side. For example, to help the food industry achieve authentic
beef flavor profiles, which consumers love that much all
around the world, Symrise developed “discover beef,” a new
generation of beef flavors and top notes for use across a
broad range of culinary applications. “With its sensory and
consumer insights tools, Symrise made sure that discover beef
truly meets consumer and industry expectations for beef
dishes from all over the world. This includes to also know
about locally relevant preparation methods, ingredients and
trends,” the company writes.

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Scelta Mushrooms recently launched Scelta Taste Accelerator (STA), which


uses the natural power of umami to increase flavor – as alternative to
MSG/I+G/AYE – and reduces sodium up to 50% in processed foods,
without compromising taste and function. Although made from mushroom,
Scelta has succeeded to reduce the distinct mushroom flavor from these
powders and concentrates, without using chemical processes. The product
can be declared as “natural aroma” and can be used in many different
savory solutions. It won the overall FiE 2015 award in Paris.

These ingredient solutions show the need for customization to local


demands and how you can go back to the origin to discover the real taste
of an authentic foodstuff, or indeed use authentic flavor for a natural and
clean marketing advantage.

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7. Small players, big ideas


Big companies used to have a few major competitors, now they
have hundreds of small ones. Many of these small players only do
one thing, but they do it well, which holds high appeal for
discerning millennial consumers. Because they are less restricted
in their development process, small companies are getting their
ideas out much quicker and serving as
inspiration for the big boys, who are resorting
to copying them, or just buying them out
altogether.

 High food innovation interest from Silicon


Valley start-ups and small innovators in
general.
 Creative thinking in online supply-chains
to consumers e.g. drone delivery.
 Growing opportunity in “craft” products
with a clear heritage.
 Major manufacturers’ copy or buy-out
successful small players.

Turning an ocean liner is a


challenging task, as is shifting the
innovation strategy at a multi-
national food or beverage
company. Decisions are slow, as
both financial and embarrassment
risk is high. Small players have
always been more innovative, but a
recent trend has been just how
interested their giant competitors
are in what they are up to. The
small players are truly functioning
as thought leaders, with innovators
being quickly copied or snapped up
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altogether. This is particularly relevant in the adoption of innovative


ingredients, including ancient grains, alternative proteins and novel
sweeteners. They can also be the first to demonstrate new technologies,
with Skype’s recent creation of an online delivery system technology,
illustrating what future retail can look like.

Consumers are experiencing a wave of nostalgia [also see trend #6]:


“going back to what was good.” Additionally, craft and home-made brands
are creeping up through to mass retailers in all categories. Simplicity,
quality and nostalgia are key terms, while you can also see the rise of
burger bars, real food, nothing new or too fancy, just great quality. And
they often serve old fashioned diner style milkshakes. There is a rise in
specialty and gourmet stores, which offer gourmet hot dogs and gourmet
popcorn.

Small players in growing


niches
The big overall theme at Anuga 2015
in Cologne was how niches such as
“free from,” “vegan,” “organic” and
“artisanal” are now moving into the
mainstream. Even if the major food
companies haven’t adopted them yet,
smaller manufacturers are serving as
thought leaders. From snacking
concepts with algae, to savory banana
chips, to edible bowls that serve as a
more sustainable alternatives; ideas
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were widespread. The incorporation of trending ingredients such as chia,


seaweed and oats into diverse applications was also noteworthy, as was
the use of olives in the beverage space. While small companies may still
only represent a low percentage of overall sales, the industry is reversing
the consolidation of the past 20 years. There are going to be many more
small players on the market and the big boys will have to look out for the
growing number of them.

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Filling a specific need state


One of the unlikely success stories of
2014 and 2015 has been the rise of
small start-ups, many from Silicon
Valley (e.g. Impossible Foods, trend
#3), who are meeting the demands of
millennials with highly simple solutions
to address a specific need. The best
case in point is Soylent, a tasteless,
nutrient-packed meal replacement that
has taken off among time-starved
young urban consumers. The company
was started with a crowd-funding
campaign to raise $100,000, but the company was recently reported as
having raised $24.5 million to date, with funding from various venture
capital firms.

Invented in 2013 by Rob Rhinehart, then 24, Soylent isn’t meant to be a


health drink, but rather a geek-friendly beverage made of soy protein and
edible algae oil, with all the vitamins, minerals, fats, carbs and protein that
the body needs – and none of the time wasted on the actual buying,
preparing and eating of food. The company
recently introduced “Soylent 2.0,” which is a
vegan, soy-based nutritional drink that’s now
shipping in a ready-to-drink package.
Previously, Soylent sold its $3-per-meal shake
in the form of a powder that shipped with a
free mixer and scoop.

A foodservice shift
The foodservice sector has seen a particularly
major shift in recent times, with millennial
consumers shunning the traditional fast food
big boys for smaller players with more
artisanal quality products. From salads to

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sandwiches and breakfast cereals, regular packaged food items are


appearing in the foodservice channels.

Specialty stores do only one thing, but they do it very well and are
enjoying success as a result. The popularity of specialty stores and
restaurants is closely related to a couple of consumer sentiments: the
desire for real, quality food, at affordable prices, mixed with a sense of
nostalgia. Globally, there is a rise in the number of chicken or meat only
restaurants, smokehouse restaurants, burger bars, and now even
breakfast cereal bars, sandwich only bars. A great example
of this is the Five Guys fast-casual restaurant chain, which
rules the US “better burger” category (hamburgers in the
US$8 range).
The anticipated backlash against the moves from these
small players is now occurring. McDonald’s is struggling to
regroup in the wake of several disappointing quarters, but
the burger giant appears to have conceded that following
the small guys is the way forward. McDonald’s recently
announced the introduction of the Signature Collection in
the UK, a line of new premium burgers available in three
flavors: The Classic, The BBQ and The Spicy. The Signature
Collection was created by McDonald’s team of food
specialists and their prestigious Chefs Council. This range
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of premium burgers features a thicker beef patty made from 100% British
& Irish beef and served in a brioche-style bun.

As part of the ongoing restaurant transformation program, McDonald’s has


also introduced new lay-outs and increased technology to the kitchens,
meaning all iconic menu items will be made specially to order for
customers. The trial is taking place in 28 restaurants in London and the
South, and is set to roll out across the country next summer when the
Signature Collection will become a permanent item on the menu in around
400 already refurbished restaurants.

If you can’t beat ‘em


Of course another strategy to dealing with the
small boys is simply to buy them. This is
particularly the case in the rapidly consolidating
beer sector.
For example, Anheuser-Busch, recently announced
that it will acquire Los Angeles-based Golden Road
Brewing, the largest craft brewer in the city. The
deal will enable Golden Road to bring more of its
fresh, canned beer to the brewery’s local market
and to introduce its unique hop-forward beers to
more consumers. The partnership will build on
Golden Road’s commitment, since 2011, to bring
fresh beer to the market, in the most sustainable
way possible.

In September 2015, Heineken announced the acquisition of a 50%


shareholding in the Lagunitas Brewing Company, the fifth largest craft
brewer in the United States by volume. Lagunitas owns a stable of award-
winning brands, including Lagunitas IPA. Lagunitas IPA is the largest India
Pale Ale brand in the United States and has become a benchmark for the
category.

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Sometimes it is a matter of “if you can’t beat them, join them,” but on
other occasions a suitable strategy could be “if you can’t beat them, buy
them.”

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8. Beyond the athlete


Major sports nutrition manufacturers have realized
that they can only get so far in targeting the
saturated niche of bodybuilders, elite athletes and
fitness fanatics in western markets. The benefits of
sports nutrition components such as protein and
energy ingredients can be exploited by all
demographic groups and manufacturers are
therefore diversifying on the “healthy living”
platform for everyone. Previously specialist product
portfolios are expanding into new categories, while
some major manufacturers are launching products
that in the past could have been seen as the
athlete’s domain.

 Regular consumers understand the benefits of sports


nutrition products, as part of a healthier living lifestyle.
 Demographic changes have resulted in a demand for protein
fortification.
 Role for innovative suppliers in offering taste masking
solutions to cover nutraceutical off-notes.
 Products in unlikely categories such as bread are given a
sporty makeover.

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Products with sports nutrition


attributes are no longer the
reserve of the athlete, or indeed
the weekend warrior. The high
protein, energy enhancing
properties of traditional sports
products are benefits required
by all demographic groups to
varying degrees; whether it is
the office worker looking for an
afternoon energy boost, or the
elderly consumer needing to
boost their protein intake, in
order to counteract declining
muscle mass.

But mainstream consumers are far more demanding from a taste


perspective, than bodybuilders or triathletes. So rather than consumers
opting for these sports nutrition products, manufacturers are reaching out
to them, with better tasting sports products that are presented in a
friendlier way, so that sports nutrition can be truly suitable for all.
Demographic changes are also helping to
inspire this. It is well documented that a
rising aging population will require
increased protein to tackle sarcopenia
concerns. But a newer change, such as
China’s removal of its 1-child policy will
also have an impact; with a potential new
baby boom occurring there, that will
demand a greater amount of infant
formula.

Overall, it can be concluded that due to the


rapidly growing consumer base that are
health aware, fitness enthusiasts or living
an active lifestyle, the market for specific functional products is growing,
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and crossing over. Sports nutrition is moving


away from focusing solely on powders, bars
and shakes to offer a world of real foods that
are high in nutrition and suitable for sports.
MyProtein, for example, now sells cheese, beef
jerky, nuts, nut pastes; everything that is real
food, but packed with nutrients to supplement
an athlete’s diet. The trend does not only relate
to sports foods, but functional foods in general.
For example, the use of ingredients for
cleansing, brain health, relaxation or stress
release, are all increasingly being observed.

An ongoing sporting boom


The market size of the global sports nutrition market in 2014 is US$ 9.4
billion (in retail value), according to Innova Market Insights. Currently, the
US market has taken the leading position in terms of both size and
forecasted growth. The US accounts for 63% of global sports nutrition
consumption, which equates to an overall retail value of US$5.9 billon. The
US market is further forecasted to grow at a CAGR of 7% over the period
2014-2018, which is the highest growth rate globally. With market values
of $479 million and $471 million, Australia and the UK respectively
complete the top 3 of
the strongest
markets in sports
nutrition. Both
countries are
forecasted to
substantially grow at
a CAGR of 5% and
7%, respectively, for
the period 2014-
2018. It is clear that
the overall outlook for the sports nutrition market is very positive and is
mainly fueled by a rapidly increasing consumer base.

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The burgeoning market is clearly inspiring


growth for suppliers, with Glanbia’s recent
strong results partly coming about through a
reported surge in demand for whey-based
performance nutrition products, such as protein
shakes, widely used now by sportspeople of all
abilities to aid recovery and muscle repair after
exercise. Global Performance Nutrition (GPN)
delivered a good performance in the first nine
months of the year, when compared against the
same period in 2014. As a result of the surge in
demand for whey, Glanbia said it is in advanced
discussions with its joint venture partner, at
South West Cheese (SWC), to expand cheese
and whey production capacity by 25% at its plant in New Mexico, US.

A protein need for all


As mentioned in trend #3, the rise in demand for protein is one of the key
consumer trends driving new product innovation. While high protein
products initially focused on specific consumer conditions and needs, these
were predominantly centered around sports, diet and clinical nutrition
platforms.

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Over 3% of global launches recorded by Innova


Market Insights in the 12 months to the end of
March 2015, used a high-in or source-of protein
positioning, rising to nearly 7% in the US. There
have been increasing numbers of products
introduced on a high-protein platform across the
food and drinks industry, led by cereal products
and dairy products, with about 18% of the total
each.

Cereal bars make up the largest individual


category, with 12% of global introductions on a
protein platform, equivalent to over a quarter of
total cereal bar launches over the same period,
rising to over 45% in the US. Another key area of focus in recent years
has been the dairy sector, where protein is increasingly being used as a
marketing platform linking benefits for muscles and bones with general
associations with sporty and health-conscious lifestyles. About 7% of
global dairy launches used protein claims in the 12 months to the end of
March 2015, rising to nearly 17% in the US.

While the fact that 30% of US yogurt launches


use a protein positioning is fairly impressive, it
still trails behind Greek and Greek-style
launches, which accounted for 57% of total
yogurt introductions, indicating that by no
means all Greek yogurts are using a high
protein positioning to date. In addition to Greek
yogurts, other traditionally high protein
fermented dairy products are being introduced
onto the market, led by the Icelandic fermented
dairy product Skyr, with Arla Foods launching a
line in countries such as Germany and the UK in
the spring of 2015. In addition to Skyr, Arla has
also been active in other high protein dairy
products, starting with the 2014 launch of its
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Melkunie Breaker High Protein Yogurts in single-serve, on-the-go pouches


in the Netherlands. It followed this with the January 2015 launch of its Arla
Protein quark in the UK, which is marketed as a “quick, portable snack to
help muscles recover after exercise.” It has also introduced its Protino
range of high-protein milk drinks in Denmark.

In the milk drinks market, performance has generally


been a key focus for protein beverages, although Coca-
Cola’s launch of its Fairlife milk in the US at the end of
2014, did mark a potential new direction for white
milks. The product is a filtered milk, whereby a
proprietary process separates it into its five key
components – water, butterfat, protein, vitamins &
minerals and lactose – before recombining them in
different proportions to provide a lactose free milk with
50% more protein and calcium and 30% less sugar
than regular milk.

The ingredient response


The surge in demand for mainstream protein options has also led to an
opportunity for ingredient suppliers. Givaudan has created a suite of
flavor, taste and texture solutions for the fast-
growing high protein dairy products market in
Western Europe. Givaudan’s solutions are
claimed to address the issues of Authenticity,
Balance and Consistency (ABC) in high protein
dairy, as identified by consumer research.
These issues form part of the company’s
overall focus and approach with protein.
Givaudan applies holistic expertise and
partnering with external experts in this field to
create delicious high protein dairy products,
using either dairy or plant protein, that have
the potential to change the future food
landscape.

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Thomas Ullram, Category Manager Dairy of Givaudan, explains: “In the


UK, 86% of consumers believe that protein is important to stay healthy.
Consumers are looking to dairy to
provide protein, with almost half of
consumers in the UK, Italy and Spain
saying they would like to see more
high protein yoghurts.” He adds:
“Consumers recognize and
understand the role of protein in a
balanced diet. High protein products
are now no longer purely the preserve
of health and fitness products – they
are mainstream.”

But even in highly alternative product categories, innovation is occurring.


One of the most innovative launches presented at IBA 2015 in Munich was
Backaldrin’s launch of Actipan – a new bread for athletes and sporty types
alike. Developed in accordance with the recommendations of the German
Olympic Sports Confederation, the wholegrain bread is a basic nutritional
building block. Actipan is a rich source of carbohydrates and energy for the
physically active. In addition to its high fiber content, Actipan also has a
high protein content. As a wholegrain bread, with specially selected milled
cereal and legume sprouts, it offers a high
proportion of vitamins, minerals, trace
elements and polyunsaturated fatty acids.

Of particular interest to athletes and


sportspeople are the minerals iron and
magnesium, as well as the high content of
vitamins B6 (pyridoxine), B1 (thiamine) and
B9 (folic acid). Combined with spreads or
other foods, Actipan provides everything that
active, body-conscious people need on a daily
basis. The bread pairs equally well with
hearty fare as with sweet combinations.
Actipan is perfect for all meals, and even as
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an in-between snack.

Sports products are truly becoming suitable for all, and innovators will do
well to exploit this burgeoning market.

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9. The indulgence alibi


For some categories such as desserts and
chocolate, there will no valid argument to
take up a health positioning. It can be
confusing and detrimental to a brand
steeped on a premium & indulgent
platform. But health conscious consumers
do want to justify consuming a product
purely for pleasure and therefore look for
an excuse. A classic “indulgence alibi” can
be the wholesome or natural quality of
ingredients. The trend is also an
opportunity to create smaller, but still
highly indulgent treats.

 The premium & indulgent positioning continues to dominate


certain categories.
 A natural or wholesome marketing angle will make it easier
for consumers to justify purchasing indulgence products.
 Regional sourcing or the high quality of ingredients will be a
focus.
 There is a driving interest in creating smaller format sizes for
highly indulgent products.

Health trends may come and go, but


indulgence remains king. There are simply
some categories that cannot justifiably be
seen to have a potential benefit beyond
enjoyment. So it may be best just to
admit that a different positioning will
never work, and instead focus on keeping
them relevant, despite the overarching
health trend. While there is an enormous
rise in specialty products that are simply
too good to ignore, they have to be
presented in a clever way. But there can
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also be a strategy of eating lower quantities of certain foods (like meat


and cheese), but consuming better quality products when you do.

The power of indulgence


Indulgence remains by far the most important
attribute for categories like chocolate and
desserts and very little seems to affect the
ongoing consumer desire for chocolate. This is
apparent not only in the confectionery market,
but also in categories such as desserts, where
the popularity of chocolate as an ingredient and
flavor appears to be continuing unabated. Over
30% of the chilled desserts launches recorded
globally by Innova Market Insights in the 12
months to the end of July 2015 featured
chocolate, rising to over 42% in the chocolate-
loving UK, but falling to less than 8% in the non-
traditional chocolate market of Asia.

One of the pioneers of the UK super-


premium chocolate desserts market
was Gü, which was launched onto the
UK market as a chocolate-based range
in 2003, although it now also
incorporates fruit variants as well as
hot and cold chocolate desserts in a
number of formats. In early 2015, it
extended the range further with a 6-
strong single-serve range to run
alongside the established twin-pot
lines.

Activity in the UK mainstream market in 2015 has included Müller’s


extension of its market-leading Corners twin-pot brand with Püd Corner
chocolate desserts, while chocolate-confectionery-branded desserts have
also continued to thrive, with Müller’s Cadbury range in the top 10 yogurt
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and dessert brands overall. Other leading confectionery brands with strong
positions include Nestlé’s Aero and Rolo.

With the blurring definition of chilled


desserts and yogurts in some instances and
the rise in indulgent and dessert-style
yogurt lines in many countries, yogurt has
also seen the rising use of chocolate as an
ingredient and flavor, primarily in the luxury
market. It is still a relatively limited trend
globally, however, with just 6.5% of global
yogurt launches in the 12 months to the end
of July 2015 featuring chocolate. This
reflects the ongoing popularity of fruit
variants and the continuing use of plain or
natural yogurt as an ingredient.

Activity in chocolate desserts seems set for further growth, according to Lu


Ann Williams, Director of Innovation at Innova Market Insights. She also
points to the increasing focus not just on chocolate flavors and sauces but
increasingly on flakes, pieces or other chocolate inclusions, often used in
combination with a variety of other flavors and ingredients, such as cream,
caramel and fruit. “There has also been a growing focus on trends

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affecting chocolate in the wider market, such as sustainability, provenance


and a growing preference for dark chocolate,” she notes.

Overcoming the guilt element


But the consumption of these products does come with
an element of guilt. Consumers are therefore looking
for permissible indulgence i.e. an alibi. They are opting
for products with ingredients that are perceived as
being more wholesome or natural, despite the obvious
high fat, sugar or salt content of the product as a
whole.

For example, the pairing of chocolate and nuts for


added premiumisation and sensory experience is an
age-old proposition. But the role of nuts in
confectionery products and beyond is now being
looked at from a new angle, to particularly address the
burgeoning demands of consumers. For example,
Nestlé reported early success for their Cailler Les
Recettes de l’Atelier launch with the tagline “Visibly
authentic.” The chocolate tablet line is “crafted with
carefully selected ingredients and made with an
artisanal flair,” containing freshly roasted whole
hazelnuts, crunchy almonds and pieces of fruit. But
the key differentiator in products like this is the role
of visible ingredients, which offers a sort of “alibi” for
consuming chocolate in the first place; something
which they consider as a pure indulgence product.
Interestingly, Nestlé recently announced that it was
taking its Cailler super-premium 200 year old Swiss
chocolate brand to other markets for the first time.

A coconut surge
Another angle can be to switch oils and use healthier fat claims. For
example, one product category that is on the rise in premium positioned
products is coconut oil. The use of coconut oil is trending, whether applied
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as a beauty, health-conscious or wellness


treatment, or enjoyed in a culinary manner – in
smoothies, in baking, or frying. Health-minded fans
of coconut oil use it to moisturize skin and hair, or
as an alternative to butter, and in one of the latest
and more controversial trends, use it to promote
gum health by “oil pulling.”

In Australia, health food innovator, Celebrate


Health, has capitalized on coconut oil being an on-
trend health ingredient, by developing a potato chip
product cooked in coconut oil as a healthier
alternative to regular oils used for potato chips. Vita
Coco, the most popular coconut water brand in the
US, has now launched a new product: Vita Coco Coconut Oil. Just as Vita
Coco coconut water is “never from concentrate” – part of the brand’s
commitment to producing the most delicious, nutrient-rich beverages
possible – its coconut oil is produced with premium quality in mind. Vita
Coco Coconut Oil is USDA organic certified, 100% raw and cold-pressed.

Zach Bluemer of Vita Coco says: “you see that not only coconut water, but
coconut in general is becoming a much bigger trend, as a beverage and as
an ingredient. We saw what was happening, also in terms of a lot of other
coconut oils, and realized a great opportunity to build on our current
supply chain.”

In Germany, indi coco is also expanding its


product range and is now offering 100% virgin
organic coconut oil in premium quality. The
coconuts are harvested fresh and processed
directly. With the gentle cold pressing process,
the valuable ingredients and fresh, unadulterated
taste of the coconut oil are preserved. indi coco
organic coconut oil is a true all-rounder: ideal for
cooking, baking and frying as well as for
application on skin and hair.
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Beef jerky products are a classic indulgence product, but here the category
has enjoyed somewhat of a renaissance on the back of the high protein
trend; with the protein content serving as the alibi. In fact, when analyzing
the meat snacks market, a protein claim featured on nearly 15% of global
launches, rising to over 50% in the US in the 12 months to the end of April
2015.

A wholesome experience
It is also a matter of marketing wholesomeness,
with a significant rise in the use of the word
“wholesome,” which is +64% in 2014 compared
to 2011. For example, Uncle Toby’s (Australia)
has launched a new range of Muesli Bars that
have been created with lots of premium &
wholesome ingredients. “They have all been made
with oats that have been rolled in our mill on the
banks of the Murray River in rural Victoria.” Three
different ingredient blends are available in 5
packs: Almond & Blueberry, Roasted Macadamia
& Almond and Fig & Apricot.

Other strategies can simply involve creating very high quality products in
smaller portions than you would typically associate with something. It is a
matter of marketing. These types of products may be premium in nature,
but do offer some sort of healthy justification for consuming them;
whether it is their sourcing, quality or naturalness. This provides a sort of
alibi.

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10. Tastes for new experiences


Well-traveled and highly adventurous consumers are expecting
more authenticity and originality from the food and beverages that
they consume. They are looking for highly specific and authentic
products from all corners of
the globe. Their curious flavor
palate is open to trying out
new taste experiences, which
can include combining
apparently non-
complementary flavors in a
single bite, or opening up to
unusual textural ideas through
layered flavors. Creative
marketing and the
development of 3D printing are
just two platforms driving this
innovative trend.

 Flavor portfolios are widening to cover highly specific flavor


notes, from specific origins.
 Creative flavor names and wacky descriptions are capturing
the attention of flavor sensation
seekers.
 There is both a look to the past
with artisanal flavors and a look to
the future with 3D printing.
 Spicy flavors remain on-trend and
can be exploited in creative
marketing campaigns.

Innovators are going beyond the obvious.


They are delivering flavors that are highly
specific in nature, but also those that offer
an adventure both in terms of the flavor
experience itself, but also in the marketing
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and branding. While just 5 years ago, there


may have been 50 different types of chili flavor
available, there are now hundreds on offer
from suppliers. For example, a 43% increase
was reported in the use of spices and seeds in
2014 from 2013. Leading spices and seeds
used in 2014 were: ginger (47%), spices (not
specified) (10%), sea salt (7%), cinnamon
(6%) and cayenne (5%). Manufacturers can
also reach out with highly specific and
authentic regional flavors.

Product trends are being much more


customizable as part of overall consumer
trends towards personalized products when you want them; we are
effectively moving from network television to on demand Netflix. This
means that it is no longer a matter of choosing between a milk chocolate
or a dark chocolate; but rather the choice has widened to countless cocoa
percentage chocolate products. More and more restaurants are diversifying
beyond a simple steak, by instead offering options for steak that has been
aged for 30 days or 45 days and beyond, to meet consumer taste and
texture preferences. Even foods that in the past had a commodity and
standard image, such as mushrooms and salt, are being offered in
countless formats e.g. smoked salt.

Two recently highlighted crisp launches


from the UK indicate how even retailers are
testing the senses with highly unusual
combinations. Tesco was mocked on social
media for its new Finest crisps flavor –
Prosecco and Elderberry, which features an
on packet description reading: “Sweet,
delicately fragrant elderberry with the
festive fizz of Prosecco.” Earlier this year,
Marks and Spencer unveiled their
Christmas fizz in crisp form with Winter
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Berries and Prosecco with Fizz and Sparkle. The


packet explains that they are “made using
specially selected British potatoes, thinly sliced
with their skins on and hand cooked in small
batches to give a delicious and crispy snack.” The
crisps are apparently sprinkled with pink glitter
designed to fizz on your tongue.

More than a flavor experience


But sensory experience goes beyond flavors alone,
with greater innovation occurring in texture
creation and marketing too. A rise in the use of
layered flavors has been reported for greater
sensory sensations (for taste & texture, or a combination of both). Flavors
are being combined or alternated into a single product for a true mix and
match experience. New ideas are emerging in limited edition products that
feature extreme flavor challenges for fun-loving, adventurous consumers.

Creative flavor names, wacky flavor combinations and florid flavor


descriptions lead for flavor NPD. For example, at IFT 15, Innova Market
Insights reported a 62% rise increase in global ice cream launches tracked
with cake, cookie, pie flavors, in 2014 from 2013. Brownie was the leading
flavor choice. There was similarly strong
innovation in the use of brown flavors in
yogurt products, with the following increase
reported in specific brown flavor
applications for yogurt launches in 2014
from 2013: +96% caramel, +77% coffee,
+50% fudge, +48% dark chocolate and
+10% honey.

Flavor innovators are also looking for


culinary inspiration, with “pulled meat”
claims for pork and chicken on the rise in
NPD, far beyond the traditional US market.
If we look at selected flavors on the rise
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from 2013 to 2014, you can see some interesting examples: +57% “pulled
meat,” +27% “slow cooked”/”slow baked,” +21% “smashed” and +19%
“inspired.”

Impactful taste profiles


Regine Lueghausen, Marketing Director
Flavors EAME, International Flavors &
Fragrances believes that impactful taste
profiles and allowing for flavor
experimentation, are building blocks to the
road to success, with “you are what you eat”
reaching a new dimension, particularly for
Millennials. “As Millennials long for new
experiences and view eating as self-
expression, they are open to flavor
experimentation and new ethnic cuisine styles.
They want to be the first to try and share
something new, for instance unexpected flavor
combinations (think wasabi flavored popcorn)
or exotic ingredients – surprise me!,” she notes.

Lueghausen explains how Millennials want their food to taste as unique as


they are. Generation Y consumers become co-creators, both in food and
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non-food. “As an example, a major snack manufacturer invited consumers


to submit flavor suggestions online and crowd voting decided on the next
variant being launched. This is true for almost every end use: Millennials
want to partner with brands,” she adds.

“If manufacturers aim to offer Millennials what


they want, choose and shop for, then iconic
flavor profiles can have a renewed lifespan, but
in new formats or unexpected combinations,
e.g. BBQ sauces with alcoholic notes, or spicy
cinnamon vodka and ‘Fireball’ drinks in the
beverage arena.”
For Lueghausen, nostalgic flavors with a twist
allow the consumer to keep one eye in the
happy past while, even if translated into
unexpected categories, e.g. chewing gum with
the taste of a classical dessert like lemon pie.

“Millennials respond to products which cue ‘hand- or home-made quality,’


which explains the renaissance of ice-pops and shaved ice. Craft and
artisan concepts are greatly appreciated by this target group, as seen in
sodas and lemonades, but also ready meals.”

At the same time, Millennials are health


conscious, as proven by the popularity of coconut
water, the success of hummus, green and
superfood smoothies, energy drinks providing
“natural energy” through plant-based ingredients
and infused water as the latest trend.

“Furthermore, Millennial palates appreciate


‘excitement in the mouth,’ through tingling,
warming, cooling or extreme sour sensations,
flavor changing taste or sweet-savory
combinations. Bold flavor profiles, e.g. with heat
or spice, or street food inspired variants are also
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popular,” she concludes.

Feeling hot, hot, hot


Hot flavors are increasingly in demand, with
consumers interested in new flavor varieties.
In response to consumer demand for more
specialized heat, particularly in certain chili
pepper varieties, Kalsec has introduced the
extension of its specialty pepper product line.
New chili pepper varieties will include
cayenne, pasilla and the ghost pepper
extract.

Current Kalsec specialty peppers include


ancho, chipotle, guajillo, habanero, jalapeno,
and Szechuan. The new specialty peppers are
extracted in the US, using proprietary expeller-press technology that is
consumer label friendly. In addition to a complete line of specialty
peppers, Kalsec offers a full range of heat management innovations
including HeatSync Systems, Fusionary Heat, and ClearCap Super Soluble
capsicum. Kalsec provides many clean label options that include naturally
sourced spice and herb flavor extracts, colors and antioxidants.

One of the biggest examples of creative


experimentation with hot flavors came from
the Doritos brand, which launched Doritos
Roulette chips to a number of markets during
2015. First introduced in Mexico and
popularized in numerous markets across the
globe ever since, Doritos Roulette chips:
“offer fans the ultimate game-of-chance-style
snacking experience.” Each bag contains
mostly Doritos Nacho Cheese flavored chips
with an ultra-spicy, hot chip in every handful.
With all of the chips looking the same, it’s
anyone’s guess whether that next chip will be
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spicy-hot or not.

A renewed focus on Brazil


Brazilian flavors were on the menu at the
2014 World Cup, but will remain there through
the 2016 Olympics, which are slated to take
place in Rio de Janeiro. “We expect the
spotlight to remain firmly on Brazilian cuisine
over the coming twelve months, particularly in
anticipation of the 2016 Olympics,” says Hugh
Evans, Marketing Manager at Synergy.

“Our research has revealed that the Brazilian


trend is a prelude to a greater interest in
South America as a whole. Indigenous
Brazilian flavors, such as passion fruit, have
become a key element in dishes at prestigious
restaurants across the UK, featuring in several courses from appetizers to
desserts. Linked to this, passion fruit flavors are making their way onto
supermarket shelves too, with new product launches including passion fruit
flavored tea, soft drinks, dressings and desserts.”

Evans also notes that with growing


consumer interest in global cuisine, there is
an increasing demand for more esoteric
and unusual flavors. The proliferation of
Japanese cuisine, for example, is driving
the incorporation of the Japanese flavor –
yuzu – a citrus fruit with an intense and
bold profile. “From alcoholic drinks and
cocktails, to juices, energy drinks, sauces
and desserts, yuzu brings the acidity of
other citrus fruits like grapefruit and
tangerines, combined with a fragrant
aroma and refreshing flavor that’s less tart
than its citrus counterparts,” he says.
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Supplier innovation
Flavor suppliers are ramping up innovation to
address the demands of discernible palates.
Firmenich recently announced an investment
to further develop it’s AFFIRM technology and
therefore create more consumer preference
for its strategic partners. The investment is
aimed at helping the company understand
more complex flavor systems, by measuring
more volatiles in real time, with higher
precision, greater sensitivity and better
discrimination than ever before. Improved
accuracy will also allow Firmenich to create
consumer preferred flavors faster and more
cost-efficiently. With this knowledge, the company will be able to move
from analyzing the performance of the flavors to predicting the
performance of the flavors. Firmenich began by developing its (MS-NOSE),
in collaboration with the University of Nottingham several years ago.

Novel herbal inclusions may be another way to get


a new sensory experience. For example, Darégal
recently launched Bread Mix’Seasoning, made from
a selection of culinary herbs, to reveal original,
unique and exotic flavors to anyone involved in
bread making. An innovative, ready-to-use and
clean label solution, its main purpose is to offer a
colorful and aromatic range in order to create
fresh, powerful and natural touches for craft and
industrial bakers alike.

3D printing for the unusual


The idea of 3D printing has often been linked to
chocolate, with this sector clearly lending itself well to the new technology.
And not only does chocolate continue to be in favor across the world, it’s
also a product that many global consumers think of as being a luxury or
treat item. Peter Boone, Chief Innovation and Quality Officer at Barry
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Callebaut told Innova Market Insights: “3D printing of chocolate remains a


challenge, but it is becoming increasingly popular. Why? Well, while
chocolate sits in most consumer cupboards, the opportunity to
differentiate yourself becomes harder,” says Boone.

“Personalization is big at the moment. We see that in the demand for


color, texture, and 2D printing. I am therefore sure that 3D printing will be
in demand when we can do it in a scaled up way.” It goes without saying
then that bespoke 3D-printed and limited edition chocolates should work
well in the marketplace. Chocolate is an easy to use and mold product.

More than 50% of the innovations described in


journal abstracts for food printing (2004-2014)
relate to chocolate 3D printing. Cadbury, part
of the Mondelez stable, pre-empted the
possible rise of 3D bespoke chocolates, by
bringing out its own (not 3D printed) unique
and limited edition Dairy Milk Bar in early
2015, to tap into this idea of bespoke and
“treat” chocolate to share with friends and
family. The bar, described as a “super sharing
bar,” comes complete with seven different
flavors to match all of Cadbury Dairy Milk’s
hero variants. Only fifty bars of Cadbury Dairy
Milk Spectacular 7 were made, however, with a
selection for a few lucky Brits to win on Twitter.

Even more daring is the company’s eyeing of the hybrid trend through the
highly unusual Australian launch of Cadbury’s Vegemite-flavored
chocolate, which Innova Market Insights sampled at FiE 2015 in Paris.
Cadbury and Kraft, which produce Dairy Milk and Vegemite respectively,
are both owned by Mondelez, which has been combining unusual flavors
before e.g. Kraft Philadelphia and Cadbury chocolate. Cadbury Australia
described the chocolate bar as being filled with caramel with a hint of
Vegemite taste, similar to salted caramel, rather than filled entirely with
the salty, yeasty spread.”
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Just how successful these types of unusual flavor experiences can be


remains to be seen, but they certainly illustrate creativity. A vast choice of
flavor ideas is allowing manufacturers to have a very complete flavor
palette, to offer sensations to demanding taste palates.

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