From ‘the end of categories’ to tech-enabled permissibility: The trends reshaping the future of food

14-Nov-2023 - Last updated on 14-Nov-2023 at 15:41 GMT

Ryan Daily

The lines that separated retail and foodservice are blurring and breaking, as food technology is addressing logistic and supply chain issues and providing new ways for consumers to experience products, Kevin Ryan, CEO of Malachite Strategy & Research, shared during a keynote presentation at the 2023 Private Label Manufacturers’ Association trade show.

Restaurants push into retail, C-stores become grocers (and restaurants)

Overall, consumer demands are blurring the traditional scope of product categories, as they "are becoming more okay with the idea and more willing to experiment," Ryan said. Consumers' willingness to blend and mix categories is creating opportunities for food manufacturers and CPG companies to innovate new products, he added.

"It is the end of categories in grocery retail,” Ryan said. “Twenty-five years ago, people [thought] about grocery stores as aisles. It's the peanut butter aisle; it's the soup aisle ... now, as we're shopping more online, and we're shopping hybrid, in the sense that we're bringing our phone with us, the categories are starting to disappear. Now, you can actually think peanut butter, peanut butter is also peanut-butter snack crackers [and] peanut-butter ice cream."

The divide between restaurants and retail brands is also blurring, and restaurants are becoming “product labs,” Ryan noted. Quick-service restaurants like Wendy’s, IHOP, Red Lobster, Panera, and others have released branded products in the retail space, he explained.

High-end restaurants also are making retail plays and some “are actually shutting down their restaurants because they're finding is too expensive and starting up in retail,” he said. Renowned restaurant Noma launched its CPG business last year and offers a variety of vinegars and sauces, and Momofuku offers chili crisps, noodles, and sauces.

Convenience stores (c-stores) will “radically change in the next couple of years,” as they become hubs of social activity, and consumers look to them to fulfill their grocery needs, Ryan said. In YouGov's Q3 2023 list of the most popular grocery stores, 7-Eleven was the most popular grocery store for Gen X, and Millennials ranked it third behind Aldi and Whole Foods Market.

C-stores have not only moved more into the traditional grocer space, but they’ve also gained popularity for providing foodservice options, he added.

“C-stores are becoming [restaurants] for towns, suburbs, [and] rural areas, and some of the C-stores are actually partnering with restaurants like IHOP. So, this idea that restaurants and C-stores can live together. The other is that it's becoming more of a hangout; it is the coffeeshop; it is the place to be.”

Permissible indulgences get a tech twist, plant-based focuses on taste

Beyond retail and foodservice, food technology is finding novel ways to meet consumer demands on taste, while providing alternative ways to source and create products, Ryan explained.

As the permissible indulgence trend continues, food manufacturers and CPG companies are finding unique ways to create these products with “no tradeoffs” with the help of technology, he said. Kraft Heinz has invested in Wyss Institute to find an enzyme that turns sugar into a fiber in the gut, while companies like Torr FoodTech are creating snack bars with the help of ultrasonic technology as opposed to sugary binders, he noted.

“There's a company called Oobli, [and it has] … a product that actually tastes like chocolate, eats like chocolate, has the same type of sweetness as chocolate, but doesn't have any sugar in it. They actually use sweet proteins in order to make it sweeter.”

On the other end of food tech, plant-based meat alternatives have faced several headwinds, but consumers “are still interested in eating plant-based, but taste is the driver,” Ryan said. Plant-based meat companies are focusing more on providing indulgent products and meeting consumer demand on tastes, which is demonstrated by Impossible Burgers’ larger format Indulgent Burger, he added.

“A lot of people said that this is the death knell of plant-based. I don't believe that, and the reason I don't believe that is I think plant-based was overhyped to begin with,” Ryan said. “In my opinion, [plant-based] was sold as a tech stock. It had really high growth potential. Everyone said, ‘Oh, it's going to be really, really high,’ and then it came in pretty good, and people were disappointed. I actually think plant-based still has runway. It's just going to grow like [a] normal food trend, not like a tech trend.”