Food + Beverage Industry: Ingredients for a Successful 2020
With the rise of impossible meats, popularity of cannabis induced meals, consumer interest in health-related products, and focus on sustainability efforts, the food and beverage industry is constantly evolving and shifting their focus to adapt to an ever-changing public.
In just the last few years, plant-based foods, according to Nielsen and the Plant Based Foods Association, jumped 20% to more than $3.3 billion in sales and the CBD market is predicted to be a $2 billion industry by the end of 2020.
Consumer priorities are changing at an alarming rate - making businesses act fast or double down on their offerings. Setup consulted marketing leaders from prominent food and beverage companies to get an inside look into marketers’ priorities / trends for 2020 in the food and beverage industry.
#1 - Sustainability leads to consumer retention.
According to CDP, “60% of companies are investing in biodegradable plastic and recycling infrastructure.” This could be because of “50% of CPG growth from 2013 to 2018 coming from sustainability-marketed products.” Meaning, consumers (and even businesses) are interested in sustainable efforts.
While some brands may see pursuing sustainable efforts as profitable, others are motivated by their impact on the environment and future generations. Marcel Nahm, the Chief Marketing Officer of Auntie Anne’s, for example, explained, “Sustainability is an important filter by which we evaluate not only our products and packaging, but also the brand itself. Auntie Anne’s believes in being responsible stewards of our natural resources for future generations.”
“Sustainability is an important filter by which we evaluate not only our products and packaging, but also the brand itself.”
Rachel Chambers, the Vice President of Marketing at Perfetti Van Melle, added, “We are fully committed to operations that help sustain a healthy environment. We have taken steps toward improving our manufacturing footprint and reducing packaging. As consumers and customers alike have become more and more concerned about the environmental impact of the products they purchase, we have continued to strive for a more sustainable packaging approach, innovating for more eco-friendly materials and recyclability. We seek to reduce water waste and consumption, energy consumption, and emission and material waste.”
But these brands are not the only ones moving towards a sustainable business model.
Brian Penrod, Senior Director of Marketing at Gloria's® Latin Cuisine, shared, “we made the decision to switch from plastic to-go/delivery bags to paper. We wanted to reduce our reliance on plastic and provide our guests with the ability to properly recycle our bags. Our new paper to-go/delivery bags are scheduled to be in-store in Q1 2020.”
The Coca-Cola Company is also making additional strides in sustainability efforts. Javier Meza, the Global Chief Marketing Officer of Sparkling at The Coca-Cola Company, noted, “When it comes to packaging, we are taking responsibility for the packaging we introduce to markets. As part of our ‘World Without Waste’ global goal, we aspire to create packaging that contains at least 50% recycled material by 2030 and continue pursuing the goal to make all consumer packaging 100% recyclable by 2025. The products themselves have also responded to sustainability trends. You can see this in the variety of categories that we now offer and also in the amount of sugar reduction we have implemented across many products around the world.”
Working towards sustainability is a group effort between the consumer and company. Ashley Turner, the Director of Marketing for Elior North America, states, “Our customers are our partners, so it is important for us to be even more nimble than we have been in the past to understand and live their sustainability models – what is important to them is important to us. As innovation in the field deepens, it is our responsibility to review what makes sense for our customers and clients.”
“Our customers are our partners.”
“And we’re not just talking the talk,” Ashley continues, “we’ve made real, tangible changes to our business practices over the past few years to better serve our customers and create positive and lasting environmental change. For instance, last spring we worked with the Monterey Bay Aquarium’s Seafood Watch program to add sustainably sourced frozen wild-caught salmon to more than 800 of our client kitchens. Over the next year, we plan to add responsibly sourced canned tuna and shrimp to our menus, and, by 2025, ten of our major ingredients will adhere to local and sustainable sourcing criteria.”
However…sustainability comes with challenges…
Every effort must come at a cost. To be completely sustainable may be a pricey endeavor, or even an inconvenient one. Rachel Layton, Vice President of Marketing and Growth at Taziki’s, mentions, “From a packaging standpoint, it's significantly more expensive, less available, and inferior when it comes to preserving food quality, so there are naturally challenges we're trying to solve for, along with balancing keeping guests happy.”
So, there is a need to educate consumers about sustainability!
An increase in sustainability means an increase in production costs which leads to an expensive market price. Rachel continues, “From a marketing standpoint, we've realized that guest education is critical to the success of any program, especially because there will be costs inquired through the transition process and transparency is always a win. The products themselves also change depending on what packaging they go in, so some recipes may have to be tweaked to ensure the items make it through transport and still delight the guest.”
#2 - User generated content is a marketer’s feast.
User generated content shows that brands are authentic and that they appreciate and listen to their consumers. Utilizing consumer content shows that brands value their consumers’ time / support and want to engage in a connection.
Brian Penrod shared, “When we come across real and beautiful shots taken by our guests, we share them on our Instagram story and use #GloriasFanPics. We’ll even use their photos for our own organic post and give them photo credit. We want to share our guests' experiences along with the content we post as well at @gloriaslatincuisine.”
“We've leaned into guest created content and taken that opportunity to celebrate and thank them,” added Rachel Layton, “which we feel makes them feel special and in turn, remain loyal to our brand.”
Michelle Bythewood, President of Salata contributed, “News travels fast on social media. We keep social media and influencer marketing central to our strategy. For Salata, social media provides a platform to encourage guests to break the salad rules--customize their meals just the way they want. We love it when people share their amazing creations on their social channels and know there's a certain amount of pride they take in them.”
#3 - Expand the menu to include more options for consumers.
Food brands have an opportunity to expand their menu selection which, in turn, increases their clientele. Identifying dietary trends that lead to alternatives (in addition to staple menu items) in dairy products or plant-based proteins may open up an entire consumer market.
“Our Corporate Chef is always testing new and fresh culinary ideas and different entrée ideas that keep up with food and flavor trends. We already offer Gluten-Free options on our menu and have even showcased our ‘Organic Margarita,’” said Brian.
#4 - Embrace change with a pinch of innovativity.
The food and delivery industry has altered in the past few years - especially with introductions to new forms of production and processes. In order to adapt, brands need to think out of the box. Brian Penrod believes “the greatest opportunities for a Food and Beverage brand (especially in the Casual Dining Space) will be the need for ‘ghost kitchens.’ With the increased popularity of third-party delivery apps, like Uber Eats, GrubHub, etc., some kitchen and restaurant spaces built before these times will need to adapt. A solution may be creating a ghost kitchen that only caters to online/delivery orders to keep up with demand. This will help overall sales increase, while keeping the efficiencies of the current kitchen design intact for in-restaurant dining.”
“The greatest opportunities for a Food and Beverage brand (especially in the Casual Dining Space) will be the need for ‘ghost kitchens.”
Even social media has changed how food brands approach food when it comes to presentation, image, storytelling, etc. Brands who develop creative solutions to challenges stand out. “Probably the biggest change we’ve seen on our end from social media is a shift in the demographics and target market,” shared Ashley. “We still operate with a food and quality-first mentality, but, at the same time, we more heavily consider things like the originality of a dish’s name, how it photographs, how we choose to promote it, etc. Social media has really just challenged us as a company to lean into the creativity and innovation aspects of our business.”
#5 - Serve campaigns with a side of authenticity.
“The important thing is to remain true to the brand and develop innovation in a way that is consistent with our values and our beliefs,” mentioned Marcel. “For example, we have products that are vegetarian since our pretzel snacks are made with simple ingredients such as flour, salt, water and butter. It is fair to say that for Auntie Anne’s what is true to our brand is that we bake our snacks fresh from scratch in every location, every 30 minutes. And our biggest opportunity is to remind guests that we offer snacks that are baked fresh from scratch everyday, every 30 minutes, with absolutely no preservatives!”
“The important thing is to remain true to the brand and develop innovation in a way that is consistent with our values and our beliefs.”
Adaptation and inclusivity is important, but brands need to stick to the root of what makes them unique. Authenticity is important and brands that don’t take a stand but adapt to the latest trend just to fit in, will not have a strong foundation. “Taziki's is not a trend-following restaurant,” stated Rachel Layton. “As a 21+ year old brand, we know what we're good at and work hard to keep that as our true North when making menu decisions. We see a lot of value in adding plant-based entrees to our menu because it aligns with the Mediterranean lifestyle but we don't plan on hopping on any bandwagons simply because they're newsworthy. Taziki's food ethos is to make Mediterranean food approachable for anyone, anywhere -- so gluten free options have been available for a very long time and the complexity of our menu requires intensive kitchen training, so our staff is used to accommodating guest's allergy-specific needs.”
#6 - Providing value to the consumer is the recipe for success.
“Marketing has always been about inserting the brand in places where it naturally belongs in ways that are relevant and contextual to consumers,” Marcel Nahm stated.
“The important thing is engaging [on social media] in ways that are natural for the brand, in a context that is adding value to our guests. If not, we are doing more harm than good for the brand.”
Understanding consumer preferences in order to detail and communicate with relevant marketing personas leads to a comprehensive marketing strategy. “We follow the consumer, and today’s consumers are very clear in their preferences,” shared Javier Meza. “This allows us to adjust our business to meet these needs. For instance, this year we are launching a new sparkling water brand in the U.S. that contains caffeine, and in Australia, we acquired our first organic kombucha brand. These are examples of broadening our product offerings to take advantage of the opportunity that arises from new consumer trends.”
“[We are] broadening our product offerings to take advantage of the opportunity that arises from new consumer trends.”
Since health is becoming increasingly important to consumers, food and beverage companies are making an effort to develop food products that meet dietary needs. Ashley Turner shared Elior North America’s initiatives to offer healthier options for customers. “We take a boutique approach to who we are as a food company, and consider ourselves among the trendsetters creating new culinary directions, as opposed to reacting to them,” she stated. “One of our greatest accomplishments has been the development and rollout of our BeWell platform. BeWell is a mindset that we instill in our chefs complemented by programming that focuses on high quality, whole food ingredients as preventive maintenance from disease, as opposed to use of diet as a reaction to a symptom.”
“As part of this platform,” Ashley continued, “we commit to transparency when we cook, meaning minimally processed ingredients and an emphasis on plant-based foods while still incorporating lean meats. We also work to create environments that will draw consumers to healthy choices, such as putting water and fresh snacks at eye level, clearly marking ingredients, executing educational wellness events, and cooking demonstrations in schools so that kids are exposed to healthy foods from a young age. We believe this is an approach all culinary companies can and should get behind.”
#7 - Food and visual content go hand in hand - especially on social media.
“We eat with our eyes,” shares Marcel Nahm. “Presentation and visual appeal have always been important to food. This just got exacerbated in the era of Instagram, in terms of content that can be shareable. Auntie Anne’s snacks are hand rolled and hand made, and, as such, are imperfect. So, imperfections are the authentic way we show [our product] on Instagram!”
Social media plays an integral role in communication. Because consumers trust reviews, influencers, and word of mouth endorsements over businesses, it’s important for brands to develop an authentic presence online. “People are often more likely to trust a friend or influencer than a brand, so when we open or re-open a store, we rely on local influencers to help spread the word as well as keep Salata top-of-mind throughout the year as a go-to source of a healthful, customizable and quick option,” stated Michelle.
Brands, like Perfetti Van Malle even develop their marketing strategies around social platforms like Instagram. Rachel Chambers shares, “We do indeed leverage Instagram to help bring to life our brands visually – in particular, we find Airheads with their rich and vibrant colors and playful brand identity, plays well in this space. In particular, Instagram influences marketing and social strategy – with shifts to telling stories with powerful visuals.”
Even before social media, brands have capitalized on visual appeals for decades - defining their brands with signature styles. “From the mesmerizing floating bubbles to our signature contour bottle, we have always taken pride in the distinctive visual identity of our products and used that advantage in our marketing. The current state of social media has only advanced that strategy,” Javier Meza added.
Bonus - The perfect food and beverage balance is a healthy, yet fun one.
Consumers with increasing purchasing power like Generation Z and Millennials value experiences and their health. While tasty food trumps other options in most cases, Rachel Chambers shares that a combination of healthy and experiential creates a perfect opportunity for health-conscious brands to explore:
“Health and wellness trends are also playing out in confection with more offerings available including those with simple / transparent ingredients and portion packs. It is interesting, however, that consumers do see candy as a treat and taste is king – so they are less willing to trade off an amazing experience for health benefits that could hinder that taste. Brands that can bring the best of both worlds will be well positioned to meet this trend.”
“Brands that can bring the best of both worlds will be well positioned to meet this trend.”
Thank you to Brian Penrod, Michelle Bythewood, Rachel Layton, Marcel Nahm, Javier Meza, Rachel Chambers, and Ashley Turner for contributing their thoughts on the future of the food and beverage industry as well as sharing their upcoming marketing initiatives!
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