Martha Gibbons

martha.gibbons@dairy.org

2017: TRENDS SHAPING THE FOOD INDUSTRY

Trend Areas

March 2017

With the New Year came a raft of predictions from a wide variety of food industry sources. In a recent DMI review of fore-casts/predictions for 2017, some common threads were noted and will be shared here. Several of these forecasted trends

have implications for dairy. Links to a selection of trend resources reviewed in preparing this summary can be found at the end of this document.

2017 Trends are based in familiar themes that have been in-play for several years

What is changing for 2017 is the specific way these influences will be expressed. To-

day’s market includes smaller consumer segments with like-minded views, often at odds from more broadly accepted ideas about health and wellness, taste and what is important in the products consumers use. Responsible production practices and trans-

parency continue to be of growing importance to consumers.

Overall, “niche is becoming even more niche” as food and beverage companies at-tempt to tailor products to a more diverse consumer market. The language of food is being driven by this exploration of the more niche into greater complexity and sophisti-

cation. For example, the Farm-to-Table concept is now expanding into other areas such as Dock-to-Dine, Seed-to-Glass, and Farm-to-School.

‘Point and counterpoint’ exists in the 2017 predictions

Developing technologies are staged to help answer the call to action on the sustaina-

bility front, nutrition research, product development and delivery. This will provide an interesting counterpoint to consumer drivers based in the view that traditional, more natural, approaches are the best.

The health and wellness drive will be balanced to a certain degree by an appreciation

for indulgences and comfort food as the new health and wellness is less about sacrifice and more about balance.

Premiumization endures

A more evolved definition of premiumization is emerging that goes beyond the food itself to include notions of sustaina-

bility, traceably and self image. Consumers are willing to pay more for products tailored to meet their needs as defined by this broader definition.

Craft/crafted products, with their “plain sophistication”, offer an example of how the new premium is being expressed.

New flavor exploration continues

Flavors will include a focus on the traditional and authentic, but will make room for new twists on old flavors and tradi-

tional cuisines.

Ultimately, adoption of trends predicted for 2017 will depend on how widely they are embraced by food companies, clearly

marketed and accepted by customers. The extent to which products can respond to multiple consumer drivers at once will

be key success.

Dairy products play an

important role in con-

sumers’ lives, offering

delicious taste

experiences wrapped in

health and nutrition.

Staying on the forefront

of consumer trends will

keep dairy products

relevant to consumers

and set the industry up

for continued growth.

Martha Gibbons

martha.gibbons@dairy.org

2017: TRENDS SHAPING THE FOOD INDUSTRY

With positive message coming from the dairy industry and dairy farms, around the “re-

purposing” of manure for power generation and by-product applications such as whey,

along with other sustainability efforts, dairy is in a good position to participate in the sus-

tainability conversation overall, though it may also find some challenges here. Minimizing

food waste through fostering dairy product access for the food insecure provides an op-

portunity to link food waste and hunger concerns in a positive direction.

March 2017

Transparency & Sustainability

Product safety, understanding what is and what is not in food and beverages and where they come from continues to be im-portant to consumers and drive transparency throughout the supply chain. Clean and clear labeling will be taken to a new

more holistic level that includes claims related to processing and environmental responsibility and animal welfare as consum-ers look for products that align with their personal views. This was encapsulated by The Food Network in their 2017 forecast: “The food has to be grown “right,” harvested “right” and prepared “right,” and even more - anything left over needs to be dis-

posed of “right.”

In 2017, consumers will deepen their requirements on food production and use. Sustainability will take on a greater focus with Food Waste predicted by most sources to be a hot topic that will express itself through zero-waste aspirations. With food waste more under the microscope, there will be an attempt to use all parts of animals and vegetables.

Regenerative Grazing is an emerging buzzword. For dairy, animal care related practices, including antibiotics, hormones

and feeding practices such as pasture feeding will continue to be items of focus and GMOs remain a watch-out.

Photo Source: dairygood.org

Martha Gibbons

martha.gibbons@dairy.org

2017: TRENDS SHAPING THE FOOD INDUSTRY March 2017

Health & Wellness

The definition of what is healthy food continues to evolve through a person-alization of nutrition in accordance with the consumers’ desire to control their

own health and to feel confident that they are making healthy choices for themselves. Consumers are getting more educated on foods and elements of a healthy diet. Their approach to eating has become more sophisticated

and new rules/definitions are being applied as they continue to define health and wellness for themselves on an individual basis.

The focus will be more on “holistic” wellness that is about wellness and energy through natural, nutrient rich and health-promoting/naturally function-

al qualities of food. Folk lore and traditional solutions will continue to play a part as “old is new” continues to draw on consumers desire to meet their health and wellness needs naturally. Much of consumers view on what is

healthy will be driven by what is in food. Sugar is still a key ingredient to limit. Juice products, including some smoothies, may be challenged as at-tention to sugar increases. Alternative sweeteners will continue to be ex-

plored by manufacturers including dairy.

As consumers expand their food choices, 2017 will see continuing focus on fresh foods, whole foods, and a greater emphasis on plant based diets.

Opportunities for fermented and cultured foods will continue to grow as more consumers connect to developments in information around the gut’s microbi-ome and its importance in nutrition and wellness. Consumer interest in pro-

tein is forecast to continue with meatless options being embraced as well as meat-based. Food science and manufacturers will continue to add to the growing list of alternate, especially plant-based, protein sources as

options are expected to grow.

Carbs will continue to be in focus and are being evaluated using a more discriminating approach. Consumers are avoiding or cutting down on perceived “bad” carbs such as highly processed foods such as cereals,

where as healthy such as vegetables are pursued.

“Golden Milk is milk with a teaspoon or so of

turmeric stirred in”

”“According to Google Food Trends, earlier

this year turmeric rose as one of the hottest

food queries, as people searched how to use

turmeric and for more information on its

health benefits.” Source: dairygood.org

Martha Gibbons

martha.gibbons@dairy.org

2017: TRENDS SHAPING THE FOOD INDUSTRY March 2017

Health & Wellness (continued)

Pulses (legumes, such as peas, beans and lentils) are expected to receive greater attention as a relatively high vegetable protein source with high fiber, essential nutri-

ents and a low glycemic index. Seeds bring a natural source of flavor, texture and health, including a high protein content and consumers are looking to benefit.

Consumers value naturally healthy foods with natural ingredients. Organic foods/beverages will continue to benefit from the safety and health halo these products

are perceived to offer. Sports nutrition in will also see benefits in this area.

Weight loss is still on the consumer radar and foods that help consumers to manage their weight while satisfying primary purchase drivers of taste, convenience and price will find acceptance.

Other specific health concerns are also on the radar. Products focusing on diabe-

tes or promoting cognitive or gut related complaints are rising to the top in 2017 forecasts. Inflammation and food ingredients with anti-inflammatory proper-ties are expected to have increased interest. Digestive wellness will be a key area

of focus as consumers are connecting digestion to feeling good overall. The focus on digestion will continue to drive interest in fiber, probiotics, fermented foods and

gluten.

Of particular note is a forecast by several sources that Americans will have a grow-ing awareness of a concept referred to as FODMAP. FODMAP is an acronym for a group of compounds, present in some foods and thought to contribute to irritable

bowel syndrome/gastrointestinal disorders. The term FODMAP is used mainly with reference to a diet that is low in these compounds. While the main FODMAP diet focus is on certain types of carbs, dairy is also implicated as a source of these com-

pounds on some websites, so there is a potential watch-out here.

Opportunities will con-

tinue for dairy to bene-

fit from heightened

consumer interest in

protein, the snacking

trend and whole foods.

Buttermilk and Kefir, in

particular, are products

that connect to the

forecasted health and

wellness trends as a

traditional, natural and

cultured options.

Martha Gibbons

martha.gibbons@dairy.org

2017: TRENDS SHAPING THE FOOD INDUSTRY

Opportunities for dairy products will continue, benefiting from the conven-

ience and snacking driver, as well as the ability of dairy to provide healthier

options. Cheese, protein enhanced dairy beverages and yogurt drinks will

continue to see opportunity as health and wellness concerns pull new prod-

ucts in natural and nutritional directions.

March 2017

Eating Patterns

Consumers will continue to define where, when and how to meet their nutritional needs on a flexible and more personalized basis. Forecasters are looking for the recent trend toward

snacking and the blurring between meals and snack occasions to continue into 2017 with an emphasis on healthy snacking. With snacking now occurring at any time of day, the snacking market is expected to grow faster than the food market overall.

The elevated focus on breakfast foods and their expansion into opportunities at any time of

the day will continue.

Convenience will also continue to be a key driver in foods and packaging for on-the-go eating and convenient meal preparation. ‘Grocerants’ will take on increased visibility providing consumers with ready-to-eat balanced, but flavorful meals.

Martha Gibbons

martha.gibbons@dairy.org

2017: TRENDS SHAPING THE FOOD INDUSTRY

Dairy is forecast to continue

to benefit from an on-going

trend toward traditional foods

as manufacturers and chefs

look to dairy as a natural

source of comfort or indul-

gence. New options howev-

er, will play off of the tradi-

tional through updated and

on-trend flavors, formulations

and formats.

March 2017

Flavors and Culinary

Overall, Americans will continue to be more adventurous and open to new flavors and cuisines. Growing diversity, especially among younger consumers, and global

influence will continue to feed flavor exploration. Authenticity will continue to be a driver as a key feature of 2017 flavor and culinary trends could be de-scribed as “old is new”. Traditional flavors, foods, preparation techniques and

dishes from both abroad and home underpin many of the forecast trends. Con-sumers will continue to see value in the plain sophistication of craft and crafted products. In addition, specific forecasted trends in flavor, food and culinary tend to

align with one or more of the broader trends mentioned here under sustainability, health and wellness and/or eating patterns.

As niche becomes more niche, regional will refer more specifically to smaller re-gions, both globally and within the U.S. For example, in the U.S., the Northeast

becomes the coastal northeast and Hawaiian food will give way to exploration of each of the Hawaiian island’s cuisine. Prominent global influences cited for 2017 include Mediterranean, Middle Eastern (including African) and Far Eastern

cuisines. While influence from some of these regions has been evident in recent years, expect to see focus on areas that are smaller and/or less familiar, such as

the Philippines, Turkey and historical Persia. Menus will be incorporating tra-ditional breakfast dishes, re-interpretations of dishes, or applying spices or other flavorings from these areas to more familiar American dishes.

Specialty citrus flavors are in the forecast, alone and in combinations with

heat and spice. Floral flavors and notes, a long-time feature of some global cuisines, will see more frequent use in US food and beverage products and menu items. Tropical fruits, especially dragon fruit with its powerful antioxidant content

will see a play in both global and nutritional trends.

In a back-lash against industrial agriculture there has recently been a focus on naturally pollinated, old-time vegetable heirloom varieties that are in contrast with modern hybrids, which are seen as sacrificing on taste and nutrition. In 2017, this

concept will push beyond produce and be extended to heritage breeds in meat producing animals. Heritage breeds claim a connection to the past, with more fla-vorful meats that help preserve diversity in our food stock. In particular, specialty

heritage breeds of chicken were noted among 2017 trends.

Butter and ice cream in particular have been called out as vehicles for

culinary trends in the coming year. The butter repertoire will expand

through addition of fresh in-house churned butter, browned butter and

continued use of flavored and compound butters.

Ice cream is also forecast to serve as base for global flavor

trends and a vehicle for indulgence. Texture exploration is

also evident in some recent introductions of Thai inspired rolled

and shaved novelty ice cream menu items.

Martha Gibbons

martha.gibbons@dairy.org

2017: TRENDS SHAPING THE FOOD INDUSTRY

March 2017

Digital Influence

Social media and digital media will continue their growth in fueling food information with new voices joining existing influencers.

Consumers will want to continue to share the story of their food explorations and visual

content is expected to increase. Pinterest, in particular, with its strong Millennial base, continues to grow as a space where consumers share food ideas and positive food experiences. Snapchat, another sharing platform with a current reach of 11% of

the total U.S. digital population, is also seeing strong growth. Snapshot is especially strong with those under 34 years of age. According to the Omnicore Agency, 45% of Snapchat users are between 18-24 years of age.

In line with consumers’ growing desire to take greater control over their health and well-

ness, Apps that help them more clearly set goals and identify foods to address health needs will continue to proliferate.

The need for convenience will drive continued growth in using mobile devices for ac-cessing information and ordering food from restaurants and groceries. On-line grocery

shopping is forecast to grow five-fold over the next decade with large food retailers competing with Amazon and other e-commerce players. “Brick and click” (ordering on-

line for store or alternate site pick-up) is emerging as a key strategy for these traditional food retailers. Restaurant food delivery will likely continue to grow through the use of aps and services such as GrubHub as well as restaurant based aps.

Convenience is also driving a proliferation of the meal-kit approach to meal planning

and preparation. Traditional grocery store food sales will likely see growing pressure from services such as Blue Apron and Hello Fresh, for home food kit delivery of recipes and fresh ingredients tailored to preparation of restaurant quality home-prepared meals,

with the added benefit of lower food waste coming from pre-measured ingredients.

The explosion of digital will increasingly shape consumer food and

beverage decisions. Getting it right is critical to staying relevant with

tomorrow’s consumer.

Martha Gibbons

martha.gibbons@dairy.org

Links to access a selection of the resources used in the preparation of this

DMI summary of 2017 food related trends:

February 2017

Internet Links:

Food Channel - 2017 Top Ten Food Trends

IFT - Editors Predict Trends for 2017 IFT’s summary of Trends from a wide variety of resources, including: Flavor Fore-casts from McCormick, Firmenich, Comax; General Food trends from Innova, Whole Foods, Mintel; Foodservice and Culi-nary forecasts by National Restaurant Association, the Sterling Rice Group, James Beard, Grub Hub

Food Navigator - Global Cuisines Will Rise in 2017 Along With Complex Nutrition Claims

Prepared Foods - 2017 Dairy Food Trends Primarily a summary of Innova and Mintel 2017 trend forecasts.

Food Navigator - 15 Food & Beverage Trends to Watch in 2017

Food Business News - 2017 Top Food & Nutrition Trends

Food Manufacturing - (Infographic) Rise in Consumer Health and Sustainability Concerns Drives Food & Beverage Trends

Food Navigator - Beverage Trends at Bev NET

National Restaurant Association - What's Hot 2017

Document Links:

Innova - Top Ten Trends 2017

Packaged Facts - (deck from) 2017 Trends Webinar

Technomic - 2017 Commercial Foodservice Trends

New Nutrition Business - 10 Key Trends in Food Nutrition 2017

Ketchum - 2017 Global Food & Nutrition Predictions