Keeping product information relevant in response to consumer demand: from what s not in your food to what is

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1 Keeping product information relevant in response to consumer demand: from what s not in your food to what is Andrea Launay - Market Analyst INNOVA MARKET INSIGHTS Food Matters Live 22 November 2017

2 Food Matters Live: keeping product information relevant TOPICS FOR TODAY Keeping product information relevant in response to consumer demand: from what s not in your food to what is The free from trend The protein trend The clean label trend Key Insights ABOUT INNOVA MARKET INSIGHTS Innova Market Insights is a leading market research company, serving our customers with our unique and powerful Innova Database: the world s largest database for the food industry, used by leading companies in food ingredients and manufacturing for future success in the dynamic FMCG/CPG industry FOOD MATTERS LIVE: IN STORE INNOVATION SESSION Trends in consumer demand and product categories demonstrating growth. As consumer trends emerge and change at a rapid rate, so too do the products they crave. What are the categories which are exhibiting the strongest growth? And, how can product innovation harness the power of consumer demand? 2

3 The importance of labelling for consumers MAJORITY OF CONSUMERS READ PRODUCT LABELS How often do you read the ingredient label on a food or beverage product? UNDERSTANDING INGREDIENTS IS PARAMOUNT "I find it important to be able to know/understand most ingredients listed on a product's ingredient list." US UK US UK Great majority of US & UK consumers pay attention to the label of food & beverage products. Consumers in UK & US are looking for clear and understandable labels. 3 Sources: Innova Market Insights, Ingredients survey 2017

4 4 Top 10 Trends for 2017

5 Trends are shaping packaging information available to consumers FREE FROM TREND PROTEIN TREND CLEAN LABEL TREND Perception not science drives free from Health awareness drives growth of protein Clean supreme covering all aspects of transparency 5

6 6 Free from Trend: highlighting what s not in there

7 Indexed # of new product launches (2012=100) % share of total F&B The protein trend: consumers are looking for added benefits HIGH GROWTH FOR PROTEIN CLAIMS IN F&B SPORTS NUTRITION & ACTIVE NUTRITION % share of F&B new product launches tracked with a high/source of protein claim (Global) % 2.9% 4.1% 4.5% 5.0% 4.5% 4.0% 3.5% 3.0% Around 56% of US & UK respondents indicated that they currently practiced any kind of sport or physical activity (2017)* % 2.5% % 1.5% % 0.5% % 7 Sources: Innova Market Insights, Lifestyle survey 2017

8 Clean supreme: a global standard that continues to affect the industry EVOLUTION OF A TREND THAT IMPACTS NPD IN F&B BIG NAMES CLEAN THEIR PORTFOLIOS Indexed growth of F&B new product launches tracked over time with a key clean label claims (Global, 2008=100) 500 From Clean to Clear Label 400 Processed is Out Go Natural

9 Ingredient choices Ingredient sources Ingredient production Ingredient numbers Clean Supreme: covering a broader range of clean & clear aspects No additives/ preservatives No trans fats Designated origin Local sourcing Traceability Organic No antibiotics No GMOs Sustainable/ ethical Simple, short ingredients lists Natural and recognizable ingredients 9

10 Clean label: an unmet need for naturality claims? NO ADDITIVES/PRESERVATIVES CONTINUES TO GROW BUT CONSUMERS LOOK FOR NATURAL INGREDIENTS 18.0% % share of F&B new product launches tracked with selected clean label claims (Global) How often do you intentionally choose food and beverage products claiming: 16.0% 15.3% No additives/preservatives Contains natural ingredients" 14.0% 12.6% 12.0% 10.0% 8.0% 6.0% 6.5% 6.0% 4.0% US UK US UK 2.0% 0.0% No additives/preservatives Natural Overall consumers in US & UK are looking for more products that claim contains natural ingredients Sources: Innova Market Insights, Ingredients survey 2017

11 A source of differentiation for natural clean label claims SPECIFIC NATURAL CLAIMS ARE INCREASINGLY SEEN FRONT OF PACK EMPHASIS ON NATURALITY 250 Indexed number of F&B product launches tracked featuring selected specific natural claims (Global) Natural sweeteners Natural ingredients Natural colouring Natural flavoring

12 Clean label trend drives plants as coloring food EVOLUTION OF NPD WITH COLORING FOODS +22% GROWTH FOR COLORING FOODS WITH FOODS Indexed growth of F&B new product launches tracked with coloring foods in the ingredient list (Global, 2011=100) Coloring foods include black carrot, carrot and elderberry and can be listed as ingredients instead of additives. Key categories for applications include confectionery, dairy, soft drinks, bakery, ready meals and sauces Smirnoff Soda Blackberry And Yuzu Naturally Flavored Vodka Mixed Drink United Kingdom, Aug 2017 CLAIMS Contains 4% alcohol by volume. Vodka mixed drink with soda water, Smirnoff Vodka, fruit extracts and natural flavorings and colorings. Colored with fruit and vegetables. No artificial flavors, colors or sweeteners 12 12

13 Key learnings FROM WHAT S NOT IN YOUR FOOD TO WHAT IS Consumers look for label and want to understand them. Consumers are a driving force behind trends impacting the world of F&B including recent free from, protein or clean label trends. The Food & Beverage industry is using specific claims to emphasize the presence or the absence of certain components to respond to consumer's demand. The nature of the trend and the consumer opinion will directly affect front of pack claims. Unmet needs in term of naturality are driving developments in clean label claims, focusing on more specific claims. The opportunity now lies within communicating what is in the product rather than what is not in the product

14 THANK YOU!