Food and beverage companies make ‘tectonic shift' toward social responsibility
The natural-products industry is expanding rapidly, gaining consumer trust and capitalizing on shifts in how they lead lives their lives and what they expect from companies, according to a
'This industry is sizable now, we surpassed $200 billion in sales last year and on track to hit $300 billion in sales in 2022,' said Carlotta Mast, senior vice president for content and insights at Colorado-based New Hope Natural Media. She was speaking Jan. 31 at North Bay Business Journal's North Coast Specialty Food & Beverage Industry Conference.
She is the chief editor of the NEXT Natural Food Product Forecast and board president of Naturally Boulder, a 1,200-member trade group focusing on the natural products industry in Colorado. In 2013, she co-founded a 'paleo' snack company called Wholly Bites. In 2016, Wholly Bites was sold to 1908 Brands in 2016.
Natural-products businesses make natural and organic food, 'functional' foods and beverages, dietary supplements, natural and organic personal and health care products and pet products. The industry in 2007, when she joined New Hope, was just at $100 billion and has roughly doubled, despite a recession along the way.
'But this more than a growing industry, this a major tectonic shift…,' Mast said. 'We are doing so much more than making money, we as an industry really changing the world. We are using business as a force for good … not only creating successful companies but working together to tackle really important issues, like climate change, like social injustice like life style related disease. I think is the most important part of our story and our legacy.'
She said this segment of the food and natural products industry continues to grow with sales from 2016 showing a 9 percent boost while the total food industry sales grew by less than half a percent in the same period. Though the sales are small compared to the $770 billion in sales for the overall industry, Mast contended the large companies continue to take notice.
'These top companies are feeling a lot of pain as a result of the consumer-driven changes that are happening in the market place,' Mast said. 'And losing billions of dollars as a result. Those companies are rapidly trying to figure out what to do in this changing environment. They are acquiring the best of the natural and organic brands and in some cases trying to reinvent their own purpose and what they stand for. This is a Herculean challenge and nipping at their heels are all these challenger brands.'
As the industry grows, she said, it is also seeing some trends in the marketplace that are dictating what products are developed, how companies position themselves in that marketplace and even the culture of some companies.
For example,'Snackification' is a big market trend.
'Meal times are so different than they would have looked like maybe 10 or 20 years ago.' Consumers snack throughout the day, yet are 'expecting snacks that have boosted nutrition….'
So beans get added to make 'Go Dip' snack or crackers become 'Rockin' Reishi' because they are infused with reishi mushrooms. One producer is also marketing a 'grass-fed collagen protein bar' to answer that need for a nutrient dense product.
And when or if some consumers do sit down for a meal, 'forward-thinking' brands are catering to that convenience but nutritional demand, by supplying meal kits that are messaged in a socially responsible way. On the shelf examples include a 'Love the Wild' fish kits or 'Rebel Fish' which is a Thai chili microwaveable product.
Health has always been a driver in the marketplace for some,
Mast said the trend is moving to developing products that are not only healthful but also marketed to help people 'thrive throughout the day.'
So a North Bay company, Traditional Medicinals' is producing a 'stress ease' tea, while another company's tea product touts itself as offering 'preventional wellness.'
Eliminating the current cultural 'bad guy' sugar from products has also lead some companies to develop new products, like 'no sugar' coconut water or 'Sound Sparkling Tea' — minus any sweetener.
Some firms even are focusing on 'ancient wisdom' ingredients, as opposed to the emphasis solely on the vitamins and minerals content. These ingredients can be drawn from different cultures or just ingredients that customers can 'pronounce and understand.' Some examples include 'Chia Viva' chia pudding with cinnamon coconut or 'Wildbrine Probiotic Red Beet and Cabbage' salad.
That is not the only shift in the industry, according to Mast. Consumers want — and in some cases will pay more for — products from companies that 'have products which stand for something,' she said.
A company for example which makes a butter-like product without using animal sources has a clear mission and a good product and is capturing market attention.
'The company has a mission to help people see the value, benefits and how delicious eating plant-based products can be,' Mast said.
Another product in this category isn't obscure about its social focus, marketing a snack under the name: 'This Bar Saves Lives.' She said some consumers will not only support such companies, they will pay more for their products. She cited a New Hope survey of millennials in which 60 percent indicated 'they would pay for those who produce their products in an environmentally responsible way.'
Even more impactful is a company which has developed solutions or products that try to help solve problems in the world.
Food waste is a huge issue in the world, and there are segments of the industry that are developing products from waste, like snacks made from the pulp produced when fruits and vegetables are juiced or 'MisFit Juicery' with includes 'rejected ugly produce.'
These are 'brands that are being smart about that and in the process creating an amazing purpose and brand story,' Mast said.