FoodNavigator-USA Podcast

Delivering on whitespace innovation can propel a CPG food and beverage startup into mainstream success, and filling a gap in the market might be simpler than some startups think, explained Karen Anderson, CEO of Purple Peak Marketing, during a recent Founders’ Fundamentals podcast.

Emotional wellbeing is emerging as a top health concern for consumers across the generations, according to new research by the Hartman Group, which also found an increasing portion of people prefer to manage their moods with food, beverages and supplements than over-the-counter and non-prescription medications.

A broadly-supported new definition for “pasture-raised” poultry proposed by USDA this fall could help level the playing field for small, independent farms and brands competing in the increasingly important, crowded and confusing humanely-raised chicken category.

Research and advocates for 100% grass-fed dairy suggest the practice is better for people, the planet and animals – but is it better for business?

After a year of “unapologetically” embracing luxury, indulgence and whimsy through vivid colors and unexpected flavor combinations, consumers will rediscover and recenter themselves in 2025 by choosing taste profiles and hues that more realistically represent their individual needs and support their emotional wellbeing, according to tastemakers at the nutrition and ingredient giant ADM.

Successful CPG startups not only strike the right balance between delivering on product claims and branding aesthetics — the head and heart of building a food and beverage business — but also provide consumers easy ways to learn about their brand when they spot the product on shelf, Christy Lebor, partner and director of brand development at SmashBrand, told FoodNavigator-USA.

Consumer interest in products made with ingredients from regional smallholder farmers or those practicing regenerative agriculture is on the rise, but CPG companies and suppliers are struggling to meet their demand in part because most farmers are unable to access sufficient capital on their own to scale specialty crops and sustainable growing practices.

Food and beverage industry stakeholders and consumer advocates are lauding FDA’s commitment to enhance its post-market assessment of chemicals in food, but they worry the agency’s proposed process is “thin on details,” including lacking sufficient transparency about how it would select ingredients for review, how it will assess their safety and the extent to which the public can contribute.

As US consumers embrace a wider variety of seasonings to flavor their food they increasingly want to know where spices come from, their safety profile and environmental and social impact – prompting the industry stakeholders to rethink spice supply chains, which historically have been purposefully opaque to hide widespread inequity and exploitation.

Food and beverage CPG startups can set themselves up for long-term business success by slowly and strategically growing their retail footprint, focusing first on product-market fit, unique branding and wisely allocating marketing dollars to build loyalty with customers, Jordan Buckner, founder of online CPG food and beverage community Foodbevy, shared on a recent episode of FoodNavigator-USA’s Founders’ Fundamental podcast.

More Americans – especially younger generations – are drinking tea and herbal tisanes more regularly as brands lean into the beverages’ innate functional health benefits and positive sustainability story as well as enhance accessibility with innovative packaging with appealing flavor combinations.

Nutrient dense dairy often is positioned as a posterchild for tackling malnutrition and feeding the world, but it also can have a significant impact on climate change due to greenhouse gas emissions, water pollution and biodiversity loss among other factors depending on how it is produced, transported and used – creating a difficult dichotomy for a healthy future.

After three years of double-digit declines in volume and dollars in plant-based meat alternatives, the hemorrhaging in the category is steadily slowing, according to data from Circana – tentatively giving credence to claims by segment stalwarts that the best days are ahead for alternative protein.

Nutrient dense dairy often is positioned as a posterchild for tackling malnutrition and feeding the world, but it also can have a significant impact on climate change due to greenhouse gas emissions, water pollution and biodiversity loss among other factors depending on how it is produced, transported and used – creating a difficult dichotomy for a healthy future.

To create a sustainable business, early-stage CPG companies must be prudent in how they spend their limited capital — being cautious on how much they pay in slotting fees — and ensure they maintain authenticity and their disruptor mentality when hitting financial milestones, Managing Director at Greenwich Capital Group, Andrew Dickow, shared during the third episode of the Founders’ Fundamentals Podcast.

With Red dye No. 3 soon to be banned in California and potentially in other states, and Red dye No. 40 along with the whitener titanium dioxide also in the crosshairs of some legislators and public health activists, food and beverage companies that rely on the colors are searching for alternatives that will deliver vibrancy without significantly impacting taste or driving up costs.

Between ongoing inflation, rising fears about climate change’s impact on the food system, and increasing physical and mental health concerns turbo-charged by the pandemic, consumers have been through a lot in recent years, and in response, new data from Cargill shows they want a lot in return.

The Startup Pavilion at the Institute of Food Technologists’ annual Food Improved by Research Science and Technology (IFT FIRST) in Chicago earlier this month featured cutting-edge solutions to some of the most pressing challenges facing the food system, including food safety, nutrition security, climate change and diet-related chronic disease.

Mega-viral social media trends promoting water “recipes” and consumption, including #watertok, #beveragegoblin and #sexywater, alongside surging demand for hard-to-find Stanley cups may lead one to believe that Americans are sufficiently hydrated – but a recent YouGov/Yahoo News poll suggests the opposite is true, underscoring a tremendous market opportunity for beverages making hydration claims.

Many CPG brands eager to grow their retail footprint often rely on the expertise of brokerage firms. However, finding the right partner can be a nuanced challenge that requires founders to have a detailed growth strategy down to specific channels and regions, as representatives from brokerage firm C.A. Fortune told FoodNavigator-USA during a recording of the Founders’ Fundamentals podcast.

In an era where money is tight for consumers and companies alike, and leeway for new products to fall short of expectations is even tighter, many CPG companies are rethinking their innovation investment strategy to make fewer but bigger bets – a strategy that is paying off for Danone.

At the Summer Fancy Food Show in New York City last week, health claims were downplayed and flavor came first – for real – followed by personalization with more brands offering consumers ways to dial up or down the heat, tang, funk and other characteristics that can be polarizing.

An end may be in sight for the capital crunch that has slowed innovation, growth and M&A activity in the food and beverage space in recent years, according to one investment insider, but she warns the timeline is longer for closing deals and the bar is higher for small and midsize companies or startups to successfully exit than pre-pandemic.

As the media landscape has become more fragmented in the past ten years, social media has emerged as one of the most influential sources of information on the consumer path to purchase and many companies are shifting advertising dollars accordingly – but new research from the marketing communication agency HUNTER suggests going all in on Facebook, TikTok, Instagram and other social media outlets may not be the best marketing strategy for food and beverage brands.

Food and beverage brands should focus on the fundamentals of growing slowly and strategically to set up long-term success while also complementing a founder's vision with a team of experts with diverse skillsets, Seth Goldman, co-founder and chief change officer at Eat the Change, shared in the first episode of FoodNavigator-USA’s Founders’ Fundamentals podcast.

Today's niche diets, social media blips and internet search spikes could be tomorrow's must-have functional ingredients, breakout snacks or new kitchen staples -- the trick is spotting them early and knowing whether they represent long-term trends or short-term fads and how best to position a launch or brand to capitalize on consumer demand.

More than 100 organic industry stakeholders converged on Capitol Hill in Washington last week to lobby for increased funding, continuous improvement for certification standards, access to additional market data and improved coordination for research and extension activities that will help the now $69.7bn US industry continue to grow.

Consumer tolerance is running out for food and beverage companies raising prices to offset inflation, based on volume and sales declines reported by several large CPG manufacturers during the most recent round of quarterly earnings calls.

Water stewardship and use claims are quickly emerging as a top trend in 2024 and could become a “tiebreaker” between competing products as consumers become progressively concerned about sustainability amid increasingly inconsistent rainfall – including droughts and floods – that threaten crops, livestock and overall wellbeing.

Nearly a third of Americans are self-described “health-conscious snackers,” according to new research by YouGov, which also found 35% of healthy snackers are willing to spend more than $50 on snacks each month.

Consumers increasingly are weary of “drinking empty calories,” and are instead looking for less sugar and more functional benefits from their beverages – be it enhanced hydration, gut-health support, mood and mental health management or permissible indulgence from drinks that cut the calories but not the flavor.

Meaningful innovation in the consumer packaged goods industry has ground nearly to a halt post-pandemic for all but an “elite 20%” of companies, according to the Boston Consulting Group’s latest Build for the Future Survey, which analyzes insights from more than 1,000 C-suite executives, including from 68 CPG companies, about their ability to harness their “innovation vision” to accelerate growth, enhance operations and compete effectively.

Despite buckwheat’s status as a superfood staple in many parts of the world, including as the base for soba noodles in Japan and in kasha in Ukraine, the protein- and fiber-packed pyramid-shaped seed has struggled to secure a stable spot in the US diet – until now.

A third of global consumers consider cheese a staple, with most buying the dairy product because they love the flavor or are drawn to its health benefits, according to Innova Market Insights, but industry innovators add those are not the only reasons sales of cheese in the US are steadily climbing.

Sales of clean label products are outperforming total store sales, according to new research from the Acosta Group which also found consumer interest in products free of “bad” ingredients or “chemicals” is rising alongside high-profile state legislation seeking to ban specific food additives.

Can the humble hotdog help slow or even reverse the negative effects of climate change? According to natural and organic meat brand Applegate Farms the answer is yes – especially if it is made with regeneratively farmed beef, which the company is committing to using for all of its beef hotdogs by the end of 2025.

Beverage sales have outpaced that of food within the specialty segment in the past decade, according to the Specialty Food Association, which attributes the boom to an increased demand for functional benefits, a faster pace of innovation and a lower threshold for initial trial.

Sustainability may not be as highly prioritized as taste or price in purchase decisions for food and beverage, but research suggests it is increasingly important to consumers -- especially younger shoppers who are coming into their buying power.

With the recent launch of an AI-powered Smart Assistant, leading business-to-business e-commerce platform Alibaba.com wants to help level the playing field and increase the odds of success for small and medium enterprises and solopreneurs by simplifying their sourcing and supply chain operations.

Regenerative agriculture may be a relatively new or unknown concept to most US consumers, but new research by ADM suggests that as shoppers’ awareness of the practice grows so too does their trust in retailers and brands that implement its tenets and their intent to buy products sourced from those that practice it.

A resounding theme of “better” emerged at the Winter Fancy Food Show in Las Vegas last week, where more than 1,200 specialty food companies came together to showcase the latest innovations in cheese, condiments, baked goods, snacks and more.

Historically, most Americans have liked to keep their food and tech separate, as in the case of genetic modification, but research from animal-free dairy company New Culture suggests the majority of consumers will accept technology or unfamiliar production methods if the taste and texture of food are uncompromised and if there are added benefits, such as for the planet or animals.

Once considered taboo and woefully underfunded in terms of research and product development, women’s health will continue to emerge as a major growth opportunity for food and beverage brands in 2024 as hormonal health and menopause rise to the top of the list of health claims fueling social discussions.

Tea’s inherent functional benefits, positive sustainability messaging and diverse usage occasions, formats and flavor profiles should make it a shoe-in for US consumers searching for healthier options that don’t compromise taste or convenience, and yet it is often overshadowed by other beverage categories, revealing opportunities for brands to better communicate the value proposition of and stories behind their products.

As an early adopter of the “triple bottom line” framework, the premium confection company Endangered Species Chocolate has been “doing well by doing good” for 30 years by responsibly sourcing ingredients, supporting fair trade, prioritizing sustainability and giving 10% of its annual net profits to conservation efforts.

After Perdue Farms received unsolicited but ultimately what it characterized as “fair” criticism for its approach to animal care years ago, the protein producer began inviting annually animal welfare advocates, farmers, academics and stakeholders from across the value chain to visit its farms to share concerns, ask questions and offer feedback after learning how the company currently approaches its business, how the broader landscape is changing and what the future may hold.

Snacking in the US continues to climb, according to data from Circana, despite predictions that a surge in the frequency and sales of snacks during the pandemic was unsustainable and would revert to pre-COVID levels as consumers returned to in-person events and adopted a hybrid lifestyle.

Nearly 150 dairy industry stakeholders, including producers, entrepreneurs and investors, gathered at a winery in idyllic Livermore, Cali., earlier this month to celebrate the winners of the 5th Real California Milk Excelerator competition, which scoured the globe to find and accelerate the best startups using milk and dairy in novel ways ranging from innovative foods and beverages to textiles and plastics to personal care.

Warning letters sent last week by the Federal Trade Commission to two food industry trade groups and a dozen online health influencers questioning the adequacy of paid partnership disclosures may not be a harbinger of impending enforcement that some believe, but they do shine a light on common social media practices that the FTC deems insufficient or is unwilling to give a pass going forward.

Contrary to high-profile headlines about sliding sales of meat alternatives, consumer demand for plant-based products across categories continues to climb, but for the segment to reach its full potential – and continue expanding its consumer base – new research suggests brands and retailers must improve access to reliable, accurate information about how their products are made, the value they offer, where to find them and how to prepare them.

According to tastemakers at the nutrition and ingredient giant ADM, consumers are ready to “unapologetically” embrace luxurious, indulgent flavors and whimsical, vivid colors in their foods and beverages after years of holding back due to limited options during the pandemic or limited financial resources in the face of inflation.

Good food is the foundation for good health, but according to the US Department of Agriculture 10% of Americans, or approximately 33.8 million people, don’t have reliable access to healthy nutrition – a sobering statistic that online grocery technology and delivery company Instacart is tackling head-on through a wide range of programs, partnerships and policy advocacy.

As grocery shoppers shift back to brick-and-mortar stores after relying heavily on ecommerce during the pandemic, food and beverage brands also are shifting their advertising from social media to in-store with many turning to retail media networks to target consumers closer to the point of purchase.

Startups with little more than an idea and a compelling founder’s story may no longer be able to secure wild valuations or enough funding to blow millions a month proving a concept, but companies that have product-market fit in competitive categories and can prove they are on the path to profitability still have options – such as from the recently launched growth equity firm Humble Growth.

More than fat or calories, the nutritional information consumers are most likely to look for on food and beverage packages is sugar, with a survey conducted by Cargill finding nearly two out of three consumers aiming to avoid it and the majority also reportedly bypassing artificial sweeteners.

The 2023 holiday season is around the corner and this year promises more good cheer – or at last more spending – than last year, but the higher inflation that will buoy sales is a double edged sword that simultaneously threatens volume and must be considered when crafting marketing campaigns for the next four months.

Inflation may finally be cooling, but prices at the shelf remain significantly higher for most products than a year ago, and certainly since pre-pandemic – leading to widespread food insecurity in the US and prompting consumers, retailers and brands to make difficult decisions about purchasing, merchandising and marketing.

The grocery industry is at an inflection point as retailers and manufacturers grapple with dramatic changes in how food is produced and sold and an increasingly diverse consumer base that is no longer willing to settle for the one-size-fits-all, supply-driven business model that has dominated the segment for decades.

Even though plant-based protein sales continued to slide in July, prompting retailers to slim down and shift offerings from the more premium placement in the refrigerated section to the freezer aisle, startup TiNDLE Foods still sees significant opportunity in the segment that it plans to seize with a full line-up of cross-category launches.

With roughly 2 billion people overweight, nearly a billion people suffering from hunger and a third of all food produced lost or waste – the current food system is “too unbalanced, too wasteful and too vulnerable,” according to Unilever, which is why the CPG giant’s nutrition division is on a mission to be “Boldly Healthier” for people and the planet.

Offering an abundant selection of fresh, high-quality, diverse fruits and vegetables is a top priority for most grocers given the produce section is often a key driver for overall store foot traffic – but according to a recent survey staying stocked is also a top pain point for many retailers.

While regulators, legislators and industry stakeholders debate whether whole, 2% and flavored milks should be offered alongside plain, low-fat and fat-free options as a required component of school meals, a growing number of students are raising concerns – and their voices – about a lack of plant-based options.

Between climate change’s negative impact on food production and ongoing supply chain challenges that threaten access to high quality nutrition, ensuring the growing population has enough to eat without further compromising the planet’s health will require significant innovation, technological advancements and funding – all of which investment and mentoring firm Techstars says its sixth Farm to Fork Accelerator program brings together.

At the Summer Fancy Food Show in New York City late last month emerging and established brands were going back to basics with simplified ingredients, streamlined packaging, clear cut benefits and natural – if not always familiar – flavor profiles.

Under a new CEO and with peak-pandemic receding farther into the background, the Consumer Brands Association is “going back to the future” to focus on core values that, while still priorities in recent years, took a backseat during the chaos of COVID and rising geo-political tensions.

Despite efforts to upcycle ingredients, promote so-called ugly produce and educate retailers and consumers about how to sell and use food before it spoils, food waste in the US remains at a stubborn 30%, in part due to inaccuracies predicting consumer demand.

While the cultivated meat industry has overcome significant upstream processing and regulatory hurdles in the past year, new market research suggests startups still face notable downstream food manufacturing challenges that could place them – along with investors and consumers – in a dangerous position.

Fresh and frozen retail seafood in the US has been on a rollercoaster the past three years with shifting shopping and eating habits during the pandemic sending sales and volumes to dramatic highs and then rising inflation in the past year causing unit sales to plummet while dollar sales have barely held on thanks to price hikes.

Between consumer desire for a more sustainable food system, growing momentum behind extended producer responsibility legislation and – of course – a desire to do the right thing, many CPG manufacturers are exploring more environmentally friendly packaging.

As a new anti-ESG era emerges, food and beverage businesses that set ambitious goals to reduce their environmental footprint, improve worker livelihoods, diversify leadership or enhance accountability could find themselves stuck between a rock and a hard place.

After three years of innovation-stifling supply chain and labor challenges paired with record high inflation and a trying economy that has discouraged both investors and adventurous shoppers, food and beverage manufacturers are finally ready to prioritize new product development again, but this time many are taking a different approach, according to new research by TraceGains.

Millets may be relatively little known in the Global North currently, but the small, nutrient dense and drought-resistant grains (well, technically seeds), could be poised to become the next quinoa with the power to turbo-charge sales of CPGs featuring them, thanks to the Food and Agriculture Organization and UN declaring 2023 the International Year of Millets.

The dreaded question of what to cook for dinner or what to eat next isn’t just challenging for consumers, it is high stakes for retailers, which risk shopper loyalty, lost sales, food waste and more if they predict the wrong answer and fail to stock the right items.

At Natural Products Expo West this year, walking down an aisle without seeing a callout for prebiotics or probiotics was nearly impossible as more players race to meet consumer demand for each, which research from Coefficient Capital shows is climbing fast.

As consumers look for foods and beverages to do more for them and the planet they are becoming more sophisticated and skeptical of unverified claims – demanding proof that products and companies can deliver what they promise.

Precision fermentation is emerging as one of the buzziest technologies in food, and even though it has been used safely for decades without raising eyebrows, new uses and broader awareness are prompting consumer questions that if left unanswered could threaten its full potential.

Organic rice grower Lundberg Family Farms is on a mission to certify all of its organic rice as regenerative organic by 2027 to better meet growing consumer demand for sustainable food and to “leave the land better.”

Change is inevitable, and for most it is uncomfortable – but it isn’t necessarily bad given it can be a catalyst for tremendous growth, deeper connections and betterment, which is good news for the consumer packaged goods industry considering research from Deloitte predicts the segment is facing “a once-in-a-century economic, social and technological transition.”

Since Project Potluck was founded in 2020 to support people of color in the CPG industry, the landscape and conversation around diversity and inclusion has changed dramatically, but according to the grassroots group turned non-profit a lot remains to be done to achieve equity – and it is ready to help on a larger scale in 2023 thanks to donations and support from like-minded industry players.

Alongside falling sales, volume and units, plant-based meat has slid into the trough of despair, also known as valley of disillusionment or sorrow, and while it is unclear if the category has hit bottom yet, many stakeholders already are looking for a way up the other side where the promise of full integration, success and fulfilment wait.

Most Americans think about food in terms of servings, but Johns Hopkins-trained cardiologist Elizabeth Klodas talks about the snack bars, pancake mix, granola-like sprinkles and packets of oatmeal she offers under her brand Step One Foods’ in terms of ‘doses.’

As frozen pierogi maker Mrs. T’s celebrates 70 years of tucking ‘the stuff you love’ into a soft pasta pockets shaped ‘like a smile,’ the founder’s son and now company president reflects on what it takes to not only survive but thrive for seven decades in the highly competitive food and beverage industry.

Born out of the pandemic when product availability was unpredictable or limited and when a premium was placed on immunity-boosting, consumers in 2023 increasingly are seeking positive nutrition – both for themselves but also for the planet and workers across the value chain.

The idea of food as medicine is as old as food itself, but only recently has the mainstream US health care system begun to take notice, and action, as community-directed efforts to prevent, manage and treat diet-related illnesses through nutrition education and more equitable access to healthy food generate positive health outcomes and reduced health costs.

While consumer spending remained strong through the holidays despite rising prices, the new year may bring a new level of financial scrutiny as more Americans consider budget limitations and what is essential – altering when, how and where they shop and what they buy.

After a scathing review published earlier this month by the Reagan-Udall Foundation criticized FDA for its scattered and inefficient approach to food safety and applied nutrition, the agency says it is committed to “building a world-class human foods program” that can “more quickly adapt to an ever-changing and evolving environment.”

The “three-headed monster” of rising inflation, product shortages and labor challenges continues to wreak havoc across the food industry with little sign of relief on the horizon – prompting many consumers to shift their shopping habits and forcing manufacturers and food service providers to rethink how and what they offer.

Sales of non-dairy yogurt – like those of most plant-based products – have sharply declined in the past year, but a few bright spots revealed by consumer research and recent innovations by players in the space suggest the category could turn around with help from a few tweaks in product formulation, platform innovations and marketing shifts.

The stressful one-two punch of pandemic lockdowns followed by runaway inflation has many consumers looking for comfort and escapism from their food and beverages, which industry leaders say is driving demand for new flavor combinations that are nostalgic, whimsical and so hyper-saturated that they overwhelm their concerns.

While not a panacea for all the challenges facing the grocery industry, one stakeholder argues a less is more approach in 2023 may help ease the ongoing burdens of inflation, supply chain woes, and labor shortages as well as rapidly shifting shopper preferences that are intensifying competition.

Between Americans’ hectic on-the-go lifestyles pre-COVID, the pandemic prompting everyone to hit pause followed by hybrid work schedules, inflation rates at 40-year highs, and increased expectations that food not only nourish the body but also the soul, how and what Americans eat is in a constant state of flux.

Despite efforts to brand fruit ‘as nature’s candy,’ celebrity endorsements by the likes of Jessica Alba designed to make vegetables ‘sexy,’ and many retailers selling fresh produce at a loss to improve access and drive foot traffic – the vast majority of Americans do not eat the daily recommended amount of either.

Despite efforts to brand fruit ‘as nature’s candy,’ celebrity endorsements by the likes of Jessica Alba designed to make vegetables ‘sexy,’ and many retailers selling fresh produce at a loss to improve access and drive foot traffic – the vast majority of Americans do not eat the daily recommended amount of either.

Between the supply chain challenges and product shortages that marked the beginning of the pandemic and rising food prices due to inflation continuing to push some products out of consumers’ financial reach, many Americans are being forced to try new brands – creating opportunities and challenges for companies vying for their dollars and long-term loyalty.

Organic sales continue to reach unprecedented highs as consumers gravitate to options they perceive as healthier for them and the planet, but the segment faces significant headwinds that are slowing growth and will demand ongoing flexibility, innovation and education about organic’s value proposition for the category to maintain relevancy – especially as the economy tightens.

Natural Products Expo East may not be as big as its West Coast counterpart, but the 18,500 registered attendees and more than 1,200 exhibitors who convened in Philadelphia earlier this month for the annual conference were just as enthusiastic and the innovations they showcased revealed what is most important to natural and organic shoppers: products that are better for people and the planet.

As consumers navigate rising inflation, out-of-stocks due to lingering supply chain and labor challenges and contemplate the potential impact of their purchases on the environment and workers, they are more willing to push aside old loyalties and try new brands – opening the door for savvy small and mid-sized brands to earn their business.

Plant-based meat alternatives continue their downward slide with sales, units and volume all dropping in July from a year ago – a trajectory that IRI data crunched by 210 Analytics shows was set in motion months ago, but which doesn't shake at least one investment analyst's faith in the category's potential.

Knowing entrepreneurs often dramatically underestimate the time it takes to validate their business models, are more likely to lose money or break even than make a profit and face abysmal failure rates, one successful founder is offering a helping hand with the launch of a new accelerator program.