December 7, 2015

What Does 2016 Hold For The Food Industry?

2012 small food business trendsThe only thing that stays the same is change – isn’t that how the saying goes?  Food is no different so let’s take a look at how the food industry is predicted to change in 2016.   Based on interviews with several experts in the food and consumer goods industries, we believe the following 5 trends will have the biggest impact in the coming year:

Convenience Is Key
Convenience is the name of the game these days.  If you read the 2015 Plate of the Union report, you’ll remember that I mentioned it then a main driver for 2015 and the same holds for 2016 as well.  The consumers’ desire for convenience though has more of an impact than you may first think.  Here’s where it is expected to be felt most next year:

  • Snacking on the go means that food packaging has to evolve to enable consumers to conveniently eat in the car, on the train, or throw the snack into their bag for later.  There will be changes not only in product size and configuration (e.g., bite size), but also how it’s packaged (resealable will be increasingly prevalent).  Expect to see innovations in packaging in 2016 to help address this problem.
  • The desire for increased convenience will push consumers to smaller footprint stores, eroding share from large format supermarkets.  These smaller format store are be able to offer a more targeted set of items drawing from an immediate customer base.  You see this already happening with micro-stores that are popping up in urban areas in large amounts of foot traffic.   Smaller stores that focus heavily on what their consumers will experience significant growth in 2016.
  • Technology and companies that utilize it are starting to see an uptick among consumers who are looking for ease and convenance.  Companies like Instacart are catching on as a way to make consumers’ lives easier.  When you see a company like Whole Foods Market give Instacart floorspace to store bags for their customers, as well as dedicated parking spaces, you have to take notice.  Amazon Prime Now offers some customers delivery of certain products within an hour as well.  Look for more consumers to jump on the convenience bandwagon in 2016 – the impact that will have on changing how consumers shop (and also how consumers discover new brands in stores) could have a lasting effect on the food industry.

The Millennials Are Making Their Mark
I know, I know, if you aren’t a Millennial then you’re sick of hearing how great they are but the reality is that Millennials now outnumber Baby Boomers (and if you’re in the generations in between like I am then you’re just out of luck altogether) and those Millennials are starting to make real money.  That money and how they shop has huge impacts and implications on every industry it touches with food being one them.  The reality is that the focus on convenance and use of technology to achieve that convenance is already being driven in large part by the Millennials who have a comfort level with technology thus far unseen in previous generations.

The other ways Millennials will impact the food industry in 2016 is the fact that they are no where near as brand loyal as their parents and grandparents are.  That is good news for small brands like yours as they are not so easily swayed by the million dollar marketing campaign as they are with brands and companies that help them make and build connections.  Millennials are also big foodies with research showing that 90% of them cook dinner at home at least 3 times a week.  50% also prefer to purchase from brands that support their local community.   This is the market that specialty food producers have dreamed of.  Percentage increase of sales year over year for mass manufactured food products has already been on the decline for years but 2016 may very well be a banner year for small food businesses.

Fat Loses It’s Bad Name
Maybe it’s a holdover from the ‘fat free’ days of 1992, but ‘Fat’ is starting to be recognized for the valued role it plays in healthy human nutrition.  Without a doubt, some fats are better than others, but as consumers continue to see and understand the difference, expect to see more and more food brands reincorporate fat back into their products and even start marketing that component.   Just last week Kind Bars, which had been warned by the FDA that they had to remove ‘healthy’ from their labeling and marketing, petitioned the FDA to re-evaluate the criteria through which they define healthy to include current medical and scientific findings.    Could 2016 be the year of healthy fats?

Sweet Loses Ground To Savory
As a pastry chef it pains me to say this, but the flavor trends show that consumers’ palates are seeking more and more savory items.  Fat may be good, but sugar is definitely getting a bad rap these days.  That is not to say that sweets companies should abandon hope though.  When consumers want to splurge they want to do it in with products that they know are made with real ingredients which is where small sweets businesses and bakeries shine.  But, especially with packaged food, expect to see more savory items and more savory flavors coming to store shelves near you in the next year.

The Food Waste Fight Gets Serious
Food waste, be it what a restaurant throws out every day or what makes it to your garbage or composting bin, is being talked about more and more.  Questions are being asked about why ‘ugly’ produce, that tastes fine but simply doesn’t look pretty, is being tossed when so many people are going hungry.   Websites, blogs, and Instagram accounts are popping up to help consumers use the ingredients in their homes and minimize food waste.  In 2016 it wouldn’t surprise me to see restaurants start to brag about reducing their food waste in their marketing.  For small businesses, this is something to keep an eye on from both the standpoint that food waste is literal money you’re throwing away, but also from the standpoint that this is becoming more and more of a hot topic with your consumers in the new year.

Look for a more in-depth report about food trends and economic impacts as part of the Plate of the Union report in late January.

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