Trends in New Product Launches in the Food Industry

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TRENDS IN NEW PRODUCT LAUNCHES
IN THE FOOD INDUSTRY



Report prepared for: Natur- og Landbrugskomissionen
Report prepared by: Klaus G. Grunert, Ana Alina Tudoran,
Polymeros Chrysochou & Theodosia Migkou
MAPP Centre for Research on Customer Relations in the
Food Sector, Aarhus University

November 2012


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Background
The aim of this report is to provide some insights into major trends that are occurring in the development,
launch and demand for new food products, with special emphasis on markets that are of importance for
the Danish food industry. The empirical basis for this report is data from the Mintels Global New Product
Database (www.gnpd.com). The analysis has been carried out across five continents (Europe, North
America, South America, Asia, and Middle East), twenty-two countries, eight product categories (Dairy,
Bakery, Chocolate Confectionery, Fruits and Vegetables, Meals and Meal Centers, Processed Fish Meat
and Egg Products, Snacks, Sugar and Gum Confectionery), and for a period of six years (2006-2011). The
results from this analysis are provided in the accompanying volume of tables and graphs. In the present
report, we will take the results from this analysis and interpret them in the light of major consumer trends
in the food area, drawing on recent work in the EU FP7 project RECAPT.

Major trends
We will interpret the results in terms of four major trends: Health, convenience, authenticity, and
sustainability. These four trends are clearly visible in the data analysed, and they are in congruence with
other indicators that have been used to analyse consumer trends in the food area.

Health
The data show that many new products are still launched with a health positioning, including products
where less desirable nutrients (fat, sugar) have been reduced or replaced, and including products that have
been developed with specific health benefits in mind, based on bioactive ingredients (functional foods).
The data also show, though, that in some product categories and regions this type of product launch is
declining.
The consumers awareness of links between food and health has been one of the most important social
progresses in the recent years. A vast scientific literature states that consumers nowadays are more
interested in healthy food products to prevent diseases and maintain healthy living (Krutulyte, 2010).
Consumers choose healthy products that satisfy their underlying values, such as living a long and healthy
life. Health awareness continues to rise with the increasing availability of health information, going hand
in hand with the ageing of populations and increased risk for lifestyle diseases (Kearney, 2010).
The availability of health information (e.g. based on the product labels) and the interactive health
communication (e.g. through internet) is perhaps the most important driver of consumer health awareness.
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Increasingly, consumers engage in health information seeking during food purchasing (Hansen et al.,
2010) and via the Internet (Cline and Haynes, 2001). Some findings suggest, however, that increased
product-specific health information seeking occurs only if consumers are also involved in the specific
product category (Hansen et al., 2010).
The increased focus on health has also been related to the demographic changes in society (Labrecque &
Charlebois, 2011). An important demographical change is the shift in the age profile of consumers
towards a relatively large amount of elderly people compared to young people (Labrecque & Charlebois,
2011; Linneman et al., 2006). Generally, elderly consumers are more concerned about health, wish for a
longer life and are therefore more motivated to buy healthy products (Bech-Larsen & Scholderer, 2007;
Shiu et al., 2004).
The fact that the number of product launches with a health positioning is declining, especially those where
specific ingredients have been reduced, replaced, or added, should not be interpreted as a sign of
decreasing health awareness of consumers. Instead, it should be interpreted in the light of the other trends
mentioned in this report, especially the trend regarding authenticity. Highly engineered food products with
a health positioning, like functional foods, have not been equally successful in all parts of the world, and
their growth has been hampered both by legal and formal issues regarding the approval of health claims
(especially in Europe via the EFSA system), and by consumer scepticism regarding highly engineered
food products, especially in Europe. As many consumers seem to take degree of processing as a heuristic
for healthfulness of a food product, we can in the future expect consumer demand for healthy food
products to be aimed to a higher extent at products that are viewed as natural, leading to congruence with
the authenticity trend.

Convenience
Convenience is one attribute of a food product for which demand has been increasing for quite some time,
(Buckley et al., 2005), even though the strength of the trend has differed between different countries. The
data analysed show that convenience is more important in some product categories than others: product
launches with a convenience positioning have been especially prominent in the categories bakery, fruit
and vegetables, and processed fish, meat and egg products.
Some researchers have found that convenience orientation is just as important as attributes like taste,
health and price in determining a consumers preference towards food-related behaviours (Candel,
2001).There are different meanings of the word convenience referring to time utilisation, accessibility,
portability, appropriateness, handiness, and avoidance of unpleasantness. Convenience in the context of
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food can be defined as time and effort (mental and physical) spent buying, storing, preparing and
consuming food. Convenience foods are defined as any fully or partially prepared food in which
significant preparation time, culinary skills, or energy inputs have been transferred from the homemakers
kitchen to the food processor and distributor (Buckley et al., 2005).
Lifestyle trends such as the growth in the number of single-person households have resulted in an ever-
increasing need for convenience. More facilitators discussed in a literature review (Buckley et al., 2005)
are: ageing population (IGD, Business Publications, 1998), changing household structure (Khan, 2000),
female participation in the labour force (Traill, 1997), longer working hours (Traill, 1997), consumer
prosperity (Bonke, 1992), move towards healthy eating (Mintel, 2000), desire for new experiences
(Mintel, 2000) and individualism (IGD, 1998). Furthermore, declining cooking skills (Furey et al., 2000),
breakdown of traditional mealtimes (IGD, 1998), and the desire to expend less time and effort on food-
related activities, e.g., shopping (Swoboda and Morschett, 2001) and meal preparation and clearing up
(IGD, 1998) also impact on the desire for convenience foods.
Convenience has been discussed as involving trade-offs between convenience on the one hand and food
quality and healthfulness on the other hand. However, food manufacturers are increasingly investing into
food technologies integrating health and convenience (Pool, 2009).

Sustainability
The data indicated that launches of food products positioned in terms sustainability are increasing,
although the growth is still sporadic and there are considerable differences between product categories and
countries. Food and sustainability are increasingly being discussed together, and calls for sustainable food
production may lead to increased consumer awareness and an increase of food product launched with a
sustainability positioning. Already, sustainability are appearing on food products (e.g., carbon foot print,
rainforest alliance).
According to Krystallis et al. (2011), the indicators that sustainability and responsibility are important
trends include: (1) The growing sales of organic and/or sustainable food products in many Western
countries; (2) Efforts to develop alternative channels of distribution for locally and regionally produced
food products; (3) The growth of grassroot organisations and movements such as Slow Food; (4) Major
retailers try to position themselves as being responsible (examples include Bilka, Coop Danmark, Coop
Schweiz, Irma, Retail Forum for Sustainability, Sainsburys, Tesco, Whole Foods); (5) The publication of
numerous books and articles criticizing the current food regime and consumption practices (e.g., Eating
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Animals by Jonathan Safran Foer, Food Wars by Tim Lang and Michael Heasman, Terra Madre by Carlo
Petrini, The Carnivores Dilemma by Michael Pollan, Fast Food Nation by Eric Schlosser, The Global
Food Economy by Tony Weis).
The success of organic production is less straightforward, with some decrease as a consequence of the
economic crisis in some markets, especially the UK market (The Independent, 2009), while its market
share continues to grow in other markets (Radio Netherlands Worldwide, 2010). On the other hand, across
the Western population, no clear reduction in meat consumption appears to occur (Daniel, Cross,
Koebnick, & Sinha, 2011; Narrod, Tiongco, & Scott, 2011; Nonhebel & Kastner, 2011). Nevertheless,
vegetarianism is growing (Leahy, Lyons, & Tol, 2011) motivated, at least in part by sustainability
motivations (Hoek et al., 2011; Ruby). There is a trend towards flexitarians, consumers who consciously
choose a diet with meatless meals or days in the week, and who tend to be, like vegetarians, more highly
educated (Forestell, Spaeth, & Kane, 2012), although the flexitarian trend is more attributed to a health
than a sustainability motivation (Blatner, 2008).
The main driver behind the sustainability trend is a growing awareness that current consumption and
production practices are not sustainable in the face of a growing global population. This manifests itself
in: (1) Changing consumer demands; (2) Voluntary codes/guidelines for business practices; (3) Stricter
legislation and regulations incorporating both health and sustainability (4). More risk-benefit analyses:
What are the total costs and benefits for society and consumers?

Authenticity
The data show that products positioned as natural constitute the most dominant trend in product launches
in recent years. Together with product launches based on claims of absence of additives, organic
production and/or local production, this indicates that authenticity is a major trends.
Authenticity refers to truthful, honest, sincere, un-mediated and un-alienated. In the world of
consumption, authenticity stands for everything that is natural, traditional or local. Emphasis on authentic,
local and pure ingredients is increasingly seen as a sign of quality (Skuras & Dimara, 2004; Innova, 2011).
The quest for authenticity manifests itself in several ways. Recent decades have seen a succession of
these, including the rise of organic agriculture and other extensive production systems, the slow food
movement and its various regional duplications, the microbrewery craze at the beginning of the new
millennium, various waves of comfort foods designed to bring back our childhood memories, and new
types of certifications such as protected designations of origin (PDOs) and protected geographical
indications (PGAs).
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In product positioning, authenticity operates as a substitute for things that actually matter: health,
ecological impact, responsibility for others. The logic is that of a halo effect, capitalising on the
assumption that consumers will associate everything that is great and good with a product that is claimed
to be natural, traditional or local. What is natural must also be healthy, what is familiar must be better than
what is new, and the food we make must be better than the food others make. Much empirical research
supports this assumption. Typically, consumers process product information heuristically and use mental
shortcuts that are sensitive to such halo effects.

Conclusion
We have identified health, convenience, sustainability and authenticity as major trends in the food
industry. This conclusion was based on an analysis of data on new product launches and is in line with
other sources of trend information in the food area.
We should note that health, sustainability and authenticity have a common core in that these are all
credence attributes: characteristics of the food product or of the process leading to the food product that
need to be communicated to the consumer in a credible way. Without credible communication, these
characteristics have no effect on the market. We can therefore observe a megatrend in that food products
become more information intensive, and that information flows need to follow the flow of physical
products. This will have implications for governance of food value chains and for marketing strategies
especially of export-oriented countries like Denmark.
We should also note that these product characteristics do not substitute the traditional ones, namely good
taste and appearance. Consumers are increasingly unwilling to make compromises and, for example,
compromise taste for health or health for convenience, with corresponding higher demands to product
development in the food industry.