The robotics-enabled restaurant Creator shows that tech + design can work in a fast casual restaurants.(PHOTO COURTESY OF CREATOR)
Food developers love thinking about which “it” flavor is going to pop this year, or which vegetable will replace kale and cauliflower. But there are generally bigger, longer-term societal changes that drive these things. We call them Macro Trends, and we’re thinking about them in the short term, and considering how they will impact things in the long term. Here are our picks for 2019.
1. Factory Automation Hits QSR
A robotic arm that spreads pizza sauce on crust? This is how every single frozen pizza is made. A salad robot? Guess how your bag of salad greens are tossed and filled? Hamburger patties made by a robot? This is akin to how your favorite sliders are formed before they’re tucked between a bun, sleeved and sent to your local grocery store.
This phenomenon is driven by today’s tight labor market. Restaurants are struggling mightily with labor costs and availability. A future of robotic food preparation sidesteps food safety issues like employees forgetting to wash their hands or improperly storing and holding foods. And of course, there’s no better way to assure consistency than to eliminate the potential for human error. It’s no wonder robots sound like operational saviors.
Check out Spyce Kitchen, a semi-automated restaurant in Boston serving highly flavorful bowls in a fast casual setting. Silicon Valley’s Zume Pizza combines frozen pizza manufacturing technologies and mobile ovens to bring innovation to fresh pizza delivery. Even Pizza Hut is looking to automate delivery with a human-driven vehicle that cooks and slices pizzas via robotics.
Cafe X has opened automated coffee kiosks in San Francisco, which operate like souped up vending machines crafting personalized espressos and lattes. And Kroger is delivering groceries using unmanned vehicles, which could be considered an advanced form of robots.
And in a beautiful display of how automated restaurants can deliver technology without sacrificing design, San Francisco’s Creator turns burger flipping into performance art.
The big question is how to scale these businesses. The CPG products mentioned above are made in centralized factories, then distributed to the rest of the country. The idea of a robot (or 12) in every restaurant means a capital investment in each location, which is hard to justify, especially in franchised systems. But the dream of automation is powerful enough to drive early innovation in fast and fast casual restaurants.
2. The Sprouting Plant-Based EcoSystem
A growing ⅓ of the population is choosing to actively eat less beef, pork, dairy, and poultry. We call them flexitarians and their behavior is driving a burgeoning plant-based ecosystem. This behind-the-scenes support system will enable the exponential growth of plant-based eating in 2019 and beyond.
After trying to compete against the all-powerful dairy and cattle commodity boards, plant based foods now have their own. The Plant Based Foods Association is a nonprofit whose goal is to level the playing field between meat, dairy and their plant-based alternatives.
The Good Food Institute is another nonprofit with a mission to further the causes of plant-based and cell-based foods by promoting education, research, and entrepreneurship in these areas.
If you’ve consumed plant-based products like burgers or milks, you’ve likely ingested a natural flavor from a supplier like Edlong, who specializes in non-dairy dairy flavors. Nope, not a typo. There’s an art to making ingredients like soy, peas, cashews, and almonds taste like milk (or cheese or meat or chicken), and the technology behind plant-based flavors is improving rapidly.
Back in the early days of plant-based mayo, we were working with pea protein that wasn’t, um, exactly delicious. After years of research and development, protein suppliers have improved the efficiency, functionality, and flavor of plant-based proteins like pea, garbanzo, mung bean, and more.
Then there’s the entire restaurant scene, where chefs are doing their part to make craveable, “plantdulgent” (my word!) menu items to introduce consumers to veg-forward eating.
If you still think vegetarian food is a sacrifice, you’ve not had it lately at the right places. Today’s meat- and dairy-free meals can be full-flavored, full-fat, full-sodium and full of flavor and craveability. Think house-smoked “pastrami” made from seitan, with creamy non-dairy 1000 island dressing, sauerkraut, and non-dairy cheese, served on crispy olive oil-grilled bread.
The uber successful Impossible burger is not for the faint of heart or dainty vegan eater. In fact, it was formulated to match beef in terms of fat, protein, and everything else, including how it feels in your mouth (indulgent) and belly (very satiating) an hour after you’ve eaten it. It’s truly plantdulgent.
3. The New Ag: From Sea to Cell
These days you can find organic Doritos from Pepsico and organic Hellman’s mayonnaise from Unilever. Old brands and product lines are being rebirthed with a wholesome better-for-you halo. The organic movement has fueled agricultural innovation in CPG for almost a decade. So, what’s next?
First of all, let’s be honest about organic. We’re not even there yet! Less than one percent of American farmland is organic. To offset the costs and time associated with converting from conventional to organic farming, certification agencies like QAI are offering a Transitional Certified stamp which lets companies like Kashi tell the story of how they’re supporting farmers who are transitioning over.
The risk is that by the time farmers transition to organic, there will be something newer and more progressive to strive for, such as regenerative organic, farming that addresses soil health (i.e. by crop rotation), animal welfare (grass-fed, pasture-raised), and social fairness (living wages, fair prices). And then there’s Biodynamic®, which will certify a whole farm as a “living organism,” a type of complete ecosystem.
This New Ag isn’t confined to soil tilling. With the state of overfishing of wild stocks and poor aquaculture techniques, pulling stuff from the sea is seen as just as unsustainable as raising cows and pigs. Plant-based eating is a part of the solution, but so is innovation in how we procure fish and seafood.
Fish farming has also graduated to regenerative techniques that put back into the ocean the stuff we’ve been stripping out of it for millennia. Oyster, seaweed, scallop, and mussel regenerative vertical farms, like Greenwave, serve up food while functioning as underwater filtration systems and habitats for other species.
Land-based aquaponic fisheries like Brooklyn-based Edenworkscombine the farming of fish and vegetables. Fish waste is naturally converted into fertilizer for leafy greens, that then filter the water for the fish, in a recirculating, sustaining ecosystem.
And yes, fish-free hydroponic farming is still relevant, with companies like Iron Ox adding a layer of robotics on top of a known system to further improve yields and costs.
My favorite New Ag is the still-needs-a-better-name technology currently known as cell-based, clean, or cultured meat, where animal protein is sampled from a live animal, then grown in a fermenter to create animal meat without having to grow (and slaughter) an animal.
This technology is likely years from commercial scale, but the promise of it’s win-win benefits is enough to drive investment to make it happen as quickly as possible.
4. Sweetness Preference Shifting
With sugar as public enemy #1, it’s inevitable that our collective tongues will be awash in less sweet stuff in the near and distant future. This means that our palates will adjust. In other words, we’ll start liking things that are less sweet.
This works because everyone has a preset norm: the usual amount of sweetness they’re used to experiencing. By reducing sugar in your diet by drinking kombucha or LaCroix, instead of regular soda, for example, it is likely that if you go back to that old favorite, it’ll simply taste too sweet.
This is a good thing, because studies have shown that too much sugar in the diet is unwise, and sweetness cravings are part of what drives sugar consumption.
This holds true only when people eat and drink less-sweet stuff. By keeping the sweetness level the same, for example, by switching to non-nutritive sweetened products, the palate doesn’t reset. This is true for Splenda and Equal, but also natural sweeteners like stevia and monk fruit.
Another thing that will be driving our sweetness preferences lower is the mandatory labeling of added sugar. FDA has set a date of January 1, 2020–one year from now–for most food manufacturers to switch to a new label that calls out how much sugar in a product is naturally occurring from the ingredients, and how much is added in the form of sugar, syrup, honey, or concentrated fruit juice. As consumers get savvy reading these labels, they’ll start demanding products with lower sugar, thereby helping to reset our societal taste norm.
It’s already happening, as we’ve been developing foods for a few years without (or with limited) added sugar in anticipation of this label change. Getting less sweet products to taste great isn’t as easy as it sounds. Sugar provides more than just sweetness: it also adds body and enhances aromas.
Getting it right is about creating a new type of deliciousness that appeals to both adults and kids. In fact, one of the positive results of consuming things less sweet–and ingesting less sugar in the process–is that we’ll eventually see a generation of kids who turn up their nose at the super-sweet stuff you and I grew up on.
One reaction to a decreasing societal demand for really sweet stuff is that we begin to open up to more interesting sour, bitter, and salty/savory foods. Witness: kale, cauliflower, kombucha, sour beer, mushroom coffee, moringa.
5. The New Head Buzz
Those over-attributed Millennials have shepherded in a new cultural view of drinking, or not drinking as the case seems to be. These 20- and 30-somethings are consuming less and differently-inebriating beverages than previous generations.
As a result, here’s a whole new cultural view toward not drinking. For example, Daybreaker is an event series of A.M. parties that help you start your day, “with energy and intention.” It’s the polar opposite of a rave, where drugs fuel nighttime partying and zoning out. The main event is a 2-hour morning dance party that replaces a trip to the gym. The first one in January ‘19 is on the 57th floor of Philadelphia’s One Liberty Observation deck. People are urged to “bring to the dance floor every resolution we want for ourselves, and dance …with conviction and the support of thousand. There’s “No alcohol served. Ever.”
Ruby Warrington is co-host of Club SÖDA NYC (Sober Or Debating Abstinence). It’s for people who “love how good life feels when you don’t drink, (who) want to connect with other people who’ve discovered this too…experience getting crazy high on your own supply!” Her book Sober Curious launched in December 2018.
But no alcohol doesn’t mean we’re not into catching a buzz. It’s just that the buzz may come from within. It’s about being present and mindful. This may happen at yoga, with a mindfulness app, or workplace sponsored meditation.
This has also spurred beverage innovation to give the people what they want: no, low, and different types of inebriating buzz.
Because bars don’t want to lose out on the trend, they’ve had to adapt. That means offering low and no alcohol drinks, with many bars and restaurants devoting a drink list to “0% ABV” beverages, such as Heineken’s 0.0 beer, and cocktails made from non-alcoholic spirit Seedlip and its inevitable followers.
As Big Beer brands have seen volume shift to smaller players, the acquisition of small breweries began. Today, some craft beermakers aren’t even making traditional alcoholic beer.
There’s Athletic Brewing, making non-alcoholic ale, IPA, and stout without the buzz; Wellbeing Brewing, claiming they’re “solely dedicated to non-alcoholic craft beer”; and Bravus, claiming they were “North America’s first non-alcoholic craft beer brewery.”
What sounds niche-y today might be big biz tomorrow, given estimates from research firm Global Market Insights that non-alcoholic beer will grow 100% by 2024, to ~$25 billion.
Heineken’s Northern California craft brand Lagunitas is already one step ahead of the New Head Buzz trend with HiFiHops, a bottled non-alcoholic beverage “made using everything Lagunitas knows about hops and cannabis.”
The founder of Blue Moon’s new Ceria Brewing Co. is also following this strategy of offering completely alcohol-free beers, yet keeping the buzz. Booze is simply replaced with a different, cannabis THC-driven high.
6. Cannabis Compound Callouts
Yes! Cannabis! It’s the new kale, with a dash of federal crime risk for excitement!
Speaking of… it’s likely you’ve heard of THC (tetrahydro cannabidiol), the compound in cannabis that gets you high. Now available in convenient, drinkable beer-like form!
You’ve probably also heard of CBD (cannabidiol), because it’s likely your mom or great uncle is taking it to treat a random malady for which it has yet to be proven effective. That’s not to say it’s noteffective, it’s just that CBD and other cannabis compounds have to date been hard to study in double-blind, placebo-controlled studies given cannabis’ status as a federal Schedule 1 controlled substance. That will hopefully be changing, but in the meantime, everyone’s jumping on the CBD bandwagon with hopes of it helping fill-in-the-blank condition.
You’re also going to start hearing about terpenes, another set of compounds in cannabis, that are likely good for something else we don’t know about yet. Terpenes are volatile oils that give cannabis it’s funky aromas. We use them in food and beverage formulation to add unique citrusy (or other) aromas.
If you do your research, you’ll hear a lot about “whole plant” extracts and oils. Companies offering this kind of high–or medical benefit–claim that the power of the plant is in its intact form, and separating out the compounds isn’t the same. And that’s why terpenes are important. They play a role in the overall functionality of cannabis, otherwise known as the entourage effect.
Many of these cannabis compounds are derived from hemp, which iscannabis. The difference is that the hemp version of the plant has to contain less than 0.03% THC, which means it’s not inebriating like it’s sister. In this area, new hemp products are hitting the market, like Lumen Elixirs, that don’t call out any of these compounds, instead positioning hemp as a superfood.
Not sure what to make of all this? Let’s just say we have an “it’s complicated” relationship with cannabis at the moment.
7. Clean Label Commoditization Drives Brand Importance
Clean label foods and beverages are the new normal. Short ingredient statements listing kitchen pantry friendly, real food ingredients abound across categories and channels. This is great for our health, but not so good for product defensibility.
If an innovative, new, delicious product contains only 6 commodity ingredients, even a 6-year-old knows what’s in it. That makes reverse-engineering these products that much easier. For some brands that have taken a hard line and eschew even natural flavors, emulsifiers, stabilizers, and the like, matching textures and subtle notes of flavor are also a heck of a lot easier.
The solution? It’s about brand, branded experiences, package design excellence, and flawless market execution. That’s how you keep knock-offs at bay. This isn’t easy, but some do find their target consumer, engage them with experiential points of contact, and continue to offer new and innovative products to stay one step ahead of the competition.
A few of the many brands we love: 19 Crimes, noosa, Trader Joe’s, Dirty Lemon, and their new equity partner Coca-Cola for keeping The Real Thing real with packaging and flavor innovation. It’s not easy keeping a 133 year old brand relevant.
8. Big Food And $ Offer Motivation to Start A Food Biz
When I started in food innovation in 1997, the only way to grow a F&B business was to do it yourself. It required drive, struggle, suffering, and years and years of patience as the business reached critical mass. If you needed money to grow, you went to the bank and applied for a loan. That’s not the case anymore.
As Big Food continues to struggle, they’re throwing money at small companies of all sizes. There’s the standard strategy of acquiring proven innovative brands and products, versus developing them internally (General Mills + Annie’s). And there’s investment in growing, small companies who fit their portfolio, with the hope that they’ll eventually acquire them outright (General Mills 301 Inc.). But now there’s investment at the startup level, well before brand, product, or founder is proven.
And it’s not just Big Food that’s throwing money at startups. It’s private equity and venture capital, too. It’s enough to motivate everyone to start a food or beverage business. And it feels like that’s what’s happening. Easy money lessens the risk for founders. All that’s needed is to develop a product, do a single production run, get distribution at one big retailer, and you’re ripe for investment or collaboration.
Beyond money, Big Food is also offering other resources through their incubator and accelerator arms. Pepsico’s Nutrition Greenhousegives startups $20k in the form of a 6 month “grant,” with a chance to earn $100k more. KraftHeinz’s Springboard has brought on early-stage startups selling sauerkraut, Venezualan hot sauce, and egg white chips. This is just the tip of the iceberg.
Even more motivating is the potential payout if the startup eventually gets acquired. According to SDR ventures, the 2018 median industry deal multiple was 16.0x EBITDA and 1.3x revenue.
With today’s economy humming, this all makes perfect sense. But when the economy slows–and it will–it’ll be interesting to see how the flow of F&B money is impacted. For this reason, I’d counsel entrepreneurs to not count on easy money or free resources in the long run. They have to be willing to tackle it alone, over years and years of patient hard work. And if they don’t have the passion and drive to make that happen, they should reconsider.
9. Single-Serve Plastic Packaging at Risk
Some of the categories that grew over the past couple of years, like ready-to-drink coffees, protein shakes, calorie-free waters, and refrigerated cheese and hummus snacks are conveniently offered in single-serve packages. This makes them perfect for tossing into a backpack for on-the-go consumption, but also means the packages were specifically engineered to be used once, then thrown away. Other offenders of single use plastic (SUP) include coffee stirrers, plastic bags, Q-tips, plastic cutlery, and the much-maligned plastic straw.
According to the World Health Organization, 50% of the plastic we use is single-use or disposable. In 2018, the WHO started, “catalysing governments, industry, communities and individuals to … combat plastic pollution and explore sustainable alternatives, saying ”we urgently need to reduce the production and excessive use of plastic, in particular… single-use…” Watch the clever video, here.
Also in 2018, the European Parliament put a ban on many SUP items, and highly restricted the use of others.
In response to backlash, Starbucks announced in 2018 it would eliminate plastic straws, replacing them with new strawless lids by 2020. They’re also working on developing a compostable lid.
In San Francisco, we’ve even got our own local campaign to end single use plastic.
If the poster child of the cause was plastic straws in 2018, what’s on 2019’s chopping block? Food and drink packaging, beware! While it’s unlikely to significantly affect the CPG industry in 2019, it absolutely will in the longer term, so it’s something we’re watching.
10. The Devaluing And De-socializing Of Dining Out
Dining out used to be aspirational. The proverbial dinner-and-a-movie night was one of the highlights of the week. These days, we’re doing the same exact thing, but dinner is being delivered by a third party service (GrubHub, UberEats, DoorDash, etc.) from the restaurant to our home, and the movie is playing in the living room, thanks to Netflix, Amazon, or iTunes.
Who can blame us? Going out to the movies requires parking and childcare hassles, and the cost of a meal is inflated by the need to tip, pay worker healthcare fees (like the infamous one in San Francisco), and the escalating price for scarce labor.
For those who do venture out, the hottest segment right now is known as Flex Casual, Fine Casual, or Fast Fine. At these places, classically trained chefs with fine restaurants are opening cheaper alternatives, where you order at the counter and your food is delivered to the table or in a bag to go. It takes fewer people to run these operations, and the food can be just as good as an old-school full-service experience.
In other segments of the restaurant industry, operators are trying to enhance the dining-out experience with communal tables, which force a more social experience into our cocooned lives.
And for those who still want a home-cooked meal, there are fresh kits now conveniently available at the grocery store (or delivered via Shipt, Instacart); even for pick-up while lunching at Chick-fil-a.
My household is made up of two working adults, and we’ve got maybe three waking hours together weeknights. With more binge-worthy shows to stream than we could ever watch, plus really good food delivered in minutes, I’m as guilty as the next person!
BONUS: What To Watch On Your Plate And In Your Food
- Mushrooms in everything including coffee
- Botanical and herbal flavors like juniper
- Upcycled anything and everything from banana skins to green banana flour to sunflower seed byproducts to chicken skin
- Shichimi togarashi
- Grilled octopus
- Burmese food
- Okonomiyaki, the ultimate Japanese pizza/comfort food
- Grain-free is the new gluten-free
- Adaptogens (turmeric, ashwagandha) replace antioxidants
- New conventional wisdom is to expose kids to allergens
I’m President and Chief Innovation Officer at Mattson, a Silicon Valley food innovation and development firm. We work with clients from start-ups to the world’s largest food companies, helping them identify new food business ideas, bringing them to life with commercially-vi…
See more at www.MattsonCo.com and www.barbstuckey.com.