2021 has been a year of transition, not least when it comes to food. According to Accenture, 70% of people want to make a “fundamental change in their approach to their health” and are generally more conscious of what food brands are doing for sustainability, the environment or helping them be “conscious consumers” (whatever that means). It’s anyone’s guess how long these good intentions will last, but what we can say for sure is that society at large is at a point of reckoning. With so much time on our hands and so many changes forced upon us, it’s impossible not to turn inward, to think about our work, our health, our habits and our place in the world.
To Jamie Valenti-Jordan, engineer-turned-commercialization consultant and founder of Catapult, that comes down to the question: “Are people moving at the same speed they used to in the past?” Every year, Catapult helps scores of food and beverage startups turn their big idea into something that can scale. We asked Valenti-Jordan about the macro trends he’s seeing as our changing lifestyles affect the food we talk about, manufacture and consume.
On the Up
More mileage in on-the-go
Across categories, new products are emerging in the space between groceries and prepared meals. “On-the-go options will be key for everyone,” Valenti-Jordan sums up. “Brands are coming up with solutions for products that people might have hacked together themselves at home.”
Bar companies are loading up their products with functional ingredients, such as Quantum or Verb’s caffeine-boosted energy bars; startup Chubby is giving the “Uncrustable” PB&J sandwiches a better-for-you facelift; and Mason Dixie is cleaning up the frozen breakfast biscuit category. The big players are casting their nets as well: Campbell’s is innovating in the humble soup category with its Well Yes! “Power Bowls” and Slow Kettle line that comes with a foil packet of crunchies on top, à la Yo Crunch yogurt, while KIND rolled out a line of Smoothie Bowls. And that’s not to mention the proliferation of kits reaching across dayparts, from Ore-Ida’s “Just Crack An Egg” microwave breakfast bowls to multicomponent snack trays from brands like P3 and Hillshire Farms (not dissimilar to adult Lunchables) to BumbleBee Seafood’s recently launched Prime Protein on the Run “tuna snack kits.”
Grocery stores are getting savvy, with a growing number of convenience meal solutions like thaw-and-eat and slack-in-store (products that are shipped frozen, defrosted in-store, and sold refrigerated). “Kitting in grocery stores is also taking off for the illusion of home cooked without the prep,” Valenti-Jordan points out.
“It’s the same target market, targeted over and over—people locked at home who are looking to take something with them when they do leave for the day, which they're doing twice a week rather than every day,” he says. “‘Make-at-home’ becomes ‘take it away from home.’”
If there was one uniting kitchen aspiration/fixation/meme during lockdown, it was the sourdough starter that could (or couldn’t). “Everyone’s turned into an at-home fermenter,” Valenti-Jordan comments. Mix in the pre-COVID gut health fad, and you get the perfect conditions for a longer-tail trend.
It also helps that some startups are using fermentation to tackle food waste. Spare Foods makes “probiotic sparkling tonics” from the whey that results from yogurt-making. Wildbrine, a California-based food brand that started in all-natural krauts and kimchis, recently launched a “plant-based creamery” offshoot making dairy-free condiments, dips and spreads using the leftover ferments from their brined products.
The only problem? Fermentation takes a long time. So some companies are skipping the 18-hour fermentation cycle in favor of a more scalable solution: just add an acid to create the desired pH. Some are repurposing techniques from other disciplines, an innovation trend that applies to other food and beverage categories as well. For example, Valenti-Jordan says, “Fermenting can use a proofing box used in the baking industry for the last century rather than a $100 million fermenter. It provides the same conditions.”
Yet another of-the-moment application: fermentation has long been used to avoid adding nitrates to meat, a technique plant-based meat companies are now availing themselves of to extend shelf life without preservatives.
Dairy, but make it plants
The plant-based dairy market continues to grow as both newbie founders and established brands race towards the—wait for it—white space. The question now, Valenti-Jordan says, is “Who will stake their claim, and stake it large enough?”
This also contributes to the rise in popularity of individual ingredients: tiger nuts, for example, took off after tiger nut milk became a “thing” among plant-based milk aficionados. “That has a downstream effect on other products, like cheese,” he explains. At this point, ancient grains are the new on-trend ingredient in the category, as it would appear every nut on earth has now been milked.
Valenti-Jordan also argues that the plant-based dairy market is entering a new phase of innovation: “Companies are trying to diversify their ingredient deck to achieve something nutritionally superior.” For example, a combination of nut milks in one product might yield a nutritional profile most similar to the real thing than any one on its own. At the same time, “you’re always improving taste as you go.” The next phase? Micronutrients are brought out and validated by regulatory bodies—at which point it both tastes better and costs less than the incumbent.
Ready-to-drink specialty beverages have been growing as a category for some time now, so it’s no surprise that the functional beverage sub-category has seen a noticeable spike, with hundreds of teas, kombuchas, tonics, coffees and other elixirs bursting onto the shelves, each with its own beautiful label and promise of better gut health, more sustained energy, and general saintliness. Valenti-Jordan predicts that it will cool off somewhat from this explosive growth, but will continue to trend as “health has taken up a greater percentage of brainshare.” But health claims are not looked upon favorably by everyone: as the FDA staffs back up again, he warns, “a lot of brands have a warning letter coming.”
Return to the real
The un-chicken nugget designed for fast food restaurants and college cafeterias is great…for when someone wants to eat at a fast food restaurant or like a college student. As people get serious about preventative health and overall wellbeing, we expect the plant-based frenzy to curve back around to real foods as we tire of deep-fried, plant-based mystery nuggets. Startups in food and food tech who can cater to this confluence of needs—convenience meets fresh, minimally processed foods—will be well-positioned.
Indulge me for (one last) moment
Have we overindulged? Snacking surged during COVID as anxiety ran high and prompted many of us to turn to comfort food favorites, a trend the New York Times covered in June of 2020 under the headline “Has Pandemic Snacking Lured Us Back to Big Food and Bad Habits?”. But for all the mini cheesecakes and frozen chocolate chip cookies we stress-ate, signs indicate indulgence plays have crested and are returning to more measured proportions. Annie’s alums launched Goodles to serve up “adultified” boxed mac and cheese; Nestlé is now selling ersatz refrigerated candy bars stuffed with nut butter; and many proclaimed this a sober holiday season, evidenced by the growth of the low- or no-ABV beverage market. While indulgence may be hidden in more virtuous wrapping (see aforementioned deep-fried mystery nuggets), the era of monster shakes and Instagrammable “stoner food” seems to be over—at least for now.
Plant-based meat overfed
Yes, we’re saying it: we’re reaching a plant-based meat saturation point. Category sales are already slowing down: pioneers like Beyond Meat are seeing their sales (and share price) tumble as the novelty begins to wear off and their loyal user base starts to emerge at its true size. As a seemingly endless number of startups continue to rush into the space, a cascade of “me-too products” has flooded in the market—each offering less and less differentiation.
“In the future, I would expect more startups in this space, and when the dominos start to fall on M&A, they will fall very, VERY quickly,” predicts Valenti-Jordan.
As a final note as we look to the year ahead: how are we really behaving as a society these days? While headlines tout that flagship companies like Google are pushing back their return to office plans “indefinitely,” the latest stats from the Bureau of Labor Statistics show that just 11.3% of employees are teleworking, or around 1 in 10—meaning that the vast majority of Americans are still leaving home to work. Furthermore, data from Statista shows that office vacancy rates fell to 12.4% in the third quarter of 2021, from a Q2 pandemic high of 17.6%. On the other hand, ongoing supply chain trouble and worrisome inflation are affecting both economic output and consumer optimism, not to mention variant fears. According to Datassential’s survey research, 80% of Americans think inflation will get worse, restaurant meals are the spending category that most will choose to reduce if it does (42% of those surveyed). However, opportunity always abounds for those who can see it, seize it—and sell it.
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