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What's the size of the Paleo foods prize? Mintel and IRI weigh in

Post a commentBy Kacey CULLINEY , 11-Jul-2017
Last updated on 11-Jul-2017 at 16:33 GMT2017-07-11T16:33:25Z

Picture: istockphoto-antimartina
Picture: istockphoto-antimartina

Paleo themed product sales could soar to $4bn in the US in the next three years if enough manufacturers invest, according to IRI, although Mintel says we're not looking at the next Greek yogurt.

While IRI only monitors US retail sales of foods and beverages with Paleo in the name of the product* (a market up 8% to $11.6m in the year to June 11), the number of products featuring Paleo claims on pack, certified Paleo or referencing Paleo in marketing materials is somewhat higher, and sales could reach $4bn by 2020, said Sally Lyons-Wyatt, executive president and practice leader at IRI.

“Over the next few years, I think you’re going to see increased penetration from tryers and repeaters; I think you’re going to see increased purchase size and more trips; and some of the big retailers are going to be very instrumental.

“Our $4bn estimate could be very high if you don’t have enough product to go out there… So, it really depends on how manufacturers and retailers really embrace Paleo as another option for consumers to practice holistic health,” she told FoodNavigator-USA.

But if you look at the manufacturers in it now, they’re not the big guys yet… We haven’t even scratched the surface on core categories coming out with Paleo options.”

According to Mintel, there were 190 Paleo-labeled products launched in 2016 across several categories like protein powders, bars and frozen meals – a figure Lynn Dornblaser, director of Innovation and Insight at Mintel said was “really quite small” when compared to around 20,000 new food and beverage products launched each year.

For 2017, she predicted that new product launches would be “somewhat higher than last year” but not into the thousands – “it’s simply not going to happen”.

It’s no Greek yogurt…

While Dornblaser agreed Paleo presented opportunities for manufacturers, she said the potential remained relatively small.

“What we see for the most part, is Paleo has a lot of appeal for a very small segment. And that very small segment talks about it all the time, so it feels like it’s way more important than it is.”

“Paleo is not going to be like Greek yogurt ,” she said. “Greek yogurt caught lightening in a bottle because of the positives around it - that you can have a low fat or no fat product that doesn’t taste like it and is filling and satisfying and adaptable to all kinds of flavors. It also builds off something that everybody knows, which is yogurt.”

“I think with Paleo, just as with so many things that are all bar and protein powder based, or very strong in those areas, it’s hard for consumers to see those as natural and wholesome,” she said.

In 2015, Greek yogurt sales in the US amounted to $3.7bn, according to Statistica – a sum representing around half of all yogurt sales in the country.

Asked what Paleo’s answer to Greek yogurt could be, Dornblaser said meat snacks could be if manufacturers got the wholesome and natural messaging right.

“Meat-based snacks that have a softer bit and focus on uniqueness of flavor and texture have a real opportunity, and it’s something companies haven’t been able to find the right way to explore.”

Lyons-Wyatt said: “You’ve got to be careful not to go too far away from the whole form of what Paleo means. I think it’s a fine line between giving consumers what they need for this diet but also remembering this is the caveman diet, so keeping it as close to the pure form as possible.”

To claim or not? That is the question…

Dornblaser suggested manufacturers steer clear of Paleo titles or claims on pack, as it could alienate potential consumers.

For any consumer that is eating a very specific way, you can say whatever you like on the pack, but they’re going to read the ingredients statement anyway. The term ‘Paleo’ on pack can be a shortcut but the question is, do you want to only appeal to that very small slice of consumers that are only seeking out Paleo products?” she said.

Lyons-Wyatt disagreed, stating how important labels had been for major trends and categories in the past: “What we have seen over the last ten years is that claims matter. If companies can either have Paleo in the title or something like ‘Paleo approved’ on pack, that’s a draw.”

There was a 35% increase in the number of Paleo themed products launched in 2016 vs 2015 globally, according to Innova Market Insights at the 2017 IFT show

“To me, every time a trend comes out I see the same thing happen – with non-GMO, for example, companies were putting ‘non-GMO’ on pack and then consumers wanted it verified. So, my hunch is that if other trends are a precursor, something similar will happen in Paleo,” she said.

Eventually, she said Paleo could have its own space in store like gluten-free and organic [a trend we are already seeing in some retailers, with Paleo-themed dispays]: “I think Paleo will eventually get the critical mass where it makes sense to have a Paleo merchandizing area. We’re not there yet, but we’re not far off.”

*IRI Worldwide: Sales of food products with Paleo in the name, 52 weeks ending 06-11-17, total US, multi-outlet and convenience (food, drug, mass, dollar, club, military, and convenience; excludes the natural channel). The figures are lower than many other market analyses as they don't include products that make Paleo claims elsewhere on pack, or are Paleo certified.

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