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Aware consumers up pressure on cos to speed product innovations
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Saturday, 07 December, 2019, 08 : 00 AM [IST]
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Ranga Pothula
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Many consumers are passionate about their food quality, the impact on wellness, and the environmental footprint left by food manufacturers. Today, highly-aware consumers represent an important target audience. To meet their shifting expectations, food and beverage manufacturers will need to speed product introductions and develop new offerings which reflect the changing views on what is fresh, healthy and mindful. Technology can help.
It’s not just taste, freshness, and convenience that drive food purchases today. Conscientious consumers also focus on health, wellness, and social issues as they shop for family meals. They will take into consideration clean labels, visibility into suppliers, humane treatment of animals, and environmental sustainability. While these expectations put added pressure on food and beverage manufacturers, agile companies, turning to technology to help, can seize the opportunities. Meeting the demands of today’s socially-aware consumers can be a valuable differentiator.
The Growing Demands
It Starts with the Farm - Consumers today want to learn more about the origins of their food and its entire journey from farm to fork, the International Food Information Council (IFIC) Foundation states in a recent paper about food trends for 2019. “Americans have a growing appetite for more information about their food, and technology is enabling eaters like never before,” said Joseph Clayton, CEO of the IFIC Foundation. “It’s also driving transparency across the food supply chain.”
Pharma-Nutritional - It’s not just millennials looking for health-related options. People of all ages are turning to vitamins, minerals, and other ingredients that are potentially beneficial for bone, joint, immune system, digestive and brain health. Mintel’s research shows 20% of US consumers aged 65+ currently use a supplement for joint health. As consumers seek food and drink products that reduce inflammation, more products will feature ginger, turmeric, green tea extract and medicinal mushrooms.
Cross-over Health and Beauty - Food and beverage manufacturers can benefit from research done by the beauty industry which indicate certain berries and spices have been found to have anti-ageing benefits. Also gaining attention are Omega-3 fatty acids, biotin, aloe vera, and coenzyme Q10, an antioxidant that benefits heart health. In the past, companies were reluctant to make these investments as they were limited on what health benefit claims they could make. Today’s well-informed consumers require less background education and explanation of claims on a package. The challenge is more in determining what ingredients are appropriate in what product.
Sustainability - The IFIC says, “There is a movement towards circularity as new approaches to sustainability span the entire life of a product, from ingredient sourcing to package design, disposal, or reuse. The 360-degree approach reflects the principles of a circular economy, where resources are kept in use for as long as possible, extracting the maximum value while in use and then recovering materials at the end of use.”
Rethinking Plastic - Plastics have come under fire globally, pushing demand for new packaging innovations. Bio-based packaging materials will likely be key components to the next generation of responsible packaging. Additionally initiatives such as Loop are attempting to bring back the idea of returnable and reusable packaging.
Less Waste - In 2018, awareness around “ugly produce” grew. Fruit and vegetables that fall outside of the specifications retailer typically insist upon got a second chance. Tesco became the exclusive retailer for a range of fruit juices, Waste not, made from produce designated as ugly.
Soil Conservation - Healthy, nutrient-rich soil provides the foundation for healthy food. Companies play a role in helping to replenish the soil. US baby food brand, Gerber’s Clean Field Farming line is banking on its holistic approach organic agriculture will pay-off, as well as increase biodiversity and enhance ecosystems. Annie’s Homegrown in the US is another brand helping to raise awareness in this area.
Reducing Sugar - Many people are responding to dietary guidance that recommends eating less added sugar with 77 per cent saying they are taking steps to limit or avoid sugars in their diet, and 59 per cent view sugars negatively. New plant-based and dairy sweeteners are gaining attention and provide new opportunities for updating classic product offerings.
Vegetarians - Plant-based eating continues to gain adoption, with sales of “vegetarian alternatives” growing by 20 per cent since 2017. Only five per cent of Americans identify as vegetarians and three per cent as vegans, according to a Gallup poll, but others are adding vegetables and reducing protein consumption for general health benefits.
Tech for Manufacturers to Keep Pace with New Product Demand
In order to remain relevant, food and beverage manufacturers must continually stay tuned into trends and update product offerings. Technology can help in several ways:
Product Innovation - Introducing new products quickly is a necessity. The new product lines can represent healthier choices and include minerals and nutrients associated with wellness. Reducing sugars, artificial colours, and preservatives will also appeal to many modern consumers. Advanced ERP solutions, purpose-built for the F&B industry, help manage recipes, raw ingredients, and formulations—ensuring the quality is maintained. Product Lifecycle Management solutions (PLM) also help speed launches, managing the various steps, enable improved project management, collaboration and product testing.
Clean Labels - Transparency and visibility into how food is produced is increasingly important. Labels are the key tactic for conveying the message. “With today’s instant access to information, if a consumer can’t understand or find out where and how a product is made and what’s in it, they’ll be more inclined to leave it behind,” say RSM, consultants in the industry. F&B manufacturers can turn to technology to help comply with current mandates for clean label formatting and content. Modern PLM solutions help streamline the process, making it easier to stay within compliance.
Supply Planning - As new ingredients come to market or the demand for them starts to expand, the challenge may quickly be a shortage of supply. Companies need to work closely with their suppliers as well as leverage supply chain planning tools so supply can meet the demand.
Supply Chain Traceability - Food traceability is one of the top five food trends in 2019, according to the IFIC. This is expected to continue and will cause demand for technology solutions which provide clear product information. “Food traceability is on the verge of a technological shift. Data collection and IoT technology become cheaper, more reliable, and easier to use, replacing more tasks from weight measurement to temperature monitoring. Data analysis, Artificial intelligence, and big data technologies will enable food companies and authorities to analyse supply chain activities.” Modern supply chain management solutions are essential for full visibility and tracking suppliers.
Predictive Analytics - Modern Business Intelligence solutions, with built in Artificial Intelligence, will help companies project trends and anticipate market demands. This insight into the future helps procure raw ingredients and plan use of resources, like machinery, packaging and personnel.
Final Take Away
It’s an ever-changing world of food and beverage with taste becoming just one of many factors influencing the consumer’s decisions. Today, health, wellness, and social issues like environmental sustainability are also important. Manufacturers can see this as a challenge or as an opportunity to align with customers. With modern technology in place, companies can seize the chance to speed introductions and offer new product line-ups which will appeal to consumers. This can be the ticket to future growth.
(The author is MD & GM, India Business Unit, Infor)
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