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The K-Cups Avalanche in the Coffee Aisle

After getting its foothold in the office segment of the market, single-serve beverage brewing has experienced tremendous growth with widespread and continued adoption in the retail market.  Research conducted by the National Coffee Association (NCA) in 2012 found that 36% of respondents who had a single-serve brewing system obtained it within the last six months, indicating just how fast this segment of the beverage market has been growing.

 

As a result, the packaged coffee category at retail is undergoing a a substantial transformation.  U.S. retail market coffee sales grew at an impressive 10% in 2012 thanks to the single cup segment, which increased 82%.  Single-cup coffee sales, at $415 million at the close of 2011, rose to $922 million in 2012.   Single-cup coffee sales have thus grown to account for over a fourth of the total coffee dollar sales in grocery (Progressive Grocer, April 24, 2013).

 

 

Several factors are contributing to this sea change in what was a seemingly mature market:

·         A nation of dedicated coffee drinkers

·         Consumer desire to recreate coffee shop quality at home

·         Continued adoption of single-serve brewers in offices and hotels

·         Innovations in brewer technology supporting enhanced beverage quality

·         A large selection of brewers to choose from, many of which are aggressively marketed and attractively priced

·         Popularity of single-serve brewers as a hot kitchen gadget, well suited for holiday gift giving

·         A wide selection of single-serve beverage options that continues to expand

·         Recent increase in published reports of the health benefits associated with coffee consumption

The take-away:  the possibility for innovation and transformation in the often static-seeming center aisles of grocery stores should never be underestimated.

For more information on Packaged Facts' report on Single-Cup Brew Beverage Products in the U.S.: Coffee Pods and Beyond, please see http://www.packagedfacts.com/Single-Cup-Brew-7372397/

Seafood Sustainability Consciousness and the Price of a Can of Tuna

Why are many retail groceries  stressing that the fresh fish on display in their seafood departments is from sustainable sources? After all, according to Packaged Facts’ June 2013 National Consumer Survey, less than 20% of consumers make a seafood purchasing decision factoring in the sustainability of the catch.

Partly it goes to show the power of the interplay between leading edge shoppers, seafood suppliers, and retailers.  The issue is already reaching critical mass in consumer consciousness, and will continue to gain traction thanks to the efforts of merchants such as Whole Foods, Trader Joe’s, Safeway, Wegmans, Harris-Teeter, Target, Aldi, and Ahold, all of which have been acknowledged by Greenpeace for the their sustainable seafood policies.

Sustainability in the fish and seafood category refers to the efforts to harvest various species in ways that keep their populations from being permanently depleted.  As noted in Eco Eating Culinary Trend Mapping Report (July 2013), a joint publication of Packaged Facts and the San Francisco-based food consultancy firm CCD Innovation,  some 50% of world's fish stocks are considered fully exploited, and another 25% are overexploited, depleted or in recovery.  Bluefin tuna, Chilean sea bass and orange roughy are among the species that have been overfished to the brink of extinction.  And of the more than three quarters of America’s seafood that comes from abroad, much of of it is caught or farmed in ecologically dubious ways, according to James Beard-award winning author and Blue Ocean Institute fellow Paul Greenberg (Food & Wine, May 2013).

 

There are a host of government agencies, such as the Office of Sustainable Fisheries, and private organizations, such as Friends of the Sea and the Marine Stewardship Council, that are working with the seafood industry to limit catches so that further drastic depletion is avoided. Some of the associations offer certification to seafood companies and to retailers so that consumers can become more attuned to who is behaving in an environmentally responsible way.

 

 

At least to a degree, promoting sustainability is a great marketing strategy, according to OgilvyEarth, the sustainability communications subsidiary of the global advertising, marketing, and public relations agency Ogilvy and Mather. It notes that two-thirds of all consumers can be characterized as “Middle Greens,” who have good environmental intentions but are put off by efforts that seem more focused on the “Super Greens,” as well as by the higher costs associated with sustainable and otherwise environmentally correct products. OgilvyEarth refers to this as the Green Gap.

It’s obviously a good thing for so many retailers to be getting out in front on the sustainability issue, but what will it take to close the Green Gap? It could come down to the price of a can of tuna fish. Over 80% of U.S. households, according to Experian Marketing Services Fall 2012 Simmons NHCS Study, purchase tuna in cans or pouches. If tuna resources continue to dwindle, as they have been, the price of this very basic commodity could rise.  The long-term costs associated with non-sustainability would come to the fore, and take consumer consciousness about seafood sustainability to the next level.

For more information on Packaged Facts' report on Fish and Seafood Trends in the U.S. (June 2013), see http://www.packagedfacts.com/Fish-Seafood-Trends-7649917/

For more information on our Eco Eating Culinary Trend Mapping Report, see http://www.packagedfacts.com/Eco-Eating-Culinary-7710822/

Dogs, Do-Gooding, and Social Media

Facebook has become a promotional venue for many pet industry marketers, letting them keep connected with current customers as well as recruit new customers. In the pet food market, Facebook can really help put a “face” on animal welfare efforts, letting companies post images and videos of the animals helped by their causes.  The ability to personalize content to suit specific needs, and almost instantly reach thousands, sometimes hundreds of thousands, of consumers, makes social media perfect for launching animal welfare campaigns. Marketers can also develop Facebook-specific applications for contests and promotions related to their causes.

PetSmart Charities took full advantage of the benefits of social media when it launched its “Share a Pic, Save a Pet” application via Facebook, in a bid to drive awareness and animal adoptions. The app lets Facebook members use their Facebook profiles to post alerts about adoptable pets in their communities. Users can enter their zip code and select up to 10 adoptable pets to highlight from Adopt-a-Pet.com’s nationwide shelter database. Highlighted pets appear in friends’ newsfeeds and on the user’s Facebook timeline. The selected pets also link to the local animal-welfare organizations where the pets are available for adoption. The app has save nearly 5,000 pets as of 2013.

The Nutro Company uses Facebook to promote its Room to Run Dog Park Appreciation Project. Nutro plans to award 30 grants to help fund dog park enhancements nationwide. Videos from previous years’ successes, a photo gallery and a link to the application make it easy for those seeking dog park grants to check out the project and apply, and also show Nutro customers how the company is working towards making these improvements.

 

For more information on Packaged Facts's recent reports on the U.S. pet market and pet food industry, see http://www.packagedfacts.com/Pet-Outlook-7372395/ and http://www.packagedfacts.com/Pet-Food-Edition-7372391/

Sports Drinks Are from Mars, Nutrition Bars Are from Venus

The market for sports nutritionals—which includes sports drinks and nutrition bars as well as product categories such as protein and weight gain powders, and pre- and post-workout supplements and energy gels—has experienced encouraging growth in recent years.  Factors contributing to future growth in the sports drink and nutrition bar categories include a rapid increase in the number of dedicated fitness enthusiasts and the bullish growth plans of specialized retailers of sports nutritionals, while nutrition bars will benefit from a long-term trend toward healthier snacking.

The 77 million users of sports drinks and 28 million consumers of nutrition bars are key consumer segments driving the sports nutritional market as a whole.  However, the demographic and attitudinal differences between the users of each of these products are so vast that they might as well live on two different planets.

As reported in Packaged Facts July 2013 edition of The Market for Sports Nutritionals in the U.S., compared to high-volume consumers of sports drinks, nutrition bar aficionados are less likely to be members of Gen-Y and more likely to be Boomers.  They also have a higher likelihood of being married, living in one of the largest urban areas, having a college degree and enjoying a household income of $100,000 or more. The most remarkable difference between the two market segments, though, is the yawning gender gap that divides sports drink users from nutrition bar consumers.

 

Men, especially young men, dominate in the sports drink market.  Males make up 64% of high-volume consumers of sports drinks.  Men in the 18- to 34-old age group make up 15% of the population but account for 31% of high-volume sports drink consumers. 

In the market for nutrition bars, however, is primarily a women’s world.  Only 45% of those eating at least one nutrition bar in the last 30 days are men, while 55% are women.  Female consumers of nutrition bars outnumber their male counterparts 15.2 million to 12.4 million. 

Marketers of sports drinks need to face up to some dismal demographic news over the next decade that should lead them in the direction of paying more attention to women.  The population of males under the age of 25, their most prized marketing target, will experience negative population growth between 2011 and 2020, declining from 24.5 million to slightly less than 24 million.  Besides, although not the dominant consumer segment, women are important to sports drink marketers even now.  More than 30 million women are active users and 13.3 million women are high-volume users of sports drinks. 

Some sports nutritional marketers have already capitalized on the power of women.  For example, Simmons National Consumer Study data show that women account for 77% of those consuming a Clif Luna bar in the last 30 days; nearly one in three (30%) are 35- to 44-year-old women.  Other marketers are beginning to recognize that sports nutritional products geared toward women offer growing opportunities.  Barre, which claims to be made with “real ingredients for real athletes,” is a nutrition bar designed by two professional dancers especially for women.   On their website they write that “just reading the labels on most energy bars is enough to throw us off balance.  So we traded our leotards for aprons and whipped up something of our own:  a real food bar, made with wholesome, all-natural ingredients—stuff you can actually pronounce!”

Marketers also are responding with new products to meet a growing interest by women in whey protein, a natural supplement increasingly popular among bodybuilders.  Examples include Designer Whey Protein for Her, which is marketed as “a high-quality nourishment designed for women who want the best of both worlds:  a delicious supplement that helps support their fitness goals.”

The Real Deal Behind Dairy Food Coloring

“Berries over Bugs” was the headline of a July 24th press release from The Center for Science in the Public Interest (CSPI, a.k.a., the food police). Being a Berry, of course, I fully endorse “choosing berries over bugs” any day! But seriously, CSPI issued this press release a week after the closing of the 2013 Institute of Food Technologists (IFT) Annual Meeting + Food Expo, where a whopping 97 ingredient suppliers were listed in the directory under the “Colors, Natural” category. But, as we all know, not all natural colors are equal.  

(In case you missed my review of innovative ingredient technologies for dairy product formulators, which includes a section on the fact that “natural colors were the buzz” at IFT, you can view it HERE.

Understanding Natural Colors

(If you need a refresher course on food color additive regulations in the States, scroll to the bottom of this blog for “Food Colors 101.”)

In general, artificial colorings are manufactured from petroleum-based raw materials. Colors exempt from certification, commonly referred to as natural colors, are obtained from a variety of sources, including plants, minerals, insects and fermentation, resources considered by many to be natural.

It is this generalization that has some color suppliers creating a point of differentiation by touting the fact that their natural colors are derived solely from food, and most often, directly from fruits and vegetables. This is because carmine--a dye extracted from the dried, pulverized bodies of cochineal insects—is an exempt-from-certification color and continues to be controversial in terms of its naturalness.  

CSPI’s Latest Beef with Carmine

CSPI’s recent press release is urging global yogurt giant Dannon to choose berries over bugs, that is, in terms of a colorant for a number of its yogurt products. Dannon uses carmine to give several varieties of fruit-flavored yogurt their pink color. The nonprofit food watchdog group says that Dannon’s practice cheats consumers who might expect that the named fruits—and not the unnamed creepy crawlies—are providing the color. Carmine also puts some consumers at risk of serious allergic reactions if they don’t read the ingredient statement carefully. 

Strawberry, Cherry, Boysenberry and Raspberry varieties of Dannon’s “Fruit on the Bottom” line all contain carmine, as does the Strawberry flavor of Dannon’s Oikos brand of Greek yogurt. Two flavors of Dannon’s Light and Fit Greek use the extract, as do six of its Activia yogurts.

With all due respect to my fellow food scientists at Dannon, I am sure use of carmine is under careful consideration. After all, Dannon does use only natural colorings, such as purple carrot juice, in its Danimals line of yogurts marketed to children.

The food police are relentless. The chief of police, Michael Jacobson, CSPI executive director, said in the press release, “I have nothing against people who eat insects, but when I buy strawberry yogurt, I’m expecting yogurt and strawberries, and not red dye made from bugs.” 

CSPI is sponsoring an online petition urging Franck Riboud, CEO of Dannon’s parent company Groupe Danone, to replace carmine with more of the fruit advertised on the label. The petition can be viewed HERE.

CSPI originally took interest in carmine a number of years ago because of the fact that some consumers experience serious allergic reactions when they consume this exempt-from-certification colorant. In response to a CSPI petition on this issue, the FDA now requires carmine to be listed on food labels when it is used. 

Read FDA’s final rule HERE.

Previously, companies could obscure the presence of the insect extract by labeling it “artificial color.” CSPI had urged FDA to go further and describe carmine as “insect-derived,” making it easier for vegetarians, those who keep kosher, or anyone otherwise averse to eating such ingredients to avoid it. 

The food police are reading the fine print, so are many consumers. With at least 97 ingredient suppliers marketing natural colors, consider choosing berries over bugs whenever possible.

Here are two new products that rely only on colors derived from fruits and vegetables.

Wallaby Organic Lowfat Kefir comes in four different flavors: Blueberry, Strawberry, Vanilla and a traditional Plain. It comes in family-friendly, multi-serve 32-ounce plastic bottles with a suggested retail price of $4.29. The ingredient statement of the strawberry variety reads: Organic Cultured Pasteurized Lowfat Milk, Organic Strawberries, Organic Cane Sugar, Natural Flavors, Organic Locust Bean Gum, Pectin, Fruit and Vegetable Juice for Color.

New Kemps Greek Yogurt comes in four varieties--Black Cherry, Raspberry, Strawberry and Vanilla—and is sold in 5.3-ounce cups. The ingredient statement of the Black Cherry and Strawberry varieties indicates that vegetable juice concentrate is used for color. The Raspberry variety gets enough color from the use of high-quality raspberries and raspberry puree.

Food Colors 101

The term color additive is legally defined in Title 21, Part 70 of the Code of Federal Regulations (21 CFR 70). Basically, any ingredient with the sole purpose of adding color to a food or beverage is a color additive, with all color additives requiring approval by FDA as a food additive. 

In the U.S., synthetic food colors are classified by FDA as color additives subject to certification (21 CFR 74). They are certified with an FD&C number. This indicates that the additive has been tested for safety and is approved for used in foods, drugs and cosmetics, or FD&C. Seven colors were initially approved under the Pure Food and Drug Act of 1906. Over time, several have been delisted and replaced. Today there are still seven, which can be combined into an infinite number of colors; hence, the seven are considered primary colors.

The seven synthetics are further classified as standardized dyes or lakes. Dyes are a concentrated source of color and are water soluble and oil insoluble. Lakes, on the other hand, are made by combining dyes with salts to make them water-insoluble compounds. Thus, they are best described as providing color by dispersion. Lakes are considered to be more stable than dyes and are ideal for coloring products that either contain fat or lack sufficient moisture to dissolve dyes.

FDA also provides a list of color additives that are exempt from certification (21 CFR 73). By default, these colors are often characterized as natural but FDA does not consider any color added to as food unless the color is natural to the product itself. For example, consumers expect strawberry milk to have a red hue. If strawberry juice is added for color, and providing that none of the other ingredients in the milk were characterized as artificial, this product could be labeled “all-natural strawberry milk.” Such a description is not possible if beet juice, an FDA-recognized exempt-from-certification color additive, is used for a colorful boost. What is appropriate to say is “does not contain any artificial colors.”

To get a full dose of Dairy market research, go to www.berryondairy.com to learn about new featured dairy products every day. See additional samples of featured dairy products here.

Thanks for reading!

A Final Rule from the FDA on Gluten-Free

The FDA’s ruling on the use of “gluten-free” labeling is a triumph for consumers who suffer from Celiac disease, wheat allergies, or other grain-based food intolerances.  When the regulation goes into effect a year from now, consumers who follow a gluten-free lifestyle out of necessity or choice will be able to shop for groceries with more confidence.  

 

The FDA's final rule is setting a gluten limit of less than 20 ppm (parts per million) in foods that carry this label. The FDA explains that is the lowest level that can be consistently detected in foods using scientific analysis. This limit is consistent with those set by other countries and international bodies that set food safety standards. This rule holds foods labeled "without gluten," "free of gluten," and "no gluten" to the same standard.

 

The FDA rule may not have significant impact on the market size and growth for gluten-free packaged foods, however.  Much of the growth projected by Packaged Facts in its current gluten-free report, which forecasts an increase from $4.2 billion in sales to $6.6 billion between 2012 and 2017, will be attributable to the mainstreaming of specialty marketers whose products and facilities already undergo the testing required to qualify for certification by one of the gluten-free credentialing bodies.

 

 

For information on Packaged Facts' report on Gluten Free Foods and Beverages in the U.S., 4th Edition, see http://www.packagedfacts.com/Gluten-Free-Foods-7144767/

Carrots for Store Credit Card Holders

Once home to consumers with higher risk profiles and higher chargeoff rates, store credit card volume and active accounts took a nosedive during the recession, as issuer portfolios groaned under the strain of bad debt and reduced customer engagement.

But signs point to a private label turnaround.  Deal-making activity suggests that private label card programs have become a more viable and stable income source for issuers; the payment card segment has been buoyed by a spate of deals that has invigorated market leader Citi Retail Services and has brought TD Bank and Capital One into the competitive mix.

Packaged Facts' consumer survey analysis also suggests that private label cards have turned a corner, with consumer usage penetration and engagement on the rise from 2010 lows.

As store card issuers look to build their accounts, they will be threading promotions with discounts and rewards to catch consumers’ eyes.

According to our survey findings, roughly half of store card users would be motivated to apply for a card if they received points for every dollar spent on the card or received a 5% everyday discount on all card purchases.  Some 4 in 10 would be motivated by receiving a discount with the first card purchase or by receiving 0% financing for 12 months on purchases made with the card.
 

Importantly, these carrots may also entice non-cardholders: for example, fully one-third of non-cardholders would be motivated to apply for a store card in return for a 5% everyday discount on all card purchases.

For more information about Packaged Facts' report on Private Label Credit Cards in the U.S., please see http://www.packagedfacts.com/Private-Label-Credit-7278869/

Worldy Snack Tracking: Brazilian Brigadeiros

Move over Parisian macarons and Pennsylvania Amish whoppie pies: Brazil’s beloved brigadeiro (pronounced bree-gah-day-ro) may be next in line as America’s latest sweet snack trend. A traditional treat at Brazilian social events, this humble confection is made with chocolate, condensed milk and butter that are slowly cooked down to a smooth, creamy consistency. Once cool, the chocolate is scooped into rounds and rolled in toppings such as chocolate or multi-colored sprinkles, nuts or coconut.

 

Brigadeiros boast the kind of simple recipe that makes it a family classic, sort of a cross between an easy fudge and chocolate truffles.  This confection, also well known in Spain, Chile and Portugal, is often enjoyed with a cup of coffee or paired with a glass of dessert wine.

These Brazilian sweets began hitting the CCD Innovation radar several years ago, spotted on media lists of top sweets and chocolates around the country, including Oprah’s blog in 2012. This year, they have been featured on the Cooking Channel’s Taste in Translation and as a Valentine’s treat on Epicurious’ blog.  With Brazil and its cuisine moving into the spotlight as the 2016 Olympics and World Cup host, this signature snack is ready for a global close-up.   

Brigadeiros became wildly popular after Eduardo Gomes, a Brazilian Air Force brigadier general, ran for president in 1945. His female campaign volunteers whipped up batches for fundraisers. The candy ended up being a bigger hit than the politician, in that Gomes lost the election; however, the treat took its name from his impressive rank, leaving him a confectionery if not presidential legacy.

In the continued economic doldrums, it's worth noting that brigadeiros sprang up as sweet snacks for hard times:  this trend took off during wartime shortages, when imports such as confections and nuts were scarce. During this same era, Nestlé introduced its cocoa powder and condensed milk into the country, setting the stage for the success of this simple bonbon that’s easy to make, easy on the budget, and easy to customize for adults or for kids will different roll-ons.

 

For more information on the recent Worldly Snacks: Culinary Trend Mapping Report from CCD Innovation and Packaged Facts, see  http://www.packagedfacts.com/Worldly-Snacks-Culinary-7609483/

Prune Juice Power

When defined in terms of overall dollar sales and volume consumption, the market for fruit juices and juice drinks has remained remarkably stable for years.  Packaged Facts estimates that between 2007 and 2012 dollar sales of fruit and vegetable juices and juice drinks barely budged, and that the volume of juices and juice drinks consumed by households hardly kept up with population growth.

Yet, underneath its apparently placid surface, the market for packaged juices and drinks has been roiled by undercurrents of constant change.  Traditional consumption patterns are dying on the vine as consumers continue to turn away from products such as frozen orange juice. 

As they reject the traditional, consumers are embracing new juices and juice drinks with wildly innovative forms and flavors.  Many of the products achieving the highest growth rates are riding trends driven by juice bars and smoothie chains, which quickly impact on the habits of health-focused juice consumers. 

As a result, the market for packaged fruit and vegetable juices has been upended.  No longer do consumers need to frequent juice bars or natural and specialty gourmet retail channels to find novel blends and flavors.  They only need to cruise the aisles and perimeter of their nearest supermarket to find cutting-edge products such as exotic blends of fruit juices, unexpected combinations of fruit and vegetable juices, smoothies, coconut water, aloe vera juice, and juices made from a new exotic antioxidant-rich “superfruit.”

Even so, consumers still make room in their refrigerators and pantries for tried-and-true juices and juice drinks.  As Packaged Facts' Fruit and Vegetable Juices: U.S. Market Trends points out, despite the rush to create new and exciting flavors and textures for juices and juice drinks, many of the most old-fashioned flavors and products still have a hold on American consumers.  Apple is a juice flavor used most by 65 million households, and orange juice still reigns as king of the mass market. 
 

As might be expected, when it comes to traditional juice flavors, there are significant differences between the preferences of younger and older consumers.  For example, consumers 55 years old and over have a higher likelihood of preferring cranberry juice and cranberry juice blends, while consumers under the age of 35 are more likely to favor tropical, pineapple, lemonade, lemon/lime, grape, fruit punch and cherry flavors.

There is just one fruit juice flavor with the power to fully bridge generational boundaries.  Younger Millennials (those in the 18- to 24-year-old age group) are about as likely as those in the 65+ age group to say that prune is a juice flavor they use most. 

For more information on Fruit and Vegetable Juices: U.S. Market Trends (April 2013), please see http://www.packagedfacts.com/Fruit-Vegetable-Juices-7497441/