WHAT WAS DISCOVERED

While some trends from years past, such as additives, organic, natural and super foods like pomegranate, have become mainstream, new trends are starting to emerge.

Organics are everywhere these days with products spotted in everything from milk, ice cream, energy drinks, eggs, beef and even pet food (pets are after all no longer just cats and dogs, but children for many people, so they eat the same as the rest of the household).

Pomegranate and other super foods like acai were also seen in many products (even a V8 product), but a new emerging super food might be aloe. We found it used as the core ingredient in several health drinks. Both were from Asian-based companies and were promoted as helping digestion, among other qualities. One was mixed with wheat grass for added energy. Both products were quite tasty and will likely catch on in the U.S., first with the health and wellness crowd and aging Boomers, before mainstreaming down the road.

We’ve seen flavors, vitamins and other nutrients added to water for several years now, to add flavor and more of a soda/energy drink appeal without all the sugars and caffeine. Milk may be the next frontier for these types of additives. We came across a display for Muscle Milk, which promotes itself as a nutritional shake that is much more than the typical energy drink. Muscle Milk is loaded with protein, carbs and energy for today’s active lifestyle. For those who like the product qualities, but don’t want a milkshake, Muscle Milk also has a line of protein bars.

MAY 15, 2008

WHAT WE DID On May 5, representatives from Luckie & Company attended the May 2008 Food Marketing Institute (FMI) show in Las Vegas to explore the latest trends in food and beverage.

We spent six hours walking the massive convention floor viewing displays, sampling products and asking a lot of questions.

What we discovered is summarized in this Luckie Extra newsletter. Please enjoy.

BROADER TRENDS TO WATCH FOR 2008

While there were a lot of new and interesting products to taste and see, we quickly discovered some macro themes running through the show. Some broader trends to keep an eye on for the coming year are: the invasion of Disney-branded foods, growing mass food marketer sophistication (taste and package design), rapidly growing brand extensions and something we are calling FoodPlus.

DISNEY FOODS

Disney has very quickly (and quietly) assembled a very impressive list of branded everyday food products from a variety of partners. Some have already been soft launched, but many are on tap for a back-to-school push. All characters and Disney franchises have been tapped for this effort from lovable originals such as Mickey and Cinderella to the latest blockbusters like Hannah Montana and High School Musical. While many partners have been tapped for this project, most of the packaging and design elements have a similar look and feel, leading to a unified food brand appearance.

Nearly all these food items appear to fit into a healthy eating pattern. Even the sweets/treats are in portion-control packaging, with many being at or under 100 calories. A next-generation Mickey lunchable (called a Foodle) offers trail mix, grapes and apple slices as a potentially healthy alternative to existing Kraft Lunchable products. There are many fresh and packaged fruit products in addition to milk and juices.

Other products on the Disney list include: eggs, vegetables, raisins, honey, salads, graham crackers, pasta, color-a-cookie, dried fruit (Hannah Montana Apple Crisps), granola bars, crispy treats, nutrition bars, cereal bars and snack cakes. The snack cakes are currently packaged in two flavors (chocolate and vanilla) and will come in three varieties based off of the Cinderella and Cars franchises. These snack cakes will come individually wrapped six to a box and be less than 100 calories each.

GROWING MASS FOOD MARKETER SOPHISTICATION

While we’ve seen more sophisticated ingredients and package design from specialty food marketers for years, we might finally be seeing the same from the mass marketers, possibly to engage the more seasoned palates of Foodies and aging Boomers. Lean Cuisine is introducing a line of entrees that focus on flatbread wraps (which we are also seeing Fast Food and Fast Casual chains embrace). DiGiorno is introducing a line of pizzas based on focaccia bread versus their traditional pizza crust. Miller is introducing an upscale line extension for Miller Lite that has three varieties (Wheat, Blonde Ale and Amber) and will be sold as the Miller Lite Brewer’s Collection. While there were many examples of this growing mass sophistication, these should give you some insight into how these three brands are approaching the more sophisticated consumer palate.

BRAND EXTENSIONS

Brand extensions were everywhere as established brands seemed to collectively realize the equity they have locked up in their existing products and start discovering natural avenues to expand. While there were many examples, some of the more recognizable brands included: Campbell’s V8 soups, Entenmanns’s Coffee, Starbucks upscale chocolate collection, Kraft Macaroni and Cheese Snack Crackers and Bagelfuls, Fig Newton Apple Crisps, and Oreo and Chips Ahoy Milk Straws. As a matter of fact, the Oreo brand may have been the winner for most brand extensions as in addition to the Oreo Milk Straws, we saw quite a few other new Oreo products including Oreo Cakesters and Oreo Fudgees, to name a few.

FOODPLUS

In today’s world, consumers are expecting food to bring more to the table than just simple sustenance.Consumers want food to do more, to be more, to work more – the same expectations that they have of themselves and other products and services that they purchase.

Our trip through the FMI exhibits revealed numerous examples of this idea of FoodPlus – the idea that food has to be more than just food. Here are four areas we saw the FoodPlus trend expressed:

FoodPlus Health and Wellness

In this area, food is infused with, or created from, ingredients that are intended to improve our health and wellness. This is more than diet foods – in this area, we have organic products, beverages made from aloe or pomegranate and milk with vitamins. Kraft LiveActive granola bars feature active yogurt cultures to improve digestive help. The general idea in this space is that eating these products does two things – solves your hunger while improving your heath.

FoodPlus Green

In this area, your choice in food not only feeds your hunger, but also helps the environment. Contessa brand frozen foods had a major display at the show, with the principal message that Contessa was the most environmentally responsible frozen food brand in the grocery store – focusing on its green production processes, how it sources its seafood and its use of recycled materials in packaging. Coffee roasters featured prominently in their materials that they sourced their beans through sustainable sources and business practices, while others talked their initiatives for minimizing their carbon footprint. For those consumers who are trying to be more green in their purchasing habits – FoodPlus Green products meet their expectations that their food did more than feed them, but that they were good for the planet.

FoodPlus Entertainment

In this space, food is required to be entertaining as well as filling. This was expressed primarily through licensing arrangements. For example, the extensive number of Disney-branded products are for consumers who want more than just basic food items, but like the value and excitement added by the addition of packaging featuring Cinderella or Mickey Mouse. There were, for instance, Mickey Mouse-branded breakfast sandwiches that consisted of Mickey Mouse-shaped pancakes with a Mickey Mouse-shaped sausage patty.

FoodPlus The Story

In this space, the food is interesting because of the story attached to it. In many cases, the story is about the founder. For instance, Betty Lou’s Snack Cakes out of Oregon makes healthy and organic snacks – but the real story is about the founder of the company, and how she developed her business without the benefit of a business degree. Another example is the Soup Man’s Soups – better known as the Soup Nazi from the Seinfeld show, whose products give consumers a story to add to the food. Other stories could be about where the food was grown, or the difficult production process, or the exceptional quality control – but there are consumers to whom the story behind the food is an essential and necessary part of the satisfaction provided.