In the past 52 weeks, natural and organic products “across the board are up about 8% and so tremendous, and that is showing no sign of slowing,” Tracy Miedema, VP of innovation and brand development with Presence Marketing, told FoodNavigator-USA at the Natural Products Expo West earlier this month.
Part of this growth stems from consumers who increasingly want products that are healthier and more transparent, but also from an influx of investment from strategic conventional food and beverage companies that are trying to remain relevant and compete as natural products continue to gain influence over shoppers.
While the financial contribution of these players is sizeable, the influx of expertise that comes with it is also notable, Miedema said.
“The expertise from strategics that is flowing into this industry is one of the biggest shifts that has happened in the last 36 months,” and increasingly is coming in the form of incubators within large companies, such as General Mills, she explained.
This model allows large players to tap into the energy and innovation of startups in exchange for financial support and guidance, while also insulating startups in a way that allows entrepreneurs to “shape their own destiny” without getting lost inside of a larger company, she said.
“The brain trust that exists in these large CPG companies is tremendous, and the power now has been unlocked,” by companies like General Mills, which was a pioneer in this model and helped pave the way for “all kinds of new incubators that are housed inside of strategics at Campbell’s today, at Kellogg’s, at Hain (Celestial). They all know they need to give some autonomy and create some safe space for those brands to really thrive,” while also providing resources to help them “keep doing their thing,” she said.
Opportunities beyond Whole Foods Market
This power shift also is impacting where and how new natural and organic products can debut, Miedema said, explaining that startups are no longer restricted to just Whole Foods Market. Now conventional channel retailers are offering helping hands to young companies in an effort to better meet modern consumers’ evolving demands.
“For a long time [Whole Foods] has been not only the place, but perhaps the one and only company that would work with you behind the scenes to help shape your innovation pipeline,” she explained. “But now we are seeing other retailers’ interest really climb in doing so.”
As such, she said, startups are no longer restricted to starting in the natural and organic channel.
“We are seeing opportunities outside the natural channel for that type of innovation. We are seeing excitement on the part of consumers discovering new products, and that is not going away at Whole Foods, but it is opening up in more places,” Miedema said.
Six trends to watch
According to Miedema, among the new trends in natural and organic that are inspiring investors to open their wallets and retailers in the conventional channel to open their doors earlier are bone broth and saturated fat.
“Around the world today, you will find bubbling pots of bones,” that are used to create broth that is rich in healthy amino acids to support gut, joint and overall health, she said. She also explained that consumers are embracing saturated fat from animals that are raised properly as a “nutrient powerhouse.”
Other trends to watch in beverage are an increasing use of functional herbs, ready-to-drink cold brew coffee and the ongoing evolution of plant-based dairy alternatives.
With regards to plant-based milks, Miedema said she expects to soon the proliferation of individual base ingredients – from almonds to peanuts to cashews – to soon be blended for finished products that are even creamier and more nutrient dense than those on market now.
Back on the food side, Miedema said the grain-free movement is building beyond a better-for-you niche to represent a fundamental shift in the way Americans are eating.
“There are so many foods, let’s face it, they are nutritionally vapid. Things like breads, tortillas, chips, pasta that form this whole layer of the diet, yet deliver very little more than a simple carbohydrate. And a lot of people are trying to weed those foods out of their diets,” she explained.
But alternatives that swap the basic grains with ingredients like almond flour, cassava, seed flours and healthy fats are allowing consumers to eat see foods that once were “nutritionally worthless” as something that is a nutritional powerhouse, Miedema said.