What Will Drive Food & Beverage
Innovation in 2022?
Blue Diamond Global Ingredients Division's Director of Strategic Marketing, Loretta Kelly, joins Vice President Laura Gerhard to talk about the food and beverage trends that will affect your formulations in the year ahead.
Loretta Kelly: Hello, and thank you for joining us. I'm Loretta Kelly.
Laura Gerhard: And I'm Laura Gerhard. Today we'll be looking ahead to 2022 checking in with trends and consumer needs, as well as how we can address them. Let's start with the obvious. The COVID 19 pandemic continues to have an impact on food and beverage innovation.
In fact, 85% of consumers say they've made changes in how they eat due to the pandemic in three key areas. Those include showing a heightened interest in functional foods and beverages, plant-based alternatives to food that's more traditional and a desire for getting greater value for money.
First, let's take a look at these statistics around functional foods and beverages. 60% of consumers believe that functional foods can help to treat certain illnesses. 70% are already using at least one product with functional benefits. And about a third seek out functional foods for more general purposes like mood enhancement, anti-inflammation benefits and detox.
Plant-based proteins are on the rise too. Almost two thirds of consumers have recently tried a new plant-based protein. 30% say they're getting more of their protein intake from plants. And 40% say they perceive plant-based products as healthier.
However, all of that health seeking behavior doesn't always translate into a willingness to spend more money. That's where number three - value - comes in. 80% of American shoppers say they're taking at least one action to try and find greater value for the money they're spending.
And overall, 70% of the US shopper base comprises value seeking consumers. That's an opportunity for growth for brands that can offer the plant-based products with easy to understand ingredients that consumers want - and at a price that feels like good value.
One big way consumers find value is in products that promise more than one marquee benefit. In fact, 33% of consumers say they're more likely to buy a food or beverage that claims multiple health benefits. And 40% are looking for products that offer three or more functional benefits in one.
It isn't always about cramming in as many functions as possible, though. 64% of consumers - that's nearly two thirds - are looking for products that are specifically tailored to their own needs. Seniors want products that promote healthy aging, while younger consumers are looking for overall preventive care.
The fastest growing health claims focus on joint health, energy and alertness, immune health, brain health and bone health. Other consumers are looking for products that match their specific diet. In fact, between 2016 and 2020, the total global number of vegan food product launches doubled. And over the same period, keto friendly claims rose 165%.
It's not just diets that are getting a new look, either. 88% of consumers surveyed said their snacking habits increased during the pandemic. And beforehand, 83% of consumers were already saying convenience was growing more important to them.
As some consumers return to offices and classrooms, convenience is expected to continue playing an important role in food purchasing decisions. And another factor that's growing in importance: transparency.
39% of consumers say environmental sustainability affects their purchase decisions. And a similar number say it's important that the people farming their food do so in an environmentally conscious way.
This is particularly noticeable among Gen Z consumers, nearly three quarters of whom say they're willing to pay more for sustainable products.
Sustainability, functional benefits, personalization and value are just some of the trends we're following. The good news is there's a fairly simple solution that can help you address all of them: plant-based ingredients. To talk about that, here's Loretta, our director of Strategic Marketing.
Loretta Kelly: Thank you, Laura. Plant based foods are chosen by consumers for their health benefits and sustainability. In fact, 70% of consumers consider protein from plant sources, the healthiest. For consumers choosing from among the rapidly growing landscape of plant-based foods, the most likely driver of purchase intent is still taste.
Innovative companies will be focusing on achieving a clean taste while maintaining a clean label. Blue Diamond Almonds and almond ingredients can help. Almonds come in a variety of versatile forms like almond flour, almond butter and almond protein powder - all of which offer both the functional benefits of almonds and a clean taste.
Almond formulations can help you create products that appeal to consumers who are simply looking for healthier foods, as well as targeting those who adhere to keto, vegan and other specialty diets.
And they can actually improve the taste and texture of the foods they're added to, helping to eliminate the beany or earthy taste of some plant-based products. Our almond ingredients are produced by mechanical separation, which means we use no chemical additives in processing. That helps you maintain a clean label.
And consumers love them. Almonds are immediately recognizable in an ingredients list on the back of a pack, and they're perceived as a superfood because of their protein and dietary fiber content. In bakery and nondairy products, almonds offer a variety of opportunities. Almond flour's fine granulation is ideal for even the most delicate pastries.
Almond protein powder and almond butter contribute to viscosity and a rich dairy like creaminess in nondairy frozen desserts and custard. And more traditional almond forms offer a value-added texture and taste as a topping or inclusion.
Blue Diamond has spent more than 110 years growing almonds, and the almond marketplace. And our network of growers and supply chain partners is ready to assist in solving your taste and texture challenges with versatile almond ingredients.
With proprietary processes and equipment that allow us to maximize quality and consistency, and an expert R&D team committed to helping you enhance taste, texture and labels, we're ready to deliver on our commitment to innovate solutions that will bring better-for-you products into consumers' homes for a long time to come.
Laura Gerhard: Thanks for joining Loretta and me today. We hope you found these powerful insights and our applied almond expertise helpful.
Toby Stonelake: Welcome back, everyone, and thank you for joining us for the Q&A portion of our webinar. My name is Toby Stonelake. I am a senior product marketing manager here at Blue Diamond. I would like to thank those of you who have submitted questions prior to this webinar.
We'll be starting with a few of those questions, and I would like to encourage all of you to go to the top of your screen where you can then enter your own questions after seeing some of the content that you have just seen on the trends.
Next, I would like to introduce our panelist, Laura Gerhard, Vice President, Blue Diamond Global Ingredients Division; Loretta Kelly, Director of Strategic Marketing, Blue Diamond Global Ingredients Division; and Lu Ann Williams. She is Global Insights Director from Innova Market Insights.
Laura, would you like to share with us a little bit more about your role?
Laura Gerhard: Sure. I lead our global ingredient division that is comprised of our manufactured ingredients and products in our commodity portfolio as well, and I'm really excited to be here today to talk about some of the trends that you saw in the webinar and talk about our applied almond expertise.
Toby Stonelake: Thank you, Laura. And Loretta, you?
Loretta Kelly: Hi, Loretta Kelly, I lead the strategic marketing group here. I'm really working on developing all the technical and commercial reasons to believe for all of our ingredients that we're bringing to market.
Toby Stonelake: Thank you very much, Loretta. And last: Lu Ann.
Lu Ann Williams: So I lead a team of analysts here at our market research company, and we help food companies launch successful new products.
Toby Stonelake: Perfect. So before jumping in, I wanted to get your take, Lu Ann, on a few things. So what are you seeing from your perspective or what would you add when it comes to the food and beverages trends for the year ahead?
Lu Ann Williams: I think the video was excellent. I think you really touched on most of the ones that I identified. We do a top ten trends every year. And I think you really touched on most of them, and I think I agree that there's an overall shift to health.
So that's absolutely important now. I think maybe one that I would add would also be mood food around, but more around. We know Gen X, for example, are looking for foods that help them relax, that calm them down.
We know younger consumers are looking for adventurous flavors and so on. So maybe if you think about it, we've just come off two years where food was just about our only entertainment. So I think there's a new appreciation for the role that food performs in our life, in addition to just eating and sustenance that it really became an important part of the social fabric and social moments in our families.
And then I think everything else - Yeah, I think it was really summed up really well by Laura and Loretta in the presentation.
Toby Stonelake: Great. As a follow up question to that, and this is for any panelist, what's a trend you believe isn't getting enough attention right now?
Lu Ann Williams: I would say healthy aging, and I know you mentioned it also in the video, but about a third of consumers in the U.S. are Boomers. And so I think there's a big opportunity for addressing the really specific needs of this consumer group.
Toby Stonelake: Absolutely. Anything additional to add?
Loretta Kelly: So, I think that's a really great trend to talk about - the healthy aging one. I think people are looking at that, but they're looking specifically at the different diets that are out there that allow you to live longer. I know that a lot of conversation around Blue Zone diets and the anti-inflammatory diet and those diets that have been proven to show that people who consume those foods live longer. And what's interesting about both of them is that the majority plant-based. Right? So it's reiterating another trend that comes back.
Toby Stonelake: Absolutely kind of concentric trends, right?
Loretta Kelly: Yeah.
Lu Ann Williams: And if I can maybe just add one more layer to that, I think we're we're living in the most interesting time ever in the food industry because everything is really broken into a lot of small niches, right? You can find your target market, so you really can adapt these trends.
You can look at age groups, you can look at regional differences. But even if we take healthy aging, if you look at young consumers, say 20 to 25, they really care about physical beauty, right? So skin, skin health - and if you look at social media, it's absolutely packed full.
If you have teenage girls in your house, you know for sure about skincare. But if we use almonds as an example, almonds prevent wrinkles. 30 to 40 almonds a day, and they have all these really high-tech cameras where they can really measure it, right?
So younger consumers care about healthy aging. You hear 20-year-old saying they're getting on retinol, all kinds of things. And as you got older, the needs change and your … and the functional benefits change. So. You mentioned fiber.
You mentioned almonds. Also, as a source of protein, there's lots of minerals in there. There's healthy fats. So you can actually, if we use this as an example, there's ways to target either ingredients or your food product for the different stages of healthy aging.
So it's bigger. But then you get to that part where people are really worried about mental aging and physical aging, and it's an absolutely massive consumer group. So there's a huge opportunity that I think nobody's really cracked yet.
But if I were putting my money or my bet on something, I would try to figure that out because, you know, 70 is the new 50, and it's a group of people who really do want to stay active and healthy.
Loretta Kelly: You know, I think that's a really great. I think one of the key pieces is that COVID 19, I think, is accelerating that whole idea of aging. People are taking a step back and they're really looking at their lives and that work life balance.
But they're also looking at it like, how do I live healthier and live longer? And I think it's caused these trends that have been somewhat dormant and lying under the surface for a while to just pop up and really accelerate.
Lu Ann Williams: Absolutely. If you look at the statistics, everybody is affected, even kids, you know, who watched parents, aunts, uncles, grandparents get sick. So I think this one is going to have a huge impact over a long period of time and over every consumer group because absolutely everybody - if you haven't been impacted, you've watched somebody else that you care about be impacted.
Toby Stonelake: Absolutely so. So kind of building on COVID 19: Were there any other trends that we either saw or going to see because of COVID 19? I think we've kind of covered health, wellness and kind of the aging aspect of it, but anything else that we can kind of see from COVID?
Laura Gerhard: I can jump in on that, Toby.
Toby Stonelake: Absolutely.
Laura Gerhard: So for sure we continue to see those trends and impacting the way consumers shop. So there's been this whole - for one the switch to digital that I think COVID has but also more of what they're expecting from the foods themselves that they're purchasing and putting into their diet.
So I think, you know, kind of the three big things that we've been talking about is this focus on function and really drawing out that link to some of those health outcomes. So, for instance, immunity and detox and some of these things that you've seen in the webisode.
Plant based alternatives, that's the big one. And we continue to see that trend. A lot of interest there and we'll continue to see that over the next several years. And then there's value. Of course, everybody wants to get value out of the products that they're that they're spending their money on.
Loretta Kelly: I can double click on the value piece. I think everyone seeing rising prices. I always like, look at gas prices to help me, you know, determine where we really standing when it comes to inflation and you can see that number is just getting higher and higher - I don't care where you live, be it California, where I think it's almost $5. And I think in North Carolina, I think it's close to like $4, $4.50 - you're seeing these this huge rise in inflation. And I think people are looking at their pockets and trying to determine, "OK, how do I spend my money the best way?"
But they still want these amazing claims. They still want this high level of functionality from their foods. They're still willing to pay for that plant-based alternative. But it has to mean something, it has to be valuable to them, right?
And so it's I will spend my money on what I find valuable, but I expect to get the most out of every dime I spend.
Lu Ann Williams: Yup. I'd like to maybe touch on two more. So plant based for sure, and maybe just to add another layer to that.
We have as our as our number two trend is plant based as a canvas for innovation that we're starting to see innovation that really goes past just we'll say Plant 1.0 where we saw meat alternatives and dairy alternatives, that there's a new opportunity to take some of these nice ingredients and do something completely different with them. That is absolutely a trend that is gone through COVID and resonated again because it fits into so many lifestyles and so on. So for sure, that's one that's that's going to continue to grow.
And maybe just one more: If you think about millennials, if you look at younger and older millennials, that's about 40% of the U.S. population. They really did spend COVID prioritizing indulgence and snacking and treating themselves.
So there's a big opportunity to do a lot more around healthy indulgence as well and to look for those hero ingredients that still do bring enjoyment and so on. So I think that's - you could look for so many opportunities, but that is one that goes along with everything is happening and COVID as well.
And then of course, we see really like almost you have two Americas: you have 50% who were severely impacted by the by the pandemic and the value is really important to them. And about 50% who are less impacted. So the value is absolutely going to be something that we're going to hear a lot more about.
Toby Stonelake: This is great, this is great conversation. I'm going to shift things up a little bit, and I think, Loretta, you're probably best poised to answer this: How does Blue Diamond help food developers address evolving consumer needs?
Loretta Kelly: Well, we have a lot of great resources to help us there. First off, we have, you know, in the Global Ingredients Division, we have dedicated technical service managers to help with your applications, help you understand how to use the ingredient, when to combine all that under applied almond expertise.
So you really know what to do with that product, so it stands out on your product and on your label. We also have a wonderful R&D team that has the ability to really dig deep and understand the research behind what makes almonds such a versatile ingredient.
And Lu Ann talked about hero ingredients and almonds is definitely one of those that stands out. It provides the functional benefits as well as it provides nutritional benefits. And so when you take those combined, you know, you were able to drive some things forward.
So when we go to market, we can actually leverage both our technical service support, our R&D support, and last but not least, our sales team. They're extremely knowledgeable about almonds and the market and how best and when best to go after different versions of almonds that we have available for use.
Toby Stonelake: That's great, thank you. Again, so we've talked a bit about different generations and the trends that are impacting them. But Lu Ann, if you wouldn't mind diving a little deeper on this question: "what consumer age group has the greatest impact on industry trends?"
Lu Ann Williams: Well, I would say if you're talking about plant based, it's definitely younger consumers. If you talk about something like clean label, which is still really important, especially when it goes along with what's happening in plant based as well.
But Clean Label is equally appealing to all age groups. If you look at things like considered consumption, transparency was mentioned sustainability, making sure that food products align with your personal values, that's also something for younger consumers. But then boomers really say that the food industry should be contributing to the health of the planet.
So it's a difficult question just to say one thing. But I think if we take one of the absolute biggest trends - which is plant based - it is definitely younger consumers. Yeah, so that's it. And then health again, there's different how younger consumers want more really super functional foods. They are protein eaters, and they're looking for a lot of these added benefits. But then when you get to older consumers, they're looking at reducing some of the bad things. And now they're starting to look for things that really target specific needs as they get much older.
So that's maybe a messy answer, but it kind of depends upon what kind of benefit that you're looking for. But the absolute biggest group of consumers is millennials - that's still about 40% of the population. But I still say waving the flag for boomers because it's the second largest group, and I still think there is absolutely massive opportunity.
They haven't been impacted as much financially through the pandemic, for example. And they have a lot of needs. So I think there's a lot of opportunities across all different age groups.
Toby Stonelake: Absolutely. That's great insight. So kind of talking through, you know, what trends, what's the benefits, what, what are we seeing - and this is to the panel - what are we seeing as the most important claim right now? Is it environmentally friendly? Is it vegan? Is it keto? Paleo? What is, you know, if there was a ranking, what is what are your top three claims in the industry?
Lu Ann Williams: Plant based, sustainably made some type of sustainability claim and then something related to health. If it's fiber, I think fiber is a huge one right now, for example. Gut health is one of those emerging topics.
Toby Stonelake: Absolutely.
Loretta Kelly: I would add to that the transparency. I think that is growing significantly. Everybody is this informed consumer, right? And they've been researching it from something like social media on Instagram to actually looking at the medical research papers and so forth.
And so I think customers or companies that actually have policies or put the right information out there - via blogs or other methods - are going to help inform this population that's doing this research and allow people to see behind the closed doors that have been so closed for so long. You know, to see how we're making things, why we're making things, what choices we're making. And so they're more informed.
So transparency, to me seems like another piece that's popping up, and it's becoming critically important on both sides of the aisle so that you get the right information to the consumers, but also you're being socially responsible to give out the right information.
Toby Stonelake: Thank you, both. I think we may have time for one or two more questions. This question just came in: "How does health-conscious work out in convenience category, specifically frozen food segment? They usually don't go hand in hand."
Lu Ann Williams: Oh, I think we have to move away from thinking about like the old TV dinners. Think about probiotic almond milk smoothie cubes. Think about little frozen bakery treats that are gluten free that are made out of almond flour.
You know, the whole family doesn't eat gluten free, then this is a great way for somebody to have little treats in the freezer that somebody that can eat like that. So I think there's lots of things that you can do. If you just think about the healthy things that some people are doing through fresh, I think you can apply a lot of that through frozen as well.
I mean, think about all the people are using their blenders to make smoothies and so on. Just imagine all the ingredients that you can make and you could apply kind of a freshness benefit to having it frozen. So I think you can make it go together. I think you just have to maybe look for new opportunities in that space.
Loretta Kelly: I can add to that as well. I think convenience keeps popping its head back up year after year, right? And I think people have so much to worry about now that they're looking for the most convenient way to apply all these trends., be it from plant based to functional eating.
And so when you can go in your freezer and pull out that bag of mushrooms, pull out that bag of cauliflower, it's a lot easier. Yes, you know, fresh cauliflower is better. But and in some cases, I actually don't know if it's better. I think there's some places where they're picked straight from the vine and freezing it actually hold it in more antioxidants than it going through the whole supply chain of being shipped and, you know, it's been sitting there and storing for maybe 2-3 weeks. But for the most part, I think people are really trying to figure out how to leverage the convenience aspect as well as the health aspect and like frozen foods, is that great option.
Toby Stonelake: Perfect. Lu Ann, Laura, Loretta, thank you all for being such great panelists today and providing such great insights. Thank you to everyone in the audience for joining us and carving out a portion of your day to listen in.
If you are hungry for more food and beverage insights, please visit our Ingredients Insights page at bdingredients.com/insights and check out our podcast "Grown in California. The Blue Diamond Almond Podcast." Thank you again. And until next time, I'm Toby Stonelake and we hope to have you soon.
Meet the Experts
Vice President, Blue Diamond Global
Laura has worked in food and agriculture for over 22 years. She has rich experience in the industry, developing and leading commercial and product line strategies and sales leadership. She is a champion of continuous improvement initiatives regarding pricing and product portfolio optimization, consistently resulting in improved profits. Her passion for and knowledge of natural and better for you food market trends translates into exceptional outcomes for Blue Diamond customers worldwide.
Director of Strategic Marketing,
Blue Diamond Global Ingredients Division
Loretta is a marketing and business development professional with over 15 years of experience in the food and beverage industry. She knows the strategic levers marketing needs to pull to make progress on pipeline opportunities, and how to marshal people and resources to drive innovation and shift the status quo. She holds an MBA from Chicago Booth.