Expect These Trends to Dominate the Food & Beverage Industry

Last Week’s Moves

BLS Cash Index  617.50 (-1.91%)                 BLS Industrials Index 640.21 (-2.29%) 

BLS Foodstuffs Index 585.64 (-1.37%)         BLS Fats and Oils Index 839.52 (-2.52%)   

BLS Livestock Index 712.08 (+0.43%)

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Welcome to your weekly food & beverage report, where we cover everything you’ll need to know for the week ahead. This week, Ukraine and the US enters into a partnership to fight back against global food insecurity, new trends in the food and beverage industry are emerging, and new insights around consumer behavior vary by age and income. Let’s dig in. 

New efforts to mitigate international food crisis announced as Ukraine and the United States enter into information exchange agreement 

As the war in the Ukraine continues, warning calls of international food insecurity are growing louder. After a meeting with ambassadors of the UN, US Secretary of Agriculture Tom Vilsack has announced that the USDA and the Ministry of Agrarian Policy and Food of Ukraine are entering into a Memorandum of Understanding (MOU). The MOU aims to coordinate both countries’ agriculture sectors in building a partnership that preemptively addresses food security.

• Information nations… With the MOU comes a three-year partnership between the US and Ukraine, guaranteeing a consistent information flow regarding crop production, new technology, climate-smart practices, food security, and supply chain issues in efforts of boosting production for both countries. 
• Stark strategy… “Russia is using food as a weapon and a tool of war to threaten the livelihoods of those around the world,” said Vilsack, “that is something the agriculture community cannot and will not stand for.” 

New consumer trends and patterns of behavior are emerging; all signs point to positives for the food and beverage industry

Trendsetting trade show… Before the pandemic shut down in-person events, the Summer Fancy Food Show was known for being a great place to spot the next trends in the food and beverage industry; the event’s returning year proved to be no different. The New York-based trade show featured over 1,800 exhibits displaying specialty food and drinks from restaurant owners, food service operators, and other industry representatives. One key takeaway? New trends are definitely on the horizon. 

• Pasta parade… Of the up-and-coming trends making waves, pasta seems to be surprising industry analysts. After years of lagging sales growth, noodles are making a comeback. Brands are experimenting with new noodle shapes and different flavors and ingredients after sales bounced back during the pandemic.
• Clean eating comfort… Many of the latest plant-based product launches haven’t been focused around milk or meat substitutes, but instead are offering consumers a new spin on comfort foods. Pancakes, especially, are getting extra attention from companies experimenting with either packaging, ingredients, or both.  
   

Trust the taste… According to a report from Morning Consult, over seven in ten adults in the US have faith in food and beverage companies, making the sector the most trusted industry. According to data from the study, despite consumers generally having long-term relationships with food and beverage brands, they will still switch brands if trust wanes. One in three consumers will switch food and beverage brands if trust is broken, more than any other industry.

• Finicky factors… Factors that lead to consumer trust being broken include a decline in product quality, price increases, or if a brand stands for a cause they disagree with. Escalating input costs, supply chain disruptions, and open discussion of social issues means these factors are in the spotlight quite frequently. 
• Differentiated by… Older and wealthier consumers are more likely to have a stronger sense of trust in a brand, with 84% of baby boomers and 82% of high-income consumers placing more trust in brands. Younger consumers are considerably more skeptical of marketing efforts and brand interactions, resulting in 62% of Gen Z adults placing trust in a food and beverage brand.  2019 according to IRI data. 

Other stories…

• Bubling over… PepsiCo’s (PEP) Bubly is entering the RTD Mocktail arena with the launch of its Bellini-inspired non-alcoholic beverage. The RTD cocktail space is becoming increasingly popular, with all of the big beer companies (BUD, STZ, DEO, and SAM) all launching new products. 
• Cereal spending… Post Holdings (POST), the owner of brands such as Honey Bunches of Oats, Pebbles, and Great Grains, will be spending up to $110 million to expand its cereal production capacity at its Nevada facility.
• Eat your veggies… Chipotle (CMG) is re-trying its whole cauliflower rice idea, bringing the keto, vegan, vegetarian, and paleo menu option to 60 restaurants for a limited time after bringing in new customers last year.

That’s all we have for you this week, do you have anything for us? We’d love to hear from you with stories or recommendations for new sections to include! Drop us a line at news@barchart.com with any feedback or input. 

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