It has been a whirlwind of a year for the food and beverage industry. At the onset of the COVID-19 pandemic, some brands saw a surge in sales and had to scramble to increase production to keep up with demand while others were forced into survival mode.

More than eight months have passed, and brands are still figuring out what the best path forward looks like. As if changing consumer preferences weren’t hard enough to keep up with before the pandemic, it’s even more uncertain how consumer purchase habits will evolve as we approach a new season, a new presidential administration, a possible vaccine and anything else the new year brings.

Despite these unprecedented times, it is important innovation doesn’t suffer if brands want to grow long-term. Brands that wait too long to innovate will miss opportunities to be the frontrunner in categories and risk launching “me too” products in an oversaturated market.

The trends

Data from the last several months suggest there are a few trends that are here to stay for the foreseeable future. One of the biggest trends is that physical health is a top priority. Although this has been a significant trend for several years, it has been accelerated by the pandemic.

A survey of 2,000 Americans by OnePoll found 4 in 5 individuals are completely rethinking their health priorities since the onset of the pandemic. More than half stated they wanted to eat more fruits and vegetables and to increase their exercise regimen, but the largest shift was the desire for immune-boosting products. Eighty percent of respondents said they want to incorporate immunity-strengthening foods and supplements into their diet.

Google search data also supports these trends. Searches in the last month for the term, “exercise,” are up 5% in the U.S. compared to the first month of the year (a time when consumers thinking about exercise is typically at an all-time high) and searches for exercise equipment are up 14.5%. Additionally, searches for immunity have increased 34%. This suggests consumers are seriously thinking about their wellness goals and looking for help to achieve them.

Innovation inspiration

Knowing that consumers are focused on health, here are some ways brands can innovate:

• Better-for-you products. Whether it’s renovating a current product line or introducing a new, delicious health-forward beverage to the market, there’s a lot of opportunity to help consumers be their best selves. This could mean continuing the pattern of developing low and no sugar products, reducing calories and incorporating natural ingredients. Brands can also incorporate fruits and vegetables to help consumers meet their health goals. Superfoods are especially of interest to consumers -- Google searches for superfoods have grown 10% since January.
• Immunity beverages. There are so many ways to promote immune health, such as incorporating vitamins and minerals, electrolytes, probiotics and anti-inflammatory ingredients. Ingredients that provide benefits naturally are even more attractive. In March, searches for, “natural immune booster,” skyrocketed 422% from January, though they’ve subsided in recent months. Consumers are also searching for immune-boosting nutrients like zinc (+80%) and vitamin C (+49%).
• Fitness boosters. Consumers want to exercise more, which creates an opportunity to introduce a new audience to sports nutrition products. Beverages such as protein shakes and waters, electrolyte replenishers, performance enhancers and weight-loss elixirs that help consumers meet their fitness goals have a lot of potential. Differentiators in the category include using clean label, plant-based and/or diet-friendly ingredients as well as incorporating multiple functional ingredients in a single product to give consumers more bang for their buck.

Technical considerations

Many of these trends leverage the benefits of functional ingredients, which often present challenges product developers must overcome to achieve the ideal taste, texture and appearance of a product. Off-notes, insolubility and stability issues, color distortion or degradation, and strong odors from ingredient interactions are common issues that can affect the quality of a product. Finding the right balance of functionals, stabilizers and taste modulators is essential to creating a product that satisfies consumers’ expectations.

Most functional ingredients are also negatively impacted by the high temperatures experienced in thermal processing. The higher the temperature, and longer the exposure time, the more risk of functional ingredient degradation. As such, beverages processed under ultra-high temperature processing (UHT) or retort will suffer the most functional ingredient loss. To combat losses during processing, formulators typically add an appropriate amount of overage to their products. Other steps can be taken to protect functional ingredients, such as using encapsulated forms or, depending on the mechanism of degradation, the addition of antioxidants.

Additionally, brands launching functional beverages should make sure claims on product labels and ingredients used in the product are compliant with regulatory guidelines. For example, products that use ingredients that aren’t FDA GRAS (generally recognized as safe) and are marketed for their health benefits, such as, “helps support your immune system” will be labeled as a supplement. Other considerations include whether or not there is significant evidence to back up a health claim and whether or not a claim has been reviewed by the FDA.

Although everything may seem like it is at a standstill because of the pandemic, it has actually accelerated many health and wellness trends. There is a lot of opportunity for brands to renovate existing products or introduce disruptive products that deliver the health benefits consumers want, and it’s important to keep innovating for the market to grow. To continue the conversation about developing health-forward beverages, reach out to me at [email protected].

Holly McHugh is the marketing associate at Imbibe, a Chicago-based beverage development company. She focuses on the company's external communications and brand awareness. She also monitors and analyzes beverage trends to guide clients in making strategic decisions about product development. She has a bachelor's degree from Columbia College Chicago and a master's degree from the University of Denver.

As consumers modify their protein preferences to include a healthy dose of plants, the growing popularity of this choice is evident on store shelves and restaurant menus and reaffirmed in consumer research.

“Mintel data suggests nearly  one-third of Americans now opt for meat-free days, with even more (35%) noting they get most of their protein from sources other than red meat,” said Pam Stauffer global marketing programs manager, Cargill. “In similar fashion, the appeal of dairy alternatives transcends the traditional vegan or lactose-intolerant consumer.” 

Cargill 2018 proprietary research found health perceptions figure prominently in the move toward plant-based eating. “In a survey of more than 1,900 U.S. shoppers, nearly half said they felt better about eating plant proteins,” Stauffer said.

Some consumers are choosing to eat fewer animal-based products for ethical reasons. “Research from The Hartman Group suggests nearly 3 out of 4 U.S. consumers make food purchase decisions based on concerns for environmental and social well-being,” Stauffer added.

The proof is information provided by the Plant Based Foods Association (PBFA) and The Good Food Institute (GFI). U.S. retail sales of plant-based foods grew 11.4% in the 52 weeks ending December 2019, according to SPINS data, bringing the total plant-based market value to $5 billion. Compare that to the U.S. retail food market, which only grew 2.2% in dollar sales during the same period. Plant-based meats grew 18%, with more than $939 million in sales—refrigerated plant-based meat largely drove growth, up 63% in the course of the year. Plant-based milk sales grew 5%, accounting for 14% of the entire milk category.

“Emerging plant-based dairy categories are growing even faster as more households are introduced to new plant-based dairy items, while sales of many conventional animal-based products stagnate or decline,” PBFA’s website reported. “In the past year, plant-based yogurt has grown 31%, while conventional yogurt declined 1%; plant-based cheese has grown 18%, while conventional cheese has remained flat at 1% growth. Plant-based creamers alone account for almost $300 million, growing 34% with its share of total creamers growing from 4% a year ago to 5% in 2019.”

Packaged Facts observed the vegan and vegetarian population has remained fairly stable. “An increasing number of people, particularly younger and trendier eaters, identify as flexitarians,” noted the report, “U.S. Food Market Outlook 2020: Home Cooking, Grocery Shopping, & Food Trends in the Age of Coronavirus.” It continued, “Major manufacturers have grasped the magnitude of this external wave of innovation and are aggressively acquiring or funding new companies. While smaller brands have gained traction in numerous food categories, they have made the most notable difference in meat and poultry, where Beyond Meat and Impossible Foods reinvented the meat alternative and plant-based spaces. Almost every major meat producer and retailer has followed suit.”

Although a segment of the general population perceives plant-based food to be healthier and more sustainable, the report pointed out “many plant-based foods are highly processed and are far from being clean label, which is a highly valued trait.”

The 2020 Food & Health Survey by the International Food Information Council (IFIC) concurred that health is a driver: “More than 4 in 10 consumers (43%) would assume that a product described as plant-based would be healthier than one that is not, even if it had the exact same Nutrition Facts label. Consumption of protein from plant sources, plant-based meat and dairy alternatives increased in the past year, with 28% eating more protein from plant sources, 24% eating more plant-based dairy and 17% eating more plant-based meat alternatives than in 2019. Those following a specific diet or eating pattern are huge drivers of these numbers: 41% of those consumers say they increased consumption of protein from plant sources (versus 18% of those not following a diet), and 28% say they eat more plant-based meat alternatives (versus just 9%).”

To read this article in its entirety, check out the Plant-based nutrition – deep dive.

Cindy Hazen has more than 25 years of experience developing seasonings, dry blends, beverages and more. Today, when not writing or consulting, she expands her knowledge of food safety as a food safety officer for a Memphis-based produce distributor.

An agency within the U.S. Department of Agriculture intends to propose barring the statements, “No Nitrate or Nitrite Added” and “Uncured” on products that have been processed using any source of nitrates or nitrites—substances that preserve processed meats like bacon, hot dogs and deli corn beef.

The Food Safety and Inspection Service (FSIS) made the disclosure in a Dec. 10 letter to a representative of the Center for Science in the Public Interest (CSPI), which along with another consumer organization, requested the relief more than a year ago.

While “No Nitrate or Nitrite Added” statements containing non-synthetic sources of nitrates or nitrites must contain a disclaimer that identifies the non-synthetic source, the disclaimer is confusing to consumers, according to a 2019 petition by CSPI and Consumer Reports. And the consumer groups argued labels like “Uncured” and “No Nitrate or Nitrite Added” for meats processed from non-synthetic sources, such as celery powder, may mislead consumers into thinking the products are healthier than their competitors.

“Both synthetic and non-synthetic nitrates and nitrites may cause cancer, and product testing results released today by Consumer Reports show that processed meats made with celery powder and other non-synthetic sources of nitrates and nitrites can contain residues of these substances, just as do meats that use synthetic sources,” the consumer groups wrote in their Aug. 29, 2019 petition to FSIS.

The petition was met with opposition from the National Turkey Federation, which urged FSIS to keep its current regulations, noting the role of nitrates and nitrites in eliminating the risk of botulism in certain products.

“Decades of research have shown when nitrate and nitrite are carefully used in meat and poultry products, following prescribed levels regulated by USDA, these ingredients are completely safe and pose no human health risks whatsoever,” Lisa Wallenda Picard, NTF’s senior vice president of policy, trade and regulatory affairs, wrote in comments in response to the 2019 petition.

Picard also rejected the notion that the current labels at issue in the petition confuse consumers.

“For products that do not use synthetic nitrites and nitrates, they are permitted to make the claim of being uncured and when noting the absence of synthetic nitrites/nitrates in their product, they are required to provide a clear, easily understood statement that reads ‘Except those naturally occurring in sea salt and celery powder,’” she wrote. “Consumers have seen this labeling for many years, meaning a change would only serve to confuse consumers more.”

FSIS partly grants petition

In the recent letter to Sarah Sorscher, CSPI’s deputy director of regulatory affairs, an FSIS official, Rachel Edelstein, said her agency was partially granting the consumer groups’ petition. In addition to plans to bar the statements, "No Nitrate or Nitrite Added" and "Uncured" on products that have been processed using any source of nitrates or nitrites, FSIS also intends to approve non-synthetic sources of nitrates or nitrites as curing agents.

“However, rather than requiring disclosure statements about the use of nitrate or nitrites on labels of meat and poultry products, as requested in the petition, FSIS intends to propose to amend and clarify its meat and poultry labeling regulations to establish new definitions for ‘Cured’ and ‘Uncured,’” Edelstein wrote.

FSIS intends to explain the basis for the proposed changes in the proposed rule, “with a tentative publication date of May 2021.”

According to the consumer groups’ petition, U.S. adults, on average, consume about 21 pounds of processed meat annually, despite the advice of expert bodies—including the World Health Organization, American Cancer Society and American Heart Association—that recommend limiting consumption of processed meats.

“When consumers see a claim like ‘no nitrates added’ on meat, they think the product is healthier,” Sorscher said in a press release in response to FSIS’ letter to her. “A lot of us are surprised to find out that a healthy food like celery can be extensively processed to make the same compounds in the body as synthetic nitrites do when eaten. Removing the ‘no nitrates’ claims will help, but without a clear disclosure many consumers are not going to recognize that these meats are processed with nitrates and nitrites.”

The Senate on Dec. 9 passed a bill that would codify sesame as a major food allergen for purposes of food-labeling requirements and direct the U.S. Department of Health and Human Services (HHS) to submit a report to Congress on challenges related to prevention of food allergies, reduction of risk and cures.

A similar bill was passed Nov. 17 in the House of Representatives, so the bills must be reconciled in order to reach the president’s desk. If passed into law, the legislation would make sesame the ninth major allergen—joining milk, eggs, fish, shellfish, tree nuts, peanuts, wheat and soybeans.

"With approximately 32 million Americans living with food allergies, it’s important for us to take targeted steps to address the growing challenges posed by food allergies and to protect those who are vulnerable," Sen. Tim Scott said in a Dec. 9 press release. “Nationwide, caring for children with food allergies costs an average of $25 billion annually, and can pose extreme hardships on low– and middle–income families.”

Scott, Republican from South Carolina, introduced the Food Allergy Safety, Treatment, Education, and Research (FASTER) Act, along with Sen. Chris Murphy, Democrat from Connecticut.

The FASTER Act (S. 3451) would declare sesame the ninth major food allergen to be recognized by FDA and boost federal funding for food allergy research, noted FARE (Food Allergy Research & Education), a non-governmental organization engaged in food allergy advocacy and private funder of food allergy research.

“More than 1.5 million Americans are allergic to sesame, and they and their family members live in constant fear and anxiety that sesame may be hiding in the food products they buy,” said Lisa Gable, CEO of FARE, in a Dec. 9 news release. “With today’s Senate passage, ushered forward by the incredible leadership of Senator Tim Scott and Senator Chris Murphy, a critical new law that will improve the lives of those with food allergies is one step closer to becoming a reality.”

The FASTER Act would codify sesame as a major food allergen under the Federal Food, Drug & Cosmetic Act (FDCA), effective for products introduced into interstate commerce on or after Jan. 1, 2023, according to the news release from Scott’s office.

The bill also would direct HHS, within two years of enactment, to submit a report to Congress about opportunities and challenges related to food allergy prevention, risk reduction, cures, data collection and diagnostic and therapeutic development. HHS’ report would also describe a potential framework for changing the federal list of major food allergens in the future, the news release added.

“While mandatory labeling is required for major food allergens recognized by the FDA like milk, eggs and peanuts, FDA labeling requirements do not include the ingredient sesame, leaving more than 1.6 million Americans with a sesame allergy in the dark about what foods and products to avoid,” Congresswoman Doris Matsui (D-Calif.) said in a Nov. 17 news release, commenting on passage of the legislation in the House of Representatives. “The FASTER Act is the solution—legislation that would not only update labeling laws to include sesame, but also lay the groundwork to help understand, treat and one day prevent food allergies.”

Consumer concerns about the perceived health risks of synthetic ingredients have propelled the clean label movement from a trend to an expectation. Products identified as natural, organic and environmentally friendly are believed to be healthier, safer and contribute to one’s overall wellbeing, according to Packaged Facts’ 2018 report “Organic and Clean Label Food Consumer in the U.S.” Brands are responding by formulating, or reformulating, with natural sources and using “free from” claims to position products as better-for-you.

The benefits of using natural colors and flavors sometimes go beyond their primary function. Many of these natural enhancers have inherent health benefits like powerful antioxidants, relaxation support and anti-inflammatory properties. However, realities like cost and shelf life need to be considered while also meeting consumer expectations for what a product should look or taste like when using these ingredients.

Color

Consumers are trained from an early age to believe color represents flavor profile, freshness and overall quality of a product. For that reason, it’s important to consider appearance and source of colorants to achieve the ideal experience for your target consumer.

Natural colors, or colors that are exempt from certification, come from natural sources like vegetables, minerals or even animals. Thirty-eight colorants are exempt from certification for food and beverage, such as grape color extract for purple, beet juice for red, and turmeric for yellow.

In addition to imparting color, many of these ingredients have functional benefits. Spirulina, one of the most common natural color sources for blue or green, has essential amino acids and is rich with calcium, niacin, potassium, magnesium, B vitamins and iron.¹ Beta-carotene, an antioxidant found in many vegetables, is used to create a red-orange color in products like Izze clementine flavored sparkling juice and Kellogg’s Strawberry Krispies cereal.²

Of course, the benefits of these ingredients are dependent on the amount incorporated into the product, which is why some brands use them at higher levels to impart color, flavor and function. Ingredients like blue algae, beet, matcha and turmeric make beautiful beverages full of health benefits. One of the rising stars in beverage is turmeric because of its bold color and anti-inflammatory properties.³ Several brands such as Rebbl and Pop & Bottle have launched ready to drink (RTD) golden milk products, and a handful of third-wave coffee shops are serving lattes with turmeric for its inherent health benefits and the Instagram appeal of the bright yellow beverage.

While natural colors offer many advantages, these types of ingredients can be challenging when formulating RTD beverages. Before clean label became common, most beverages were colored artificially using synthetic colors to maintain color intensity. As a result, bright, bold colors are something consumers have come to expect. Natural colors are more sensitive to pH as well as fading due to heat during processing and light; therefore, product developers must choose natural colors that will maintain intensity throughout processing and on the shelf. Despite these challenges, certain methods can protect the integrity of the product when formulating with these colors, such as masking agents and packaging with a UV barrier.

Knowing the target pH of a product can help inform what natural color will maintain the desired appearance through processing and shelf life. For example, reds at a certain pH will turn purple and get dark or muddy, so it’s important to choose a natural color that works within the beverage matrix. Increasing the levels of a color can also create bolder colors, though too much color can impact the flavor profile of a product. Cold-pressed juices are an exception because they use high-pressure processing (HPP) instead of a thermal heating process, which results in a much brighter, fresher product. However, the shelf life of cold-pressed juices is much less than traditionally pasteurized juices.

Flavor

Marketing claims are driving choices for flavor sources because brands want to position products as clean label and differentiate them from the competition. Demand for clean label has led many brands to formulate with natural flavors only, even steering clear of WONFs (with other natural flavors) that come from natural sources and help flavorists highlight finer nuances to complete a flavor profile that an essential oil or fruit juice lacks. Instead, more brands are opting for natural flavors made from raw materials, essences and extracts.

Botanical flavors, which have experienced significant growth during the last few years, are ideal for natural flavors because many flowers, herbs and spices are available as raw materials. Flavorists can create a solid flavor profile that captures the subtle notes of botanical ingredients and since the raw materials descend from nature, they can sometimes be less expensive than an artificial version. These flavors can also have functional benefits to the consumer, such as the calming effects of lavender⁴ or digestion support from ginger.⁵

Nuts and berries are also popular flavors available as raw materials, but many brands want these natural flavors to be allergen-friendly, which is counterintuitive if it’s coming from the authentic source. However, these flavors can be crafted using different flavor components to meet the desired taste profile. Fantasy flavors that are man-made creations like s’mores, cotton candy or birthday cake also require more flavor expertise and ingredients to simulate them with natural ingredients, which makes them more expensive than an artificial flavor created with a synthetic raw material.

Another trend in the flavor industry is organic flavors, especially since the guidelines for flavors in certified organic products will change at the end of the year. These changes will require brands using certified organic claims to use only organic flavors, unless an organic version of that flavor is not achievable because the organic extracts and/or oils needed are not commercially available.

Incorporating organic flavors can make a product appear more healthful since the raw materials are produced with no synthetic pesticides. However, the taste profiles of an organic flavor are distinctly different because the raw materials are produced using a cleaner process that makes crops more vulnerable to environmental factors. This can create a challenge for brands with products on the market that are transitioning from organic compliant to certified organic because the flavor profile will likely change. Additionally, environmental factors can affect supply chain, which impacts cost of raw materials.

Consumers are taking the saying “you are what you eat” to heart and becoming mindful about how food and beverage ingredients affect health and wellbeing. The importance of health and wellness among consumers will continue to proliferate, especially with younger generations who are raised with these ideals and have grown up with access to information online. Though synthetic colors and flavors are still common in food and beverages, an increasing number of brands are listening to consumer demands for simple, natural ingredients and making changes to products. The operational realities of using natural colors and flavors include cost and shelf life, but pressure from consumers combined with the inherent benefits of natural ingredients will drive growth for years to come.

Holly McHugh is the marketing associate at Imbibe, a Chicago-based beverage development company. She focuses on the company's external communications and brand awareness. She also monitors and analyzes beverage trends to guide clients in making strategic decisions about product development. McHugh’s market insights have been published in BevNet, Beverage Industry, Natural Products Insider, Prepared Foods and Food Ingredients First. She has a bachelor's degree from Columbia College Chicago and a master's degree from the University of Denver.

References

1 Gutiérrez-Salmeán G, Fabila-Castillo L, Chamorro-Cevallos G. “Nutritional and Toxicological Aspects of Spirulina (Arthrospira).” Nutr Hosp. 2015;32(1):34-40. DOI: 10.3305/nh.2015.32.1.9001.

2 Kasperczyk S et al. “Beta-carotene reduces oxidative stress, improves glutathione metabolism and modifies antioxidant defense systems in lead-exposed workers.” Toxicol Appl Pharmacol. 2014280(1):36-41. DOI: 10.1016/j.taap.2014.07.006.

3 Kocaadam B, Şanlier N. “Curcumin, an active component of turmeric (Curcuma longa), and its effects on health.” Crit Rev Food Sci Nutr. 2017;57(13):2889-2895. DOI: 10.1080/10408398.2015.1077195.

4 Gilani A et al. “Ethnopharmacological evaluation of the anticonvulsant, sedative and antispasmodic activities of Lavandula stoechas L.” J Ethnopharmacol. 2000;71(1-2):161-7.

5 Haniadka R et al. “A review of the gastroprotective effects of ginger (Zingiber officinale Roscoe).” Food Funct. 2013;4(6):845-55. DOI: 10.1039/c3fo30337c.

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, averaged 105 points in November 2020, up 4 points (3.9%) from October and 6.4 points (6.5%) higher than its value one year ago. The November increase not only marked the biggest month-on-month rise since July 2012, it also resulted in the index reaching its highest level since December 2014.

The Cereal Price Index averaged 114.4 points in November, up 2.7 points (2.5%) from October and as much as 19 points (19.9%) higher than its November 2019 value. The latest increase marked the fifth consecutive monthly rise in the value of the index. Wheat export prices rose, linked to reduced harvest prospects in Argentina, as did maize prices on account of lower output expectations in the United States and Ukraine as well as large purchases by China. International rice prices held steady during the month.

The Vegetable Oil Price Index averaged 121.9 points in November, gaining a staggering 15.4 points (or 14.5%) month-on-month and reaching its highest level since March 2014. The rally mainly reflects additional spikes in palm oil prices, combined with further increases in soy, rapeseed and sunflower seed oil values. International palm oil price quotations rose for a sixth consecutive month, underpinned by sharp contractions in world inventory levels, as smaller than customary output in major producing countries coincided with firm global import demand.

The Dairy Price Index averaged 105.3 points in November, up 0.9 points (0.9%) month-on-month, continuing the upward trend registered in recent months and nearing an 18-month record high. The latest rise was largely driven by firmer butter and cheese prices, reflecting steady increases in global import demand and a surge in retail sales in Europe coinciding with the region’s milk production reaching seasonal lows. By contrast, following six months of consecutive increases, skim milk powder prices dropped due to a slower pace of purchases in Asia, especially China, coupled with increased global export availabilities, including India’s powder surpluses.

The Sugar Price Index averaged 87.5 points in November, up 2.8 points (3.3%) from October, representing the second consecutive monthly increase. The increase in international sugar quotations in November was mainly due to growing expectations of a global production shortfall in the upcoming marketing season as unfavorable weather conditions drove weaker crop prospects in the European Union, the Russian Federation and Thailand.

The Meat Price Index averaged 91.9 points in November, up 0.8 points (0.9%) month-on-month, marking the first increase since January, but still 14.6 points (13.7%) below its value in the corresponding month last year. Prices of bovine, ovine and pig meats all increased, while those of poultry meat declined.