“Hope is more verb than noun. Become hope, and take action.” – Anna Lappé
Hope and action are two words that truly embody the spirit of Natural Products Expo West, the annual event that has spurred both dramatic and lasting change in the CPG category globally. Now in its 38th year, the event drew more than 85,000 attendees to the Anaheim Convention Center March 7th-11th – including more that 3,500 exhibiting companies. Increasingly, Expo West has become a convergence point for the entire supply chain – from producers and regulators to investors, manufacturers, distributors and retailers. But it’s consumers that truly wield the power.
Conscious consumers – those who consider the social, environmental, ecological and political impact of their purchases – have become increasingly influential over the past decade, simultaneously building up and killing off scores of brands with their buying power. 1 Natural product sales have doubled in that time – from $100B to $200B – while the top CPG companies have lost nearly $20B in market share. 2 It’s no coincidence that as big brands shrank, smaller natural ones grew – as conscious consumers started looking for, and then increasingly demanding, better products to put in and on their bodies.
When you think about it, the original conscious consumer was the natural product founder. The leaders of almost every brand at Expo West will admit that they reluctantly embarked on their journey into food entrepreneurship as dissatisfied customers. Their personal reasons for rejecting big food led them to innovate what didn’t commercially exist at the time (meat bars, almond butter, cold brew coffee… and on, and on) – for themselves or their family members first, but ultimately for the benefit of many others. Even with the odds against them, this groundswell of brave souls slowly attracted more and more like-minded buyers to their brands – and encouraged thousands of other entrepreneurs to take action as well.
Fast forward a few years, and the food system we once knew has fundamentally and permanently changed. Nearly every Big CPG strategic has squarely placed their bets on natural products for future growth, either through innovation or acquisition. With 74% of growth in U.S. food and beverage spread out across 20,000+ small companies, 3 the volume and value of investment activity has subsequently skyrocketed. In the U.S. alone, food and beverage M&A saw a 5-year deal count high of 195 transactions worth a total of $50.8B in 2017. 4
And the upside potential of natural food is encouraging investors to place their bets earlier and earlier – which is driving transaction multiples to an all-time high. 5 For evidence, look no further than the first natural food unicorn of 2018, Amplify Snack Brands, which recently sold to The Hershey Company in a deal valued at $1.6B – a whopping 14.8x multiple of 2017 EBITDA. Pretty impressive for a company that only started in 2014.
So what do today’s conscious consumers want – and what’s next? Expo West always offers the best view into current and future food trends. Here are three we observed on the show floor:
#1: GUILTLESS INDULGENCE
Did you roll your eyes when Frito-Lay launched their Simply snack line last year, which includes USDA Organic certified Doritos and Cheetos? Regardless of the optics, Pepsico and other strategics are simply following the money trail. While half of consumers report eating more better-for-you foods than a year ago, 6 even the most conscious consumers still have their vices – but naturally, they feel better indulging when there’s a great-tasting option that doesn’t compromise their values.
Junk food upgrades we enjoyed at the show include Peatos, an update to the crunchy (rhyming) cheese snack that swaps out corn for of-the-moment ingredient pulses for added protein and fiber; Whisps, a delightfully airy take on a Cheez-It that’s made from 100% real cheese, with 10g of protein per serving; and SPOKES, wheel-shaped, air-puffed potato snacks that satisfy the urge for chips at only 110 calories per 1 oz. serving (I personally could put down an entire bag without guilt). Other craveable trade-ups we tried: Siete grain-free chips (made from cassava flour and avocado oil), Nush snack cakes (Keto-friendly with 3g net carbs and no added sugar), Sweet Earth frozen vegan pizza, and Jeni’s new Frosé flavor (a 2-for-1 indulgence that scratches the wine and ice cream itch simultaneously).
On the sweeter side, we encountered an impressive array of organic candy. Standouts were Alter Eco’s dark chocolate coconut clusters, an addictively crispy treat that’s also Fair Trade and Non-GMO certified; Chuao’s Moon Bark, an adventure-worthy bar of dark chocolate studded with dried fruit, quinoa, chia and pumpkin seeds; Torie & Howard’s individually-wrapped hard candies, in sophisticated flavors like grapefruit and tupelo honey; Yum Earth’s organic strawberry licorice (one bite ruins Twizzlers forever); and Wholesome, bringing you better-tasting organic versions of classic confections like gummy bears, Swedish fish, jelly beans and lollipops.
With U.S. organic product sales at their highest point ever ($47B+),7 the seemingly final frontier of organics in the candy aisle is a smart strategy for confection companies to continue to appeal to conscious consumers – especially those with kids. Millennials are more aware of food health than previous generations – and this is particularly true now that they are starting families of their own. 8
#2: FAST FUNCTION
For most consumers, convenient food formats are essential – we’re busier than ever and often eating on-the-go. But conscious consumers reject the notion that quick must be synonymous with unhealthy. Not only do they want convenience food to be nutritious, they want it to be functional – imparting energy, focus or stamina via key nutrients like protein, fiber and good fats. As a result, more and more innovative quick meals and snacks have cropped up over the past few years – everything from vegan instant pho to probiotic shots and oatmeal in a pouch.
An interesting sub-segment of “fast food” we saw at Expo West were brands that had reformatted conventional drinks as food, and foods as drinks – all in the name of convenience and function. Edible coffee products were in abundance, with brands like Eat Your Coffee, Simple Squares and Thunderbird providing a simple solution for when you need a caffeine boost but don’t have time to enjoy your morning cup. In addition to edible coffee, we were re-introduced to drinkable chocolate with Cacoco’s antioxidant-rich beverage made from regenerative cacao.
There were also brands like Forager Project, who turns their juice waste pulp into delicious pressed vegetable chips; and Bonafide Provisions’ Drinkable Veggies, a union of gazpacho-style pureed vegetables and collagen-rich bone broth that delivers a nutrient-packed, Paleo-friendly lunch you can take just about anywhere. Honey, not a traditionally portable product, also shined in new formats – like Blume Honey Water’s refreshing beverage, or Wedderspoon’s raw Manuka Honey Plus shots in a 1 oz. to-go packet that promote immunity, digestive health and mental clarity.
#3: FOREVER YOUNG
In the same way that conscious consumers are still attracted to indulgent and convenient products, their sense of righteousness does not preclude them from vanity or the fear of aging less-than-gracefully. And isn’t that why we choose to eat healthfully – to both look and feel our best? A product that fulfills both needs is collagen.
One of the hottest supplement trends at Expo West, collagen showed up in a variety of product formats – most popularly in bone broths like Kettle & Fire, but also in tasty soft chews from Neocell, nut and seed bars from Primal Kitchen, and a unique collagen sandwich wrap from Cali’Flour Foods. The rising popularity of high-protein diets has fueled investor interest in functional ingredients like collagen – with recent large financing rounds going to Ancient Nutrition, Vital Proteins and Bulletproof. While still a niche category in the larger realm of natural food, collagen is expected to grow by 30% this year – reaching an estimated $122MM in sales.9
So what is collagen, exactly? It’s the largest and most abundant protein in the human body. Collagen forms the connective tissue in skin, hair, nails, bones, and organs. Essentially, it’s the glue that holds the body together. After age 25, the body’s natural ability to produce collagen decreases – and can be affected by a host of conditions, or impacted by habits like smoking or consuming too much sugar. Enter collagen supplements, which have been lauded for their ability to smooth and hydrate skin, improve hair and nail condition, increase joint flexibility and strength, and aid in quicker recovery from exercise and injuries.
One important thing to note about collagen is that it is derived from animal byproducts – bones, skin, scales and connective tissues – similar to gelatin, which is collagen that has been cooked. And while not vegetarian or vegan-friendly, it does boast a high protein count (40% DV per serving of hydrolyzed collagen peptides) and a range of potential wellness benefits.
INCREASING CONSCIOUSNESS & INSPIRING ACTION
In my 4th year of attending Expo West, I felt more hopeful than ever that our food system is headed in the right direction. But as Anna Lappé reminded us in her keynote, we haven’t won just yet. Each natural food investment or acquisition is a signal of broadening consumer awareness and adoption, and the show always inspires with the launch of hundreds of innovative new products each spring. But for every natural product success story that led to a happy ending, there are hundreds of other fantastic tasting, incredibly nutritious and socially conscientious products that are still struggling to gain widespread adoption.
So what can you do to become a more conscious consumer, and elevate some of these new upstarts into the mainstream? For starters, shop your values. If a living wage for farmers is important to you, support Fair Trade certified products. If animal welfare strikes a chord, explore the wealth of brands that are sourcing humanely raised animals, or experiment with the many delicious plant-based snack and meal options available. Search out founders with stories that resonate, and support the ones that are authentically and transparently developing better products. And if you’re a parent, openly share these values with your kids at an early age – and feed them the best food you can possibly afford, as often as you can. It’s now our generation’s responsibility to nurture what the pioneers of the natural food movement built – and continue to push all players in the food system to expand their consciousness as well. Not only because it’s where the money is going – but because it’s the right thing to do.
9 out of 10 Americans agree that “healthy food is a necessity, not a privilege” 10. So let’s continue to hold food manufacturers, investors and retailers accountable, and raise the next generation of conscious consumers to use their voices to fight for good food – once and for all.
- Medium – Age of Awareness
- Nutrition Business Journal
- Nielsen – Breakthrough Innovation Report (2016)
- Food Engineering – Food and Beverage Mergers and Acquisitions Trends (2018)
- Stout – Food & Beverage Industry Update (Q3 2017)
- Mintel – Better For You Food and Drink Trends (2017)
- Organic Trade Association
- Forbes – Brands Connecting With Millennial Moms Capitalize On Healthy Food Trends (2015)
- Nutrition Business Journal
- Lake Research Partners