just-food's outlook for 2014: health still key to NPD but is fast evolving
With economic conditions improving, the budgetary shackles on NPD teams may be loosened, with more new products hitting the market. However, health will still dominate the minds of product developers and their marketing colleagues. That said, different themes are emerging, as industry watchers told just-food.
In many ways, as we seek to plot what could be on the minds of NPD teams in 2014, little will change. The mega trend of health will still be central to many of the new products that emerge on retail shelves this year.
The mega trend continued to be at the forefront of product development even during the downturn, either in spite of and driven by the economic pressure consumers found themselves. Health became a key consideration for more and more consumers throughout the first half of the Noughties; in many ways, the trend was so entrenched in the minds of many shoppers that it was not blown off course by the recession.
However, with economic conditions improving, the budgetary shackles on product developers and their marketing colleagues could be loosened, prompting an increase in the number of new products hitting the market. And, when one drills down into the big three trends continuing to drive NPD, there are specific developments that will either intensify or gain traction this year.
"Now that economic conditions are somewhat better than they were a couple of years ago, I do think there will be an inevitable shift - from a consumer perspective to spend a bit more and want to be a bit more adventurous - but also, from a manufacturer's point of view, they've now got the budget to think about expanding and capitalising on their positions in the market, so we will probably see more NPD this year off the back of that," Lamine Lahousiana, head of packaged food research at Euromonitor, tells just-food.
Lahousiana argues a "shift to on-off dieting" could inform the development of healthy options this year.
"It is still emerging - we are not expecting to see it everywhere - but it is something some of the more progressive manufacturers will try and think about," Lahousiana says. "Things like multipacks for example. Having a certain percentage of the pack as the full-fat version and a certain percentage that is suitable when you are on the diet. The nature of dieting is slowly starting to change in North America and Europe and manufacturers will have to keep track of that."
Other industry watchers agree consumers are trying to take a more balanced approach to how they manage their weight. "With consumers' personal memories of failed weight loss attempts and with the media delving into the science behind weight loss, diet is becoming a dirty word," Emma Gubisch, strategic insights manager at UK-based industry analysts Leatherhead, says. "Rather than compartmentalising healthy eating to a particular part of their lives, consumers are looking for more balanced approaches to weight loss and weight management."
Protein is becoming an ingredient of increasing interest to consumers. It has been behind the boom in Greek yoghurt sales in the US and Lahousiana argues different types of products could reach the market containining the ingredient as NPD teams look to tap into an emerging healthy-eating segment.
"There is potential to have a similar claim for something like chocolate or snack bars. You can talk about how wonderful the protein content of peanuts is in a Snickers potentially one day. There is a lot of scope for manufactures to utilise that protein-is-good argument. It has been somewhat limited to dairy," he says. "I think what will see over the next year is more and more manufacturers trying to think of ways of how they can leverage that benefit in other food categories."
Of course, health-conscious consumers can also turn their focus on particular ingredients for negative reasons. Once fat was the baddie. Then it was salt. In recent weeks in particular, the focus has switched to sugar. As just-food reported from the global confectionery industry trade show ISM this week, there was an acknowledgement the issue - already on manufacturers' radars - is growing in importance.
Gubisch argues "natural sugar alternatives" could increasingly be used in new products. "Plant-derived sweeteners, such as stevia, which can be marketed on a more natural platform, are expected to provide the main impetus for growth in the sweetener market in the coming years," Gubisch says. However, she acknowledges issues around taste still provide room for artificial sweeteners. "As manufacturers work to create the right taste profile for stevia and for other plant-derived sweeteners, such as monk fruit, to attain regulatory clearance, the artificial sweetener market still offers growth opportunities, however, in particular the sucralose and acesulfame-K market."
Lahousiana agrees consumers are going to focus more on sugar, particularly in products where there is lack of awareness about how much of the ingredient is used. However, he is dubious about whether stevia is the solution for all products.
"For soft drinks and for certain food categories it works without too much effect on taste and texture but it's not for every food category. The standard high-intensity sweeteners are probably going to do quite well out of this as well. Recently, EFSA has come out stating aspartame has no detrimental impact on human health, so that, combined with the renewed focus on sugar as an evil, will probably swing things around for high-intensity sweeteners and we should start seeing a lot more of its use in lots of different products to replace sugar."
There are major manufacturers looking at the issue of health from many angles. According to analysts at Innova Market Insights, the health trend is becoming "more holistic".
"Some big food manufacturers are looking to all areas of health for a more holistic approach in providing nutritious food and beverage solutions to consumers," it says.
Nestle has focused much of its NPD efforts on developing functional products and the company in a bid to help drive top-line growth. Last year, the group launched a number of functional products, including a bar for "older adults". Nestle also acquired brain health nutrition business Pamlab.
And last week, the company entered into a partnership with the Singapore government's Agency for Science, Technology and Research (ASTAR) to establish a global R&D platform for functional products.
It could be argued a company the size of Nestle can afford to invest in such areas more easily than smaller peers. While true, Nestle's initiatives do serve as an indication of the thinking of some in the industry - and the opportunities that could potential be on offer.
Health then will again be central to many a manufacturer's product development strategy in 2014. However, to dismiss the trend as simply more of the same would be to misunderstand what continues to be an evolving subject - and one that, if NPD teams and marketers can better grasp, could prove lucrative for their business.
- Focus: Danone CEO Faber puts stamp on business
- Cleaning up Tesco will have mixed supplier impact
- The just-food interview: Doux CEO Arnaud Marion
- Interview part 2: BRF CFO Augusto Ribeiro
- Bitesize interview: Cricketer Farm MD Greg Parsons
- General Mills outlines "aggressive" NPD drive
- Coles supplier payments broke competition law
- Lay's heads "billionaire food brands" list
- PepsiCo opens snacks plant in Saudi Arabia
- Australia consumer watchdog probes raw milk sales