Low Alcohol by Volume

One of the latest trends in the bar scene may influence your next summer cocktail or craft beer selection – whether on a patio or in your own backyard. The “Low ABV” category is growing on all fronts, from bartenders experimenting with new recipes, to producers creating near-beers and faux spirits that provide flavor and fun.

BUT, WHY?

You might be wondering… “but why? isn’t that missing the point?” As Millennials and Boomers are trying to stay fit, a recent study by International Wines and Spirits Record found that “52% of US adults who drink alcohol are either trying now or have tried before to reduce their alcohol intake”[1]. This is right in line with the emergence of “Dry January” – the 31-day alcohol-free challenge that has become a tradition for many following the holidays. Indicative of an overall search for moderation with alcohol, restaurants and retail brands have taken note.

WHAT’S HAPPENING

In NYC, the bar scene is rising to the challenge with trendy sober bars, mocktail menus and booze-free pop-up parties. These spaces are set up to look and feel like any other hip bar in the area, offering patrons an “alternative” night out. Most claim not to be a strictly sober space but rather one that promotes being social: talks, meet-ups, music, workshops, and my personal favorite: Juicebox Heroes, a karaoke lounge split into sober and non-sober sections. I have to imagine the experience is rather different from one side to the other!

On a broader scale, bars are putting more effort into their Low ABV program, and many times calling it out as a specific section on the menu. Generally defined as containing less than 1 ounce of high proof spirit, they are often only slightly less expensive as they tout similar high quality and unique ingredients as their alcoholic counterparts.

SO, WHAT NEXT?

Consumers will continue to look for what benefits their beverage choices can provide for them, by way of both wellness and experience. With the low- and no-alcohol beverage category projected to grow roughly 32% by 2022, it’s likely that creativity will continue to be key in shaping this trend – with the addition of items like “CBD-infused lattes” and “mushroom-elixirs”, the bar scene and how we consume mood-altering beverages is going to look very different even a few years from now.[2]

[1]“Low- And No-Alcohol Beverages Are a Growing Trend Worldwide.” Forbes. Pellechia, Thomas. February 20, 2019.
[2]“Sober-ish Summer?” Vanity Fair. Bryant, Kenzie. May 24, 2019.

Series: JTM Scale

This month we continue with the JTM Scale Series – a monthly post dedicated to sharing some of what we’re seeing in the local food and beverage start-up scene. Last time, we covered the beginning of this season of the MN Cup. While we anxiously await the second round of applications, we take a look at how “thinking small” is put into action to get closer to the consumer.

WHAT’S HAPPENING?

Innovation is the primary driver for many of the accelerators, incubators and venture arms that have been created in recent years. Now that these programs have been established, it’s been especially interesting in the past few months to see how they are being brought to life to bring real learnings and change.

Voice of Customer. If you’re familiar with Kickstarter, it’s likely you associate it with start-up brands or perhaps mission-based projects or causes. It is currently being utilized by Mondelez as a tool for testing different methodologies as they refine new product launch plans.[1] In a recent campaign, Kickstarter backers are required to select which product they would prefer to receive in exchange for a pledge, which provides Mondelez with real-time feedback and a less traditional research method. Ultimately, the goal being to launch products on a timeline more reflective of a start-up.

              

Real-Life Food Labs. Food brand themed restaurants are nothing new – and have often been leveraged as a real-life lab for testing new innovative products and partnerships. A unique take on this concept is Edwards Dessert Kitchen, a beautifully designed space in the North Loop of Minneapolis with sophisticated dessert items and a craft cocktail menu curated by Tattersall Distillery. The concept is backed by Schwan’s (Edwards is the name of the frozen pies division), a collaboration between its corporate entity and a very talented pastry chef. With an intentional lack of corporate branding, it’s an opportunity to innovate, create and learn.

WHAT’S NEXT

As incubators and venture arms become more prolific, the creativity in approach and execution are what will truly create a competitive advantage. The impact of these efforts on speed-to-market and innovation will take time to measure – but it’s exciting to see how “thinking small” is taking on its own meaning within organizations.

[1]“With Dirt Kitchen & CaPao, Mondelez Tests New Launch Strategies.” Nosh. Ortenberg, Carol. July 1, 2019.

Sweets + Snacks Expo

We have been on the road a fair amount in 2019 to industry events and trade shows. A new one for us, Sweets and Snacks Expo, took place in Chicago May 21-23 at McCormick Place with an estimated 15,000 people in attendance. Snacking has continued to carve out its own daypart as consumers of all ages (yes, younger generations at a more significant pace) are turning toward a more frequent and convenient eating lifestyle. We saw how this is playing out in the $86 billion market of snack ($51 billion) and confectionary ($35 billion) first-hand.[1]

STAND OUT BOOTHS

A colleague with prior Sweets and Snacks Expo experience dubbed the show “like Trick or Treating for adults”. I have to agree. I also have to admit that in many cases, I’d take the “trick” over the treat if that’s what the booths were intended to deliver. The quality of the booths at this food show stood out more than any I’ve been to when it came to experience and creativity.

       

WHAT’S TRENDING?

It isn’t too surprising that many of the same trends we shared from Natural Products Expo West the past couple of years are making their way into mainstream CPG products. Plant-Based, Adventurous Flavors, and Fats + Fads (think: anti-sugar, and proliferation of Keto-friendly) were all prominent themes throughout the show. It was interesting to see how these themes showed up in both legacy products and newer formats.

         

WHAT’S NEXT

We’ll continue to expect rapid innovation from this category. Not only due to the fact that it’s quickly becoming a dominant daypart but also because it’s inherently a factor required for brands to remain relevant. When new products account for nearly 5% of sales in snacks and over 6% in confectionary as compared to 3% in overall consumer packaged goods, it’s a great place to turn for inspiration in product, format and overall brand experiences.

[1]“Top Trends at Sweets & Snacks 2019.” Watrous, Monica. Food Business News. May 21, 2019.

Series: JTM Scale

Last month we kicked off the JTM Scale Series – a monthly post dedicated to sharing some of what we’re seeing in the local food and beverage start-up scene. This is the start of the 15th season of the Minnesota Cup, the largest and most impactful statewide start-up competition in the country. Connecting emerging entrepreneurs with tools, resources and support to further new ventures, there is a lot of momentum going into this year’s competition.

SO, WHAT’S HAPPENING?

At the end of May, the semi-finalists for each of the nine divisions were announced. A total of 88 teams will continue on the path to compete for their share of $500,000 in prize money – not to mention incredible mentorship, connections and in-kind sponsorships along the way.[1] As active participants in the Food, Agriculture and Beverage division, we were excited to meet the entrepreneurs and see elevator pitches from each of the teams this past Thursday, June 6th.

Food/Ag/Beverage

 

The turnout to the event itself was strong – the auditorium at the Carlson School of Management was packed with an engaged audience. A combination of judges, mentors, other entrepreneurs, and general enthusiasts filled the seats which made for a high-energy platform. With just one minute each, the live pitches were a perfect glimpse into the story behind the business and a quick opportunity to “give a face to the name” of the entrepreneur. The semi-finalists in our division represent a wide range of products and solutions and they maximized their 60 seconds. I have to say, I walked away pretty excited about what I saw within the top 10!

WHAT’S NEXT

Over the next 60 days, the semi-finalists will be in the thick of the season – getting paired with local mentors (one of the benefits most highly spoken of by past participants), working on their next round of submission materials and taking part in education seminars offered through the program. The next milestone is August 22, where the the top 10 semi-finalists will compete in a division-wide “Pitch Slam”. During the event, JTM will announce the recipient for this years’ JTM Scale award, $25,000 of advertising expertise and brand development resources in an effort to help propel one of these great brands forward. We’re excited to see how this season shapes up – so far, it’s looking like it will be pretty fierce!

[1]“2019 Semifinalists.” MN Cup. University of Minnesota. May 30, 2019.

 

What’s On Your Grill?

As we head into grilling season, what gets thrown on the BBQ might look a little different this year. While plant-based eating is certainly not a new trend in 2019, it is becoming increasingly more mainstream – particularly when it comes to the format we know and love: burgers.

HOW SIGNIFICANT IS THE SHIFT?

Many factors are contributing to the growth in the overarching trend of plant-based eating: health/nutrition benefits; animal welfare; environmental conservation, to name a few. Add to that, recent reporting that shows 61% of U.S. adults want more protein in their diets and it is no surprise that plant-based protein is the #1 growing category in NPD’s SupplyTrack research.[1]

(Plant-Based Proteins; The NPD Group/SupplyTrack)

Based on independent and micro chain reporting, plant-based burgers are the largest product type within the category. In many cases they look like, taste like, and “bleed” like meat. With descriptors like “Meat Lovers Vegan Burger”, the target audience is clearly a broader base than those trying to get away from the experience of animal protein. All of these factors contribute to the rapidly evolving landscape of beef alternatives.

WHO’S MAKING IT INTERESTING?

This continues to be a topic we see and read about on a daily basis in the industry. So what – and who – makes it interesting? The innovation in the space is interesting. Impossible Burger, the burger that goes directly after meat lovers and recently launched a new recipe that “rivals beef in the attributes that matter the most: nutrition, versatility and, of course, taste”.[2] Truly focused on delivering a beef alternative that surpasses the “real thing” in likability, it originated in an effort to reduce overall global footprint. Beyond Burger, the pea-protein based burger that is free of GMOs, soy and gluten, rivals beef in the restaurant and retail scene. The brand has significant public spotlight as it grows its global footprint (now available in 700 stores in the Netherlands) and announced it will go public later this week.[3] Aside from these two leaders, there are many other alternatives – many coming from brands that have been in the “vegetarian” world for some time: Morning Star Farms’ “Meat Lovers Vegan Burger” and Lightlife’s plant-based burger with pea protein and beet powder.

There are 5 markets that make up 1/3 of the plant-based beef burgers in the U.S.: LA, Chicago, Atlanta, New York and Boston. [1]

WHAT’S NEXT

What makes this interesting is how operators and consumers are responding to these new offerings. I recently attended a panel of three different operators, each offering a different version of a meat-alternative burger (Impossible Burger, Beyond Burger, and a blended mushroom/beef burger). In their own way, each operator highlighted that there is a lot of room for trial and error when it comes to recipes, messaging and overall mainstream consumer education.

 [1]“2019 US FOOD SUMMIT.” NPD Group. April, 2019.
[2] “The Impossible Burger.” Impossible Foods. April 2019.
[3] “Vegan Unicorn Beyond Meat Enters Dutch Super Markets With Its Plant-Based Burger.” Banis, Davide. Forbes. April 2019.

Series: JTM Scale

JTM ScaleLast year, JT Mega launched JTM Scale, an initiative designed to bring our agency’s expertise to the rapidly growing food start-up space. We’ve had the opportunity to connect with incredibly talented local entrepreneurs and to partner with some fantastic organizations throughout the past 12 months. The level of innovation in food and beverage continues to impress. In the next couple of months, we’ll share some highlights we’ve observed over the past year.

SO, WHAT’S HAPPENING?

Collaboration. Collaboration is key in any rapidly growing, complex space – and the people who are passionate about food and beverage don’t just talk the talk – they roll up their sleeves, get involved, and work together. One of the strongest representations of this is in our own backyard. Minnesota has a long history of leadership in food and agriculture, with businesses like General Mills, Hormel, Cargill, Schwan’s and Land O’Lakes all headquartered in our state. With this foundation, there is a natural proliferation of innovative start-ups all around us.

The community is taking notice – and making a concerted effort to cultivate and foster this energy. MN Cup, a community-led, public-private partnership is kicking off its 15th annual competition and has a division dedicated to food/ag/beverage. It’s the largest, most impactful statewide startup competition in the world.

Organizations like Grow North (who hosted the first annual Food, Ag, Ideas Week last fall) are developing events and forums to bring people together and create an ecosystem of support and innovation. The turnout was impressive – with panels, discussions, community mingles and a range of topics covering “the health of school lunches, competition in craft brewing, the emergence of the hemp industry and development of self-driving tractors.”[1]

WHAT’S NEXT

Organizations like MN Cup and Grow North are becoming more established across the country and around the world. Food has always been an integral part of culture, which is quite literally bringing more seats to the table. With this influx of interest comes support from industry stakeholders in the form of formal incubator programs, collective kitchen spaces, education seminars, mentorship and funding. It is an exciting time to be part of this community as collaboration is elemental in developing innovative products and solutions.

[1]“Announcing the first-ever Food, Ag, Ideas Week.” Make It. MSP. Grow North. August 4, 2018.

Food Halls on the Rise

I distinctly remember excitedly sending a few messages back home from Lisbon in 2015 about a food market that was unlike anything I had seen. This is well before my official “days in the industry”. After wandering the city, I stumbled upon “Time Out Market Lisboa” – a food hall with more than 40 spaces that covered just about every category of local and global cuisine I could imagine. Today (and then, in many cities around the world), it’s a pretty well-known concept. From my personal initial “awe”, I can understand why. But what’s behind this concept that’s growing at a crazy fast speed?

“Time Out Market Lisboa” in Lisbon, Portugal

What is it?

Food halls are a gathering of independent, chef-inspired pop-up restaurants that are often housed in a repurposed urban, post-industrial setting. How’s that for an image? If you have been to one, or a few, you know that this doesn’t really capture the experience at all. Much of what makes a food hall interesting, in my opinion, is the volume of options and the ambience in which you get to make your selection(s).

Why It’s Happening 

There are a number of underlying factors that are driving the rapid expansion of Food Halls globally. From 2010 to 2017, the number increased around 700% and by the end of this year, it’s anticipated the number will double from that.[1] The concept itself is appealing to critical stakeholders: diners, developers and chefs.

Much like trendy food trucks or street food vendors, food halls allow diners to access numerous independent restaurants all in one place, and at a full range of price points. In addition, the ambience works well for solo diners, large groups, or families. Developers are on board in a big way as this concept allows them to repurpose abandoned spaces – plus, they typically draw a crowd and are popular with Gen Z and Millennials.[2] Last, but certainly not least, food halls allow chefs to open an independent concept with some critical built-in benefits: foot traffic (if done right) and lower operating costs.

What’s Next

In our own backyard and across the country, what’s next is more food halls with varying twists! In Minneapolis alone, there are a number of projects underway and many of the “originals” are getting more attention from the buzz alone. The Midtown Global Market has been around since 2006 and offers cuisine from all around the world. Now, there are at least two significant developments underway downtown that will house food halls in our own backyard. In Manhattan, Mercado Little Spain will open as a Spanish-themed food hall with support from renowned chefs and restaurateurs.[2] This rapid growth certainly raises the question around saturation. While food and retail are changing rapidly, the verdict is out as to the longevity of this concept and its ability to meet the ever-changing consumer who demands novelty at every turn.

[1]“The Origins of the Food Hall and Its Booming Popularity.” Hautzinger, Daniel. February 15, 2019.
[2] “What if Food was the New Rock’N’Roll and Food Halls were the New Stages?” Brennan, James. January 3, 2019.

Expo West 2019

This was our third year of traveling to Anaheim for Expo West and each time it has been inspiring in its own way. The energy of 86,000 people from 136 countries gathered in one place to partake in the world’s largest natural, organic and healthy products event is contagious. Aside from sharing the enthusiasm (which is critical!), the trends that emerged this year are important for many reasons – and will likely shape much of the dialogue and direction of the CPG space in months to come.

First: The Smarts

This year, the education sessions really stood out in both content quality and relevance. One of the most informative was hosted by NEXT and shared findings from recent consumer research. The research captured a broad spectrum of buyers that identify with different attitudes and behaviors and established five consumer segments. Each of these segments are unique in many ways but what really shaped the dialogue around the presentation was a key finding: that the segments agree on what the most important issues are in the industry: Waste Reduction, Sourcing Responsibly, and Regenerative Agriculture.[1]

Then: The Trends

Global / Environmental Responsibility. Waste Reduction, Sourcing Responsibly and Regenerative Agriculture were prominent trends at Expo West this year, in a broader umbrella trend of “Global / Environment Responsibility”. Definitely the most dialogue and energy from “the crowd”, these themes came to life through the show in a number of interesting ways. Generally, products and brands are talking about much more than the end product. More of the messaging is around the larger footprint – partners, sourcing, labor practices and sustainability efforts. Applegate Farms was acknowledged in the “Regenerative Agriculture Innovation: Humane Animal Treatment, Soil Health” category for its ecological practices, specifically for their Organic Chicken Strips.[1] The chicken is verified for animal welfare through certified programs that ensure they meet strict requirements for the treatment of animals.  

Applegate Farms was acknowledged for its ecological practices

CBD. If you’ve read any of the post-show recaps, you already know how massive a presence CBD had at Expo West this year. I won’t pretend to be an expert on this topic – in fact, as someone who attends a number of industry events that include education sessions dedicated to this very topic –I still find it pretty ambiguous. Aside from the regulatory complexities, the broad range of products and claims leave a lot to be desired when it comes to minimizing consumer confusion. What is clear is that there is a huge appetite to develop new and innovative products in this space. The sheer quantity of products with this messaging compared to a year ago proves that – along with the wide variety of formats in both food and beverage. In speaking with a number of founders at different booths, there is a high level of energy to understand, educate and adjust – which will likely be a key factor of success in upcoming months and years.

CBD had a massive a presence at Expo West 2019

Fats + Fads. As NEXT dubbed it, “sugar villainized” was a key theme at Expo West this year.[1] Alternatively, products flaunted the prominence of fat. In fact, many incorporated it in the name and messaging, and often embraced the animal-base that it was derived from. Whether a fad or here to stay, the prominence of lifestyle diets has grown over the past year – Paleo and Keto, in particular. The incidence of the use of “Protein Claim” on products exhibited this year is now in the top 10 at the show[1]. This is inline with what I saw when it came to messaging that spoke directly to being Paleo- and Keto-friendly. It will be interesting to watch how this evolves over time alongside Vegan, Kosher, Clean and Whole-30.

Many products embraced the animal-base that it was derived from

Final Thoughts

Expo West continues to grow each year – not only in the number of exhibitors and attendees but also in content and conversation. Based on what we saw this year, there is going to be a continued focus in the natural food space on how products fit into a more integrated lifestyle that incorporates values, functional ingredients and the ongoing pursuit of healthy living.

[1] “Connecting with the Changing Consumer” NEXT, Data & Insights division of New Hope Network. Expo West: 2019. March 2019.

Immersing in local culture through food

There is a good chance that this post will either inspire you to find the best local representation of Southeast Asian food, or possibly just leave you really hungry. I recently spent time in Southeast Asia, traveling around Vietnam, Laos, Cambodia and Thailand. I have had the “travel bug” since college and ventured to a number of incredible places around the globe. It’s in my DNA to appreciate a region through the people, the natural setting, and the food. And wow, the food in SE Asia. Green Curry, Bun Cha, Kao Soi, Kebabs, Spring Rolls, Papaya Salads, Pho, Cocount Rice, Morning Glory. This was my first personal international trip since joining the “food world,” and I was amazed at the different lens that I viewed my experience through with having spent time in this incredible industry.

WHAT STOOD OUT

This entire blog could be dedicated to the different flavors and dishes that I experienced throughout the different regions, but more compelling are the themes that emerged through that time — and in recent weeks of post-trip reflection.

“Regional”
Perhaps this is something I should have expected going into the trip. But one of the things that surprised me right out of the gate was just how different regional food and beverage specialties were within a relatively short distance. This first dawned on me when traveling from Hanoi to Hoi An in Vietnam. A night train ride away and suddenly, Bun Cha (an incredible Hanoian lunch noodle dish) was no longer available at every corner — and not for the going rate of $1.75. I hadn’t been prepared to have experienced “my last bowl of Bun Cha” in Vietnam! While I was immediately blown away by the local Ban Xeo (a Hoi An crispy pancake), it made me realize how much I needed to savor each flavor experience, since in many cases it wouldn’t be offered even a few hours away. While there were some commonalities, it was eye-opening to see how much the dishes, eating habits and international influences varied by both regions and countries.

Bun Cha, an Hanoian lunch noodle dish as featured on "Parts Unknown"
For those of you familiar with Anthony Bourdain’s “Parts Unknown”, Bun Cha was the meal he shared with Barack Obama in his Hanoi episode.

Bun Cha, an Hanoian lunch noodle dish

“Fresh”
At each new location, the food market was always a highlight. Wandering through the narrow aisles of various sections (produce, meat, seafood, spices, etc.) provided an instant glimpse of the local ingredient influences. A wonderful opportunity to connect with locals, the market was always a significant center that the city revolved around throughout the day. It truly captured the meaning of “fresh”. Each stall (mostly run by local women) was set up before dawn with new product for the day. Without refridgeration on-site and a very low “shelf life”, it made its way into the hands of restaurant owners, street food vendors and local residents throughout the day. In many cases, these markets are visited by locals not weekly or daily — but twice a day or more! Each meal prep included a stop at the market to gather ingredients and is often reliant on what is available and fresh. No matter the daypart, convenience was served up in the format of “meal kits”. A handful of vendors at each market I visited could be found bundling common ingredients in a ready-to-prepare kit that required just a step or two to make the local cuisine at home. I took advantage of this in a number of instances and loved encountering such a familiar “trend” with a different customer experience across the globe.

A noodle soup with fresh herb meal kit found in Laos.
A noodle soup with fresh herb meal kit found in Laos.
Local produce market in Hoi An, Vietnam.

Local protein market in Hoi An, Vietnam.
Local markets with produce and protein in Hoi An, Vietnam.

WHAT TO TAKE AWAY

One of the best things about traveling far away from familiar settings is a reminder of how both big and small the world is — and food is a perfect reflection of that. The diversity of customs and ingredients within a single region is mind-blowing. It’s exciting to think about how many of these global flavors are making their way to US menus, and the opportunities to expand are never-ending. Simultaneously, the familiarity of food trends halfway across the globe is a reminder that this industry is truly unique, in that it is one of shared human experience.


Complexity, Loyalty and Collaboration – all top of mind in 2019

We are entering the season of conferences and tradeshows, with a number of industry events right around the corner. Recently, we attended IFMA’s Chain Operator’s Exchange in New Orleans where we walked away with a few interesting nuggets that span beyond the content that was shared in the presentations and roundtables.

Complexity

If there were a word cloud built that captured the dialogue and content of all the events I’ve attended in the last year, “complexity” would be one of the largest. Complexity in reference to the quickly changing landscape, food safety, labor issues, the consumer journey, access challenges, supply chain transparency; the list goes on. In my opinion, the opportunity lies in the communication and a continued appetite to understand and evolve. One of the ways JT Mega is addressing the challenge is by staying — and ramping up — our involvement in the industry; but just as importantly, sharing the experiences among our own team. While it can be difficult to carve out time when schedules are only getting tighter, the post-JTM15 (our agency share-outs that last 15 minutes) conversations are a reminder of how much is happening right “within” our four walls that can support better navigating complexity. 

If you’re interested in a JTM share-out with your team, let us know! We have a number of events coming up that may be of interest.

Loyalty

In addition to a complex landscape, it’s common understanding that consumers have more options and are becoming more selective when it comes to food choices. This increases the importance of measuring, understanding, and influencing guest loyalty for the sake of repeat purchase and growth. Datassential provided insights on some recent findings around what drives loyalty with restaurants.1 Relatively few chains achieved a net promoter score (NPS) of greater than 59%, but the bigger learning was in uncovering which qualities had the greatest correlation with true loyalty. It isn’t affordability or new LTOs – rather, attributes more ingrained in the culture of a restaurant. If you really want to impact loyalty, Unique Experience, Craveable Items, and Great Staff are the drivers. 1 These aren’t quick triggers by any means, but are in line with what we are seeing in the industry as a whole — brands have to offer more than the product; embodying a culture and experience that align with consumers personally matters more.

Collaboration

Over my short 2+ years in this industry, I have been continually reminded and pleasantly surprised by the “in-it-together” mentality that is inherent in the food and beverage world. It seems that the conscious focus on collaboration — how to do things better, together — is openly a priority. Continuing to raise the bar in this industry is a collective goal and it makes it an exciting time to be part of it.

Final Note

This “season” of events is off to a solid start and it will be interesting to see what emerges in both themes and trends for 2019. We look forward to sharing what stands out to us and would love to hear what you think is a little different about this year. (Or…to hear what you’d like to hear more about…).

1 “Keys to Brand Affinity.” Datassential. IFMA COEX. February 2019.

Questions, comments or want to learn more? Let's connect! weshouldtalk@jtmega.com

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