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The Business of Food

by Jennifer Barney


Hot (and not so hot) Categories
3-min read

My take on categories that are growing, mature, or sleepy.
I recently provided guidance on “what to make” to a client. These folks had already made prototypes of various products using almond as a core ingredient. Here’s what I told them.
I understand you are seeking help with R&D and product development. Right now you are really product focused. Let’s look from a different lens:
Think in terms of categories
When thinking about innovation you have to look at categories. Where to play is about product development for sure, but it’s also about understanding which categories are growing, which are mature, and which are sleepy and ripe for innovation. 
Alt dairy
This category has really hit its stride and still growing, mostly through new forms (i.e. creamers). Still dominated by Danone and Blue Diamond, there are many new entrants. The biggest threat is oat milk, and we are seeing lots of blends of almond + other nut, seed or oat offerings in alt milk. We are also seeing clean label versions (no additives like gums or oils) such as Three Trees products

My take: what’s grabbing consumers attention here are all the new forms for different usage occasions such as creamers, puddings, yogurts and bowls (see MUSH overnight oats with almond milk)
Alt meat / blended meat 
1 in 3 Americans self-identify as flexitarian and we are seeing a surge in plant-based options (Beyond Meat), lab made meat (Impossible Burger) and blended options (typically soy, pea or pulses). See Hormel’s new launch. Soon to launch will be whole muscle look-a-likes from fermented derivatives of plants like what Meati is doing

My take: this is a high growth category. The negatives of fake meat are high sodium and highly processed. I think there will be a focus on complete protein. There are studies about how nuts + pulses can create a complete protein and I believe this will be the next shift in consumer demand for alt meat.
Despite being a mature category there are still high numbers of new product introductions in bars. The category is expected to grow at a 3.9% CAGR in the next 3 years. Protein remains the top ingredient but nut volumes in bars are down in recent periods.

My take: newer protein sources like pea, with higher PDCAAS (protein digestibility) are challenger ingredients, although the musty taste and off-notes are tough to formulate around. What is new and exciting in this category is the addition of a refrigerated bar section, spearheaded several years ago by PerfectBar (now in snack size). Refrigeration allows for a higher percentage of fat and protein (like nut butters) in formulations with less undesirable binders like starches and sugars.
Nut Butters
Near and dear to my heart, this category is super impacted with lots of new players making it increasingly competitive.

My take: New entrants have to do something different like mash-up brand Butterfly’s almond and mushroom. Or Kelloggs owned RXBar almond butters bringing egg white protein fortification (just like their bars) to spreads. Still a growing category, private label has surpassed branded volume in specialty nut butters. Really tough to differentiate and compete. 
Stagnant, “sleepy” categories like canned goods for example, can afford opportunities because no one is paying attention. You’ll have more time to go slow and iterate. The trick is finding where there is consumer unmet need. 

If you do want to go into a hot category where everyone else is, my advice is to get a team of strong industry professionals who can help you navigate the waters because when it’s time to move there will be little room for error. 

All my best,

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