The paradox of choice
Not long ago, Nielsen released an eye-opening report on the television watching habits of Americans. Despite the fact that the average number of TV channels received by US households increased dramatically from 128 to 189 within five years (a 48 percent jump), the average number of channels actually watched remained flat at just 17. More channels did not equate to viewing a wider selection.
The same can be said about consumer eating habits. While Americans are moving in all sorts of different directions, as people become increasingly more selective about the foods they will and won’t eat, the overall number of food and beverage occasions consumed by the average consumer is flat, according to a new report by The NPD Group.
“This means that food manufacturers and foodservice operators are increasingly competing for a larger share of a smaller food and beverage pie,” says David Portalatin, vice president and food industry analyst at NPD. “This doesn’t mean that main meals, ingredients, condiments and side dishes are going away. It just requires food manufacturers to reconsider the role of these items in the occasion and how these items can stay relevant to consumers’ new eating patterns.”
Consumers, for one, are relying more on “healthy” portable snack foods to be a part of their breakfast, lunch, and dinners. Dinner has seen the greatest contraction in dishes and ingredients, according to NPD data, while breakfast has gained a bit of activity with the popularity of eggs.
Another equally menacing fact for food manufacturers and food retailers is consumers’ increasing demand for purity in their foods and beverages. Consumers are avoiding adulterated elements and looking for natural and fresh foods and beverages, as well as avoiding some of the processed foods on which many major food companies base their business.
Fresh, limited processing and natural are desired characteristics particularly among millennials. Given millennials' integration of fresh and natural foods into a healthy lifestyle and the fact that NPD’s 30-plus years of eating pattern trend shows that consumption of fresh foods increases with age, the longer term outlook for fresh foods is strong based on a generational study NPD is currently conducting.
Generational and multicultural attitudes are also influencing US consumer consumption patterns and the business of food. Millennials are more diverse than the generations that preceded them with 44 percent being part of a minority race or ethnic group. Even more diverse are those Americans younger than 5 years old with 50 percent being part of a minority race or ethnic group.
By 2044, the US Census Bureau projects that more than half of all Americans will belong to a minority group.
“The bottom line is that major food companies and retailers are faced with meeting changing consumer needs with processes and infrastructure that were built for the mass-produced foods consumers craved a decade ago,” says Portalatin. “It’s now a battle for share of stomach but through acquisitions and American ingenuity, food companies have made progress over the past few years in finding white space, growth occasions, and new products.”
Consumers are seeking food adventures for their taste buds, a trend that is here to stay, according to a report by Anderson Partners, a food ingredient marketing firm.
According to Packaged Facts, food preparations that feature bold, spicy and ethnic flavors are gaining popularity. When it comes to bold, it’s not just about the exotic Asian flavors—citrus has joined the bold bandwagon along with other tangy flavors like tomatillo and cilantro. In addition to foods with bold flavors, consumers are showing interest in unexpected flavor pairings like vanilla and cardamom, savory and spicy flavors with desserts and confectionery foods.
According to Mintel, alternatives to meat and dairy will be a top consumer priority in 2016. Mintel also predicts consumer demands for less processed foods and drinks will continue to drive food manufacturers to remove artificial ingredients from their products. With consumers having a better understanding of how diets can affect their appearance and a rising interest in fitness and becoming more active, food manufacturers will be tasked with developing new dishes that have added protein and other nutrients that are vital to building muscle or even muscle repair after exercise.
The latest report from consumer trends experts The Hartman Group, “Weight Management & Healthy Living 2015,” found there is greater acceptance of being overweight as a society than in the 1950s, when modern dieting culture began. Since most American adults are overweight today (63 percent), being heavy is now the social norm and much less stigmatized than in the past. The new enemy for consumers is obesity, not simply being overweight.
“Over the past ten years, overweight and obese Americans have come to accept their weight status as defined by the CDC,” says Laurie Demeritt, CEO of The Hartman Group. “This is a huge shift in self-awareness and in willingness to accept stigmatized terms like obese as personal labels. When individuals accept that they have a problem like obesity, it forms the platform for actual behavioral change.”
Over half of US consumers (56 percent) are trying to lose weight, and the Weight Management & Healthy Living report found that consumers continue to see themselves as primarily responsible for their own weight and are more holistic in approaches to managing weight. More than eight in ten consumers (85 percent) say they are solely responsible for their own weight, and nearly nine in 10 consumers agree with the statement, “I am personally responsible for choosing the right foods, not manufacturers” (an increase of five percentage points from 2010), according to Hartman Group.
According to Innova Market Insights, the clean eating trend is the overarching theme for 2016. This trend is one that has inspired a back-to-basics approach in product development. Innova ranked “organic growth for clear label” as the number one trend for 2016—clear label referring to a greater transparency and focus on simpler products with fewer artificial ingredients and additives. This trend aligns with what Innova labeled as the number four trend, “processing the natural way.” With western consumers increasingly aware of the health benefits of fermented foods, there are newer technologies that may be seen as an alternative to using preservatives in foods.