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The Last Word

It’s been a busy year for the food industry, dominated by Brexit, writes John Stapleton

Brexit, of course, wasn’t the only event impacting the food and drink industry in 2019 and while we embarked on stockpiling (twice!) the uncertainty is still with us. This is likely to remain through 2020 as negotiating a trade deal with the EU will only get started on February 1. Food and drink trends established in 2018 carried through into 2019, but a few key elements stand out for me for next year:

Health and wellness
This isn’t really a trend anymore as it’s now mainstream with its meaning to the consumer becoming increasingly holistic. However, what is hardening is consumer attitude to what ‘health and wellness’ really means to them. Food companies need to try harder to justify what is ultimately healthy about their products in order to remain appealing to a cross-section of individuals.

The millennial influence
Millennials have begun to put Big Food under the spotlight in regard to health and wellness and Gen Zs are taking this to a new level in the context of transparency and authenticity. The delivery of nutritional benefits through personalisation is a sub-sector that may break through in 2020 – whether through leveraging DNA analysis or medical records or through lifestyle analysis. Scalability and access to effective distribution channels are key to seeing this area take off.

Plant-based diets
Veganism has generated huge momentum, but I see this giving way more to flexitarianism in 2020. Consumers are now making informed decisions about reducing meat consumption, as opposed to entirely avoiding it. Brands have responded by launching exciting, tasty and innovative products with mixed protein sources (meat/non-meat) that deliver well on taste and texture. This is giving consumers more choice over their diets and the freedom to make less radical lifestyle choices.

Sustainability
Sustainability is on everyone’s agenda – particularly with consumers, retailers and producers (in that order) focusing on the ubiquitous over-use of non-biodegradable packaging. It may not happen in 2020, but I believe we are nearing the jumping-off point for the introduction of a ‘Green Mark’, which can demonstrate a company’s green credentials. Clear definition and consumer understanding are key to this becoming a practical tool that helps inform consumer choice.

CBD

The CBD trend gathered momentum quite quickly throughout 2019, particularly in drinks – Green Monkey & Cirrus were some of the earliest to adopt the trend, and now even Vita Coco are doing it. By comparison to the explosion of introduction of new products in the US, market proliferation in the UK has been a bit hesitant. I imagine once UK/EU legislation catches up, products in a wide range of applications will begin to appear quite quickly.

Range consolidation
If the industry is to anticipate further uncertainty, consumers may well have to deal with the effects of a recession. This would accelerate the developing tendency for the major retail chains to consolidate their ranges. We have seen range proliferation and category extension for more than three years and many categories are nearing bursting point, such as healthy snack bars, popcoårn and granola). The justification for proliferation is typically ‘extending consumer choice’. However, many categories are now so cluttered that consumers don’t understand the individual USPs anymore and resort to buying on deal, resulting in less brand loyalty.

Big vs Small Food
Finally, within the industry, we have seen interesting developments by Big Food, in response to realising that smaller challenger brands were increasingly squirreling away market share. They have been acquiring small brands – either outright or in part – through in-house VC-style vehicles or simply buying non-controlling stakes initially with an option to purchase more later. I remain sceptical whether a corporate is the best partner for an entrepreneurial start-up challenger brand and feel there is space for an independent accelerator/incubator to provide value to the growing number of disruptor and challenger brands.


John STAPLETON
 
Co-founded New Covent Garden Soup which transformed the UK fresh soup category. He also launched Little Dish, which opened up the fresh, chilled, infant cuisine category.
 

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