Fancy Foods, Millennials and Fiber...Making Dairy Relevant

Photo source: Baskin-Robbins

Happy 4th of July holiday week!

I’ve been exploring New York City’s food scene these few days before the Summer Fancy Food Show commences on Saturday, July 30. Lots of great finds, fodder for future blogs.

I ate my way through Chelsea, SoHo and the Lower East Side on Thursday (almost 20,000 steps), and today will explore Brooklyn. Three key findings:

1)    Fresh, preferably local dairy is alive and thriving, and in all forms: cheese, cream, milk, ice cream and yogurt. When you premiumize it and make it specialty, it sells. This is true at retail and foodservice.

2)    Dessert is hot, when it’s fresh. Honestly, I’m a bit shocked by the number of bakeries and ice cream shops, carts and trucks. Research from the Specialty Food Association’s 2018 State of the Industry report shows that this is because of Millennials. Compared to other generations, Millennials buy a lot of ice cream and frozen desserts, as well as brownies, cakes, cookies and pies. Calories are ignored. It’s all about the deliciousness and the freshness.

3)    Better-for-you nutrition profiles make a difference at retail. Stores such as Whole Foods Market, Trader Joes and local independents are mealtime destinations. Once again, fresh and local attributes are key, along with comparative callouts such as more protein, less sugar and added fiber.

Here are additional highlights from the Specialty Food Association’s 2018 State of the Industry:

• Sixty-five percent of consumers purchase specialty foods, leading the industry to $140.3 billion in retail and foodservice sales in 2017—an 11% increase over 2015.
• Foodservice accounts for 21.6% of sales.
• Specialty food and beverage sales as a share of total market reached 15.8%. Plant-based categories dominate the top four spots and are expected to grow over the next five years.
• Retail dollar sales for specialty foods grew 12.9%, versus 1.4% growth for all food.
  Foodservice and online are burgeoning bright spots for specialty food Sales. Each grew more than brick-and-mortar retail sales from 2015 to 2017. There continues to be growth potential in the convenience, drug and vending channels.
• The iGeneration (18-23) has arrived and has a greater awareness of specialty food than its predecessors. This suggests continued growth. 

Source: Specialty Food Association’s 2018 State of the Industry

Specialty foods are defined as foods or beverages of the highest grade, style and/or quality in their respective categories. Their specialty nature derives from a combination of some or all of the following qualities: uniqueness, origin, processing method, design, limited supply, unusual application or use, extraordinary packaging or channel of distribution/sales.

A look at sales and current industry performance shows fresh, refrigerated, frozen, plant-based and health-focused are key words related to growth. Notably, seven of the top-10 categories by retail sales are chilled or frozen foods.

Health is an important consideration when purchasing specialty foods. In fact, a better-for-you formulation might just be what upgrades an ordinary dairy food into a specialty dairy food, a fancy dairy food.  

When it comes to nutritional awareness, more than one in three U.S. consumers are following a specific diet or eating pattern, and they are increasingly averse to carbohydrates and sugar, according to the 13th Annual Food and Health Survey, released May 16, 2018, by the International Food Information Council Foundation.

In an open-ended question, the top eating pattern cited was intermittent fasting (10%). Diets considered at least somewhat restrictive of carbohydrates were well-represented, including paleo (7%), low-carb (5%), Whole30 (5%), high-protein (4%), and ketogenic/high-fat (3%). Younger consumers (age 18 to 34) were more likely to follow a specific eating pattern or diet than those 35 and above.

More Americans than in previous years blame carbs, and specifically sugars, for weight gain. While sugars continue to be the most cited cause of weight gain (33%), carbohydrates ranked second at 25%, up from 20% in 2017. Both of those numbers are the highest since 2011. Fats (16%), protein (3%) and “all sources” (17%) lagged behind when placing blame.

That brings me to the recent ruling on fiber ingredients, which are ready and able to assist with reducing sugar and carbs in dairy foods, while boosting intake of fiber, a nutrient of concern.

According to a final guidance published on June 14, 2018, in the Federal Register, inulin and inulin-type fructans, including chicory root fiber; high-amylose starch (resistant starch 2); polydextrose; mixed plant cell wall fibers, including sugar cane fiber and apple fiber; arabinoxylan; alginate; galactooligosaccharide; and resistant maltodextrin/dextrin are now recognized by FDA as fiber.

The approval of these eight non-digestible carbohydrates gives food manufacturers additional clarity in updating their labels as needed ahead of the compliance date for FDA’s new Nutrition Facts Label, which is Jan. 1, 2020, for manufacturers with $10 million or more in annual food sales, and Jan. 1, 2021, for smaller manufacturers.

The announcement follows various petitions, many with like-ingredient suppliers joining together to request the addition of beneficial non-digestible fibers to FDA’s definition of fiber, which was issued on May 27, 2016. This was FDA’s first time defining fiber, with the definition being “non-digestible soluble and insoluble carbohydrates (with three or more monomeric units), and lignin that are intrinsic and intact in plants; or isolated or synthetic non-digestible carbohydrates (with three or more monomeric units) determined by the FDA to have physiological effects that are beneficial to human health.”

All of the eight recently approved fibers fit the second definition. The petitions, and supporting research, clearly showed that the fibers support physiological health benefits as assessed by FDA’s strict criteria, according to Carl Volz, president of Sensus America.

FDA’s examples of beneficial physiological effects include lowering blood glucose and cholesterol levels; lowering blood pressure; increase in frequency of bowel movements (improved laxation); increased mineral absorption in the intestinal tract; and reduced energy intake (for example, due to the fiber promoting a feeling of fullness).

Speaking to inulin, the most commonly used fiber food ingredient in dairy foods, namely yogurt, “The FDA’s inclusion of chicory root fiber as a dietary fiber in its new food labeling regulations allows our customers to continue marketing their products as sources of dietary fiber and to continue to use chicory root fiber as a tool to reduce calories and added sugar,” says Volz.

To read the FDA published ruling, link HERE.

Now…off to Brooklyn I go. Hope to see many of you at the Fancy Food show.