By Hayley Null, food and beverage industry marketing lead at NetSuite
⏰ 5-minute read
Earlier this year, CB Insights released a report on emerging food and beverage trends for 2019. Now, Grow Wire revisits the report and adds predictions from our own coverage.
Trends range from easy-to-adopt (like opening up a direct-to-consumer sales channel) to more arduous (such as working with blockchain-based supply chains).
No matter your food and beverage company’s stage of growth, learning about these trends will ensure it is doing all it can to outpace the competition.
Earlier this year, analysts at software company CB Insights released a report on emerging food and beverage trends for 2019. The 50-page writeup took into account the company’s constant analysis of business data including news articles, startups’ websites, venture capital deals and more in an effort to predict how the food and beverage industry would change this year.
Now, more than halfway through the year, Grow Wire revisits the report, pulling out its most salient predictions and adding examples of brands that embody them. We also added predictions from our own coverage trends we've identified via our own coverage of the food and beverage industry this year.
The result is a concise roundup of trends that food and beverage companies can expect to encounter during the back half of 2019.
1. Direct-to-consumer distribution
Food and beverage companies are starting to branch out from solely relying on Amazon for e-commerce, CB Insights notes in its report. Historically, companies have maintained websites but outsourced e-commerce to Amazon. In 2019, however, more food and beverage brands are adopting direct-to-consumer (D2C) distribution models -- selling to customers directly rather than through a distributor or retailer like Amazon.
This is partly due to increasing competition from startups focused entirely on D2C and backed by investor support, the report adds. Take for example Birch Benders, which sells instant gourmet pancake and waffle mix both on its site and at retailers like Target. The business has received over $5 million in funding since its founding in 2011. It’s also due to big-box retailers investing more in their own private labels, minimizing available shelf space. (Consider Kroger’s private brand Simple Truth, which became the largest natural and organic product line in the country and reached $2 billion in annual sales by 2018.)
Implementing a D2C model can allow your food and beverage company to have more control over product presentation, collect more and better-quality consumer data and increase customer loyalty.
Food retailer Birch Benders sells to big-box stores as well as directly to consumers on its site.
2. Unique e-commerce product display
With this surge in online presence, food and beverage companies must consider how their products appear online. CB Insights notes that innovators in the space are moving beyond featuring traditional brick-and-mortar packaging online and are showcasing what’s beneath the packaging: their products. For example, health food delivery company Daily Harvest shows its smoothies in see-through cups on its website, though the actual product arrives in an opaque cup.
Daily Harvest gets creative with product display on its site, where customers can subscribe to the service.
3. Creative physical touchpoints
Customers want to be able to purchase directly from brands online, but they also increasingly want their brands to meet them where they are physically. Successful food and beverage companies do this in a few ways:
- Experiential brick-and-mortar
Traditional storefronts aren’t dead; they simply require more creativity these days. Hint’s retail store, which opened last year, offers customers samples of its flavored water and the opportunity to use the store’s in-house photo booth. Like many modern brick-and-mortars, the shop serves to connect with customers and increase education on products while providing an Instagrammable lifestyle experience.
Water company Hint recently opened an experiential store in San Francisco.
For food and beverage brands that aren’t keen on investing in a permanent brick-and-mortar location, pop-up shops are a worthy marketing tactic. CB Insights cites e-commerce company Brandless, which has hosted pop-up stores in Los Angeles and New York City.
Pop-up shops can also promote social media sharing, encourage brand loyalty and serve as collection points for customer data.
- Alternative offline points of sale
Food and beverage brands are meeting customers in venues they frequent, like gyms and office buildings, CB Insights reports. For example, meal delivery service Territory Foods delivers its products to Flywheel Sports studios, for customers who’d rather receive their meals at their workout studio than at home.
4. Next-generation technology
As business models change and consumers continue demanding transparency in their food and drink, the technology that food and beverage companies need to keep up is also evolving.
CB Insights mentions blockchain-based supply chains as a trend, as blockchain provides transparency into the entire product lifecycle. In the case of food safety issues (i.e. the romaine E. coli outbreak last year), blockchain can help trace the source of an outbreak in seconds. Without this technology, the process can take days. As this type of automation continues to become more commonplace in the industry, costs will decrease, and next-generation technology adoption will increase.
Only the largest food and beverage companies (i.e. Walmart, Nestle, Unilever) are piloting projects like these right now. Meanwhile, your business will benefit from paying close attention to these big players and partnering with technology companies that are investing in and/or able to support next-generation technology.
In addition to transparent supply chains, many food and beverage companies are dedicating themselves to sustainability as well, CB Insights reports. For Coda Coffee, a Certified B Corporation, sustainability isn’t just a goal; it’s ingrained into the mission and business model. Sustainability is a prerequisite for the company when sourcing its coffee beans and it helps to encourage sustainable growing practices at the farms its works with.
According to CB Insights, “As consumers expect companies to drive more social and environmental change, food and beverage companies are making their supply chains more sustainable to boost public perception of their brand, cut out unnecessary operational costs and ultimately benefit their bottom lines.”
Denver-based Coda Coffee showcases its direct relationships with coffee farms around the globe.
6. IoT packaging
Finally, the report notes that food and beverage companies are beginning to invest in smart packaging, incorporating the Internet of Things (IoT) to gather information on how customers are using products: when, how often, etc. The packaging can also remind consumers to take their daily medications, automatically refill products when they’re about to run out and alert consumers about spoilage before food goes bad.
The report highlights Water.io. In 2015, the brand debuted a smart bottle cap for disposable water bottles, which reminds consumers to drink every 30 minutes via flashing lights. The company has expanded this technology to pharma, beauty and more: Its smart pill box tracks whether consumers have taken their vitamins each day and works with an associated app to automatically reorder when supplements run low.
This increases convenience (i.e. customers no longer must go in-store or online for refills). However, it also raises some privacy concerns: Consumers might not want to give brands their real-time consumption data.
Due to high investment costs on widely producing smart packaging, time will tell whether the wider marketplace will adopt this trend.
Water.io debuted a smart bottle cap that it's since applied to categories including pharma.
🌱 The bottom line
There is no single “definitive list” of trends that will continue to impact the food and beverage industry. Keeping tabs on industry news -- as well as what the market’s biggest players are up to -- is a wise way to ensure your brand is doing all it can to outpace the competition in the second half of 2019 and beyond.