6 trends shaping food and beverage growth in 2022

Table of Contents 1. Gen Z gets ready to take over2. Functional ingredients find new…

Editor’s note: This story is the first in a series on the trends that will shape the food and beverage industry in 2022. 

As many consumers hope for a fresh start in 2022, the ongoing pandemic will play a major role in shaping food and beverage trends regardless of whether COVID-19 itself finally becomes a thing of the past.

The virus’ effect will be especially noticeable in health and wellness, with functional ingredients such as adaptogens, nootropics and CBD making their way into new product categories.

Plant-based meat, which has seen tremendous growth during the past two years, will continue to evolve, with more progress made on the form and texture of products. And Generation Z is maturing into adulthood and will shape trends with its interest in ethical sourcing, sustainability and local food.

The new year also is expected to provide a boost to private label as inflation, a draw-down in savings and better-quality products attract new consumers to the category or bring back those who chose to stock up on more familiar brand names throughout the pandemic. Meanwhile, CPGs that are not only facing higher expenses but also supply-chain disruptions will continue to see ongoing labor shortages disrupt their operations. 

After conversations with industry experts and analysts, here is a breakdown of the six biggest trends that Food Dive predicts will impact the food and beverage industry in 2022.

 

Jeff J. Mitchell via Getty Images

 

1. Gen Z gets ready to take over

A decade ago, the newest buzzword was “millennial,” referring to people born between 1981 and 1996. At the time, millennials were entering adulthood, and were about to mold society with their attitudes on technology and social issues, their relatively high levels of education, and purchasing power.

Now, Gen Zers — people born between 1997 and 2012 — are starting to come into adulthood. Barb Stuckey, president and chief innovation officer at Mattson, said their entirely new perspective on society and the environment is likely to cause big changes in the food business.

“I think the Gen Z consumer really will be driving things from the bottom up,” Stuckey said. 

She recalled how one person who works with young readers around the globe had described the generation: “They have a generational stress on them because of what’s happening with the planet.”

A 2018 study found that Gen Zers have between $29 billion and $143 billion in buying power — though much of the money represented in this study came from allowances. And while Gen Z consumers said in a Piper Sandler report last spring that food is their top spending priority, they pay much closer attention to the sustainability, nutritional value and the ethics of the corporations who make what they eat. 

Plant-based meat maker Impossible Foods has been paying close attention to Gen Z’s opinions and behavior, and found that younger consumers are more likely to eat plant-based food and eat less meat in order to save the environment. A survey commissioned by the company discovered that kids were optimistic about their potential contributions to help stop global warming, with 73% saying they could make at least some difference through their personal choices. After those kids read a statement about the impact animal agriculture has on climate change, 78% said it was important to do something to reduce the use of cows for food.

Stuckey said that just about every new brand today launches with the story of its mission, sustainability aspects, philanthropy and commitment to making the world a better place on full display. These assets, she said, are likely to only be more important in the near future.

This attention to sustainable and social missions goes deeper than new brands, though. In the food business, the traditional supply chain is flattening as CPGs and their suppliers shift from traditional approaches — like trucking produce grown in warm and sunny California all over the United States — to searching for ways to make food more local. EIT Food, a Europe-based agrifood innovation agency, found in a study last year that 74% of Gen Zers said that growing food locally helped with sustainability. Half said that importing food is not sustainable.

In response, some companies are bringing a new spin on old ideas, like AppHarvest, with its massive greenhouse for indoor farming in Kentucky — a location that is less than a day’s drive from more than two-thirds of the U.S. population. Some are using technology to re-engineer precious commodities that have traditionally been shipped from afar into chemically identical items, like Atomo’s bean-free molecular coffee and Voyage Foods’ no-cacao chocolate.

While companies like these are all still scaling up, Stuckey said more traditional manufacturers and retailers will likely be willing to work with them in 2022. The pandemic taught everyone lessons about what happens when long and inflexible supply chains break, she said. It also reinforced consumers’ desire to know where their food comes from, and underlined the environmental footprint that a long supply chain leaves behind.

Though some of these foods made through new technologies might seem odd to older, more traditional consumers, Stuckey said Gen Z will help them succeed on the market in both the short and long term.

“You’re going to have people who are really excited, like the Gen Z consumer who is really, really, really focused on the environment because they’re growing up having to clean up this mess we’ve made,” Stuckey said.

 

kerdkanno via Getty Images

 

2. Functional ingredients find new applications

As people pay more attention to their health and wellness because of the pandemic, CPGs are finding new ways to incorporate classic functional ingredients into more of their products in 2022.

Neil Saunders, managing director with Global Data, said while ingredients such as adaptogens, probiotics and nootropics aren’t necessarily new, the way they’re being incorporated into food and beverages is changing. 

Adaptogens, for example, are moving from a powder form incorporated into teas and coffees to mainstream products such as sparkling water, energy bars and chocolate. Other ingredients like prebiotics, often found in yogurt, are transitioning into drinks and foods that can be consumed during different occasions like an Olipop soda or nutrition bar. And CBD is making its way into sparkling water, beer, coffee, cocktails and even jelly beans to help people relax.

Shoppers used to look to food and beverage offerings for hydration or sustenance, but increasingly they are turning to them as a way to improve their mood, gain a boost in energy, provide nutritional benefits or improve their gut health. The shift is especially prevalent in younger Gen Z and millennial consumers.

A 2019 study from Kerry found 65% of consumers looked for function in what they eat and drink. The pandemic has only accelerated demand, with Research and Markets estimating that the global functional beverage market alone will be worth $158.3 billion in 2023.

“It is an area that is growing and is really capturing a lot of consumer interests,” Saunders said. “These ingredients are sort of problem-solving in a way, so I think that’s why consumers are very interested in them and they’re willing to spend on them.”

Large CPGs are increasingly taking notice, too. 

Nestlé, Hormel Foods and Danone are incorporating nutritional therapy or medical uses into some of their products. PepsiCo launched a functional water called Driftwell aimed at combating stress and inducing relaxation, and Soulboost, which reportedly boosts mental stamina. And Molson Coors’ hard seltzer brand Vizzy is made with a superfruit that contains 30 times more vitamin C per cup than an orange.

 

Courtesy of Beyond Meat

 

3. Plant-based meat takes on new forms

Despite some discouraging recent earnings reports from publicly traded companies that make plant-based meat, many analysts say that the segment will continue to grow in 2022. 

https://www.fooddive.com/news/6-trends-shaping-food-and-beverage-growth-in-2022/616457/