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What Are Consumers’ Attitudes Toward Sweeteners

Posted on:August 8, 2018

Tom Vierhile, MBA, Innovation Insights Director with the UK-based data management company GlobalData, gave a thoughtful discussion on consumer feelings about sweeteners that ended with a summary of unique future developments in sugar reduction.

He began his presentation, “Sweeteners in the Crosshairs: How Do Consumers Really Feel About Sweeteners and are These Feelings Changing?” by giving a brief introduction to GlobalData. He noted that it tracked innovation in over 50 markets to discover game-changing product trends through an organized trend framework that revealed eight me-ga-trends and 63 sub-trends.

“Globally, 54% of consumers are paying attention to the ingredients in their foods and drinks,” explained Vierhile. “Growing interest in ‘cleaner’ foods; rising worries about food allergies; and food contamination issues are making consumers more ‘ingredient-aware,’” he stated. Ingredient concerns tend to be much higher for products targeted to children.

Consumers are actively trying to reduce consumption of sugar and fat because of their perceived negative impact on health. A majority of consumers are either trying to reduce sugar consumption or consume it in moderation. Concern about sugar tends to rise with age, and consumers are increasingly linking sugar with weight gain. Obesity issues have escalated universally, and the U.S. leads the pack. Sugar taxes and education are seen as tools to change behavior.

“Views toward specific sweeteners are as varied as the sweeteners themselves; for example, agave, stevia and honey are seen as most healthful with just over one third of consumers globally saying each has a positive health impact,” Vierhile claimed.

Globally, aspartame is viewed more negatively now than high-fructose corn syrup. Sweeteners derived from nature are more likely to have a positive perception than sweeteners that are not. This explains honey’s health halo, with 77% of consumers globally (63% of Americans) believing honey has a positive impact on health.

But views toward honey and stevia are changing. Honey cannot escape worries about chronic health issues like obesity or type 2 diabetes. The positive “buzz” around honey may be easing because of these concerns. Stevia is in the opposite position as honey. Worries about obesity may be helping stevia, as consumers learn more about it. Not ingredient experts, but a surprisingly high percentage of consumers globally say they are not familiar with the sweeteners xylitol, monk fruit, agave and erythritol.

Regarding sweetener claims, Vierhile stated that “little consensus exists.” No single sweetener claim emerges as the most attractive to consumers, as it is perceived that eliminating sugar comes at a cost, since sugar substitutes have their own issues.

Few differences are seen by consumers between “no added sugar” and “low sugar” claims. However, the “no added sugar” claim is viewed as appealing for younger consumers “when offered in a more natural state, and unsweetened products are perceived as more healthful, but lacking in taste appeal.”

Mixed results show that there may be no magic bullet for sweeteners. Replacing one artificial sweetener with another one backfired for Pepsi, as consumers wanting the original aspartame-based formulation rebelled. In Australia, Coca-Cola ran into resistance rolling out Coca-Cola No Sugar to replace Coca-Cola Zero (both with aspartame). Sugar reduction tends to focus on soft drinks and confectionery. However, many other categories offer reduction opportunities, including bread, wine and even meat, with Applegate Naturals launching the first sugar-free bacon.

In the future, re-engineering sugar to be less caloric has promise. Nestle has developed a new process that takes sugar and changes its physical structure. New hollow sugar crystals are said to dissolve faster and deliver identical sweetness as regular sugar, with fewer calories.

“Artificial sweeteners may be in for a rough ride,” Vierhile pre-dicted. Recent studies have found associations with negative health impacts on weight gain, type 2 diabetes and other health issues from non-nutritive sweeteners.

“Sweeteners in the Crosshairs: How Do Consumers Really Feel About Sweeteners and are These Feelings Changing?” 
Tom Vierhile, Innovation Insights Director, for GlobalData


Challenges and Solutions: Managing a Clean Label Supply Chain

Posted on:August 6, 2018
Cost-Implications-Will Lennon-2018-CLC

The cost of replacing various ingredients with clean label alternatives can pose challenges for product developers. Click on image to see a larger chart.

“As you have all probably come to realize by now, we are dealing with a clean label market that is still quite immature,” said Will Lennon, MBA, Chief Operating Officer, Imbibe, a beverage development company. “This means that pricing hasn’t yet equilibrated; information isn’t yet transparent; and raw material supply is still inconsistent.”

Lennon outlined some of the specific challenges confronting the clean label category in his presentation “Challenges and Solutions for Managing a Clean Label Supply Chain,” at the 2018 Clean Label Conference. On the ingredient side, for example, there is cost: clean label colors may cost five times more than the artificial colors they replace and require higher concentrations of use and shorten product shelflives. Clean label products may also require expensive packaging upgrades: A conventional cold-filled beverage, thanks to conventional preservatives, may now require hot-filling, along with much higher packaging material costs.

Lennon illustrated with a case study, “…a large consumer products company wanted us to develop a clean label powdered beverage. (Although the customer desired a freeze-dried berry powder, the cost was prohibitive.) So, we found a drum-dried berry powder, at half the cost, that we could blend with the freeze-dried powder to bring ingredient costs into line.” Product developers really need to press upon ingredient suppliers to provide acceptable clean label options. But, they should also establish a hierarchy of expectations. “Clean label can mean many things, and often, not all those needs can be met,” added Lennon. Does clean label mean minimally processed or preservative-free? Choices must be prioritized.

Clean label product development must also deal with capacity constraints. Normally, companies use contract manufacturers to launch new product lines to hedge their overhead risks. Today, limited capacity exists for clean label manufacturing and “large, billion-dollar companies are sequestering big parts of that capacity,” said Lennon. This results in larger up-front commitments for minimum-order production quantities and ingredient and packaging material inventories. “We also now demand that our suppliers stock three-to-four months of key-ingredient inventory, and many aren’t ready for this,” said Lennon. In some cases, key ingredients come in from overseas, further lengthening and complicating supply chains. Thus, both suppliers and manufacturers need to think about how much up-front risk they are willing to assume in case of product failure. And, warned Lennon, these supply chain challenges will only increase as large companies, such as Mondeléz, Weight Watchers, Kellogg’s and others enter the category.

An additional complication is that many new clean label ingredients originate from single suppliers and, overlooking the risks inherent to working with single-source suppliers (e.g., fires, bankruptcy), very little price competition or transparency exists when negotiating prices. Companies must thus make major commitments that can make or break their new product introductions, based on very little information.

Lennon cited the case of a single-source brown rice protein supplier that was building a plant in China due to be completed in four months’ time. Its ingredient may be key, but should the customer assume the risk of contracting with that supplier? “Reputational risk is another soft cost to consider and, often, you have little control over a suppliers’ ability to deliver crucial ingredients,” he added.

The only solution, in Lennon’s view, is to insist on complete transparency when discussing supply chain risks with both sup¬pliers and customers. Also, spend face time with each party to help avoid misunderstandings or mistranslations. “We had a Chinese supplier that claimed that their stevia leaf extract was organic, but upon discussion, it turned out that it was only the leaf that was organic, not the alcohol solvent used for extraction,” said Lennon.

Finally, there are the unforeseeable “hash-tag” costs imposed by fickle consumer trends and regulatory agencies (e.g., California Prop 65). These can place immediate reformulation demands on companies’ product development and procurement resources at a moment’s notice.

It is all heading in the right direction, affirmed Lennon. Clean label definitions continue to evolve, and supply will eventually catch up to demand, “but we are not there yet,” he added. In the meantime, get your operations team involved early in the product development process, and “be fully aware of and transparent about attendant risks,” advocated Lennon.

“Information on this page was derived from the 2018 Clean Label Conference Post-conference summary. See past and future Clean Label Conferences, which are annual events.


Microalgae as an Alternative Protein Source

Posted on:May 8, 2018

The microalgae biomass contains numerous ingredients that offer supply-chain opportunities. [For larger PDF of this chart, click on the image.]

Algal proteins have become a strategic factor for global food and beverage industries, aqua-farming and animal nutrition. Gary Brenner, Owner, Brenner pharma/food Business Development, reminded the audience that algae is a broad category, in his Special Session presentation entitled “Microalgae as an Alternative Protein Source: A Developing Story.” The distinction between micro and macro is important. There are differences between environmental diversities, and the technology and purification of ingredients.

May 8, 2018— The Protein Trends & Technologies Seminars consists of a one-day Pre conference Program: Business Strategies and a one-day Technical Program: Formulating with Proteins. Attendees can register for either one alone or for both for a cost savings. The Pre-conference Program: Business Strategies’ goal was to provide information for upper-level managers to help them identify opportunities and threats in the protein ingredient marketplace. Speaker highlights into consumer and product trends, market volatility, global regulations and emerging market opportunities, among other topics, were offered.

This year’s conference took place on May 23-24, in Itasca, Illinois. The “2017 Protein Trends & Technologies Seminar Summary-Business Strategies” provides presentation highpoints and is available for download by clicking here.

SPECIAL SESSION: Microalgae as an Alternative Protein Source

Traditionally, research has focused on Spirulina, Chlorella, Porphyry, Nannochloropsis, astaxanthin, Dunaliella and fucoxanthin. Yet the opportunities extend to over 72,000 microalgal sources of species and strains that have not been fully researched or developed. A critical part of the success in developing protein sources from microalgae lies in the byproducts that are created after cracking the biomass of the algae and extracting out fractions.

It’s not unlike the history of soy products and the price comparison between soybeans, soybean meal, soybean oil; and soy flour, concentrates and isolates. For the same percentage of protein, different food categories, such as infant formula, can demand a much higher price, although the requirements are much stricter. Added value has been found in phytochemicals, isoflavones, saponins and phospholipids.

“The world of microalgae is taking the same approach,” Brenner said. Microalgal proteins are not a niche product. The business model is centered on high-protein concentrations, functionalities and flavor profile, and ultimately—dollars per kilo.

“I’m all too aware, and the people with whom I interface are aware, that $6-8 a kilo for 70% algal protein concentrate is steep; but we can expect that most high-concentration alternative proteins will in this range, a little less or a little more,” he said. Brenner and his colleagues expect two things to happen to bring the price down. Different nutritional benefits will be associated with protein levels; efficiencies will also
drive down cost.

Work in Europe is focused on revolutionizing food production. European Institute of Innovation and Technology (EIT) Food is a consortium of 50 food partners across business categories whose objectives are, in part, to catalyze food innovation.

By supporting research and entrepreneurship, they are working to improve nutrition and make the food system more resource-efficient, secure, transparent and trusted. Of all the land crops, algae is the most sustainable, with the lowest carbon, water and arable land footprint.

Brenner said many of the industry partners are committed to the use of microalgae for alternative protein sources. One of the proposed projects given to EIT Food’s €1.2 billion multi-year initiative (over seven years) is the development of algal plant-based protein sources. The project aims to develop cost-effective, highly functional and good-tasting specialty proteins with important essential amino acid profiles.

While fractions such as PUFA concentrations may be an added value of a microalgal source, protein is driving project development, both in terms of functionalities and price point. “The alternative protein sources are putting us into a different mindset, when it comes to the possibilities of synergies between these different proteins, with new functionalities solving issues of everything from price to taste and everything in between,” he said.

Flavor is a key consideration, as are amino acid profile and digestibility. The goal is also to achieve functional characteristics that give food developers new tools with which to work. Solubility, emulsification, heat stability, color, viscosity and gelling are properties the industry is working to achieve, Brenner stated.

Brenner also brought home the need for distinction when referring to alga by showing Mintel data. When studying ingredient labels, he found many of the products are from seaweed and not microalgae. Only 24 out of 120 actually are found in food and beverage products; the remainder are dietary supplements. A separate search for microalgae protein shows two food products, both dry blend mixes with Spirulina.

His conclusion? The market for food and beverage applications for microalgae proteins is still a virtually untapped category.

“Microalgae as an Alternative Protein Source: A Developing Story,” Gary Brenner, Brenner pharma/food Business Development, garybrenner@pharmafood-bd.com

 


The Food Industry’s Current and Future Regulatory Environment

Posted on:April 27, 2018

April 27, 2018-– The Protein Trends & Technologies Seminars consists of a one-day Pre-conference Program: Business Strategies and a one-day Technical Program: Formulating with Proteins. Attendees can register for either one alone or for both for a cost savings. The Pre-conference Program: Business Strategies’ goal was to provide information for upper-level managers to help them identify opportunities and threats in the protein ingredient marketplace. Speaker highlights into consumer and product trends, market volatility, global regulations and emerging market opportunities, among other topics, were offered.

This year’s conference took place on May 23-24, in Itasca, Illinois. The “2017 Protein Trends & Technologies Seminar Summary-Business Strategies” provides presentation highpoints and is available for download by clicking here.

The Trump administration’s current freeze on food ingredient definitions and food package-labeling regulations may slow the pace of new product introductions. Why introduce new products if package claims must be redesigned before roll-out?

The Food Industry’s Current and Future Regulatory Environment
Jessica P. O’Connell, Special Counsel, Covington & Burling’s Food and Drug practice group

“What I really wanted to talk about is what to expect over the next few years, given the new administration,” said Jessica O’Connell, Special Counsel for Washington, D.C.-based Covington & Burling O’Connell.

Administrative change in Washington, D.C., normally generates uncertainty regarding new food regulations, but these are abnormal times: What happens when a new administration makes reducing government regulatory burdens one of its primary goals?

U.S. government statutes currently awaiting clarification and implementation include: FDA guidance on definitions for “healthy,” “fresh” and “natural;” FDA guidance on implementation of the Food Safety Modernization Act (FSMA); final rulings and guidance on a revised Nutritional Facts panel; FDA guidelines on ingredient definitions; and the USDA’s guidelines regarding GMO foods’ labeling.

“One of the Trump administration’s first acts after inauguration was to issue a regulatory freeze, until pending regulations could be reviewed by new administration appointees,” said O’Connell. This is a common practice.

“Shortly after the inauguration, a ‘two-for-one’ order was issued, indicating that for every new regulation approved, two would have to be rescinded,” recounted O’Connell. This was later clarified to apply only to new rules that imposed significant cost burdens on society. Months later, a further clarification instructed agencies to focus their attention on regulations that “eliminate jobs or inhibit job creation;” are “outdated, unnecessary or ineffective;” or “impose costs that exceed benefits.”

“We will have to wait and see what regulations will be eliminated under this directive, although it will probably first entail old rules and standards that are outdated,” O’Connell noted. She also pointed out that there are significantly different social and business cost burdens incurred from FDA regulations defining package-label designations, such as “natural” or “fresh” on the one hand, and the much heavier burdens associated with implementing FSMA regulations on the other. Some costs defy easy measurement.

The FSMA is especially burdensome to food and beverage manufacturers, and companies remain in limbo until the new regulatory regime sorts itself out. All seven of FSMA’s foundational rules have been published, and compliance dates have been staggered for each rule, leading into 2019…or beyond.

“There was very limited FDA guidance on FSMA compliance before the election and nothing thereafter,” observed O’Connell. If the administration applies the “two-for-one” rule to this legislation, it is fair to ask whether such guidance will ever be forthcoming, or whether the regulations will even be implemented, she continued.

Food labeling was “a huge focus” for the preceding Obama administration, but this won’t necessarily be the case for the Trump administration Though not directly pertinent to proteins and protein ingredients, the current freeze on food ingredient definitions and food package-labeling regulations threatens to derail the pace of all new product introductions: Why introduce new products if package claims must be redesigned before roll-out? Markets abhor uncertainty.

There is also one action before the USDA that should concern protein ingredient and food manufacturers, cautioned O’Connell. A USDA standard defining “bioengineered foods” disclosures is due to be implemented July 29, 2018. Implemented to pre-empt individual state initiatives, the law vaguely requires the USDA to foster collaboration with the National Organic Program (NOP), but much remains to be done.

“There have been legitimate questions regarding whether and when it will be implemented,” said O’Connell. She said that an Advanced Notice of Proposed Rulemaking (ANPRM) was submitted by the USDA in January but withdrawn less than a week later—due to the regulatory freeze.

O’Connell also alerted attendees to a soon-to be completed USDAsponsored study evaluating the use of QR codes to communicate information on food packages, which would have major implications for food labeling, marketing and advertising. She expected results “pretty soon,” so stay posted!

“I think that a final question we need to consider is [that of] resources,” said O’Connell. “It has always been a struggle to determine how many resources these two agencies could apply toward statute implementation.” This, too, remains to be determined. Without credible regulatory guidelines or enforcement, continued uncertainty can only freeze the gears of innovation.

[Editor’s Note: On September 29, the FDA released a proposed rule to extend the compliance dates for the Nutrition Facts and Supplement Facts label final rule and the Serving Size final rule from July 26, 2018, to Jan. 1, 2020. https://goo.gl/Mx9iVk].

“The Food Industry’s Current and Future Regulatory Environment,” Jessica P. O’Connell, Special Counsel, Covington & Burling’s Food and Drug practice group, jpoconnell@cov.com


Identify Trends, Stay Relevant with the Evolving Consumer Market

Posted on:April 23, 2018

How to Identify Trends to Stay Relevant with the Evolving Consumer Market
Blake Mitchell, Partner and President, Interact On Shelf

“A Sunday on La Grande Jatte,” by G. Seurat (1884). The painting, a pixelated composition of colored dots, provides a good metaphor for how many innovations, fads and trends combine to define patterns of innovation in the food and beverage industries.

People in the food and beverage industries need to get out of their laboratories and into the hidden corners of consumer food markets, if they want to catch the leading edges of food and beverage innovation.

That was the message conveyed by Blake Mitchell, Partner and President of Interact on Shelf, in his presentation titled “How to Identify Trends to Stay Relevant with the Evolving Consumer Market.”

“We help food and beverage brands realize their full potential through packaging and marketing. But this talk really is about how to identify trends,” said Mitchell. He cited his location in Boulder, Colo., as being especially well-situated for catching incipient food trends. “Boulder has a wonderful food and beverage community that supports a lot of innovation,” he said, listing leading avant-garde food brands incubated in the Boulder environment, such as Doctor D’s, Quinn Snacks and Purely Elizabeth. The Huffington Post once listed Boulder as “the number one place to start a food company,” continued Mitchell.

Mitchell likened the process of analyzing food trends to the pixelated impressionism of 19th Century painter, Georges Seurat. “Each point of color stands alone, but combined with others, creates an overall trend pattern.” However, he cautioned, one has to learn to distinguish between fads and ideas. Even famous painters erase designs and repaint their canvasses before their masterpieces emerge.

The venues whereby Mitchell and his colleagues search out incipient food trends range from food magazines and trade journals; global food and beverage trade shows (they attend some 14 per year); to major retailers—and to the dark, hidden alleys of major world cities, such as Hong Kong.

Some food and beverage trend events are readily accessible online through web services, like Project Nosh; others are small, specialized and highly regional trade shows, such as the all plant-based, annual Seed Food and Wine Festival, located in Miami, Fla. Rabobank, a leading international food and agricultural-focused bank, developed FoodBytes, a series of events and competitions designed to connect food companies and investors with start-up innovators.

Small foodservice outlets also incubate food and beverage ideas, transforming fads into tangible food and beverage trends. Mitchell pointed to MatchaBar’s (Brooklyn, N.Y.) building a beverage franchise around matcha-green tea beverages, while the Juice Press Bar in New York City features an expanding line of coldpressed fruit and vegetable juice-based beverages: Both companies sell their products on-line.

Speaking of protein, Los Angeles-based Mainland Poke (“po-kay”) has been introducing the “wildly popular” Hawaiian raw, cubed fish cuisine to the continental U.S. Presumably, poke will not be sold on-line.

“Food trucks are another great source of inspiration,” said Mitchell. “Take the time to speak with the chefs: They love to discuss their ideas and businesses.” Globally, farmers and fresh food markets around the world are continuous sources of ideas for new flavors and food combinations.

Finally, a wide constellation of food and beverage incubators beckons from around the world. Take the time to visit them or, if nothing else, explore their websites for ideas, says Mitchell. For example, NYC-based AccelFoods, a food entrepreneur accelerator and incubator backed by $35 million in investment capital, plans to use Amazon.com to launch new product ideas.

It bears reflection at this point to ponder how on-line sales venues have completely transformed the financial models for food and beverage start-ups. In Los Angeles, L.A. Prep and L.A. Kitchens are combining efforts to build a large incubator facility dedicated to helping entrepreneurs tackle issues such as regional unemployment and food waste. In Chicago, there is the Food Hatchery Chicago. In London, there is the Food Foundry. “These are great places to meet entrepreneurs and to learn how they think,” said Mitchell.

The bottom line is that the world is full of great ideas that are easily accessible, once one takes the initiative to start digging in both the obvious and the hidden corners of the world. “Be curious, be uncomfortable, be OK walking down a dark alley late at night toward a beckoning neon sign in some international city. Talk to entrepreneurs; talk to category managers.” And always: Ask questions.

“How to Identify Trends to Stay Relevant with the Evolving Consumer Market,” Blake Mitchell, Partner and President of Interact on Shelf, blake@interactonshelf.com

This presentation was give during the “2017 Protein Trends & Technologies Seminar Summary-Business Strategies” program. Presentation and post-conference summary (magazine) downloads are available.

 


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