What do you think the biggest challenge will be facing the development of healthful foods in the next five years?
Michael Sands, CEO and president of Balance Bar (MS): Making sure that the products being developed are truly healthy. There is a lot of perception among the media and consumers that some things are healthy, but itís more a matter of separating the myth from the fact.
Mark Crowell, CRC, founder and principal culinologist at CuliNex (MC): In the context of functional food ingredients, developers need to stay current with the science, principally nutrition science and the results of clinical trials. In formulating, they need to keep the right balance between providing consumers with what is on-trend and creating foods that make sense nutritionally. Keeping things simple and as natural as possible is what our clients are looking for. Most of the time, that is actually more challenging than throwing in the artificial color or flavor or stabilizing system.
What are the 3-4 biggest challenges food companies will face in developing healthful foods and, if possible, do you have any advice as to what a company can do to address at least one?
Lynn Dornblaser, director, CPG Trend Insight, for Mintel International Group (LD): Some challenges companies are going to face in terms of whatís ahead:
* Finding the right mix for each companyís portfolio--meaning, the right mix of products that offer superior taste, functional benefits, right portion size.
* Making the right decisions regarding sodium levels, the use of high-fructose corn syrup (HFCS), the use of ìall naturalî as a claim, and how to market to kids.
We will see more regulation of all of these in the future, and smart companies are doing the work now, so they wonít be caught in a tough situation, once regulations are developed. What we see are companies gradually reducing sodium, for example, so when there are regulations, they will be in compliance or already very close. With ìall naturalî as a claim, we are seeing more companies focus instead on the inherent goodness of the ingredients in the product, rather than the more general ìall naturalî claim. Consumers are looking for proof, and this type of approach helps them get that proof.
Steven Steinborn, Hogan & Hartson LLP (SS): Sodium reduction--this will remain a high priority for consumers and industry alike, because there is every indication that health professionals and key opinion leaders view sodium above recommended levels as an important public health issue. With the low-fat trend, there was a time when consumers had to be willing to trade-off most of the taste for the ìlow fatî benefit. Then, low-fat versions of potato chips, certain dairy products and other favorites emerged, and constant improvement satisfied consumer interest in moderating fat intake, while not losing the familiar taste and other properties that drove them to consume a given food in the first place.
The solution isnít obvious, and the fact that decades of work in this area has produced few success stories suggests that only good, old-fashioned R&D will get us there. Technologically, it is presumably easier to remove fat and adjust the formulation to preserve technical attributes associated with fat. Low-sodium development seems far more complicated. Another formidable challenge is, of course, consumer acceptance.
SS: Also, staying relevant--consumers seem to want everything and sacrifice nothing. This forces companies to think about their products, their consumer, and what they are good at or want to become better at doing. Food innovation can take so many forms. Look at the explosion in package design--so many clever ideas that make using a food product easier and, of course, the ìgreen revolution.î A credible message to consumers who are concerned about the environment requires food companies to think hard on what types of changes can they make, and, by extension, the consumer who chooses its brand.
Consumer opinions surrounding health and wellness seem to have undergone a metamorphosis; where once they sought products ìlow inî certain elements, they seem to be searching for products naturally rich in vitamins, minerals or other beneficial aspects, or for products with these elements added. Have you noticed this, as well? Has your research borne this out?
Joe Derochowski, executive director for The NPD Group--Food & Beverage Services (JD): Yes, to a degree. ìTaking outî declined through the 1990s, grew over the past few years, but has dipped recently. The ìnewî is about adding in, which has been growing consistently for the past five years. The question is how long that will last. Itís really all about the trend toward the ìnew;î how long the added-benefits trend will remain ìnewî is the question.
Laurie Klein, Just Kid Inc./The Family Room (LK): Weíve noticed a similar, but different, trend in our research. With the influx of more functional food products in the marketplace, consumers have shifted from looking for products that offer the absence of a negative (such as low-fat, low-calorie, low-sugar, etc.) to products that offer an added benefit (such as fiber, omega-3, etc.).
But, even more powerful than this shift toward functional food is the consumer backlash against processed foods. Over the last few decades, the food industry has made great strides in developing new food processing techniques that can create a variety of different snacks with longer shelflives and lower-cost ingredients. These advances havenít come without a price to consumers. Many food product labels now have an assortment of ingredients that arenít recognizable to consumers. Also, many of these products arenít considered healthy. Weíre seeing a deep desire among moms to return to less processed foods. In a recent study we conducted with moms, 74% of moms say they look for unprocessed food for their child, and 91% agree they want to know where the food they serve their child comes from. Consumers are becoming nutrition label readers and are becoming much more aware of what goes into the food they serve their families. Weíre seeing indications that there is a real behavior shift happening, too. In this same study, 42% of moms said they are serving fresh food or food made with fresh ingredients more often to their child vs. a year ago.
LD: What we are seeing is a move toward ìbalanceî--both in formulation and also in terms of how consumers construct their diets. It seems consumers are beginning to understand that all things can have a place in a balanced diet, and they are finding ways to make that happen.
Health and wellness have been topics at the forefront for years. What do you see as the next immediate endeavors in these areas? What efforts do you foresee manufacturers attempting in the next 5-10 years?
MC: Obesity is costing the country dearly. The Centers for Disease Control and Prevention estimated the annual price tag at $147 billion in healthcare costs in a 2009 study. This is by far the biggest opportunity area for NPD. Thermogenic foods, portion control products, low-glycemic index foods, resistant starches and many others have tremendous opportunity.
How do you see that health/wellness trend co-existing with the consumer desire for gourmet and indulgent?
LK: I donít see these as mutually exclusive trends. I think gourmet will always be about fresh, natural ingredients and more upscale and cutting-edge food. Indulgence today isnít about heavy cream sauces and high-fat foods. Itís about treating yourself right with healthful ingredients that are also good for you, like dark chocolate; Superfruits with tasty sauces; and not compromising great-tasting foods for a health benefit.
MC: They arenít necessarily mutually exclusive. Over time, product development gets better and better, as ingredients and processing evolve, but it takes time. Think about the way frozen yogurt started out in the 1970s. It was acidic, with little of the mouthfeel of soft serve--but it was a hit; it was a third of the calories. Then it wasnít a hit. All these frozen yogurt shops started closing; people got tired of it--they didnít want to trade down anymore. But, the product kept evolving with better cultures, emulsifiers and machinery. Suddenly, yogurt was hot again in the late 1990s, but it had become a different product. Today, people donít feel like they are trading down at all, when they have a frozen yogurt. It is its own experience.
Speaking particularly to healthful foods, what emerging food types or flavors do you see taking prominence in this arena in the coming year and in the next 5-10 years?
LK: I think weíll continue to see an influx of functional foods that will go even further in offering health benefits. There are already certain types of foods that not only help to prevent high cholesterol, but can also help to lower your bad cholesterol, when eaten as a regular part of your diet. There is also yogurt with added probiotics that can help with digestive health issues. I imagine weíll continue to see products on the horizon that not only taste good, but also help to prevent or correct a particular health problem. With the rise in diabetes in this country, one important area of food product development is low-glycemic foods, which can help to regulate insulin and lower the incidence of diabetes.
MC: I donít think we have seen the end of the Superfruits phenomenon; mangosteen, camu camu, sea buckthorn--there are many wonderful tropical fruits still to be discovered. The Miami-Dade County Tropical Fruit and Spice Park has more than 500 varieties of tropical fruit there, many of which you can taste--http://miamifruitandspicepark.com. I also see a return to heritage varieties. People are rediscovering them through farmerís markets, seed catalogs and potlucks.
LD: We see this waning (flavors that tie in to health trends). Perhaps the one that is strong and will stay that way is tea, especially green tea, for its energy and antioxidant benefits. Another one that we see in Europe that we think will be coming to the States is beetroot. It is appearing in energy drinks because of its vitamins and antioxidants. It is positioned as a natural energy booster. There is one energy drink in the U.S. that currently is made with beetroot; we think we will see more.
MS: No doubt, weíre seeing more ancient grains out there, whole grains. Pomegranate is very good for you, but its advantage is that it mixes well: it goes well with strawberries and with other high-flavor products. Consumers like the fresh and familiar. The mainstream wants something tasty, unique yet familiar, something new with something traditional. Plus, thereís more research with blueberries, cranberries and Superfruits, and more vegetables are crossing over, such as with V8 Fusion. The trend is definitely in beverages already (itís a dynamic category with a lot of innovation there), but weíre also seeing it in other food products--a lot of fiber and protein.
The economy obviously is emerging as an issue within all companies and divisions. How do you see it impacting the industryís NPD efforts in health/wellness? Less/more support; less willingness to try riskier propositions, etc.?
MS: There has been a slowdown in organic, but what weíve seen is that shoppers are shopping smarter. That is, there is not as much of a decline in organic for kids, as moms and dads have apparently cut back on organics for themselves. If you can still provide a benefit, if it keeps you on the job or working, if thereís a premium, the consumer seems willing to pay for it. People will take a chance on a dollar and a dream. However, there is a price point that is the limit consumers are willing to pay.
JD: Companies are not going to be as interested in supporting riskier propositions, but that doesnít mean health and wellness, as a trend, is risky. It gets to how effective companies are at marketing the products; however, consumers will not pay too high a price. If companies can create a product that otherwise fits consumer needs and doesnít increase food cost, itíll be successful.
With the Obama administration, what changes do you see on the regulations front? Particularly those that would impact companies and their product development efforts?
SS: At the federal level, important changes in leadership at FDA, USDA and the FTC all play a significant role in regulating the food industry. Over a dozen Warning Letters announced by FDA at one time to many recognizable food companies reflects FDA's enforcement mode. You see the same thing at FTC, which has entered into consent orders with several food companies, and there is every indication that more will follow. FTC is looking to forever change the restrictions in its consent orders in a manner that advances the commissionís goal of robust, enforceable consent orders. The bar for advertisers is rising, at least for companies operating under the new consent order language.
SS: The common theme is health and nutrition. If a marketer touts the health benefits or desirable nutritional properties of an ingredient or food, it needs to understand the governmentís view on adequate scientific substantiation and interpretation of claims. And, it must appreciate that certain types of claims that might seem okay, such as ìBursting with vitamin C, are not among the vocabulary that FDA has determined through regulations is appropriate to describe the level of a nutrient. Also, be careful about foods being fortified. It is often noted that FDA's non-binding policy is outdated in certain respects, and that is true; however, it contains several principles FDA is still applying, particularly with regard to foods that are supposedly not appropriate for fortification (e.g., soft drinks, snacks, meat and poultry products). That is not to say the federal government is always right, but (companies) need to marry product developmentwith an understanding of the regu-latory environment.
Allergen issues (gluten, peanuts, etc.) have emerged as a notable area of NPD. How do you see this arena advancing in the next 5-10 years?
LK: Yes, food allergies will continue to be a very important area for product development. About 1 in 5 people has some type of food allergy, with a large segment of the population still undiagnosed for certain allergies. For example, over 2 million people in the U.S. are expected to have celiac disease, or gluten intolerance, but have not been diagnosed. I expect there will be a huge surge in the need for gluten-free food products, as more is understood about this disease and more people are correctly diagnosed.
JD: I see it as the current 'new.' Companies that prove effective at marketing these products and making sure the products themselves are good, priced correctly and packaged right--those are the companies that will survive. If not, the products will have their window of growth and then will decrease sometime in the future. Theyíll probably always be around; itís a matter of to what degree. This will be determined by how effectively they are marketed and produced.
What health conditions do you see foods addressing in the near- or long-term future?
MS: It's tricky. (Manufacturers) have to review the scientific evidence: the government wants the science proven. Thereís no doubt that you can make foods either naturally functional or you can add to it and make a nutraceutical food, such as with plant sterols to reduce cholesterol. Itís easy to add fiber and antioxidants and supplements to a food and make it taste good. Functional foods are definitely in greater demand. The question is: How functional do you want to make them?
LD: Continued focus on weight management and weight control, with a special emphasis on weight management for kids. Also, products that help diabetics manage their health condition.
LK: Another area that seems ripe for innovation is foods that will help cure or prevent acid reflux. Approximately 25 million people experience acid reflux each day. Wouldnít it be wonderful if the food industry were able to make advances that were capable of eliminating the need for certain prescription medications? pf
The panel:
Mark Crowell, CRC, is founder and principal culinologist at CuliNex, a consultancy specializing in the development of organic and natural food products. He is the former director of product development for Olive Garden Restaurants and Starbucks Coffee Co. He can be reached at mark@culinex.biz.
Joe Derochowski, executive director for The NPD Group--Food & Beverage Services, has been following consumer behavioral trends for the past 12 years on a wide variety of food and beverage categories for nearly every major manufacturer, from the unique perspective of what people do, rather than what they say they do.
Lynn Dornblaser is the director, CPG Trend Insight, for Mintel International Group. New product trends have been the focus of Dornblaser's career for more than 20 years, giving her a unique perspective on the marketplace and new product development.
Laurie Klein, with Just Kid Inc./The Family Room since its inception in 1994, is recognized as an industry leader and regularly travels the country to discuss marketing challenges and provide marketing and product development seminars for kid and family products to some of the leading companies in the food industry.
Steven Steinborn, Hogan & Hartson LLP, represents food and dietary supplement companies on a range of product development, marketing and regulatory compliance and enforcement issues involving the FDA, the USDA, the FTC and the Consumer Product Safety Commission; SBSteinborn@HHLAW.com.
Michael Sands is CEO and president of Balance Bar, one of America's original nutrition/energy bar manufacturers. Prior to joining Balance Bar, Sands was co-founder and CEO of Lesser Evil Brand Snack Company and also has served as chief marketing and operations officer for Snapple Beverage group.
