I recently spoke about the food business with Shalabh Shalabh who leads the consumer packaged practice at LatentView Analytics
LatentView Analytics uses data analysis and artificial intelligence to see trends before the trends are otherwise apparent. I asked what their analysis revealed about the future of the food business in 2019. Their data points strongly to the following foods trending in 2019:
CBD – Almost every week in 2018 we saw a new startup that uses CBD as an ingredient. If you’re not familiar with it, CBD is a non-hallucinogenic product of the cannabis plant and it is legal for use in every state in the US. We are seeing a lot of drinks, foods, pain relief products and skin care that use CBD as an ingredient and there is widespread belief that CBD is beneficial in all these products. What we’re not seeing in many of these startups is a unique go-to-market strategy and that makes me question these new companies’ viability. Having a strategy of using Facebook and Instagram to draw consumers to a site is expensive and not proprietary. That commodity social media strategy operates in an environment where there’s a lot of distraction and competition so it’s hard to get and hold consumers’ attention. Startups with a unique appeal that can draw consumers to their site or app without the expense of Facebook and Instagram will have an advantage and will need less capital to reach a profitable scale. We’re not seeing a lot of those but we are seeing some startups attracting meaningful capital, especially from larger strategic players, and they will have a big advantage. Both Coca-Cola and Molson Coors are reportedly in discussions with makers of CBD-infused products for joint venturing and investment.
Water Lily Seed is a traditional Indian superfood (known as phool makhana) that US consumers are view as a vegan/paleo/gluten-free snack food that has protein content and assists in weight loss. It is being promoted as a puffed snack by two Indian-US brands. The launch of these new products has caused online consumer interest to increase by over 300%.
Oat Milk – If you’ve been to a coffeehouse on the east or west coast where the customers are almost all under 35, the odds are high that one of the alternatives to milk they’re offering for coffee drinkers is Oat Milk. It is not milk at all, but a liquid that acts like milk and is made by soaking oats in water and straining out the oats. Now the big players are coming into the market. This month, Quaker Oats (owned by Pepsico) is introducing Quaker Oats Beverage, their version of Oat milk.
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MCT Oil is a distillation from coconut and other natural sources and is believed to be a booster to energy and brain activity. Interest in MCT oil exploded after it was widely used as a supplement in paleo and keto diets. Now, products are being introduced with MCT oil as a featured ingredient to promote weight loss and other features. It has no flavor or odor and is also used as an additive in coffee, smoothies and other drinks.
Monkfruit sweetner is made from a small sub-tropical melon and all natural. It is used primarily in powder form as a sugar substitute. It is also known as Lo Han Guo.
Vegan Jerky is exploding because of the recent 600% growth in interest in veganism in the US. The most important major ingredients in vegan jerky are eggplant, coconut, mushroom, kelp and soy. They are widely available in numerous varieties.
Orange wine is a bit of a misnomer because it’s wine made from grapes, not oranges. It’s called “orange” because the grapes remain in contact with their skins during the fermentation process and that affects the color. Orange wine does not use additives so it appeals to consumers who are interested in more natural and less processed foods. It has been embraced by luxury venues like the Ritz in London as well as the food retailer ASDA (revenues in excess of $25 billion) which signals that it is gaining share at multiple levels of the market.
Spirulina is a powder made from blue-green algae. It is believed to be rich in proteins, vitamins, minerals, carotenoids and antioxidants, all the ingredients that are characterized by the term “superfood.” Consumers use spirulina in powdered form as an ingredient to boost metabolism, enhance immunity, increase energy and improve digestion.
How LatentView Analytics Does It
LatentView Analytics drew their conclusions by analyzing the following data:
- Volume of online media discussions about foods, weighted by the benefits that are popular now such as non-dairy, vegan, sustainability, others
- Number and popularity of influencers that focus on a product and the benefits they associate with the product
- New patent filings, funding from venture capitalists and other early signals
- General activity for a product such as number of locations where it’s sold, discussion among consumers and number of positive consumer reviews
What It Means
The data about the popularity of these foods is insightful and irrefutable – consumers are interested and their interest in each of these foods has exploded. LatentView Analytics also says that their analysis can determine which trends are just fads that will die out and which trends are real and sustainable. But the food industry is notoriously faddish and consumers are fickle. The trends can be real but no one can say how long they will last. One things is for sure: we’ll be hearing more about these products in 2019 and for them to go on longer will depend on consumers continuing to believe that the products deliver on their promises.
I have been doing mergers, acquisitions and capital-raising for over 35 years. I am a co-founder and partner at Triangle Capital LLC where we specialize in working with consumer-related businesses. Before Triangle Capital, I was Managing Director at a boutique firm called Fi…
My firm, Triangle Capital LLC, does mergers, acquisitions and capital-raising for consumer-related businesses.