Cat­e­gory Spot­light: Health

Plant foods, nu­traceu­ti­cals and or­ganic are grow­ing fast as more con­sumers are buy­ing into their health ben­e­fits

Progressive Grocer (India) - - News - By Ajay Chan­dran

The food and bev­er­age in­dus­try is un­der­go­ing a change not seen in decades. A con­flu­ence of mega trends is lead­ing to dis­rup­tion and in­no­va­tion that is set to change the in­dus­try and con­sumer choices for a long time to come. The food ser­vice sec­tor glob­ally and in In­dia is also adapt­ing to these trends. As a busi­ness leader for a lead­ing, fast grow­ing in­gre­di­ent sup­plier that is ben­e­fit­ting from these mega trends, I have had the op­por­tu­nity to ob­serve the global and In­dian in­dus­try from a unique van­tage point.

My gen­eral as­sess­ment is that the in­dus­try is be­ing im­pacted by the fol­low­ing trends that are ex­pected to have a last­ing ef­fect. Those brands that can un­der­stand and nav­i­gate these trends will reap the ben­e­fits in the highly at­trac­tive and fast grow­ing In­dian mar­ket in the longer run. De­mand for nat­u­ral, clean la­bel in­gre­di­ents: Con­sumers glob­ally and in In­dia are de­mand­ing prod­ucts con­tain­ing in­gre­di­ents that they can un­der­stand. They are skep­ti­cal of those in­gre­di­ents that seem like they are man­u­fac­tured in a plant with no ba­sis of nat­u­ral ori­gin. In In­dia, con­sumers are in­creas­ingly look­ing at in­gre­di­ent pan­els to make in­formed choices. Re­cent con­sumer sur­veys from Pure­cir­cle In­dia In­sights have re­vealed that 80% of con­sumers are look­ing to cut down on con­sump­tion of ar­ti­fi­cial sweet­en­ers. The on­line con­ver­sa­tions in terms of their neg­a­tive sen­ti­ment are as bad as pol­lu­tion in In­dia. This, of course, varies and not all ar­ti­fi­cial sweet­en­ers are per­ceived sim­i­larly but these have ba­sis in his­tor­i­cal con­text and mar­ket­ing of the in­gre­di­ent. For ex­am­ple, in the US, High Fruc­tose Corn Syrup [HFCS] and As­par­tame have com­par­a­tively more neg­a­tive sen­ti­ment than say Su­cralose, though all have much more neg­a­tive sen­ti­ment than nat­u­ral sweet­en­ers like sugar cane and ste­via. In the US, food ser­vice ma­jors like Star­bucks have adopted ste­via as an ad­di­tional sweet­en­ing op­tion to cater to the de­mand. In In­dia, nat­u­ral in­gre­di­ents like honey, ste­via, and gur (jag­gery) have only 5% neg­a­tive sen­ti­ment com­pared to Su­cralose with 25% and As­par­tame 44%. Clearly, there is an op­por­tu­nity for prod­ucts that in­clude nat­u­rally de­rived in­gre­di­ents. In­gre­di­ents with pos­i­tive func­tional ben­e­fits are more de­sired: Con­sumers are se­lect­ing prod­ucts that have func­tional ben­e­fits. This is am­ply demon­strated by the rise of value-added dairy, pro­tein mixes, cold pressed juices and prod­ucts with per­ceived holis­tic in­gre­di­ents like aloe vera, turmeric, ash­wa­gandha and sev­eral ayurvedic in­gre­di­ents. In short, con­sumers are look­ing for higher pro­tein, low fat, low calo­rie and with ben­e­fits like an­tiox­i­dants, vi­ta­mins, etc. The trend is cer­tainly more preva­lent in SEC A and B but the ex­pec­ta­tion is that this will per­co­late down to all sec­tors even­tu­ally. In this con­text, sugar con­tent is a neg­a­tive, and in­creas­ingly low or no calo­rie sweet­en­ers have a very im­por­tant

role. Monk fruit and ste­via with their plant-based, nocalo­rie cre­den­tials can sup­port food & bev­er­age com­pa­nies and food ser­vice providers de­vel­op­ing prod­ucts/ recipes with lower calo­rie and sugar con­tent. In this con­text, ste­via has the leg-up in terms of com­mer­cial vi­a­bil­ity. Good man­u­fac­tur­ing prac­tices, safety, trace­abil­ity and sus­tain­abil­ity are now brass tacks: There have now been sev­eral ma­jor safety scares, per­ceived and real. Glob­ally, ex­am­ples like the food scare at Chipotle that arose be­cause of poor food han­dling, melamine con­tent in milk scare in China and, lately in In­dia, the chal­lenges posed to prod­uct safety of a few MNC brands show that man­ag­ing the sup­ply chain with the high­est qual­ity and trace­abil­ity down to farm and doc­u­ment­ing it to meet reg­u­la­tory de­mands is im­por­tant. This is not pos­si­ble un­less the sup­pli­ers and buy­ers are work­ing in tan­dem to fol­low in­dus­try good prac­tices and the reg­u­la­tions in the coun­tries they op­er­ate. Sus­tain­abil­ity is an­other as­pect that is im­por­tant and has the power to add to the mar­ket­ing com­mu­ni­ca­tion while pos­i­tively im­pact­ing so­ci­ety.

From my ex­pe­ri­ence of lead­ing sus­tain­abil­ity for Pure­cir­cle, I be­lieve firmly that suc­cess of long term sus­tain­abil­ity is tied to align­ment to busi­ness ob­jec­tives. Man­u­fac­tur­ers who fol­low these prac­tices may not be the most eco­nom­i­cal in terms of mon­e­tary costs im­me­di­ately but the to­tal cost, in­clud­ing rep­u­ta­tional risk and stake holder en­gage­ment, is pos­si­ble when in­gre­di­ent man­u­fac­tur­ers in­vest in prac­tices that ad­here to sus­tain­abil­ity, qual­ity and in­no­va­tion. Con­sumers, too, in­creas­ingly feel the im­pacts of en­vi­ron­men­tal degra­da­tion in their daily life. The pol­lu­tion sit­u­a­tion in NCR, de­plet­ing wa­ter ta­bles in var­i­ous com­mu­ni­ties and chang­ing weather pat­terns are close to the heart of many con­sumers. Com­pa­nies that speak to these con­cerns in their brand­ing and com­mu­ni­ca­tion in an au­then­tic man­ner have the chance to dif­fer­en­ti­ate them­selves.

Up­start en­trants and new in­no­va­tions are poised to dis­rupt the in­dus­try: The mil­len­ni­als have an in­creas­ingly dif­fer­ent out­look on con­sump­tion than the pre­vi­ous gen­er­a­tions. This is lead­ing to a host of ways by which com­pa­nies are cater­ing to their de­mand. Many large com­pa­nies, es­pe­cially in the de­vel­oped re­gions that have not adapted, are suf­fer­ing. These trends have pre­sented enor­mous op­por­tu­ni­ties and lead­ing bev­er­age & food com­pa­nies have faced tremen­dous in­no­va­tion chal­lenge set forth by the up­starts. In the US, brands like Bai, Suja Juice, Ze­via and sev­eral smaller brands fo­cused on nat­u­ral/ or­ganic, health and con­ve­nience have cap­i­tal­ized on con­sumer trends to­wards re­duced sugar and carbonated drinks.

Plant based meat al­ter­na­tives like those in­tro­duced by com­pa­nies such as Im­pos­si­ble Foods, are set to rev­o­lu­tion­ize the fast food in­dus­try. Plant based pro­teins like pea, lentils and even cricket flours (yes) are ad­dress­ing the de­mand for clean la­bel, health im­pact­ful foods. New vari­ants like Kom­bucha tea and ex­pe­ri­ences like ni­tro­gen in­fused ar­ti­sanal cof­fees are cater­ing to the need for unique ex­pe­ri­ences and are dis­rupt­ing the mar­ket. In­ter­est­ingly, large com­pa­nies have de­cided to have bolt-on ac­qui­si­tions or eq­uity stakes to ac­cess not only the suc­cess but also the en­tre­pre­neur­ial cul­ture of in­no­va­tive and niche com­pa­nies. Kel­logg’s ac­qui­si­tion of an all clean la­bel pro­tein bar brand RX Bar, Dr. Pep­per Snap­ple Group’s in­te­gra­tion of Bai into its port­fo­lio, Nes­tle’s pur­chase of Freshly are all ex­am­ples of these. Ad­her­ence to reg­u­la­tory norms is the key: Nowhere is the need for reg­u­la­tory un­der­stand­ing more im­por­tant than in the In­dian sub­con­ti­nent. Gov­ern­ments are still tweak­ing rules and laws to bring the in­dus­try at par with the de­vel­oped regimes in this di­verse re­gion with vary­ing food prac­tices. In this sce­nario, it is im­por­tant that com­pa­nies per­form their due dili­gence and work with part­ners across the sup­ply chain that in­vest re­sources in un­der­stand­ing the reg­u­la­tory regime. The cur­rent regime at FSSAI is also lis­ten­ing to var­i­ous stake hold­ers – con­sumers, in­dus­try, med­i­cal prac­ti­tion­ers – while fram­ing laws.

But it is im­por­tant to also look ahead as to what may come down the wire, based on global trends. Sugar, fat, salt are all un­der scru­tiny across the globe. The regimes glob­ally have adopted var­i­ous prac­tices from on pack de­tailed com­mu­ni­ca­tion traf­fic light sys­tem or adding puni­tive cess or taxes on en­tire cat­e­gories and/or sugar con­tent. It is hap­pen­ing in de­vel­op­ing and de­vel­oped coun­tries alike. In fact, just a few days ago, Sri Lanka im­posed sugar taxes of 50 p for ev­ery gram of sugar in bev­er­age, forc­ing many com­pa­nies to re­act to the sit­u­a­tion overnight. Those brands that had pre­pared for the pos­si­bil­ity are in a bet­ter po­si­tion to re­act faster.

To close, In­dia is a highly at­trac­tive emerg­ing mar­ket in the throes of ma­jor changes. Brands that are will­ing to adapt and re­act to changes by part­ner­ing with sup­pli­ers and cus­tomers who in­vest in sus­tain­abil­ity, reg­u­la­tor and con­sumer lis­ten­ing are well po­si­tioned to ex­ploit the world’s soon to be third-largest food and bev­er­age mar­ket.

Con­sumers are se­lect­ing prod­ucts that have func­tional ben­e­fits. This is am­ply demon­strated by the rise of val­ueadded dairy, pro­tein mixes, cold pressed juices and prod­ucts with per­ceived holis­tic in­gre­di­ents like aloe vera, turmeric, ash­wa­gandha and sev­eral ayurvedic in­gre­di­ents.

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