What are some of the food and beverage industry trends we should be paying attention to as we head into the new year? Read ahead for a comprehensive look at our predictions.
Beverage and Food Ingredient Transparency
The food and beverage market has always been driven by consumer trends. Whether they’re on a specific diet or just being more health conscious, people want to know what they are putting into their bodies and are looking at the ingredients in their food. And that means that companies in the food industry that are upfront about what’s in their products are going to see more sales.
This includes the following:
As healthy living continues to be a top priority for many consumers, more and more people are turning to plant-based foods, as well as veganism and vegetarianism. There is currently a growing market for brands that create and advertise products that are plant-based and vegan-friendly. From snacks and health bars to frozen meals, plant-based sales are increasing across the board. As a result, more CPG brands are adding plant-based products to their shelves.
Minimally processed products
Staying in line with the healthy living movement, consumers are also showing an increased interest in products that are minimally processed, with fewer additives. This means looking for products with whole food (and pronounceable) ingredients that lack preservatives and other fillers. This means more and more people are reading labels more thoroughly than ever before.
Gluten-free food products
Even for people that don’t have celiac disease, following a gluten-free or low-gluten lifestyle is becoming increasingly popular. Brands can benefit from providing gluten-free versions of their best-selling products, as well as focusing on advertising and packaging that reflects this sought-after good.
Swapping produce for carbs
Although most people love a good plate of pasta, it’s more often being swapped out for a vegetable. Although every doctor has their own opinion, whether it’s losing a few pounds or stabilizing blood sugar, carbohydrates are usually the first to get kicked to the curb when it comes to dietary restrictions.
Grocery stores and produce companies can use this to their advantage by advertising “easy swap” recipes to customers that can boost vegetable sales. Foods that can act as a base for dishes, such as cauliflower or zucchini, are especially popular in this category.
Date swaps for sugar
For a long time now, sugar has become the enemy of food companies. And although for many years there were ways to work around this, people are becoming increasingly weary of “synthetic foods” and instead leaning towards whole foods. Sweeteners like aspartame and sucralose have become buzzwords to look out for, and phrases like “without refined sugar” or “all-natural sugar” are trendy.
And this is where dates have been having their moment. Dates are being promoted as a popular option to add unrefined sweetness to recipes.
Choosing oils wisely
When it comes to cooking, more people are becoming particular about the oils they use to cook with. Seed oils, such as canola and sunflower seed oils are becoming less popular, while whole food oils, such as olive and avocado oils are trending. Companies are now also advertising “high oleic” oils, which are high in monounsaturated fats but are able to be preserved without adding additional trans fats.
CBD / THC-infused foods
As CBD and THC products become more popular and widely available, many businesses are adding them to their already popular products to increase sales. This includes pre-packaged goods, freshly baked goods, and beverages. It’s not uncommon to see CBD products at your local convenience and grocery stores, and in fact, is a growing trend.
Branding and advertisement
Customers aren’t just looking to support a company anymore; they’re looking to be loyal to brands that embody the lifestyle they want to live. And luckily, there are plenty of ways to get your message across.
With so many options to choose from, more consumers want to know who a brand is, what makes them go, and what values they support. Having a brand with meaning goes a long way these days, and having a brand with a unique and compelling story behind it goes even further.
Many brands are becoming more personal with their consumers and trying to show the “why” to what they do and showcase their mission to improve their space in the market.
Younger generations, specifically Gen Z and millennials, have shown increased concern about climate change and the environment. Because of this, eco-friendly packaging and sustainability have become important factors in the purchasing process.
Targeted digital ads
In the last decade, and even more so in the past few years, social media has exploded and become one of the premier places for consumers to get their information. And one of the best ways to make sure that your product reaches the intended audience is through targeted digital ads.
Through targeted digital ads, you can more accurately than ever reach certain demographics and even test different messaging on groups of people – resulting in high customer satisfaction and less bombardment of products that won’t appeal to them.
Food and beverage industry trends
Here are the product trends we think will continue to help businesses increase sales through 2023.
With people having busier schedules than ever, many consumers feel like they have less time in the day to cook. Meal kits are becoming an increasingly popular option for people who work long hours or need single-serve meals.
Minimizing food waste
As the cost of many products continue to increase, more and more people are conscious of food waste – especially when it comes to food going bad. Creating containers and packaging that help keep food fresher and longer, is popular amongst buyers.
More affordable options
Over the past year, Americans have expressed a noticeable rise in the price of their food and beverages. And with the cost of just about everything rising, many are looking for more affordable ways to purchase the goods they love. This includes buying in bulk, opting for private labels, and reducing spending on luxury items.
More private labels
A private label product is one that a retailer or company gets produced by a third party but sells under its own name. However, the retailer is entirely in control of the product, including the specs, packaging, etc.
Consumers view these products entirely as the retailers and can gain trust in the product as they gain trust in the retailer. This customer loyalty allows the retailer to produce the products with little marketing and at a lower cost for a higher profit margin.
From diet culture to health culture
For years, “low calorie” and “low fat” were the words you needed to sell your product. Diet culture reigned king, and many people were concerned only with losing weight. However, as more people are moving away from diet culture and fostering a culture around health and wellness, nutrition and functionality are key factors in food choices.
Complementing the new embrace of health culture, people are not only looking to food for taste but also for fuel. Many customers are asking themselves questions like “What are the health benefits of my food?” or “How can my food be more functional?” Foods and beverages that provide additional benefits or have a specific purpose are continuing to trend.
As the quest for good health continues to trend amongst consumers, gut health holds a pretty strong lead at the top of that list. More people are looking for foods that promote gut health. This includes fresh fruits and vegetables, whole grains, as well as certain supplements and probiotics – even including those from a natural source such as yogurt.
Low to no alcohol options
After the pandemic, many people reported evaluating their relationship with alcohol and how often they drink alcoholic beverages. Partnered with recent research that has shown the dangers of not drinking in moderation, many people are moving towards a low to no-alcohol lifestyle.
In fact, in the last year, the request for mocktails has gone up by almost 60%.
Embracing flavors and cultures
As social media platforms are creating a global conversation and making it easier for younger people to become exposed to different cultures without having to travel, embracing flavors and foods from different cultures is increasing in popularity.
When it comes to transforming your business and sales, market research is key. Learning the tools and key strategies for effective market research can change the trajectory of a brand’s success, both in the short and long term.
One of the largest parts of market research is consumer feedback. This can be general, such as their interests and preferences for a wide range of products, or it can be specific such as color, ingredient, and packaging questions.
Market Research can be as simple as creating a survey or as elaborate as continuously monitoring customer behavior throughout the store. Either way, the goal is the same — to understand the needs, wants, and behaviors of customers.
This includes gathering data on the following:
- In-store marketing strategies, including displays and promotions
- Planogram or shelf-set changes
- Product packaging
- Product placement
Companies can do this through the following:
Customer surveys Customer surveys, whether on paper or digital, can provide specific insight into why a customer did or didn’t purchase your product. This type of survey allows you to ask very specific questions to solve specific problems.
Eye-tracking Eye-tracking involves watching customers interact with products in real-time. A benefit of eye tracking is that it allows you to gather feedback while customers are actually interacting with your product. However, it also relies on your interpretation of their actions, which is why it is typically best to follow up with a survey.
Field trials The goal of a field trial is to test something as it is in its natural environment. This could be from the placement of a product and whether or not people are more likely to buy it, to the usage of a product (which can be slightly more difficult to truly have in a “natural setting”). However, the goal is to get real-time feedback from customers.
Focus groups In a focus group, businesses will bring together a group of people in order to get feedback. Focus groups are a specific type of interview in which conversation amongst the participants is encouraged, allowing them to discuss, and the “interviewer” is more of a moderator to keep the discussion going.
Although it does allow for more outside influence than one-on-one interviews, it also allows for a group mentality, which can be beneficial if a person is having trouble coming up with the words to express their feelings towards something.
Customer Interviews During customer interviews, the interviewer has the opportunity to ask customers about their experiences directly and gain valuable feedback about a product. This can happen either in an individual or group setting.
When it comes to market research, businesses typically employ many of the above listed techniques in order to gather feedback on things like store setup, product placement, and specialty item placement.
However, these things can be costly and often take a long time. Virtual store research, on the other hand, uses these standard research techniques with an entirely simulated 3D store setting that is generated by a computer. It crafts as close to a real shopping experience as possible and allows test consumers within the virtual environment to interact with store merchandise and make purchases in a way that is similar to in-store behavior.
This not only makes it easier to get and track data but also increases the data pool as you are able to run significantly more tests at the same time.
With virtual store research, you can test the following:
Virtual market research allows you to observe a new product or new packaging the same way future shoppers will and experiment with as many packaging ideas as necessary.
Virtual market research allows you to identify which pricing combinations are the most successful with potential shoppers.
Business owners can test their latest marketing content through a no-risk VR experience and get the full picture of how it looks without spending the resources it would take to create real-life versions.
The software allows you to view 3D models of new shelf arrangement proposals in a virtual environment where you can make small adjustments and test out an unlimited number of arrangements.
Virtual market research is a fast and cost-effective way to innovate convenience store layouts and create shopper-approved setups for customer satisfaction.
In recent years, In order to keep up with consumer demands, companies that have options for contactless pickup and delivery can expect to see an increase in business.
Even though much of life has returned back to a “new” normal since the start of the COVID-19 pandemic, there are many habits that were once a necessity that people now find convenient – one being contactless pickup. The truth for many people is that it’s just much easier to be able to drive up to the front of a store and gather your items that have already been collected. And stores that aren’t able to provide this are losing out to stores that have options for drive-through and pickup.
Continuing to provide contactless pickup is a trend that will benefit both consumers and business owners alike.
Learn more about retail trends with InContext
Interested in using our virtual reality information technology and gaining more valuable insight into retail trends? Contact us to set up a demo and learn more about how we can help improve your retail strategies. The experienced team at InContext can assist you in improving sales, increasing engagement, and driving conversions. Let’s work together to enhance your retail success.