2018 Chicago Section IFT s Suppliers Symposium Transparency in the Food Industry
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1 2018 Chicago Section IFT s Suppliers Symposium Transparency in the Food Industry 9:00-10:00 AM It s a Big Food Dilemma (Panel) 10:10-11:45 AM: Track 1: Transparency & Nutrition (here) Track 2: Transparency in the Supply Chain (next door) 11:50-12:30 PM Transparency in Food Quality & Health (here)
2 Panelists Matt Hamrin Senior Counselor MorganMyers Kelly Braaten Manager of External Communications Hormel Foods Viriginia Hendricks Chief Human Resources Officer Foremost Farms USA Amy Roady Director of Communications Illinois Soybean Association It s a Big Food Dilemma
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33 New Product Development at the Intersection of Clean Label, Plant Based & Nutrition Rachel Cheatham, PhD Foodscape Group, LLC November 2018
34 What We ll Cover Today 34 Clean Label Definitions & The Consumer Plant Based Operating Context Marketplace Examples Wrapping It Up
35 35 CLEAN LABEL DEFINITIONS & THE CONSUMER
36 CLEAN LABEL MEANS WHAT EXACTLY? 36 Clean Label has no formal or regulatory definition Fresh Some attributes which may track with Clean Label have regulatory definitions and some do not Raw? Natural Nothing Artificial Minimally Processed Non-GMO Organic
37 SURVEY DATA: 302 U.S. GROCERY SHOPPERS 37 Signs of Clean Label Signs of NOT Clean Label Source: Cargill/Decision Analyst, Transparency & Simplicity White Paper
38 AGE OF CONSUMER MATTERS 38 Free from artificial ingredients skews older, while natural/organic skews younger Likely reflects whether or not a given generation experienced big food reformulations over time or instead sought out natural foods from beginning Source: Canadean s Global Survey, Q4, 2015
39 FOP & BOP RELATIONSHIP 39 Source: Making sense of the clean label trends, Food Research International, 2017
40 CONSIDER SPECIFIC FACTORS Consider extrinsic & intrinsic product characteristics across potential descriptor natural, organic, free from Then, also consider psychological, situational and socio-cultural factors 40 Source: Making sense of the clean label trends, Food Research International, 2017
41 LET S ASK LINKEDIN FOLLOWERS Real, recognizable ingredients. No junk. No ingredients disguised with tricky names like natural flavors Minimal number of ingredients. 41 A short ingredient deck free from artificial colors and preservatives - The definition is fluid and has been creating a headache for commercial baking. There is no FDA definition unlike organic or gluten- free. No fillers, no salt, no sugar, no maltodextrine, no sorbitol, no polypropylene glycol, No MSG, DSG, I+G... I can go on...
42 AND MORE COMMENTARY 42 Gums are lab formulated and come hidden in compound ingredients. Even a manufacturer doesn't know of them. I am over the marketing jargon on the front where they can claim no HFCS but then have an equally harmful ingredient like an artificial sweetener or chemical dye listed on the back. Nothing artificial. clean labels are often used to cynically whitewash junk food that may be high in added sugar, sodium, and/or fat. A truly clean label shouldn't be misleading in the sense that it shouldn't be used for a product that is heavily processed or objectively unhealthy. Personally I don t care if a label is clean or not because most of the food I buy has no label. Source: Dr Cheatham s LinkedIn Followers
43 YIELDING SOME LIKELY TARGETS 43 Artificial colors Artificial sweeteners Preservatives Gums Dough conditioners Natural Flavors Honest labels that consumers can trust.
44 PUTTING CLEAN LABEL IN CONTEXT 44 Understand which terms matter most in hearts and minds of your core consumer Best consider clean label more of an industry umbrella term
45 PLANT BASED OPERATING CONTEXT 45
46 FOODSCAPE METATRENDS: PLANT BASED LEADS 3 YEARS RUNNING! 46
47 PLANT POWER Plant based is increasingly the baseline entry point for new product development Plant based is best seen as a continuum emphasizing whole grains, legumes, vegetables, fruits while minimizing (though not necessarily eliminating) meat/dairy/eggs 47 Omnivore Pescatarian Lacto Ovo Vegetarian Lacto Vegetarian Vegan Eats animal and plant foods Eats animal and plant foods, but chooses fish and seafood over meat or poultry Eats dairy and eggs, but no other animal products Eats dairy, but no eggs or other animal products No animal products whatsoever, including an avoidance of honey
48 PLANT BASED: EATING EVIDENCE 48 Consistent evidence indicates that, in general, a dietary pattern that is higher in plant-based foods, such as vegetables, fruits, whole grains, legumes, nuts, and seeds, and lower in animal-based foods is more health promoting and is associated with lesser environment impact than is the current average U.S. diet. A diet more environmentally sustainable than the average U.S. diet can be achieved without excluding any food groups.
49 THE MAINSTREAMING OF PLANT BASED 49 Plant Based Foods, Beverages and Ingredients Animal Based Foods, Beverages and Ingredients TRANSITIONING OMNIVORE
50 WHO EATS PLANT BASED? 50 VEGETARIAN Estimated that from 2 to 10% of a developed country s population is vegetarian VEGAN Estimated that 0.5% of global population is vegan BUT - Don t Be Fooled 83% of consumers are adding more plant based foods into their regular diets
51 MARKETPLACE EXAMPLES 51
52 52 A Closer Look Based on the Transitioning Omnivore MEAT/SEAFOOD DAIRY WATER GUT HEALTH
53 NEW PROTEIN LANDSCAPE 53 Forecasters predict global market for alternative meats such as tofu, tempeh, textured vegetable protein, seitan, quorn and other plant based sources will reach $5.2 billion by 2020 noting a CAGR of 8.4% during the period
54 PRODUCT EXAMPLES: MEAT 54
55 PRODUCT EXAMPLES: MEAT 55
56 PRODUCT EXAMPLES: MEAT 56
57 SOY LEGHEMOGLOBIN DETAILS 57
58 PRODUCT EXAMPLES: SEAFOOD 58 Ahimi is made from fresh tomatoes, non-gmo soy sauce, filtered water, sugar and sesame oil.
59 PRODUCT EXAMPLES: DAIRY 59
60 PRODUCT EXAMPLES: DAIRY 60
61 PRODUCT EXAMPLES: WATER 61
62 PRODUCT EXAMPLES: WATER 62 In other news some shoppers seeking out raw, live and unprocessed water $37 for a glass jug of 2.5 gallons in San Francisco Potential for major pathogen issues in untreated water And let s not confuse pseudomonas with probiotics!
63 PRODUCT EXAMPLES: GUT HEALTH 63
64 Probiotic Fortification Precision GUT HEALTH: FORK IN THE ROAD? Microbes not killed off during pasteurization Often documented health benefits via peer studies Fermented Foods/Beverages Authentic Traditional Naturally functional 64 Consumers want authenticity and nutrition that comes from a traditional fermentation process and they are seeking out fermented foods and beverages yogurts, kefir, kombuchas, sauerkraut and kimchi for improved digestion.they want foods with inherent functionality and not lab-created functionality, but at the same time they are also becoming more precise about the kinds of probiotics they want. Dr. Balanko, Hartman Group
65 WRAPPING IT UP 65
66 REMEMBER, ALWAYS BELOVED EXCEPTIONS 66
67 AND SOMETIMES BEST TO NOT TINKER 67
68 SEE CLEAN LABEL AS OPPORTUNITY 68 Best view Clean Label as an umbrella term encompassing other more trending terms like natural (which also lacks definition) Consider relying heavily (or even entirely!) on formally defined terms like organic, gluten-free, etc Recognize that Clean Label efforts present an opportunity for greater internal alignment between Innovation/R&D and Marketing/Communications In other words, Clean Label efforts are best done on the enterprise level, not tidying up a single SKU!
69 BE PROACTIVE & USE INTEGRATED APPROACH 69 INNOVATION/R&D Examine all ingredients and then, re-examine all ingredients Be able to articulate the from where, what, how and why for each ingredient.know what you ve consciously excluded too Consider product category differences dairy/meat alternatives may have more leeway Have a clear position on fortification MARKETING/COMMUNICATIONS Proactively create your Health & Wellness POV on the portfolio level that aligns with ingredient choices this includes agreement on what Clean Label means for your brand and your consumer Share your POV consistently across content platforms in a style, tone and detail level appropriate for your core consumer
70 70 THANK YOU & QUESTIONS Rachel Cheatham, PhD Foodscape Group, LLC
71 Clean Label Consumers and their Perceptions Karen Graves Director of Sensory Insights November 1, 2018 on Flavors.
72 SCIENTIFIC DATA PHYSIOLOGY PSYCHOLOGY STANDARD METHODS 5 SENSES SENSORY INSIGHTS Integrates sensory properties and consumer needs Guides and validates creative development and innovation RESEARCH Bell Flavors & Fragrances CONSUMER ADVOCATE CONSULTING SERVICES 72
73 Why Clean Label? 2015 $165B $180B 2020 Projected Global Sales for Clean Label Products (in US$) 1 1 Food Insider Journal 2017: 2 Report by the Neilson Company (2017) It s Clear: Transparency is Winning in the U.S. Retail Market Bell Flavors & Fragrances 73
74 What is a Clean Label? Source: The Natural Effect Video Youtube.com by Only Organic Bell Flavors & Fragrances 74
75 Bell Flavors & Fragrances 75
76 What is a Clean Label? Proposed definition adapted from D. Asioli literature review (2017) : INFERRING FOUCS ON CLAIMS INSPECTING FOUCS ON INGREDIENT LINE Ingredients: Cultured Grade A Reduced Fat Milk, Food Starch. Contains Active Yogurt Cultures Including L. Acidophilus Source: Asioli, Daniele., et al. (2017). Making sense of the clean label trends: A review of consumer food choice behavior and discussion of industry implications. Food Research International, 99, Bell Flavors & Fragrances 76
77 In Market Examples Ingredients: Popcorn, Sunflower Oil, & Salt Bell Flavors & Fragrances 77
78 In Market Examples In other cases, large brands tried to move to a more natural product and the new products were rejected by loyal brand users. Diet Pepsi removed aspartame Trix cereal moved to a natural color Artificial Color Natural Color Bell Flavors & Fragrances 78
79 Clean Label Expectations are Category and Brand Specific. And Dependent on Usage Occasion. Cargill White Paper identified Baked Sweet Goods as a category where ingredients are not as important to Clean Label Consumer. 1 Source: E. Watson. FoodNavigator.com Article (August 2018) Common Sense with Clean Label In Conversation with Otis Spunkmeyer. 2 Source: Cargill White Paper (2017), Transparency and Simplicity: The New Normal in Product Development. Bell Flavors & Fragrances 79
80 Questions.. Who are Clean Label Consumers? What do Clean Label Consumers think about flavor ingredients? What types of Flavors are permissible in baked sweet goods? Bell Flavors & Fragrances 80
81 Objectives 1. Identify Clean Label Enthusiast demographics, behaviors and attitudes. 2. Understand Clean Label Enthusiast perception on claims and a variety of flavor types for bakery items in the breakfast and snacking/indulgent occasion. Flavor Types: - Artificial Flavor - Natural Flavor - Natural Flavor with other Natural Flavors - Natural & Artificial Flavor - Organic Flavor - Organic Certified Flavor - Non-GMO Flavor Bakery Items: - Muffins - Sweet Rolls - Cinnamon Rolls - Coffee Cakes - Snack Cakes - Cookies - Pies - Donuts - Danishes - Regular Cake - Scones Bell Flavors & Fragrances 81
82 Research Approach Phase 1: Series of Surveys Phase 2: Survey n=4,373 Consumer Understanding n=105 Perception of Claims & Flavor Ingredients All research was conducted with Insights Now Clean Label Enthusiast Online Community in a web-based collaborative environment. Bell Flavors & Fragrances 82
83 Who are Clean Label Enthusiasts? Majority Boomers (41% of CLE and born between ) 49% have households with children between the ages of 6-12 Skews towards Females (61% Female, 39% Male) 79% of Females do most/all of the household shopping Not as prevalent in the lowest economic bracket 18% in <$25,000 annual income Bell Flavors & Fragrances CLE = Clean Label Enthusiast Source: 2017 Insights Now CLE Food Behavior Report 83
84 CLE = Clean Label Enthusiast Bell Flavors & Fragrances Source: 2017 Insights Now CLE Food Behavior Report 84 Clean Label Enthusiasts (CLE) comprise of 16% of the US population of primary grocery shoppers; this number is growing. CLE geographical distribution is similar to non- CLE consumers and skews higher in the south. Clean Label Enthusiasts (CLE) tend to.
85 CLE = Clean Label Enthusiast Bell Flavors & Fragrances Source: 2017 Insights Now CLE Food Behavior Report 85 Clean Label Enthusiast Purchase Decisions Will Trade Away Taste Sustainability Concerns
86 CLE = Clean Label Enthusiast Bell Flavors & Fragrances Source: 2017 Insights Now CLE Food Behavior Report 86 Clean Label Enthusiast Purchase Behavior Fresh, Not Frozen, Produce Avoid Sweet Snacks Avoid Lunch Meats
87 Number of Stores Shopped for Specific Foods/Beverages Clean Label Enthusiast Average 4 Stores Non-Clean Label Enthusiast Average 3.1 Stores Bell Flavors & Fragrances CLE = Clean Label Enthusiast Source: 2017 Insights Now CLE Food Behavior Report 87
88 Clean Label Enthusiasts trust family members and Food Industry Watchdogs over CPG brands. Bell Flavors & Fragrances CLE = Clean Label Enthusiast Source: 2017 Insights Now CLE Food Behavior Report 88
89 Phase 2: Online Survey Participants (n=254) were screened based on purchase history of items from each occasion. Analyzed Data Bakery Breakfast: n = 105 Bakery Snack / Indulgence: n = 104 Completed Survey: Perception on Claims & Flavor Ingredients CLE members were invited to complete an ingredient survey on 2 occasions, 11 product types, & 7 flavor ingredients. Thinking about a typical/normal BREAKFAST at home before heading out for the day, when are you eating a MUFFIN, how do you feel about the following ingredient: NATURAL FLAVOR OK AVOID Clean Label Score 2 Occasions: Breakfast & Snack Participants were instructed to select OK or Avoid to describe their feeling toward each ingredient tested. Bell Flavors & Fragrances 89
90 Clean Label Score Clean Label Score Formula Response Matrix Slow Response Fast Response Avoid % Cell 3 (weight -0.5) OK % Cell 2 (weight 0.5) % Cell 4 (weight -1) % Cell 1 (weight 1) Example Cell 1 Cell 2 Cell 3 Cell 4 Clean Label Score Best Case 100% 0% 0% 0% 100 Worst Case 0% 0% 0% 100% 0 Uniform Case 25% 25% 25% 25% 50 Actual Case 60% 18% 6% 16% 75 Bell Flavors & Fragrances 90
91 Natural, Organic, GMO Free, Clean Label & Convenient are meaningful claims for Clean Label Enthusiasts for Breakfast and Snack bakery items. BREAKFAST BAKERY ITEMS cookies, cakes, pies or baked goods (n = 105) Claim Influence Natural 60% GMO Free 52% Clean Label 47% Organic 45% Convenient 43% Authentic 36% Low Salt 35% Trans Fat Free 33% Value - Lowest Cost 32% Pure 30% Low Fat 30% Easy to Make 30% Low Calorie 27% Gluten Free 21% Preferred 2:1 7% SNACK/INDULGENT BAKERY ITEMS cookies, cakes, pies or baked goods (n = 104) Claim Influence Natural 56% Organic 48% Clean Label 48% GMO Free 44% Convenient 40% Trans Fat Free 38% Low Fat 38% Low Calorie 34% Low Salt 31% Authentic 29% Value - Lowest Cost 28% Pure 27% Easy to Make 26% Gluten Free 19% Preferred 2:1 9% Q. Which of the following claims MOST INFLUENCE which products you choose when you are shopping for. Bell Flavors & Fragrances 91
92 Clean Label Enthusiasts believe Natural Flavors and, to a lesser extent, Natural WONF Flavors are appropriate for breakfast bakery items. BREAKFAST BAKERY ITEMS Clean Label Score (n = 105) Natural Flavor 89.0 Organic Flavor 84.8 Organic Certified Flavor 83.1 Natural Flavor with Other Natural Flavors 80.2 Non-GMO Flavor 73.1 Natural & Artificial Flavor 53.3 Non-GMO Flavors are not critical to the breakfast bakery category. Artificial Flavor 27.1 Bell Flavors & Fragrances 92
93 BREAKFAST BAKERY ITEMS Clean Label Score Donuts Muffins (n = 31) (n = 25) Natural Flavor Organic Flavor When looking at Donuts and Muffins, Natural Flavor continues to have the numerically highest Clean Label Score. Organic Certified Flavor Natural Flavor with Other Natural Flavors Organic Certified and Non-GMO Flavors appear to have an increased importance for Muffins (vs. Donuts). Non-GMO Flavor Natural & Artifcial Flavor Artificial Flavor CLE feel Natural & Artificial Flavor is more appropriate in Donuts than in Muffins. Bell Flavors & Fragrances 93
94 Gluten Free Lemon Poppy Seed Muffin Source: Bell Flavors & Fragrances 94
95 dddd Clean Label Enthusiasts believe Natural and Natural WONF Flavors are appropriate for snack/indulgent bakery items. SNACK/INDULGENT BAKERY ITEMS Clean Label Score (n = 104) Natural Flavor 88.6 Organic Flavor 84.0 Natural Flavor with Other Natural Flavors 80.1 Organic Certified Flavor 76.7 Non-GMO Flavor 72.1 Natural & Artifcial Flavor 53.9 Non-GMO flavors are not critical to the snack bakery category. Artificial Flavor 24.3 Bell Flavors & Fragrances 95
96 Natural Flavor is acceptable for Clean Label Enthusiasts in Cookies, Donuts, and Muffins when eaten as a snack/indulgent treat. SNACK/INDULGENT BAKERY ITEMS Clean Label Score Cookies Donuts Muffins (n = 27) (n = 22) (n = 19) Natural Flavor Organic Flavor Natural Flavor with Other Natural Flavors Organic Certified Flavor Non-GMO Flavor Natural & Artifcial Flavor Artificial Flavor Natural WONF is also appropriate for Cookies, Donuts, and Muffins. Natural & Artificial Flavor is most acceptable in Donuts. Bell Flavors & Fragrances 96
97 Bell Flavors & Fragrances 97
98 - Expand learnings to other products categories where Clean Label Consumers pay less attention to ingredients. - Investigate other ingredient types, such as Sweetness Enhancers or Salt Replacers. Bell Flavors & Fragrances 98
99 Booth #633 Bell Flavors & Fragrances 99
100 THANK YOU! Karen Graves Director of Sensory Insights Bell Flavors & Fragrances Bell Flavors & Fragrances 100
101 Bell Flavors & Fragrances 101
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