Will meatless meat, CBD and cold brew coffee help food retailers differentiate?

Discussion
Sources: Burke Brands LLC, Oh My Gosh Yum LLC, Freedom Foods LLC
Jul 02, 2019
Ron Margulis

While local, gluten-free and organic products still ruled the 2019 Summer Fancy Food Show in New York this week, plant-based protein alternatives and items with CBD added are coming on strong. Cold brew coffee, probiotics in the form of yogurt starters and bone broth are also making waves in the specialty food category.

The exhibit floor featured meatless meat in the form of sausage, jerky and even “meatballs.”  There was CBD-infused juice, baked goods and marzipan. And there were booths offering demos of vegetable-infused ice cream, maple water and sesame milk. These trends were heavy in the domestic U.S. booths and not so much in the international ones, which stick to the tried and tested (dried apricots from Turkey, maple syrup from Canada, cheese from France, cured hams from Italy, etc.).

The Specialty Food Association, which sponsors the Fancy Food Show, reported specialty food outperformed total retail food sales in 2018, up 10.3 percent versus 3.1 percent. Assortment expansion and increased availability of specialty foods through more channels is driving the segment’s growth. For instance, digital outlets, which currently represent less than three percent of sales, have grown 41 percent since 2016.

The SFA also revealed that the fastest growing categories in dollar sales are refrigerated plant-based meat alternatives, rice cakes, frozen plant-based meat alternatives, water and refrigerated RTD tea and coffee. The top selling specialty food categories haven’t changed that much, year over year, and include cheese, meat, poultry, seafood, snacks, coffee and baked goods.

Among the top take-aways from the SFA’s annual update is that reduced packaging and food waste are hot points and that the convenience store channel is an under-tapped market for specialty foods. Dave Donnan, recently retired from A.T. Kearney, confirmed that c-stores are moving rapidly into specialty foods, mentioning an operation in Chicago where data driven curation of its assortment includes a growing number of specialty products.

DISCUSSION QUESTIONS: Which of the new food trends is currently having the greatest impact on the retail shelf? Which current trend do you think will be most relevant in five years?

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"The long term strategy should be more like a marathon, instead of jumping on the hottest product trends."
"By far the hottest trend in the c-store industry is CBD products. Nothing comes close..."
"Retailers should not expect to differentiate around any of these emerging categories. Either they are important to consumers or they aren’t."

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15 Comments on "Will meatless meat, CBD and cold brew coffee help food retailers differentiate?"


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Neil Saunders
BrainTrust

CBD and meatless “meat” are two very hot trends. However, retailers will not find salvation in either. The former is becoming a very crowded market, into which everyone is piling. The latter is also extremely competitive and it also reduces sales of meat-based products, so some of the demand it has generated is not organic but merely transferred from another category. Jumping on the bandwagon of new food fads is helpful for grocers, but they need to innovate far more heavily to generate long-term success.

Joel Goldstein
BrainTrust

100%, however there have been few breakaway category leaders that are commanding market share like 5 Hour Energy did for the energy trend. Meatless meat is going to be the marathon here as more and more consumers shift over, such as almond milk vs cows milk.

Bob Amster
BrainTrust

Meatless meat just to be cool is almost as questionable as delivering groceries within 30 minutes of online ordering. It is — in this gentleman’s opinion — going from the ridiculous to the sublime. I give it a year.

Brandon Rael
BrainTrust

The hottest trending items, such as CBD, and meatless meat, along with new enhanced varieties of coffee will always drive interest and traffic to your stores. Diversification is the right strategy, yet, the customer experience, especially in the grocery segment, is all about getting the fundamentals right. This includes cleanliness, presentation, freshness, merchandising, pricing, customer service, and choice of both private label and branded merchandise.

Bottom line, innovation is far more significant than adding the latest and greatest product offering to your store. The long term strategy should be more like a marathon, instead of jumping on the hottest product trends.

Ryan Mathews
BrainTrust

First, let’s assume “greatest” is a relative judgement. In an absolute sense, i.e., total sales, it’s probably still organics, but among the trends that Ron is discussing, I’d look for cultured meat/plant based meat to start breaking through. And, of course, CBD everything will also be huge for a moment, at least until regulation and standards force tighter labeling and big CPG companies get fully engaged with the market. And, next year, we will all be flogging a new trend.

Doug Garnett
BrainTrust

Coffee trends have always been critical — just look at how beans replaced cans of ground coffee and now have to share the shelf with pods. The power of hot drip alternatives and, perhaps, cold brew seem to be showing in our neighborhood — where beans are showing new power with prime end-aisle locations.

Partly, I vote for coffee because CBD and meatless look to be fads … lots of hype right now but will prove quick to fade. Coffee changes have always had tremendous power at retail.

Why fads? One key study showing there’s no effect from just throwing CBD into a product and that biz is dying. And, having tried the meatless products, all I can say is they’re an alternative for those who are desperate to avoid meat. But they aren’t meat.

Ricardo Belmar
BrainTrust

Most of these are fads, but the true long-term trends are the ones that will change eating habits for the population at large. These types of trends don’t happen often and they don’t happen overnight either. Perhaps the gluten-free movement will have more staying power than meatless meats and CBD infused products for just that reason.

Richard J. George, Ph.D.
BrainTrust

I think all three (meatless meats, CBD, and cold brew coffee) are trends versus fads. Each will have the opportunity to develop new categories within food retail, something that is difficult to do in today’s environment. However, I do not see any of these providing long term differential advantage as most food retailers will cut in space for these products assuming they are trends not fads.

The real question for retailers is will each of these new categories increase overall store sales or simply cannibalize existing offerings? CBD should produce incremental sales and meatless meats may have some positive impact as non-red meat consumers try the new offerings. Cold brew coffee is more or less another flavor option.

Sterling Hawkins
BrainTrust

Attempting to differentiate with a few products is looking in the wrong direction. Many of these will just become more standard items on the majority of retail shelves. Consumers are looking for full experiences, with new products and services consistent with that experience. It’s around the full experience that retailers can innovate, differentiate and compete. Just look at the Best Buy turn around — did they have the latest products on the shelf? Sure. But that’s not why they started winning.

Steve Montgomery
BrainTrust

By far the hottest trend in the c-store industry is CBD products. Nothing comes close to the rapid profusion of products ranging from gummi bears to drinks. There are still many questions that need to be answered regarding the sales of these items but until they make therapeutic benefit claims, they are not subject to the FDA oversight. The FDA has held one public meeting and is likely to hold more. Until they determine what if any regulations they want to impose, CBD infused products will remain the hottest c-store trend.

Shep Hyken
BrainTrust

If the customers are asking for it (in mass), you have to listen. Specialty foods, trending product, etc. can help keep customers in the store. Retailers don’t want the customer to go to a second store to get what they need. While you can’t be all things to all people, you can decide what you need to be to the ones you want to do business with.

Craig Sundstrom
Guest

Five years versus a current fad: gee, which is really more important? CBD strikes me as a classic fad — a series of unsubstantiated (and IMHO untrue) claims, the resultant hype and a legal grey area at best do not make for a long-term marketing plan. Plant -based protein substitutes, OTOH, seem like the oft-heard “game changer” (Hate to use the cliché, but for once I think it might prove true). But of course they’ve been around for a long time, in one form or another, and never really gone anywhere … can that change? Only if they can stop being seen as “substitutes” (for chicken, beef or ####, NOT meat or ####).

John Karolefski
BrainTrust

Plant-based food alternatives have staying power and the potential to grow in sales. My local store, Heinen’s in a Cleveland suburb, has installed two “plant-based” sections in the refrigerated and frozen cases. I suspect other grocers around the country will be doing the same, if they have not done so already.

James Tenser
BrainTrust

They desperately need some sexier nomenclature, but “plant-based protein alternatives” are likely to have some staying power. There’s still a lot of product innovation needed in this area, but “bleeding burgers” stand as evidence that they are on their way to become a supermarket staple.

CBD-infused products are going mainstream in a hurry and will soon be as pervasive as any other OTC supplement or skin creme ingredient. Look for their inclusion in sunscreen products soon (just a hunch).

Cold coffee has an inside track on sugary and diet colas. I’m not impressed by “cold brew” as an attribute, however. I’ve been saving leftover drip coffee in a glass pitcher in my fridge for decades. Maybe I should have been bottling it in expensive plastic carafes instead….

Retailers should not expect to differentiate around any of these emerging categories. Either they are important to consumers or they aren’t. Give ’em what they want if you want to compete.

Dan Frechtling
BrainTrust

I agree with Steve that CBD stands above the rest. By 2024, market size is estimated to range from $5–$20 billion globally. It was called “the most disruptive force in the world today” at an investor conference in London this month.

CBD has become increasingly popular to deal with anxiety, insomnia, inflammation, pain, seizures, and other ailments. It has been added to shampoos, dog treats, coffee—even hamburgers. CBD is also a sought-after dietary supplement ingredient. The number of products carrying CBD as an ingredient and the affinity of e-commerce makes CBD the most significant of the three trends.

Unfortunately, CBD (often confused with THC) faces “chronic” uncertainty due to opaque FDA rules and a web of federal and state rule frameworks. Once the FDA puts a stake in the ground, expect products and retailers to proliferate.

wpDiscuz
Braintrust
"The long term strategy should be more like a marathon, instead of jumping on the hottest product trends."
"By far the hottest trend in the c-store industry is CBD products. Nothing comes close..."
"Retailers should not expect to differentiate around any of these emerging categories. Either they are important to consumers or they aren’t."

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