How the Pandemic is Reshaping Food and Beverage Innovation | Inc.com
Consumers prioritized both convenience and comfort during the pandemic, and that sentiment continues to grow. Hybrid and remote work has made e-commerce, delivery and curated assortments an even bigger part of the convenience trend, according to the SFA’s most recent State of the Specialty Food Industry research. David Lockwood, the co-principal writer and researcher of the SFA report, adds: “Takeout and delivery was always a convenient thing, but it became a bigger thing during the pandemic and some of it has still stuck.” One example Lockwood points out is how some restaurants purely offer take out, rather than dine in services.
The pandemic magnified consumer consciousness on health, reminding many of the adage: “you are what you eat.” It’s also driven consumers to pick up healthier options than they used to, says Summer Johnson, the founder of Zach & Zoe Sweet Bee Farm. Johnson and her husband make honey infused with different superfoods, such as beetroot and ginger root.
It’s also a trend that entrepreneurs expect will linger as more consumers become ever more health-conscious, in part thanks to the pandemic. Bryon White, who co-founded Ilex Organics with his brother Kyle, says that the concept of food as medicine is building consensus. The company houses the Yaupon Brothers American Tea Co. brand, tea made from yaupon leaves from the yaupon holly tree. Such tea was traditionally used by Native Americans for a wide range of health benefits.
Entrepreneurs in the specialty brand space are getting more creative to get retail distribution by leveraging new distribution channels and social media. Daily Crunch Snacks, which sells extra-crunchy dehydrated nuts, launched in early 2020 and faced difficulties breaking onto shelves, according to Laurel Orley, the brand’s co-founder.
Orley says that after speaking with some contacts at traditional retailers, the message was clear: They weren’t taking on new brands at a time when consumers were clamoring for essentials such as water and toilet paper. But Orley says that “it’s not just about brick and mortar stores,” explaining that there’s other approaches entrepreneurs like herself have considered. They launched on Amazon instead and continued to think about new ways to get directly in front of consumers, such as placing their product into a subscription box. Orley recalls that she also reached out to as many people as she could at virtual trade shows, which eventually led to a breakthrough: Daily Crunch Snacks got into CVS and Orley says the snack is now in 3,000 stores.
Consumers are becoming more politically conscious of the businesses that they frequent, leading them to seek out businesses owned by Black and Indigenous people of color, along with businesses owned by women. “Our base of people switched after George Floyd’s death from what I’d say were people who were health conscious to people who were looking for BIPOC-businesses to invest in [and] to just be a part of,” says Zach & Zoe’s Johnson, who is a Black woman.
While the plant-based specialty retail market outpaced growth in the overall specialty food market in 2020, that growth slowed significantly last year. In what is being dubbed “New Protein 1.0” products like Beyond Meat or Impossible Foods attracted lots of customers, but fell short in wooing the masses.
Cue New Protein 2.0, as the category evolves to create a tastier, healthier and more affordable protein alternative. New Protein 2.0 wil loop in fermented plant-based and cell-cultured meat in an effort to build out better alternatives that challenge traditional meat sources, according to Lockwood. “There are a number of potentially game-changing new launches coming out near the end of 2022, but this part of the revolution will take time,” Lockwood says., The production facilities don’t exist yet and will cost upwards of $400 million to build out. Lockwood points out a few companies to watch, including Nature’s Fynd, which is developing microbe-based proteins, Meati, created from mushroom root, and Yali Bio, which is using oleaginous fungi to to mimic animal fat.