2024 trends to watch: From functional foods and clean label to value-hunting and increased use of AI to drive promotions and efficiencies

By Elizabeth Crawford

- Last updated on GMT

Source: Getty/	LanaSweet
Source: Getty/ LanaSweet

Related tags Clean label Functional food Nutrition

The New Year will bring a renewed focus on clean-label and better-for-you products, including a desire or the “best of both worlds” as consumers gravitate towards indulgent products making functional health claims, as well as products that are better for the planet, according to industry insiders.

Experts also predict that as eager as consumers may be for a fresh start in 2024, many will carry forward shopping habits that they adopted in the past year to help manage their budgets as inflation rose. These include a focus on value and affordability, which in turn will influence how many products brands and retailers can offer.

In response, retailers and brands will increasingly turn to AI to better appeal to consumers, improve the shopping experience and manage business costs more efficiency and effectively, they add.

Enthusiasm for wellness extends beyond typical timeframe for New Year’s resolutions

Consumer interest in foods and beverages that support their health and well-being will become increasingly sophisticated in 2024, moving beyond (but still including) immunity-boosting benefits that took center stage during the pandemic, industry stakeholders say.

“Post-pandemic, the ‘new year, new me’ mentality may be an all-year trend now. As such, the wellness category will see continued growth in 2024 as consumers spend heavily on health and wellness products,” predicts Jonathan Silver, president & CEO at consumer purchase insights company, Affinity Solutions.

He explained, spending at health and personal care retailers in November increased 9.2% year-over-year and 1.6% month-over-month.

“Led by younger consumers who are looking for a shift in lifestyle preferences, this category will continue to boom in 2024, so retailers should capitalize on this evolving consumer interest,” he added.

Within this trend, specialty retailer Natural Grocers by Vitamin Cottage predicts consumer interest in nutrition as a health management tool will become increasingly niche with an increased focus on products that can help them manage their blood sugar, menopause symptoms and their body temperature as climate change increases instances of extreme heat.

Consumer interest in functional benefits will not override their desire for taste, adds Soumya Nair, global consumer research and insights director at ingredient giant Kerry.

“This means the need for craveable flavors will sit alongside the need for ingredient transparency, functional health ingredients and sustainable solutions,” she explained, calling out BCAA, creatine, functional mushrooms, berberine and electrolytes as likely winners in 2024.

Passage of California Food Safety Act elevates ‘clean label’ movement

Dovetailing with an increased demand for functional ingredients and health benefits will be an increased interest in “clean label” products – a long-established trend within the industry, but which is finally gaining traction with consumers following the passage of The California Food Safety Act of 2023​, which will take effect in January 2027.

According to Innova Market Insights, more than one in four consumers look to clean label as an indicator for health.

Acosta Group notes that 41% of consumers have now heard of clean label, according to FMCG Gurus, and 78% find it appealing when provided a definition.

As such, Acosta Group recommends retailers and brands understand “the analytics segmenting key label attributes,” actively communicate what is not in products and use promotions and digital media to further education shoppers about ingredients and demonstrate their value.

Innova adds brands should consider “label simplification.”

Consumers continue to pull back on spending

Consumers’ careful assessment of products’ benefits and ingredients also reflects an increased need to “get more for less” from products as higher prices across the board continue to squeeze shoppers’ budget in 2024.

Inflation may be slowing, but Silver expects consumers will continue to cut back on discretionary spending and focus instead on essentials in the 2024.

Tyson Foods echoed this sentiment, noting that consumers who are faced with higher inflation and interest rates in 2023 may take a “less is more” stance at the grocery store.

“That means both smaller basket size … and smaller packages of fresh meat, with lower prices to match,” the meat packer explains in a blog post.

With this in mind, Tyson Foods says it will offer a broader selection of smaller portions at lower entry points.

To further “guard themselves against the rising cost-of-living crisis and fear of inflation and recession,” Kerry predicts “consumers are moving toward frugal foods and practices,” like tinned fish, bath cooking and instant everything.

Retailers, brands and chefs will embrace AI

To help consumers stretch their dollars while still driving sales, retailers and brands will lean into artificial intelligence and machine learning in 2024 to offer personalized rewards and recommendations, according to Acosta.

It predicts retailers and brand will prioritize the use of AI for supply chain and logistics efficiencies, for price and promotion optimization, dietary and nutrition recommendations and workforce efficiencies and to streamline operations.

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