9 food and beverage experts identify the industry’s biggest challenges in 2017

With  2016 now in the past, food and beverage manufacturers can look to the challenges and opportunities that the new year brings. Considering impending legislation, FSMA rule rollouts and a new presidential administration all coming in 2017, the entire food and beverage supply chain could see major changes to their products and operations.

Food Dive spoke with a number of experts about the food and beverage industry’s biggest challenges in 2017. Those challenges varied widely, from differentiation in an oversaturated marketplace to continuing to adhere to consumers’ constantly changing demands. Here’s what they had to say. 

Reducing sugar without sacrificing flavor and maintaining clean labels

“Sugar reduction across product categories is going to be top of mind for product developers in 2017. Due to the FDA changes to the nutrition facts panel, which includes a line that calls out added sugar, companies will be looking to retain the same product quality, in terms of mouthfeel, flavor profile and sweetness, but with less sugar. Companies will also be striving to develop clean label products, and will prioritize the use of ingredients that are perceived as more natural, in conjunction with reducing sugar in their products. I know sugar reduction is currently a major emphasis on the products that our R&D team is working on at Imbibe, especially in terms of children’s drinks, carbonated soft drinks, protein and dairy-based drinks, and our customers also expect cleaner labels for these products.”

— Ilana Orlofsky, marketing coordinator at Imbibe

Differentiation in an oversaturated marketplace

“The biggest challenge food manufacturers will face in 2017 will be competitive differentiation. So much innovation has occurred over the past 10 years that multiple companies represent the proliferation of emerging brands across categories, so differentiating from one another will be difficult.”

— Ben Rudman, director at SDR Ventures

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“Improved economies, both in the United States and in other major consumer markets, have led to the development of many, many new food and beverage producers. As a consequence, consumers will face a glut of many new products, services and consuming opportunities, all vying for their attention and dollars. The problem is that decades of peer-reviewed social science studies demonstrate that consumers inundated with too many options become overwhelmed and actually wind up consuming less. Industry observers call this proliferation of products ‘SKUmagedon.’ Overcoming all the new competition and winning traction with consumers will be a major challenge of 2017 for food and beverage producers.”

— Richard Blau, chair of Alcohol Beverage & Food Law Department at Gray Robinson

“Trends such as better-for-you and organic/natural are no longer nascent newfangled concepts and the playing field has become littered with competitors. Given how competitive shelf space is at the major retailers and the fact that it is now more difficult for smaller market entrants to catch their larger competitors off guard in these categories, it is becoming increasingly more challenging for these upstarts to gain a foothold.”

— Anthony Valentino, deputy editor at Mergermarket

Integrating convenience into products across the board

“One notable trend that is really making some of the larger food manufacturers think is the rise of snacking as people are shifting away from the traditional three meals a day and eating more on-the-go … in more frequent increments, but smaller portions. This is not necessarily a new trend, however, one of the more interesting challenges surrounding this movement is that the convenience channel has become surprisingly relevant once again, after falling out of favor, and manufacturers are scrambling a bit to figure out ways to reinvigorate or craft offerings that can serve this channel or reestablish a presence that had perhaps been overlooked as c-stores became less frequent hotspots for food purchases in particular.”

— Anthony Valentino, deputy editor at Mergermarket

Adhering to changing consumer demands

“In the marketplace, rising consumer demand for products that are grown sustainably, minimally processed, ethically sourced and made with natural ingredients is creating instability within the global food and agricultural supply chain. Food companies and their trading partners must create a new supply chain framework that allows them to serve the needs of consumers without sacrificing price, product availability, convenience and efficiency.”

— Sean McBride, founder and principal at DSM Strategic Communications

“Consumers continue to become more informed and are have higher expectations than ever before. From increasing desire for clean label products to demands for more environmentally responsible packaging, food and beverage manufacturers will need to pay close attention to what their customers want to stay ahead.”

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— Larine Urbina, communications manager at Tetra Pak US & Canada

“Consumers are seeking foods that align with their values and they aren’t willing to compromise on taste, price or convenience. The challenge for manufacturers moving forward will be to create healthy, eco-friendly and humanely produced foods that deliver on taste and are cost-competitive. Luckily, the plant-based foods that meet these criteria are also trending with consumers, and there are enormous opportunities to innovate with new ingredients and products to capture consumers’ palates while connecting brands to a greater mission.”

— Bruce Friedrich, executive director of The Good Food Institute

Adapting to recent and impending policy changes

“In the public policy arena, the food industry will continue its ideological tug-of-war with policymakers who believe discriminatory taxes, bans, restrictions and mandatory labeling schemes — rather than consumer-driven marketplace changes — are the pathway to positive public health outcomes. Globally, food companies will be challenged by the proliferation of the World Health Organization’s food and nutrition policy recommendations for member states.”

— Sean McBride, DSM Strategic Communications

Food safety, FSMA regulations and increased recalls

“It’s clear that one of the biggest challenges in 2017 will be how we move forward with the harmonization of food safety standards. Today, we continue to see a proliferation of both public and private standards, with governments increasingly reinforcing their own national guidelines. It’s essential that the private sector and individual governments come together to look at how we can develop a harmonized approach and move away from creating standards and guidelines in silos. We must work together if we are to benefit from a market transformation and ensure confidence in the delivery of safe food to consumers worldwide.”

— Véronique Discours-Buhot, director of Global Food Safety Initiative

“In 2017, food companies must tighten supply chain and safety management or suffer severe consequences. Food and beverage recalls will almost certainly increase, as the FDA, USDA and Centers for Disease Control respond to pressures from consumers – who are increasingly active online – members of Congress and the news media. That means companies must invest in meticulous record-keeping of plant maintenance and safety measures, along with quality checks and full transparency with all suppliers, especially those overseas.

“Recalls, even successful ones, have become extremely costly. They can put companies out of business in weeks because of adverse publicity, government fines, production downtime and class-action lawsuits. Preparing for an inevitable recall is now part of a food company’s ongoing business cost.”

— Gene Grabowski, partner at kglobal

Source: FoodDIVE