In collaboration with the Dutch Embassy in Washington D.C. and the Dutch Consulate General in Chicago, the Agricultural Utilization Research Institute (AURI) developed a report on emerging trends, gaps and opportunities that may lead to impactful innovation for the food industry. As part of the Netherlands efforts to address issues in global food and agricultural sectors, the report summarizes discussions across three focus groups in the key Midwest cities of Chicago, Minneapolis-St. Paul and St. Louis between October 9, 2019 and November 23, 2019. Individual participants represented different sectors of the food and ag industry, government and academia.
The Dutch Consulate Focus Group Narrative report explored six key industry trends: foods, farm of the future, processing and manufacturing, packaging, food distribution and food waste through in-depth focus group discussions. These trends were originally outlined in the Food Tech in Midwest Report published in 2019. A total of 34 experts and three Dutch Consulate members provided insight that highlighted consumer values and preferences, current gaps and emerging opportunities in relation to these six trends.
Such insights include how “younger generations seek differentiation and health benefits in their food choices along with traceability, security and sustainability and have a deeper emotional connection with food and purchase decisions.”
Consumer Trends in Consumer Driven Personalized Nutrition and Alternative Proteins
Consumer trends drive product development in the food industry by highlighting gaps and opportunities. Interestingly, while the values consumers express define industry trends, purchase decisions are not always driven by these values. For example, focus group experts noted that an individual’s financial resources often determines how close their actual purchase history aligns with their values. Consumers are also learning that the food ecosystem incorporates a series of checks and balances that is manifested by their preference for supply chain transparency (both origin and environmental impact) and impact on personal health outcomes.
Perceived consumer values have manifested into two leading trends in the industry: personalized nutrition and alternative proteins. Industry experts see consumers wanting personalized nutrition options as a means to be healthier while also reducing time spent in the kitchen. As families face a variety of diets practiced by individuals in their own homes, such as gluten-free or vegan, making a family meal is becoming a bigger challenge. One solution on the rise is the creation of meal kits or options that allow an entire meal to be built from a single base item. For example, using brown rice as the base of the meal and engaging the rest of the family in selecting different ingredients for the dish that meet individual dietary requirements.
A future, potential outcome in personalized nutrition is the concept of a completely customizable diet plan based on an individual’s genetic makeup. This approach would allow consumers to obtain information about their nutritional needs and make dietary decisions driven by a scientific understanding of their DNA and metabolism. The technology is currently available in limited markets and as the technology gains scale, this trend has the potential to seriously disrupt the diet industry.
One member of the focus group noted, “We’re edging toward a time when people provide a blood sample, and technology offers an eating plan customized for you and your personal metabolism needs.”
At the same time, consumers are demanding less processed and clean label foods. This is especially relevant when it comes to the trend in proteins. While consumers prefer less processing, perceptions of food manufacturing and technology determine consumers’ acceptance of new food products. For example, consumers interpret cellular agriculture products, such as lab grown proteins, as more sustainable and ethically processed while on the other hand despite plant-based proteins rise in popularity consumers express concern about the level of processing needed to make meat analogue products.
Current Gaps in Food Waste and Consumer Education
Focus group participants offered insights into a few common gaps in the current food ecosystem. Industry professionals’ greatest concerns include the consumer’s demand for more sustainable packaging, an increase in production of specialty food and beverage products and educating consumers on product labels.
As consumers become more vocal in their demands for more sustainable approaches to their food systems, there is also an increase in demand for compostable or recyclable packaging. Unfortunately, simple replacement of conventional packaging materials with more sustainable options fails to address the lack of community level recycling infrastructure necessary to support this change. Industry professionals must weigh their options and decide where best to meet the consumer needs. Time can be invested in developing more sustainable packaging solutions that may positively impact shelf life, but may not be supported by the current recycling infrastructure, or they can bypass consumer preference for improved sustainability and utilize trusted and traditional packaging materials that meet basic product quality requirements.
Additionally, food brand owners and manufacturers are concerned about timely implementation of food safety regulations and scalability issues of emerging food and beverage products, such as CBD (a compound extracted from industrial hemp for use as a food ingredient). The Food and Drug Administration’s 2014 Food Safety and Modernization Act (FSMA) has cast a huge spotlight on food safety. Producers are struggling to navigate food safety compliance measures and best practices in a rapidly changing environment.
Further widening the gap between the consumer and industry is a disconnect in standards and language. Consumers often misunderstand or are skeptical about terms such as fresh, organic, local, sustainable and clean label. They rely on unverified, online resources for definitions and information. Meanwhile, industry professionals express concern about consumer misunderstanding of scientific standards and food research. Focus group participants expressed a need for more universal definitions and consumer education.
Opportunities for Innovation in the Food Industry
Ultimately, the trends and gaps in the food industry offer producers a wealth of opportunities to meet changing consumer demand. From joining the trend in alternative proteins to filling the gap in sustainable packaging, the focus group participants discussed possible intersections between technology, food, food waste and product packaging. While consumer demand focuses on better health and increased sustainability, the current food system is not well equipped to rapidly shift to changing consumer demands.
According to focus group participants, consumers have requested the integration of sensors or QR codes into packaging to show how a food item is produced. Consumers want to know where their food is coming from and are eager to see innovative approaches by companies to share this information.
As one participant stated from the perspective of the consumer, “I want to know how it came to be and how it got to me.”
This attention to the individual components that make up a food product is further reflected in the consumers demand for simpler, clean label foods. Beyond transitioning to clean labels and the demand for innovative new products, consumers are looking for food-based solutions to their health concerns. They also show some conflicting desires, such as products with more global flavors while preferring local and more sustainable food.
Beyond the sustainability of the food and the packaging, there is a growing awareness by consumers on food waste. This is a multifaceted problem with multiple points at which food is ultimately going to waste, ranging from the farmer’s fields to the consumer’s kitchen. Focus group participants noted that a circular system, one where a company will both release a product and accept the return of a product at the end of its usefulness, is on the rise. Solutions offered included implementing both a “BEST if Used By” and “USE By” date to reduce consumer-driven waste, food waste collection systems for supermarkets that repurpose items into compost and exploring approaches to upcycle food waste into sellable products.
AURI Observations for the Food Industry
AURI has a 30-year history assisting a wide range of small to medium sized businesses with applied scientific expertise and commercialization assistance. AURI staff have worked with producers, businesses, entrepreneurs, industry and several other organizations to bring ideas to reality for the purpose of increasing commodity utilization, product viability and market expansion. Based on the AURI teams’ observations in the food ecosystem in Minnesota and the adjacent states, it is clear that emerging consumer demands are changing the food ecosystem. As younger generations build wealth and have more access to information than ever before in human history, they have a deeper emotional connection to food and make purchase decisions based on social and economic values. Another observation notes scalability challenges, including “right-sizing” manufacturing based on business need. Finally, despite increasing consumer demand for alternative proteins, it was noted that animal-based protein consumption in the United States is rising.
Overall, the Dutch Consulate Focus Group Narrative highlights how consumers drive trends, revealing industry gaps and creating space for growth opportunities. Consumer demands for clean label foods, sustainable approaches to packaging and food waste, and the innovation of emerging foods and beverages, ultimately focus around a growing preference for health and sustainability. As demand for more transparency and innovation increases, food production systems will need to become more aligned with these trends in order to remain viable in the future.