THREE THEMES DRIVING INNOVATION IN THE FOOD & BEVERAGE INDUSTRY
By LAURE CONFREY
FoodService Beverages Brand Manager at Kerry Taste & Nutrition
Kerry Taste & Nutrition is the global leader in the development of taste and nutrition solutions for the food, beverage and pharmaceutical markets.
Laure is experienced in delivering marketing strategies and customer activations for food and beverages across retail and foodservice.
We are in the midst of a food and drink revolution and Kerry is at the forefront in anticipating and leading the industry’s response to this complex challenge through their consumer insights, world-class innovation, application expertise, and a long history of creating taste and nutrition solutions in a sustainable way.
Tomorrow begins Today.
Navigating the Post Covid-19 Landscape
Most operators are already finding their path to deal with the current disruption and ensure that their beverages reach the tables of consumers across Europe. Attention has quickly turned to understanding the ‘new normal’. What new behaviours will consumers retain? What will change for the medium and long term?
In the Food & beverage industry, we know the foodservice sector has suffered the most during the pandemic, however it is extremely resilient and history has proven this with the last recession and it is predicted to remain in positive growth again.
As with the previous recession, Innovation plays a vital role in maintaining relevancy and sustainable growth. Innovation opportunities are sought through a better understanding of the consumer mindset.
Three themes have been identified as part of the way forward for innovation in the food and beverage industry prompting new consumer decision-making and amplifying some pre-existing trends.
1. HEALTH TO THE FOREFRONT
With the Covid-19 pandemic, Health & Wellness has emerged as a macro trend, consumers are more interested than ever before in their health and that of their families. Now more than ever, consumers are actively seeking out foods and supplements to strengthen their immune systems and enable them to live better for longer.
What are the underlying trends?
- Interest in and spending on health and wellness has accelerated rapidly driving widespread interest in functional drinks. This is set to evolve in both the short and long term as consumers look to proactively manage their health.
- Mainstream Immunity: 1/3 of European consumers claimed to ‘have changed my diet to help improve my immune system1. Internet searches for ‘food’ and ‘immune system’ rose 670% globally, in the first 2 weeks of March2.
- Probiotic growth: 58% of consumers believe probiotics will have a positive impact on their health3.
- Mood foods’ and supplements that reduce the effects of stress and improve quality of sleep are seeing greater demand.
2. CONSCIOUS CONSUMPTION
Consumers are adopting more conscious consumption habits. Sustainability and waste reduction are no longer considered ‘nice to have’. There is a greater emphasis on food trust and transparency and consumers will seek clarity of the provenance of their foods and beverages. They also want to see evidence of the F&B industry players taking clear steps to reduce waste, carbon footprint, and water and respond positively to initiatives that promote environmental causes.
What are the underlying trends?
- Local sourcing: 48% of European consumers are ‘willing to pay more for products that are made with local ingredients’1.
- Informing: 51% of Europeans give a high / very high level of attention to ingredients in Food and Drink products3.
- ‘At a time when trust and transparency are paramount, consumers are gravitating towards their favorite brands for guidance and reassurance’3.
- Going “Flexitarian”: Almost 50% of European consumers say they have limited/reduced the amount of processed meat they consume over the past year due to environmental concerns1.
3. VALUE IS VITAL
Consumers will be seeking greater value for money during a recession, but this doesn’t always mean lower prices. Millennials and Gen Zers will still want to experience new foods and unique beverages, without compromising their health or their sustainability values. There are tried and trusted ways to generate footfall and increase loyalty that Foodservice operators will need to focus on.
What are the underlying trends?
- Brands must remain ‘interesting’ and relevant in the face of economic challenges. Those that continue to innovate will emerge stronger.
- New revenue streams: Through LTO’s (limited time offers), new occasions, new formats, new tastes and new ideas, Foodservice entrepreneurs will shock-proof their business. As an example, 48% of consumers report trying an LTO menu item every month. For consumers between the ages of 18 and 44, over 30 percent do it every week’4.
- Test and Learn: It will take a while to understand the ‘new normal’. Seize the opportunity to shape it.
- Home Wins: Home Delivery in Western Europe has grown by 67% since 2015, while Takeaway grew by just 7.8% and Eat-In has declined by 1.5%5. Revenue for online food delivery in Europe is forecast to reach $25 billion by 2023’6.
As priorities shift and consumers become more value-driven, strategies will need to be adapted and renewed focus on key areas such as innovation in functional health, sustainability, affordable indulgence, plant-based and food protection will remain critical. Sources: 1| Kerry ConsumerFirst, 2019; 2| Google Trends, Feb-March 2020; 3| Global Data, 2019; 4| Modern Restaurant Management, 2018; 5| Euromonitor, 2015-2020; 6| Deloitte, 2020
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