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FMCG and Retail In this report we consider food innovations within the FMCG and Retail landscape, tracking the trends impacting consumer behaviour and.

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Presentation on theme: "FMCG and Retail In this report we consider food innovations within the FMCG and Retail landscape, tracking the trends impacting consumer behaviour and."— Presentation transcript:

1 FMCG and Retail In this report we consider food innovations within the FMCG and Retail landscape, tracking the trends impacting consumer behaviour and attitude and showcasing a number of best-practice commercial responses. Food innovations

2 22 1. SETTING THE SCENE3 Trends at the heart of food innovation4 Fluid eating patterns6 Food price volatility7 2. FOOD TRENDS8 Discount Disruption9 Healthy Hedonism10 Gluten-Free12 Dairy-Free14 War on Sugar16 Breakfast on the Go18 Convenient Eats20 Protein Power21 Power to the People23 Everyday Indulgence24 Food Gets Personal26 Contents

3 33 Setting the scene 1

4 44 Trends at the heart of food innovation (1) Culture of Immediacy Maximising Behaviour Mass Authenticity Domestic Professional The ever-present demand for offers which save time and provide immediate satisfaction - with no compromise on quality. Single-serve, grab-and-go snacks, part-scratch cooking options… all will appeal to the convenience-hungry consumer. Professionalism is creeping into the way millions approach their domestic duties and in-home social activity. Food becomes a key status-builder in social contexts, stoking demand for evening meals that rival Michelin-starred tasting menus. A maximising mindset prevails in post-recession UK; a recent history of volatile price inflation in the food sector has inculcated a price-sensitive, value-focussed and discount-curious approach to food shopping. Authentic recipes, tastes and product heritage remain an attractive proposition for UK consumers; meanwhile, the (stated) desire to avoid the mass-produced, the artificial and the generic in food and drink is strong.

5 55 Everyday Exceptional Society of Sobriety Heavy Meddle Parents Legitimising excuses for celebration and indulgence and transforming the everyday food experience - the once drab mid-week dinner, the meal-for-one - into an occasion to savour. Nutritional and convenient children’s food options will be welcomed by a time-stretched parent demographic that is adopting a pro-am approach to parental duties. Invitations to consumer-citizens to live highly moderated, image-conscious lives become ever more insistent, energising health-focused food narratives and stimulating free-from and functional food offers. Trends at the heart of food innovation (2) Living La Vida Data Nascent services that gorge on the data consumers share with them promise a future in which smart services suggest personalised food options and recipes to consumers. Does a totally bespoke food future await us all?

6 66 In recent years, we have witnessed a loosening in the rigidity once given to set mealtimes. Working mums, office jobs and decreasing formality in how we live are all contributing factors to the rising snacking culture. From a product side, re-positioning and healthier alternatives have helped to transform snacking into a more acceptable behaviour in consumers’ minds. Source: nVision Research │ Base: 1000 online respondents aged 16+, GB, 2014 Context : fluid eating patterns 06.00 24.00 12.00 8.00 15.00 20.00 10.00 Dinner Mid Morning Snack Mid Afternoon Snack Day End Snack BreakfastLunch % who agree “I often snack between meals” 51% % who agree “children should be allowed to snack between meals” 2008 48% 2014 34%

7 77 Source: ONS/nVision, UK, 2013 Context : Food price volatility Especially intense pressures for this generation of shoppers since 2008 The shifting costs of household food essentials v CPI

8 88 Food Trends 2

9 99 That discount retail stores have become increasingly attractive to UK shoppers is clear : food price inflation, the downturn’s invitation to consumers to closely budget finances, discounters’ direct appeals to middle class food repertoires… all have contributed to the sector’s growth. All the while, discounters bring tastes and food experiences to their aisles - from premium cuts of meat to quality seasonal products, all competitively priced - that challenge food price expectations as well as the assumptions made about the quality of food that discounters offer. Source: nVision Research │ Base: 1000 online respondents aged 16+, GB, 2014 Source: ForSight/Crimson Hexagon, UK (English speakers), 2014 Discount Disruption TREND IN ACTION Connected Trends Maximising Behaviour September 2014 saw discounter Lidl release a TV advert that showed real Londoners visiting a specially constructed farmers’ market, with the food on offer all from the discount store. The food is not labelled as being from Lidl and visitors appear surprised by the low prices of the products given the quality of the produce on offer. Meanwhile, fellow UK discounter Aldi unveiled its Christmas food range in summer 2014, with highlights including caviar and whole crab at relatively low prices. 65%+ of GB respondents - whatever their socio- economic classification - agree that they “carefully budget” their personal finances each month “Go to Aldi's for it! They have soo much good fruit and veg at really good prices! My weekly shop only cost me £20!” “Lidl croissants are the best tbh I could LIVE in Lidl”

10 10 Product innovation has established the once dichotomous notion of healthy treats. Products which combine ostensibly healthy and hedonistic qualities often reinvent old treats or reinvigorate foods long since consigned to lists of undesirable products : agave syrup replaces refined sugar, coconut milk becomes the new milkshake and permutations of vitamin water challenge share from the juice or fizzy drink market. Products in this field often feature “super food” ingredients and typically promote themselves on the basis of being “natural”, “good” and “free-from” certain ingredients while also claiming to simultaneously satisfy taste expectations. Source: nVision Research │ Base: 1000 online respondents aged 16+, GB, 2014 Healthy Hedonism TREND IN ACTION Connected Trends Society of Sobriety, Perfection of the Body % agree “I try to maintain a healthy diet while sometimes treating myself to foods I know aren’t good for me” 69% Rebel Kitchen announced its first national listing in August 2014 at Waitrose. The company makes dairy-free milkshakes that are made from coconut milk and which use organic date nectar instead of sugar. According to the company : “We are against illness and obesity and health snacks that taste like rubbery old boots. Let's stand together as one and start getting the good stuff in”.

11 11 TREND IN ACTION Healthy Hedonism Green Wave Smoothies describe themselves as “a nutritious, delicious and FUN way for kids to ‘get their greens’”. They are made from a frozen blend of whole vegetables and fruit and contain no added sugar or preservatives. iQ Superfood Chocolate describes itself as “a delicious, health promoting, raw, bean-to-bar, superfood chocolate”. It comes in various varieties such as its beauty enriching BeautiQ and the YogiQ aimed at yoga-lovers. Chia pods are snackpots aimed to be eaten as energy boosting breakfast and contain sun-ripened chia seeds mixed with fruit and coconut milk. They are dairy-, gluten- and GM-free, vegan-friendly and use natural, low-GI coconut sugar.

12 12 We note the growing popularity of gluten- free foods, driven in part by those with coeliac disease but also by those choosing to cut down on wheat for milder intolerances or general health concerns. Source: nVision Research │ Base: 1000 online respondents aged 16+, GB, 2014 Gluten-Free TREND IN ACTION Connected Trends Heavy Meddle Parents BFree launched a wheat and gluten-free Fajita kit in Summer 2014. Veronica’s Snacks are a range of gluten-free baked organic snacks. Phil Vickery Seriously Good is a range of gluten- free cake mixes. No.G. is a range of chilled gluten-free sweet and savoury pastries.

13 13 In late 2012, Domino’s Pizza became the first major pizza delivery company to launch a gluten-free pizza accredited by Coeliac UK, a national charity “dedicated to improving life for people with coeliac disease”. Unlike many brands who choose to charge a premium for gluten-free, the base is offered at no extra cost. Kabuto Noodles launched a range of gluten-free instant noodles in Ocado and Wholefoods in May 2014 available in chicken and Miso flavour. Gluten-Free TREND IN ACTION Heinz became another well-known brand to expand into the gluten-free market with its 2013 launch of “Deliciously Gluten Free” range.

14 14 Around 60% of UK consumers say they moderate their consumption of dairy products at least some of the time. In recent years we have seen the wholesale arrival of dairy-free milk alternatives, including almond and coconut milk. Source: nVision Research │ Base: 1000 online respondents aged 16+, GB, 2014 Dairy-Free TREND IN ACTION Connected Trends Society of Sobriety Jamie Oliver’s website features almost 300 dairy- free recipes under its Special Diets section. Other featured diets include Gluten-free, Vegan and Vegetarian.

15 15 TREND IN ACTION Everything But The Cow is a soya protein shake made with fruit. It combines the appeal of dairy- free with the demand for protein. It is marketed at active women as a pre-workout energy or post- workout repair product. Dairy-Free Go Dairy Free, a popular lactose intolerance site, features a Dairy-Free Challenge which encourages people to try cutting out dairy for 10 days to see if they feel better.

16 16 In recent years, sugar consumption has repeatedly become the target of health campaigns and the focus of pointed academic and political debate. In response, we see brands producing low-sugar variations - in the same way that low-fat might once have been marketed - or advertising their naturally low sugar credentials. We suggest this trend has strong ties to our Healthy Hedonism story - consumers still desire sweetness but perhaps with low(er) sugar content. Source: nVision Research │ Base: 1000 online respondents aged 16+, GB, 2014 War on Sugar TREND IN ACTION Connected Trends Society of Sobriety % who agree that a “sugar tax” should be placed on foods with high sugar content 35% TOTAL 49% 65+

17 17 TREND IN ACTION War on Sugar Holland and Barrett stock a specialist range of low sugar and sugar-free products targeted at those looking to restrict their sugar intake. Lizi’s Granola launched a Low Sugar variety in the UK in 2014. Lizi Shaw, founder of the company, said, “With the emphasis, now more than ever, on healthy eating and a move to minimise sugar intake as much as possible, the development and launch of Lizi’s Low Sugar Granola couldn’t have been more timely”. Launched in Argentina in 2013 and in the UK and US in 2014, Coca-Cola Life is sweetened with a blend of sugar and natural sweetener stevia. It has a third less sugar and a third fewer calories than standard Coke and a green label replaces the traditional red Coca Cola branding.

18 18 In recent years we have seen innovation in the convenience category, as cooking times have been reduced, packaging has evolved and portions have become single- sized. Previously confined to dinner, lunch or snack options, we now see the category expand to breakfast, catering to those eating on-the-go. Source: nVision Research │ Base: 4925 online respondents aged 16+, GB, 2014 Breakfast on the Go TREND IN ACTION Yeo Valley has partnered with Tesco to launch pick & mix yoghurt bars in 160 stores. The bars feature four varieties of yoghurt and a selection of eight different toppings, compotes and sauces. Each element costs £0.50 and consumers are invited to share their own favourite flavour combinations. Average number of minutes spent commuting per day Male full-time worker 62 Female full-time worker 48 % who eat a ready meal several times a week

19 19 Emmi launched Mr Big, a larger version of its chilled coffee range in August 2014. It is positioned as an on-the-go refreshment that works as an alternative to coffee shop bought coffee. August 2014 saw FUEL YOUR 10K HOURS launch individual porridge sachets that come in their own pot (to which hot water is added). The brand targets sportspeople and those with active, busy lifestyles. TREND IN ACTION Breakfast on the Go

20 20 Busy lives drive demand each year for convenience and immediacy in the food market. Recent innovation has, in response to health concerns and the perceived artificiality of ready meals, developed instant food as a tasty and healthy option in its own right. In recent years, we have also seen the phenomenon of part-scratch cooking - catering to foodies looking for products to cut their cooking time. Source: nVision Research │ Base: 4924 online respondents aged 16+, GB, 2014 Convenient Eats TREND IN ACTION Connected Trends Culture of Immediacy Taste Inc is a microwaveable snacking brand. Each sandwich advertises its 500 calories and says its target market is those wanting something tasty but healthy - not the usual bowl of lettuce. G’NOSH, which stands for Gourmet Nosh, launched a range of ingredient-led world food inspired Meals in Minutes in Waitrose and Ocado in summer 2014. The brand focuses on part-scratch cooking and providing time-saving, meal solutions. “Which of these best describes how often you do each of the following activities?” │ Eat quick / fast food

21 21 No longer the reserve of gym junkies, protein-enriched snacks and foods are gaining popularity due to their perceived benefits to internal health as well as external appearance. This is very much a trend driven by the desire for perfected bodies - inside and out. As well as powders and supplements for the most avid protein fans, we see the re- invigoration of protein-rich snacks such as jerky (see following slide). Source : nVision Qualitative Research, 2014 Protein Power TREND IN ACTION Connected Trends : Perfection of the Body “For women this has changed over the last 10-20 years from the skinny waif look to a healthier, stronger, fitter appearance. For men, a muscular physique is still the ideal, with the six-pack seen as most desirable feature”. Trendspotter, UK “Healthy now = attractive”. Trendspotter, UK Epic is a jerky-style protein bar, which promises to deliver “protein as nature intended” by using 100% grass-fed meat. The bars, available in bison, turkey, beef and lamb flavour, are paleo-friendly, gluten-free and low in sugar.

22 22 TREND IN ACTION Protein Power IPS, Intelligent Protein Snacks, were invented by a dad who noticed that his kids loved the crispy edges of eggs he cooked. Seeking a healthy alternative to traditional snacks, he saw an opportunity in egg white crisps. They contain half the fat of average crisps, fewer carbs and seven grams of protein per pack - the equivalent of two egg whites. Jerky has become a popular protein- rich snack : Jack Link’s offers two varieties of beef jerky - Beef Jerky Peppered and Beef Jerky Teriyaki, while Norfolk-based The Meat Merchants offers premium meat snacks for pubs including chorizo, jerky and salami.

23 23 Co-creation continues its transition from niche proposition to a much more frequently deployed means of engaging consumers. From suggesting ranges to designing marketing campaigns or even developing final products, this is an area where latent consumer enthusiasm is pronounced across all demographics. Source: nVision Research | Base: 1,000–5,000 online respondents aged 16+, GB, 2013 Power to the People TREND IN ACTION Connected Trends : Peer Power, Cult of Creativity Those who have contributed ideas for new products, advertising or marketing campaigns or who are interested in doing so in the future Walkers repeated its Do Us a Flavour campaign in 2014, with six finalists vying for a £1 million prize. The six final flavours are available to buy in stores nationwide until the winner is announced in October 2014. 1.2 million entries were received.

24 24 As we discuss in Everyday Exceptional, the search for reasons to celebrate, treat oneself or create a special occasion on a daily basis becomes ever easier. Indeed, we see : special (and often limited edition) products that explicitly celebrate a particular occasion or shared festivity; and premium upgrades that invite consumers to, for instance, leave aside regular buys in favour of a more luxurious and indulgent in-category alternative. Source: nVision Research │ Base: 4934 online respondents aged 16+, GB, 2014 Everyday Indulgence TREND IN ACTION Connected Trends Everyday Exceptional The Collective launched a spiced pumpkin limited edition flavour for Halloween 2014. The yoghurt features a spiced pumpkin compote folded into live yoghurt made with “the best West Country milk”. The packaging features Halloween characters. Oykos launched a new “Heavenly” range with Salted Caramel and Cinnamon Apple flavours. They say, “We are confident that the Heavenly launch will help us cement consumer perceptions of Oykos as a truly luxurious and indulgent brand”. Occasion-based eating : % who eat out as an occasion at least once a month

25 25 TREND IN ACTION Everyday Indulgence Heinz announced in August 2014 that it was expanding its premium range of Black Label soups to include four new flavours : Cream of Tomato soup with Spanish Chorizo, Carrot & Coriander soup with Warming Moroccan Spices, Lentil soup with Fragrant Indian Spices and Rich Beef Broth with Smokey Paprika. Rubicon marked Diwali 2014 with TV advertising and special on- pack promotions. They want to highlight the role that Rubicon plays in family celebrations with the strapline “Rubicon - part of family life for over 30 years”. August 2014 saw Babybel announce it was to release limited edition Halloween packaging for Halloween 2014, accompanied by an augmented reality and gaming app called Babybel Buddies, available to download for free.

26 26 Ever-smarter algorithms are producing food and drink recommendations and suggestions which are fine-tuned to match personal lifestyles / behaviours / shopping histories. Inevitably, the years ahead will see such tools becoming more intuitive, accurate and embeddable within day-to-day lives. Source: nVision Research │ Base: 5002 online respondents aged 16+, GB, 2014 Food Gets Personal TREND IN ACTION Connected Trends Living La Vida Data, Probability Gets Personal “How interested would you be in the following services? A service that recommended food that I should buy based on my personal health/nutritional requirements” │ % who are very interested or quite interested HealthyOut is a food delivery service that lets you programme your diet preferences - whether you are trying to cut out certain foods or have a calorie target. It will then arrange delivery of two meals per day, sending you a text message 90 minutes before each meal to confirm the order.

27 27 TREND IN ACTION Food Gets Personal Momentum Machine’s Burger-bots claim to be the next generation of fast food; robot “staff” create gourmet burgers which can be customised exactly to a customer’s preference, offering tailored proportions of meat and exact amounts of toppings Wellscale is a smart scale equipped with Bluetooth that allows users to access exact nutritional information about their food via an app on their food simply by placing food on the scale. Users can then track the contents of their meals and save alerts for certain nutritional targets. The app includes an “adviser” feature which provides real-time food advice. Cheers are jellied ice cubes which calculate sips and warn drinkers when they are drinking too much alcohol. They have a colour coded warning system which changes from green to orange to red if the person carries on drinking. If the warnings are ignored, the cubes send a text to a close friend, warning of the “drinking problem”.

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