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Macro Trends from Expo West (April 2015)

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“Natural” is becoming one of the most alluring terms for both consumers and marketers. As more people seek to lead healthier lives, they’re increasingly turning to toxin-free, natural products. Indeed, the market for natural products has surged in recent years and continues to grow: U.S. consumer sales of natural, organic and healthy products are forecast to grow 64% from $153 billion in 2013 to $252 billion in 2019, a rate nearly double that of mainstream consumer packaged goods, according to New Hope Natural Media, the organizer of Expo West.

This report is based on findings from Expo West, the world’s largest natural, organic and healthy products event. Expo West, which took place March 4-8 in Anaheim, California, brought together more than 71,000 industry members and over 2,700 exhibiting companies. With dozens of panels and hundreds of networking events, Expo West is ground zero for emerging trends and innovative products.

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Macro Trends from Expo West (April 2015)

  1. 1. Trends from Expo West April 2015
  2. 2. Introduction Trend 1: Protein Everything Trend 2: The Ethics Imperative Trend 3: What’s Old is New Things to Watch What We’ll Cover
  3. 3. Introduction “Natural” is becoming one of the most alluring terms for both consumers and marketers. As more people seek to lead healthier lives, they’re increasingly turning to toxin-free, natural products. Indeed, the market for natural products has surged in recent years and continues to grow: U.S. consumer sales of natural, organic and healthy products are forecast to grow 64% from $153 billion in 2013 to $252 billion in 2019, a rate nearly double that of mainstream consumer packaged goods, according to New Hope Natural Media, the organizer of Expo West. The meaning of “natural,” however, has become significantly more nuanced and complex in recent years. Increasingly, “natural” is being applied across categories, appearing on beauty products, pet products, cleaning products and elsewhere.   At the same time, consumers are becoming increasingly skeptical of this claim, placing the term under greater scrutiny.   This report is based on findings from Expo West, the world’s largest natural, organic and healthy products event. Expo West, which took place March 4-8 in Anaheim, California, brought together more than 71,000 industry members and over 2,700 exhibiting companies. With dozens of panels and hundreds of networking events, Expo West is ground zero for emerging trends and innovative products.   This report touches on three overarching themes from the show, as well as things to watch for the future. Introduction
  4. 4. Protein Everything Image credit: Stocksy
  5. 5. 62%Of People make it a point of getting plenty of protein* *Source: Packaged Facts, ‘14 Protein Everything People are paying more attention to protein thanks to a growing belief in its ability to aid weight management and muscle recovery, as well as its role in satiety. According to a 2014 survey by Nielsen, nearly one third of people globally view protein as a very important attribute in the snacks they eat. Plus, with more people adopting the protein-heavy paleo diet (2013’s most Googled diet), protein products have added appeal. No surprise, then, that the number of products launched in the US with both a high-protein and vegan claim increased 54% between 2008 and 2012, per 2013 research by Mintel.
  6. 6. Image credits: Chapul; Exo Crickets As Protein One increasingly attractive source of sustainable protein is insects, particularly crickets. Growing evidence of the nutritional benefits of crickets, paired with mounting concerns over the environmental consequences of meat production, are pushing environmentally conscious food brands to embrace the ingredient. Exo, a brand that produces snack bars made of cricket flour, claims that dried crickets are 69% protein, while sirloin steak is only 29% protein. Chapul also showcased snack bars that blended cricket flour with ingredients like cocoa, coffee beans, dates, ginger and lime. Other brands, like Six Foods and Bitty Foods, are also using cricket flour as a sustainable source of protein. In the U.K., Grub sells freeze-dried crickets, grasshoppers and worms.
  7. 7. Image credits: Pro-nrg; Powerful Yogurt; Blu-Dot;Forte Protein Products Proliferate Brands are also finding unexpected ways to provide people with protein. Other protein-infused products on the floor included chips (Quest), water (Protein Water), yogurt (Powerful Yogurt), tea (Blu-Dot) and even ice cream (Forte).
  8. 8. Image credit: Taco Bell 16%Of British consumers are upping their protein intake by seeking out groceries that are high in protein* *Source: Canadean, ‘15 Opportunity Areas Consumers’ growing demand for protein presents an opportunity for brands to build out the nutritional power of their products. Restaurants have been adding protein- packed items to their menu. The Protein Bar, which launched in Chicago and now has several locations across the U.S., focuses on convenient grab-and-go protein dishes. Last year, Taco Bell gave its Cantina Bell menu a protein-focused spin, renaming it “Cantina Power” and adding burrito and bowl with additional meat and fewer calories. The brand also tested a Power Breakfast menu, which included items like Power Greek Yogurt and a Power Breakfast Bowl of steak, pico de gallo, cheddar cheese and eggs. As more people seek alternatives to meat protein, plant- based protein will surge. Plus, since Millennials are the most adventurous, open-minded and sustainability- focused generation, insect protein also has a chance to find mainstream adoption.
  9. 9. The Ethics Imperative Image credit: Stocksy
  10. 10. Introduction Strong ethics is becoming a keystone of building a successful business. Consumers’ mounting expectations of brands mean that placing ethics at the core of business practices is becoming a necessity, rather than a luxury. With the surge in mission-driven companies that place a commitment to social change at the heart of their business, the imperative for brands to foreground ethical practices is only growing stronger. 96% of Millennials believe brands need to think about the long-term social and environmental consequences of their actions Source: MBG Health & Happiness Survey, ‘14 The Ethics Imperative
  11. 11. Image credit: B Corporation B Corps As part of ongoing efforts to make businesses better for everyone, more companies are becoming certified “B Corps,” an official certification given by the nonprofit B Lab to companies that have passed an assessment of their overall impact. There were more than 60 Certified B Corps at Expo West, including brands like Method, Numi Tea, Seventh Generation and Cabot Creamery.
  12. 12. Image credits: One Percent for the Planet; Make a Stand Revenue Shares Brands are also officially setting aside part of their revenue for social good. Several companies are official members of For The Planet, which means pledging to give 1% of sales to nonprofit organizations dedicated to protecting the environment. Lemonade brand Make A Stand goes even further, donating 5% of total annual revenue to select nonprofit organizations.
  13. 13. Image credits: This Bar Saves Lives; Bixbee; Buy One, Give One Another way brands are embracing a commitment to social change is by adopting a buy one, give one away model: donating one product to those in need for every one purchased. Snack bar brand This Bar, for example, has a mission to save lives by donating one nutritional bar to hungry children in Africa for each item purchased by consumers. Bixbee will donate a schoolbag with supplies to kids in need for every backpack purchased. And, as part of its BuyOne:FeedOne campaign, Yumbutter promises to partner with nonprofits to “feed a child in need” for every portion of nut butter purchased.
  14. 14. 55% of global online consumers are willing to pay more for products and services from companies that are committed to positive social and environmental impact Source: Nielsen, ‘14 Image credit: Sir Richard’s Condom Company It’s clear that doing good for the world can also be good for companies’ bottom line: Nielsen showed that the percentage of people willing to pay a premium for products and services from companies that are committed to positive social and environmental impact grew 10% between 2011 and 2014.   Among Millennials in particular, there is a growing recognition that making a profit and improving the world are synergistic, rather than mutually exclusive. Though Tom’s Shoes pioneered the concept, the buy one, give one model has been adopted across categories, including food, fashion and even condoms. For example, Sir Richard’s Condoms donates one condom to charity for each one sold. Opportunity Areas
  15. 15. Image credit: How Good A new suite of smartphone apps gives consumers the power to scrutinize how ethical a product really is, placing even greater pressure on brands to operate sustainably. How Good, for instance, is an independent organization that rates a product’s environmental and social impact based on sourcing standards, processing practices and company conduct, then translates this research into easy-to-read ratings. Smartphone users can use an app to scan a product’s barcode and quickly pull up its rating. How Good also works with stores to display product ratings on shelves. In fact, How Good found that implementing and displaying its rating system in-stores contributed to nearly a $40,000 increase in weekly sales. Opportunity Areas
  16. 16. Image credit: Dave’s Killer Bread Brands can also take a stand by rethinking their hiring initiatives or launching advocacy campaigns. For example, Dave’s Killer Bread, now one of the largest bread manufacturers in the U.S., promises to help former convicts reintegrate by ensuring at least a third of its employees are ex-prisoners. The brand also hosts a Second Chance Summit, which explores how business leaders can hire people with criminal backgrounds. Opportunity Areas
  17. 17. What’s Old Is New Image credit: Stocksy
  18. 18. Introduction The move toward raw, vegan and paleo products has driven demand for natural foods. More people are looking to the past for sources of inspiration, embracing ancient ingredients as the new superfoods. For instance, the growing popularity of “ancient grains,” a term used to refer to Old World staples like farro, barley and teff, points to surging interest in nutritional mystery, archaeological discovery and anthropological interpretations of diet and lifestyle. What’s Old Is New 363%Sales growth of “ancient grain” spelt between July 2013 and July 2014* 159%Sales growth of “ancient grain” freekeh between July 2013 and July 2014* *Source: Spins, ‘14
  19. 19. Image credits: Ancient Harvest; Nature’s Path Ancient Grains “Ancient grains” were common ingredients in many products at Expo West. While the term is still up for definition, it largely refers to neglected staples like farro, barley, quinoa and teff.   Organic chip brand Que Pasa showcased Ancient Grains Tortilla Chips, a product set to debut later this year that includes buckwheat, quinoa-amaranth and chia. Gluten- free baking mix brand Amazing Foods for Health also tapped into the trend, advertising products made with ancient grains. Ancient Harvest offers pastas, cereals, flour, quinoa and other items made from grains like quinoa, millet and amaranth.
  20. 20. Image credits: Temple Turmeric; Tu Me Beverages; Turmeric Turmeric was another forgotten food that has recently surfaced. A spicy herb similar to ginger, turmeric is said to have anti-inflammatory properties, as well as the ability to treat heartburn and upset stomachs. Some research suggests that aromatic-turmerone, a component of turmeric, might even protect the brain by repairing stem cells.   After reportedly receiving a $3 million investment from Boulder Investment Group, beverage brand Turmeric: Elixir of Life re-launched as Temple Turmeric, a line of juices, smoothies and tonics that promise “positive inflammation response” and other health benefits. And TuMe is a turmeric-infused water that claims to aid post- workout recovery.
  21. 21. Image credits: Teapigs; Matcha Matcha, a finely ground powder made from green tea leaves that has been used for centuries in traditional Japanese tea ceremonies, appears to be growing in popularity. It reportedly offers a natural energy and metabolism boost, as well as improved mental alertness and focus. British tea brand Teapigs launched a range of matcha products in the U.K. last year, including powdered green tea and a trio of green tea drinks made of spring water, juice and matcha. Teapigs is set to launch matcha products in the U.S. later this year.
  22. 22. Image credit: Cheerios Growing interest in natural products, coupled with a fascination with our past, is driving a desire to rediscover once-forgotten ingredients.   Teff, cultivated in Ethiopia and Eritrea for more than three millennia, has also been touted as the next superfood thanks to its high protein, fiber and calcium content.   Major brands are starting to incorporate ancient grains into their products. In January, Cheerios debuted a version of its breakfast cereal called Cheerios + Ancient Grains, which included small amounts of quinoa, Kamut wheat and spelt.   Brands can also build out the ritualistic component of their food products. Matcha, for instance, is famous for the ritual of whisking the ingredients together to create a foamy green beverage. Opportunity Areas
  23. 23. Things To Watch
  24. 24. Nuts Are the New Dairy With more people going dairy-free, nuts are becoming an increasingly attractive alternative to cow’s milk. Almond milk sales in the U.S., for instance, reached nearly $738 million in July 2014, a 46% increase from the previous year, according to Nielsen. The beverage has now replaced soy as America’s favorite plant- based milk. At Expo, ZaZa showcased a line of rich cheesecake desserts made from ingredients like cashews, almonds, coconut oil and dates. Treeline Cheese demoed spreadable cashew-based cheeses. Image credits: Treeline Cheese; ZaZa Things To Watch
  25. 25. Water 3.0 Coconut water radically changed the beverage market when it went mainstream several years ago. Now, a new crop of beverages is redefining water again. Maple water has already been hailed as the next big thing, but there were even more options at Expo West. A few standouts included Blossom Water, which blends natural fruit and flower extracts; Caliwater, a blend of water with prickly pear cactus extract and juice; alcohol-free Hopwater, made from fermented hops, water and cane sugar; and even Arty artichoke water. Image credits: Arty; Blossom Water; Caliwater Things To Watch
  26. 26. Algae Everywhere Interest in algae is surging thanks to mounting mainstream evidence of its health properties and antioxidant content. Spirulina and chlorella, two kinds of edible algae, were popular ingredients. Carmit Candy offered chocolate coins infused with algae, while Japanese brand Sun Chlorella showcased chlorella tablets and granules, which are said to deliver 22 vitamins and minerals, as well as vegan-friendly vitamin B12. Image credits: Carmit; Sun Chlorella Things To Watch
  27. 27. Guys’ Grooming Grows UpThe market for men’s grooming products is booming, as more men become comfortable with what was once considered a feminine activity. Men’s grooming products are one of the beauty industry’s most rapidly growing segments, with global sales rising by an average of 6% a year since 2006, per Euromonitor International. The company forecasts that in the U.S. alone, men’s grooming sales will reach $6.5 billion in 2018. With demand for men’s grooming products growing, the number of natural options is also expanding. Przman showcased a line of all-natural products, free of parabens, GMOs, artificial fragrances and colors. Thrive demonstrated a line of natural grooming products made in sustainable partnership with farmers in Costa Rica. Image credits: Przman; Thrive Things To Watch
  28. 28. About MBGenhance Enhance is MindBodyGreen’s in-house consulting practice that helps brands understand and respond to rapidly changing attitudes toward health, happiness and well-being. With our community of more than 2,500 influencers and a readership of more than 15 million worldwide, we are uniquely attuned to shifts in culture and consumer mindset. We pull out the signals from the noise, and translate this into intelligence and insights that can be harnessed to drive business gain. About MindBodyGreen MindBodyGreen is the world’s leading destination for Millennials who want to discover and share content about health, happiness and well- being. With our community of 15 million monthly unique readers, we are at the forefront of a fundamental shift in the way people lead their lives. About MindBodyGreen
  29. 29. To learn what these trends mean your business… Contact: Will Palley Head Of Strategy & Insights will@mindbodygreen.com 718.801.8387 @wpalley Copyright ©2015 MindBodyGreen, LLC.

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