Soup-To-Nuts Podcast: Rising consumer skepticism requires more proof for claims
In response, at Natural Products Expo West earlier this month, more manufacturers called out science-backed, branded ingredients on packaging to support functional claims, while other industry stakeholders came together to clarify – and in some cases certify – sought-after but ambiguous ideals and concepts, such as regenerative agriculture.
In this episode of FoodNavigator-USA’s Soup-To-Nuts Podcast, experts from the branding and marketing firm Marketplace and ingredient supplier Ingredion share what claims and products are resonating most with consumers and how industry is stepping up to ensure their veracity. They also shared trends they spotted at Natural Products Expo West, including flavors, functions, and formats as well as evolving business models and emerging marketing strategies. https://www.foodnavigator-usa.com/Multimedia/Podcasts
[Editor’s note: Never miss an episode of FoodNavigator-USA’s Soup-To-Nuts podcast – subscribe today.]
A collision of food and supplements
Since founding Marketplace more than 20 years ago, Tracy Landau has watched foods and supplements speed towards each other on a collision course and at Natural Products Expo West this year she says they came together in a “beautiful way” in an explosion of functional beverages targeting a wide range of need states.
“Beverages for a while [have] been quote unquote functional, right? But now this is a whole new level,” said Landau, explaining that functional beverages now have more benefits and can more easily replace supplements for those consumers who are tired of taking pills daily.
“The market opportunity for brands and ingredients … is to rise to the occasion and create functional ingredients that have or can be blended together to create a beverage that takes the place of a supplement,
Marketplace growth strategy director Megan Hook added consumer research conducted by the firm reinforces the market potential for functional beverages as the new supplements.
“We surveyed US supplement consumers last year, and we found that 48% of them said tat they would consume a beverage every day or almost every day that contained the benefits they get from their supplements,” she said.
Rising to meet this are new products offering a range of benefits, including immunity, brain health, stimulant-free energy, focus and more, she added.
Branded ingredients gain prominence
According to Landau, the most promising functional beverages at Natural Products Expo West featured branded ingredients that reinforce consumer confidence in product claims.
“We’re see branded ingredients show up on ingredient legends … [and] the principle display panel of a package,” in part because it allows the product manufacturers to leverage the science, the clinical studies, the patented technology with their consumer, who Landau notes is “starting to get a little cynical. They want to see some proof [that] these things work.”
Sourcing branded ingredients or conducting clinical trails to verify product claims can be expensive, but Hook notes they can deliver a strong return on investment.
“Having proof through clinical trials or double-blind, third-party validation is going to really give consumers a peace of mind that it works,” which will allow companies to sell their products at a higher premium or build trust across a range of products, Hook explained.
For beverages, as opposed to pills, flavor is just as important if not more so than function. Hook noted many of the flavors favored by functional beverages have their own health halo.
Other beverage trends that caught Hook’s and Landau’s attention at Expo West include animal-free dairy, which can serve as a complementary ingredient or base for functional beverages and in adjacent categories.
Evolving business models
Another big trend on display at Expo West that caught Landau’s attention was an evolution in how businesses present themselves to consumers and investors.
She explained that between the fallout from the pandemic and the tightening economy, many food and beverage players – both large and small – are evolving their business models to ensure sufficient funds and visibility for long-term success.
This includes involving more celebrities not just as brand endorsers but as investors, she said.
Landau also noted larger businesses also are changing their go-to-market strategy to boost visibility, such as in the case of several traditionally B2B companies extending their offerings directly to consumers.
Regenerative agriculture claims abound
Another prominently featured claim touted at Expo West by stakeholders across the value chain was regenerative agriculture – and while well-intentioned and spot-on for meeting consumers’ growing sustainability concerns, the concept doesn’t have a clear definition.
Andrew Utterback, senior manager for sustainability at Ingredion explained that the idea of regenerative agriculture offers a lot of potential, but until industry agrees on a set of standards that can be clearly communicated to consumers the term is just as much of a threat to business as a force for good.
“Regenerative agriculture has picked up momentum for a couple of different reasons. Number one is investors look at it as a way to understand businesses are going to be resilient in the future. So, if you understand your supply chain and you are reaching into it and helping the commodity producers for your raw materials be more environmentally friendly, they’re going to last longer … which means your business has a better change of being successful,” he explained.
“The second piece and probably just as or maybe even more important is the consumer piece,” and being able to tell stories about the brand that resonate with shoppers, he added.
A third benefit is the ability to better manage scope three emissions, which are a stubborn challenge for many in the food and beverage industry, he said.
Despite these benefits, he warns that if regenerative agriculture is not clearly defined it risks becoming diluted and meaningless to consumers, who currently view it positively.
This is why Utterback said Ingrdion has joined the Sustainable Ag initiative, announced at Expo West, which is a new standard for regenerative agriculture that has concrete KPIs, quantitative measurements and a third party verification of measurable output.
For a show as large as Natural Products Expo West, this is just a small sample of the emerging and maturing trends sweeping the show floor and soon the industry. But unfortunately, that is all we have time for today and so I encourage you to check out more of FoodNavigator-USA’s coverage of the trade show at our website foodnavigator-usa.com.