Consumers are set to raise their standards for packaged food and beverage in 2024. This trend translates to and increased demand for products like mushroom-based meat and general better-for-you goods.
“They also care a great deal about the nutrient content of food, as well as the ingredient list,” said Christina Ra, VP of marketing at Meati, referencing the company’s target consumer base, which she said has grown 10% in two years. “They want fewer ingredients and they want to recognize them.”
As these habits continue to gain momentum and evolve in 2024, it provides an opportunity for what Chris Cain, partner at Foley & Lardner, calls “emerging-growth companies.” These are health-focused, niche CPGs that specialize in the better-for-you products consumers seek. But such conditions also beget increased competition.
“That’s what supports, in no small part, the sheer number of SKUs that you’re seeing around personal self-health,” Cain said.
Beyond the multivitamin
The trend toward better-for-you products is not new, but CPGs are working hard to cash in. WK Kellogg Co started the new year by announcing a new vegan cereal brand, Eat Your Mouth Off. Mars announced a $237 million factory for The Nature’s Bakery. General MIlls’ Yoplait brand launched a protein line.
Smaller CPGs have brands that are already aligned to such trends and innovating in harmony with them. Julia Perez, chief marketing officer for protein CPG Owyn, said she is most excited about growing the brand’s Doubleshot Protein Coffee Shakes in 2024. Launched in last August, the product capitalizes on protein and energy trends, and it lends itself to Owyn’s communication goals.
“One of our marketing approaches this year is to really focus on that functional message,” Perez said, “to lead with a strong macronutrient message.”
Consumers are getting more sophisticated, wanting more than a multivitamin, Cain said, as services that allow people to learn more about their individual nutrition needs, such as lab tests, are becoming more accessible. The general public is learning more about what they may want to consume more of or avoid. And, in 2024, the answers can get fairy specific.
Cain named adaptogenic herbs and functional mushrooms as two trendy ingredients. Meati noted consumer appreciation for fungi has grown exponentially in the last two to three years. Ra said the company’s “biggest opportunity” is to bring awareness to mycelium — Meati calls its species “MushroomRoot.”
“There was once a day when the word, ‘mushroom’ was polarizing, and those days are generally long gone, as fungi has earned respect, thanks to influencers, documentaries and a growing fandom,” Ra said.
Weighing impacts from weight-loss drugs
In 2023, Ozempic and Wegovy were hot topics.
PepsiCo CEO Ramon Laguarta was among executives watching the trend, though he told investors in October that business impacts at that point were “negligible.”
Food and beverage leaders can’t do much but speculate at this point, Ra said. “Only time will tell,” whether those using weight-loss drugs change their eating habits, she added.
It also depends on what information healthcare professionals are giving to patients using weight-loss drugs. Protein intake becomes more important when losing weight quickly, to ensure the weight loss comes from fat and not muscle, Perez said.
Owyn works with thousands of practitioners in the U.S. who are sharing that information, Perez said. But CPGs shouldn’t necessarily create strategies around the likes of Ozempic, specifically.
To Cain, weight-loss drugs are less a standalone trend and more a part of consumer demand for pathways to a healthier lifestyle, just as macronutrients and functionality are. He called the trends “complimentary,” while noting demand for weight-loss drugs may have a more negative impact on CPGs that do not provide better-for-you options.
Niche CPGs should consider diversifying their portfolios to stay ahead of competition. Larger CPGs might try to copy smaller ones, or even acquire them outright, and . Eventually, the hype and demand will dwindle.
“There’s lots of money to be made. There’s lots of SKUs to come out there,” Cain said. “It’s an exciting time for that space if you’re a young company.”
