2017 Food Trends: Are Smaller Brands Defining the Future?

hydepark Trends to Watch, Yearly Trends

2017 may become the year that small brands in the food and beverage world upend the mainstream. The little guy seems to have cornered the market on consumer trust, the insatiable palate, and the quest to find miracle ingredients from around the world. As these nimble up-and-comers outmaneuver some of the bigger players, behemoth companies are scrambling to get their fair share. Here’s what we see happening moving forward.

The Big Shift

It’s no surprise that consumers continue to gravitate toward smaller artisan and craft labels. But the big news is that this is no longer a niche, hipster-esque trend. According to IRI, smaller artisanal brands have officially taken a bite out of the retail food and beverage market. Between 2011 and 2015, smaller brands shifted a whopping $18 billion dollars away from larger players, and now account for almost half of all retail grocery trade dollars. When we think of the role trust plays in brand selection, it seems that many smaller brands like Bai, Kind and Ready Pac have the edge on transparent, unadulterated products that are health, flavor and packaging forward. In the restaurant trade, there’s been lots of excitement about smaller players doing things completely differently: virtual restaurants that are really just catering kitchens for delivery, and fine dining chef-operators opening more accessible and affordable backdoor outposts. We predict this shift will continue as smaller players continue to push the envelope on new products and food establishments that offer superior convenience, price, health, and adventure.

Shaman Health

Consumers are inexorably drawn to ancient foods from around the world that promise natural solutions to good health. Interest in functional foods has never been higher: exotic fruits and vegetables, healthful herbs and spices, fermented products and even fungi and algae are all finding their way onto grocery shelves. Web searches for curative spices, like turmeric, are at an all time high, with this South Asian rhizome topping the list, according to Google. Many small companies are leveraging these ingredients, but bigger companies refuse to be left in the dust. Larger companies have started their own venture capital funds to “invest” in smaller companies with trend-forward products. The Kellogg Company recently funded a small snack food brand called Kuli Kuli featuring moringa, a leaf extract from the horseradish plant, that promises a whole list of restorative properties. General Mills has invested in Rhythm Superfoods, makers of kale, beet and broccoli chips, and companies like Danone, Anheuser-Busch and Coca-Cola are all financing new start-up brands. As the money continues to flow, look for a non-stop flood of new “superfoods” featuring global, esoteric ingredients.

Hispania 2.0

Demand for an expanded repertoire of Hispanic foods and beverages has never been stronger, driven largely by younger Hispanic and Non-Hispanic consumers. 24% of Millennials are of Hispanic heritage, and in 2015, over 50% of all new births in the U.S. were from people of minority descent, creating a super highway for future growth. And it’s not just the U.S. Hispanic population who wants these: Food Adventurers – young twenty-somethings on a never-ending quest for an expanded, authentic foodie experience – are right there with them. Together, this population has created a head of steam for more authentic products and menu items that go well beyond your typical salsas and tacos. Ingredients like tamarind and guava, flavors like hatch, beverages like horchata and chiledas, and dishes like al pastor and elotes are being ushered in by smaller, trend-forward chefs and marketers. Tortas, cemitas and Cubano sandwiches are all the rage at food trucks and trendy restaurants. And Big Food has noticed. Frontera Foods, Chef Rick Bayless’ foray into packaged salsas and sauces, was just purchased by ConAgra. Modelo beer, a stalwart of Mexican consumption and now part of Anheuser-Busch InBev and Constellation Brands, has become the fastest growing beer in America. Watch for a continuous stream of Pan Latino flavors, dishes, and cooking methods from across the border and around the world, as Mexican-Spanish-South American foods and beverages meld and merge.

Free-From Foods and Beverages

With food allergies on the rise, particularly among children, restaurants and packaged food marketers are taking notice of this potentially lucrative segment. In the packaged food area, Mondelēz has led the way with the purchase of Enjoy Life Foods, maker of products free from the big 8 allergens that account for 90% of all food allergies: milk, egg, wheat, soy, fish, shellfish, peanuts, and tree nuts. Mondelēz purports that the free-from segment accounts for $12 billion at retail with double-digit growth. In 2016, Enjoy Life was tapped by Disney Parks to create a custom line of allergen-free cookies, bars and snacks under the “Snacks with Character” name. Restaurants are scrambling to serve this complex market. Some restaurants have as many as seven different menus to ensure allergen safety. While certain food establishments have responded with a hardcore “no substitutions” policy, others are creating consumer choice Fast Casual concepts, like the up and coming Sweetgreens, with assembly-line selections. The fast-growing Snap Kitchen carefully labels each meal component to meet just about any food preference. Watch for a surge in smaller, more nimble players entering the allergen-free market with convenient, safe solutions.
Asian Comfort Food

As the restaurant industry crawls into 2017, Asian cuisine continues to shine, capturing the hearts, plates, and bowls of the American consumer. Beyond the typical fare found at Asian QSRs and Fast Casual chains, Pan Asian comfort foods – led by small chains and independently-owned operators – are offering a more culturally-diverse selection of foods, largely centered around comforting, soup-y bowls. Southeast Asian congee, a slow simmered rice porridge, Korean bibimbap, Vietnamese pho and the craze for all things ramen are among the top searched food items, according to Google. While packaged food companies – like ConAgra with it’s P.F. Chang’s brand – are dancing around this trend, some of the most innovative meals are being created by the grocers themselves. Future-forward Wegman’s recently introduced an entire line of refrigerated grab-and-go power meals, many featuring contemporary Asian flavors and styles like tataki. We predict a flurry of activity in the grocery aisle as companies clamor to fill demand for home prepared Asian comfort foods, filling the gap many restaurant chains seem to be missing.

Of course the beverage revolution, although not a new trend, continues to be driven by smaller players with innovative ideas, savvy social media programs, and rapid response time. And yes, many quickly get gobbled up by the big guys, but the spark still starts with them. Just another example of how smaller players, with accelerated levels of ingenuity and entrepreneurship, are charting the destiny of food.