Every once in a while, an industry will see the arrival of a product or service that changes everything. For the travel market, Airbnb turned the ideas of holiday on their head, while Uber changed the way we use taxi services forever.
Disruption means seismic shift; not small evolution. So what categories are ripe for change in the food-bev world? Let’s look forward to 2017.
Dairy
The European dairy market is already straining from the pressure of consumer change.
It’s a sector that’s embraced the snackification trend already, with snack-sized cheese portions and yoghurt pouches increasingly popular.
Meanwhile, the health and wellness sector has been quick to embrace ‘good fats’, but this is changing. Many of today’s most popular weight loss programmes now advocate either low-fat dairy or no dairy at all. While buyers increasingly value food integrity and authenticity, we’re also seeing sales of non-dairy milk and other alternatives increasing.
How can dairy brands weather the challenge? In short, by tweaking the hard and soft power elements in their brands. In a hard power move, Ben & Jerry’s has launched a range of vegan ice creams. In tackling the dairy question and entering a new market, the move has also won the brand a Peta ‘Proggy’ award for innovative and animal-friendly achievements. Other brands could well explore the ‘soft power’ of their branding – especially their copy, visual identity and messaging – to pull the dairy conversation towards providence – organic and free-range products still selling well.
Pet food
The UK pet food market is now worth a massive £900 million, dominated by a limited number of major players. Such a sizeable market offers a rich opportunity for agile startup brands.
Europe is a continent of pet lovers, with afifth of owners willing to cut spending on groceries before that of their pet’s food. Yet, global pet food sales have only grown by 4% since 2015, according to Pet Food Industry, and the market has been slow to move on brand-wise from functional and generic messaging.
The seeds of change are there. Sales of natural dog and cat food have grown, while Pets At Home state that sales of “advanced nutrition” products are on the rise. Pet owners are becoming increasingly concerned about what they’re feeding their animals, too. While sales of grain-free pet food have remained steady over the last 12 months, the fact that grain-free pet food offers serious health benefits for animals suggests this part of the industry offers room for growth.
Brands like Lily’s Kitchen – an ethical, natural pet food producer – have seen huge success: after attracting several million pounds of investment in 2015, they’re eyeing up European expansion too. And it’s not simply the produce that sets Lily’s apart; it’s the messaging around it too.
Soft drinks
In the soft drinks category, the market for premium adult soft drinks is on the rise. The 2016 Britvic Soft Drinks Review shows a 75% year-on-year increase in sales of premium soft drinks in licensed retailers, while 7 in 10 adults are also drinking premium soft drinks at home.
Opportunity areas like these are important, given that the wider soft drinks market has stagnated. While bigger players focus on reducing the sugar content of their drinks, newer, more innovative players are entering the market with their focus firmly on discerning audiences. Daylesford’s Sparkling Apple & Bilberry Juice and Seedlip’s distilled non-alcoholic spirits mimic the design of alcoholic beverages for a grown-up feel. Gunna has entered the market with a striking, ginger taste, and a refreshingly unusual brand identity (by yours truly).
Food retail
Market Force Information’s recent survey of 4,500 people found our favourite fast food chain to be Five Guys, a chain where a burger and chips can cost around £12. Gourmet Burger Kitchen (GBK) also made the top five.
There’s a shift from fast and cheap to fast and high-quality here: an increased focus on provenance and quality amongst the UK’s diners writ large. Paired with the rise and rise of Deliveroo, the preference for fast, convenient food with a conscience is clear to see. Quality, origins and freshness will continue to be key watchwords for successful retailers in 2017.
Snacking
Snacking has become a major food trend in the UK, which supermarkets are increasingly tapping into. Take Tesco, where the egg and spinach protein pot and falafel and hummus snack pots sit alongside sandwiches, demonstrating the mainstream effect of snackification and catering to the ever-shrinking lunch break, which now stands at average 34 minutes.
But there is a backlash, of sorts. The proliferation of protein bars and snacks has led some to question their health benefits. Most are packed full of sugar, and even those containing artificial sweeteners are being slammed by nutritionists for potentially increasing blood sugar levels. Savvy, health-conscious consumers are beginning to question exactly what their bar contains.
From Yu! Fruit Chews (100% fruit snacks) for children to the cricket flour-based Crobar – a protein bar with no gluten, soy, dairy, sugar or sweeteners – the brands that are likely to succeed over the next twelve months are those offering sustainability and a strong brand story, to offset interrogation about their ingredients. We’re seeing similar shifts in the chocolate industry too, with healthier, more ethically-focussed brands coming to the fore.
In summary
A few key trends will emerge across the whole FMCG landscape:
The need to empower consumers will become more important – allowing them to do, feel and share so that a brand remains a relevant and appreciated part of their lives. The convergence of health, wellness and sustainability will continue, with consumers increasingly interested in mindfulness, integrity and authenticity.Snackification will continue, as almost half of those aged between 18 and 34 swap their daily meals for snacks. Food will be required to offer an experience, not simply fulfil a need, as consumers seek intense new flavours, customisation and choice.Provenance will remain a key concern, with consumers wanting to learn the story behind their food
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