The food and beverage industry has seen significant growth in the past few years, and this upward trajectory is set to continue over the foreseeable future. While there’s a myriad opportunity for growing businesses in 2019, staying on top of rising costs, changing consumer preferences and emerging technologies, all while being innovative, is essential to survive and thrive in this highly competitive industry.
With so much going on inside this ever-changing and evolving sector, what should food and beverage suppliers focus on to grow and be successful this year? If you’re looking for an answer to this question, you’re in the right place. Over the course of this article, we’ll list and analyse the trends that have been shaping the food and beverage industry in 2019.
Health and Wellness
This trend has been one of the fundamental drivers of change in the food and beverage industry at a global scale, and is not only set to continue, but is also expected to accelerate. Over the last few years, we’ve witnessed this trend manifested in clearer and cleaner labels, the rise in organic offerings from prominent retailers, and the rise of new entrants across various categories. The major factors that drive this trend include:
- Consumers becoming increasingly health-conscious
- Retailers looking to drive higher margins by diversifying their offerings
- Brands that are trying to enhance their image by producing healthier alternatives to processed sugar, saturated fats and artificial colouring.
In the last few years, we’ve seen a rise in the availability of food products that contain probiotics, protein, collagen and plant-based ingredients. In the near future, the same type of growth is expected with CBD products as well.
This opens an entirely new avenue for suppliers, providing them with the perfect opportunity to tap into a niche. Offering high-quality, organic and natural ingredients, through intelligent supply chain management, wholesalers can cater to a large sector of the industry. As retailers search for reliable suppliers, software like OrderTron can help you catalogue your entire stock, connect with clients and streamline the process easily.
An Increase in Consumer Demand for Transparency
This trend is perhaps the biggest driver of change in the food and beverage industry right now. As awareness of health and well-being continues to grow, consumers now want to know and understand exactly what ingredients are being used to make the products they’re consuming. Before now, it was just picking up a product on the shelf, giving the label on the back a nonchalant glance, and putting it in your cart. That is no longer the case.
The modern consumer is more attracted toward brands that not only reflect their personal values, but are also more inclined to sharing transparency to their products. Today, the brands that consumers wear, drink and eat have the expression of who they are and who they’re aspiring to be. This is one of the primary reasons why consumers now are more interested in finding a company’s origin story, their social consciousness, their sustainability efforts, and last but not the least, their corporate transparency.
Consequently, brands that are clean and have high ethical values have become more important than ever. Artificial, lab-created ingredients have fallen out of demand with increasing numbers of customers now incline towards real natural ingredients.
This also offers an incredible opportunity for wholesalers and suppliers to match changes in retail. It’s a chance to bring in clients interested in using your products in their businesses, whether it’s the high-quality dairy you supply, or free-range eggs and meat. Your clients will be able to know where their supplies are coming from, thus allowing for more transparency with their own customers.
We briefly touched on the subject of probiotics becoming an increasingly prevalent ingredient in food products, but we haven’t discussed how important the role of functional foods has become in the typical American diet. So, let’s do that now.
Functional foods and beverages is no longer a niche segment. In fact, according to a report by Technavio, the market is expected to grow approximately 8% annually right on through 2021. While probiotics were once only associated with yogurt, they’ve now become especially interesting to major food manufacturers and are starting to infiltrate numerous segments such as cereal, bars and even water. An example is PepsiCo’s Tropicana Essentials Probiotics line, which introduced live microorganisms to the aisle of mainstream juices.
Sustainability is yet another trend that has been steadily gaining traction in the food and beverage industry, and is set to continue not only throughout 2019, but over the coming years as well. From production, to packaging to storage, sustainable business practices are being implemented across all stages of the food supply chain. One of the main issues regarding sustainability is poor communication between the different parties of the food supply chain. Poor communication and fragmented information can have a negative effect on the food supply chain. It’s important for different parties in the supply chain to be aware of each other’s actions, and be on the same page. Poor communication can lead to waste; inefficiencies and can potentially create mistrust among customers and their suppliers. The bigger the scale you operate on, the bigger the problem gets.
In today’s digital age, communication shouldn’t be a problem. Thanks to technological advancements, gaining a full view of the supply chain and communicating with your suppliers or retail customers has become easier, faster and more affordable. Order management software solutions like OrderTron provide you with 360-degree visibility over your orders, ultimately streamlining the exchange of information between you, your clients and other partners. This not only allows food retailers to have better control over their inventory, which translates into better customer service, but it also allows them to minimise overstocking, which leads to wastage.
An OMS like OrderTron helps calculate and standardise orders, meaning that clients can fix their order quantities and values. These are managed according to their own needs, and allows suppliers and wholesalers to know what each client requires month after month, thus bridging the gap and issue of wastage and replaces it with sustainability.
Another challenge faced by the food and beverage industry in regards to sustainability is packaging. However, with the ever-growing consumer pressure and ever-tightening environmental laws and regulation, food companies are now prioritising environmentally friendly and sustainable packaging solutions, even if it comes at the cost of slashed profits. The upshot is that compostable packaging is starting to get more shelf space, and it’s a trend that is set to grow bigger. In addition to compostable packaging, other methods of combating food waste can be expected for 2019.
Yes, you read that right. Plant-based meat is a real thing, and it’s set to become huge over the coming years. 2018 proved that the days when veggie patties were the only thing vegetarians could put in hamburgers are long gone.
While conventional veggie burgers are still a thing, innovative companies like Impossible Foods and Beyond Meat are now manufacturing vegetable products for meat-eaters. The main idea behind these products is to provide options that are healthier and more sustainable, without having to sacrifice the feel, taste and even the look of meat.
Plant-based meat, in its current form, is essentially a combination of minerals, amino, lipids and water. Meat is produced by cycling plants through animals, so why not make it directly from the plants? This science (and taste) based approach means that this niche has great potential to become extremely lucrative. According to Nielsen and SPINS data, the plant-based food market is currently worth more than $4.1 billion. A 2018 report by Bloomberg revealed that the sales of plant-based alternatives for meat totalled at around $670 million. This signified a 24% jump from the previous year.
This trend is set to grow even bigger in 2019. For instance, the Impossible Burger is now offered by more than 5,000 restaurants across the United States. This includes popular fast-food chain, White Castle. The revolutionary product is set to make its way to grocery stores at some point in 2019. The founder and CEO of Impossible Foods, Patrick Brown, stated that the company has plans to replace animals as a food production technology completely by 2035.
For the last several years, both manufacturers and consumers have been anticipating the inclusion of cannabis in food products. And thanks to the passing of the Farm Bill in 2018, products made from the controversial herb are closer than ever to becoming a part of the everyday shopping cart.
The Farm Bill has legalised the cultivation of hemp, which consequently means that derivatives of hemp, such as the cannabinoid CBD, are no longer classified as Schedule I substances.
Although taking CBD-based food products across state lines in still prohibited by the FDA, all the signs indicate that it’s set to become the next big thing in the functional foods niche of the industry. Some manufacturers have already begun launching snacks and beverages that contain CBD.
However, CBD is just the beginning. The signs are that marijuana is also on its way to becoming a regulated food and beverage ingredient. Currently, marijuana is legal in 33 states as well as Washington DC. However, industry watchers are predicting that it’ll have full federal legalisation by 2021.
OrderTron is an Order Management System that helps wholesalers and suppliers improve inventory management for improved business outcomes. Their Order Management Systems are designed for Food Service Suppliers and Small Businesses, with Android and Apple iPhone applications for their clients. Get in touch with them today for more information on their services or to take on their OMS for your business.