The 6 top trends in food processing

FoodProcessing.com

Anticipating and acting on trends can make or break a company. It pays to know which ones are still in the game and which are emerging.

By David Feder, Managing Editor

When it comes to food and beverage products, one rule of thumb defines a true trend: Real trends don’t come and go; they grow – over years, decades or even longer. For processors, fads can still bring in big money, but the risk is high. Ask any food executive caught last year with a million bucks’ worth of low-carb inventory.

In between fads and trends are trendlets. These are the bubbles that pop up within a trend and are worth noting because they can provide a hook for food and beverage processors to hang their R&D hats on.

We went shopping for real trends. We sifted through numerous media reports on what was hot, comments from the editorial advisory boards of both Food Processing and our sister magazine Wellness Foods and the wisdom shared at the many food shows we attend each year. We culled a huge list down to six essential trends.

We’ve pegged Organic as the biggest and most significant trend for processors to watch. No great surprise, but more important than our No. 2 pick, Health & Wellness? Yes. Now entering its second generation of double-digit growth, organic is on another big upswing.

In simple terms, although the Health & Wellness category has a larger footprint than Organic – and the two often are lumped together erroneously – the fact is, any food product can be formulated to sport an organic label. However, not all products can wear the “healthy” tag.

Example: A rapidly growing niche in the beverage world is that of organic beer, wine and spirits. Discounting the studies showing possible benefits of moderate alcohol intake, organic vodka won’t likely get a health claim.

Health & Wellness is the second and broadest of the hot trends. It encompasses such huge components as diabetes and obesity, kids’ health, food safety, women’s health, allergies and immunity as well as the fringe issues of “well-being” and “energy.”

As a trend, Age Awareness certainly overlaps with Health & Wellness, especially as the latter concerns our aging population. But there are numerous non-health aspects for processors to consider as they help our 77 million baby boomers segue into their dotage.

Portion Control is our No. 4 trend. In some ways, it’s just a health tool. But this year, especially, it deserves its own category because it constitutes a merging of health with the perennial trend for more convenience. And it’s one trend numerous processors from all categories are jumping on.

Globalization is No. 5. Immigration controversies aside, Asian, Hispanic, African American and other ethnic minorities will make up more than 35 percent of the U.S. population in about five years, according to estimates derived from U.S. Census Bureau data. About half that figure will be Hispanics. But globalization and ethnic influences are more than population figures. Today’s businesses are international more often than not. The cultural traffic and instant global information (via mass media and the Internet) mean rapid diffusion of once regional preferences.

Rounding out the six major processing trends are Kosher and halal certification. The strange bedfellows continue to be prolific growth areas, with Kosher still progressing at double-digit rates and halal experiencing a sudden and major growth spurt.

1. Organic = healthy

That equation is not necessarily true, but the message is so ingrained in the minds of millions of consumers that the math cannot be ignored.

U.S. organic food sales totaled nearly $14 billion in 2005, according to the Organic Trade Assn. (www.ota.org), Greenfield, Mass. (OTA). Although this represents a mere 2.5 percent of all retail food sales, that total is a 31 percent increase over 2003 figures. According to OTA, sales of organic foods are expected to reach nearly $16 billion by the end of 2006.

“These findings show there is continued strong growth for organic products,” says Caren Wilcox, OTA’s executive director. OTA statistics show organic food categories experiencing the greatest growth during 2005 included meat (55.4 percent), condiments (24.2 percent) and dairy products (23.5 percent). Even Fido and Garfield are going organic: One of the fastest-growing organic categories during 2005 was pet food (46 percent).

In addition to a wide range of organic produce, Melissa's has a line of processed organic products under the Good Life Food label.

“We’re at a point where demand for organic product exceeds supply,” says Robert Schueller, director of public relations for Melissa’s/World Variety Produce Inc. (www.melissas.com), Los Angeles. “Organic everything is hot, and it’s not just produce. Most of the top retailers in the country offer organic products in their stores, and many foodservice establishments have taken notice, offering organic foods and ingredients more often on the menu.”

One of the largest distributors of variety organic produce in the country, Melissa’s offers more than 350 organic produce items. Gearing up for a larger-than-normal increase in demand, Schueller notes the number will reach about 400 SKUs by year’s end. Since the 2004 start of its Good Life Food brand of organic processed items, sales have grown an average of 20 percent a year. Forecasts double that figure for 2006.