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.


The Rise of the Lifestyle Diet

As we dive head-first into 2019, many people have set goals to eat healthy or lose weight and have begun a variety of diets. More than ever before, fast food and quick-serve/fast-casual chains have seen the value in offering on-the-go options for their keto customers, Whole30-doers and paleo patrons.

Chipotle.com advertising lifestyling bowls for Keto, Paleo, Whole30, and double protein diets.

With 80% of New Year’s resolutions failing by February1, the Chipotle-style restaurants of the world are here to help.

A quick Google search for “best diets of 2019” returns various guides for Whole30, Mediterranean, DASH, paleo, vegan, Nordic, keto, Weight Watchers, Pegan (paleo-vegan), anti-inflammatory…the list goes on. As the general population grows more concerned with their overall health and wellness — and largely having a greater understanding that what works for one person may not for another — they find there’s not a one-size-fits-all answer to adding a “diet” to your menu.

What we think:

As diets become lifestyles, chains that already incorporate customization on their menus have an easier time accommodating specific dietary desires. That being said, this opens a whole new door to mass-acceptance of healthier, nutrient-rich demand when dining out in quick-serve situations. You used to only find this type of dietary accommodation around LA or New York, maybe San Fran or Seattle, but never before has this level of dietary acceptance been made across the nation.

As dietary standards rise, restaurants — and therefore manufacturers — have no choice but to adapt alongside their customers.

A few chains incorporating specialized diets on their menus2:

  • Chipotle (keto, paleo, Whole30, double-protein)
  • Roti Modern Mediterranean (Gluten-Free Rice Plate, Keto Salad, Vegan Pita)
  • Chick-fil-A (paleo, keto or Whole30-friendly options: grilled nuggets and superfood salad, spicy southwest salad, grilled market salad)
  • In-N-Out Burger (protein-style paleo burger)
  • Taco Bell (keto options, highly customizable menu)

What’s next:

We pose the question: are many of these diets even a fad? They’ve been around for some time now, only growing in popularity. The differences in today’s “fad diets” and those of the 90s are whole foods, higher fat, and focus on origin of food, rather than low-fat shakes and non-fat cheese.

Used-to-be “alternative lifestyles” are now mainstream and restaurants are finally recognizing them as such. McDonald’s UK now offers vegan and vegetarian Happy Meal options3, and McDonald’s Sweden recently launched their first vegan Happy Meal4 — the McFalafel. Add those to the list of restaurants already offering options like the Impossible Burger or Beyond Meat, and we will see vegan options on more menus in 20195.

Keep an eye out for greater transparency in food origin, lower sweetness levels6, and values at the center of purchasing decisions for these large chains. Dining options that have previously limited their stake in these issues are getting pressure from consumers to adapt, and, as a result, these chains will likely turn to manufacturers to help accommodate these requests.

[1] “80% of New Year’s resolutions fail by February — here’s how to keep yours.” Business Insider. January 2017.
[2] “8 Fast Food Joints With Surprisingly Great Paleo and Whole30 Meals.” Thrillist. January 2019.
[3] “McDonald’s UK Launches Its First Vegan Happy Meal.” VegNews. January 2019.
[4] “McDonald’s Just Launched Its First Vegan Happy Meal In Sweden.” Delish. January 2019.
[5] “The year of the vegan.” The Economist. January 2019.
[6] “10 Macro Trends Impacting Food And Beverage Innovation In 2019.” Forbes. January 2019.

The Values of Food

As consumers have a wider range of choices in the businesses and brands available to them, social causes are beginning to play a more substantial role in their selection process. When 8 out of 10 consumers do not believe that large food companies try their best to be socially responsible or act in the best interests of their customers1, it’s important to uncover what consumers are looking for instead.

WHY IT’S HAPPENING

More than 75% of consumers support philanthropic causes in their personal lives and many are actively contributing time and energy to make a positive impact.1 Additionally, 64% of consumers want food companies to be engaged in a public way regarding their social impact.1 Transparency – in all industries – is increasing with speed of access to information. In turn, consumers realize that they can ask to know more about the businesses they support in their daily lives.

WHAT WE THINK

Personal values are just that – personal. And while consumers are interested in knowing more about what you as a company support, it’s just as important to know “how”. With a complex landscape of priorities around sensitive topics like food access, waste, transparency, ethical sourcing and more, supporting a cause that aligns with your core values matters more than ever. Consumers want to see their dollars in action. In fact, more than 80% say that your public donations are the most convincing effort you can make to prove your support. 1

And what role does this play on a consumer’s “final decision”? When you are aligned, the positive impact makes a difference. In fact, 64% of consumers will continue to purchase from a specific brand or company even when a better product is available, simply because they value what that brand or company stands for. And 25% of those same consumers will not only continue to purchase, but they’ll encourage others to do the same. 1

WHAT’S NEXT

The integration of business, personal values and charitable causes will continue to grow in importance. Younger generations consistently skew their focus on what, why and how this is communicated, with the intention of making better informed decisions. This dynamic presents an opportunity to step back and think about how to push for a more socially integrated business.

 

[1] “Personal Values and Food.” Datassential. Datassential: Food with a Story. Foodscape 2. September 2018.

What’s Next for Natural?

La Croix sparkling water in the official JT Mega mini fridge

Like many other office kitchens, the official JT Mega mini fridge is slowly being taken over by La Croix sparkling water. Once a refuge for artificially-sweetened soft drinks, the shelves now burst under the weight of “pamplemousse”, “mure pepino”, and “cerise limon.” And like most new beverage items on the market, each can proudly proclaims “100% natural flavors.”

Replacing artificial ingredients with natural ones has shown positive sales results across all food and beverage categories.  So imagine our surprise seeing a report by food and beverage flavor developer, FONA International, proclaiming “The jig is up for manufacturers hoping to win [consumer] confidence with a natural claim.”

While we adamantly reject the notion that “natural” is losing meaning with consumers, it does raise an interesting perspective about how we maximize the effectiveness of “natural” claims moving forward.

WHY IT’S HAPPENING

First, we have to understand why consumers were drawn to “natural” in the first place. In its recent report, The Hidden Drivers Behind Natural & Organic, Technomic states one of the key reasons consumers gravitated towards “natural” was because it provided an efficient mental shortcut:

Today's consumers demand transparency around each step their food takes on the way to their plate...across the spectrum of health, taste, sustainability, social responsibility and more. So how can you give consumers that much information without overwhelming them? By using umbrella terms. Terms such as 'natural' and 'organic' convey many things to consumers by perceptually encompassing a wide variety of other health claims and benefits.

In short, “all natural” became an easy way to convey both higher quality and health attributes.

But without a consistent definition of umbrella terms between the FDA and the USDA, brands began using the same words to describe various farming techniques, animal husbandry practices and ingredient parameters. Which unfortunately led to mass confusion: 82% of consumers said they confuse natural and organic at least some of the time1.

So one can see why FONA International would argue companies should be using more single-attribute claims like “no preservatives,” rather than umbrella terms like “natural”, when marketing to consumers to minimize confusion.

Which begs the question, “which one is right?”

WHAT WE THINK

You need both. Umbrella terms and single-attribute claims serve different purposes for different consumers.

We know umbrella terms provide a very necessary mental shortcut for consumers looking to delineate between conventional and non-conventional food and beverage options. And for many people, seeing a “natural” claim is all they want (or need) to make a purchase decision. For consumers demanding a deeper level of detail, single-attribute claims function as proof-points for the umbrella claim and demonstrate a higher degree of transparency.

WHAT’S NEXT

You can effectively use both umbrella terms and single-attribute claims in marketing communication by building a messaging hierarchy:

Start with the umbrella term 

Umbrella terms (natural, organic*, clean, simple) should be featured most prominently on the package/marketing communication. Its primary purpose is to help a customer more easily distinguish this as a non-conventional product.

Field Trip beef jerky packaging featuring prominent umbrella terms, 'all natural' and 'gluten free'.

 

Follow up with additional single-attribute claims 

Next, highlight single-attribute claims that are particularly important to your category and/or target audience.

Field Trip beef jerky packaging featuring supporting single-attribute claims

Finish with umbrella term clarification

Lastly, provide additional clarity as to what production and/or ingredient practices back up the product’s classification as the umbrella term.

Field Trip beef jerky packaging featuring the clarification of the displayed umbrella terms.

*Note: while the FDA and USDA have strict guidelines on how organic is labeled, many consumers are either unaware or confused as to what it means. As such, we classify it as an “umbrella” term in this post. 

1 “Natural: 2018 Trends and Insights.” FONA International. 2018.

 

Waste Not, Want Not

Though food waste has been a hot topic across the industry over the last several months, you’ll be hard-pressed to find a more passionate group on the issue than this year’s Esca Bona 2017 attendees. This past October, JT Mega joined nearly 200 food entrepreneurs, agriculturists, venture capitalists and local farmers in Austin, TX to listen and learn about the group’s passionate vision for a reimagined food system.

The National Resources Defense Council reports that Americans waste 40% of all food that is purchased. In fact, each person tosses a whopping 300 pounds of food in the trash annually; a trend that food and technology entrepreneurs at Esca Bona are seeking to solve. Like Dan Kurzrock and Jordan Schwartz, two San Francisco-based homebrewers who loved craft beer but hated the volume of wasted “spent” grain.

Historically, spent grain has created a symbiotic relationship between brewers and farmers, as the latter uses the byproduct for soil enrichment and animal feed. But the explosion of craft breweries in the area made that relationship less practical for rural farmers.

It wasn’t until Kurzrock and Schwartz began exploring spent grain’s potential as a food ingredient that ReGrained was born.

ReGrained was born when two San Francisco-based homebrewers began exploring spent grain’s potential as a food ingredient.

We couldn’t help but ask ourselves, how many other food and beverage manufacturers are throwing away potential consumer product innovations?

WHY IT’S HAPPENING

Food waste isn’t a new topic for the food industry, but it’s been largely framed as a consumer-behavior issue. But food and beverage manufacturers also play a significant role in this growing epidemic.

Historically, animal feed and land use have been the go-to solutions for waste products, accounting for nearly 85% of all manufacturer waste today1. But as the founders of ReGrained learned, transportation constraints is now the most cited barrier for large manufacturers in donating and recycling waste products.

This challenge provides Big Food with an opportunity to uncover–and even collaborate–with food entrepreneurs on new product innovations.

WHAT WE THINK

It’s time to start viewing food and beverage manufacturing byproducts as innovative ingredients, rather than waste.

This shift in perspective is not only good for business, but demonstrates a differentiated level of corporate responsibility to today’s increasingly conscious consumer.

WHAT’S NEXT

Need some inspiration on where to start? Check out these three companies for their innovative approach to food waste.

Coconut Jerky

As the demand for coconut water began to skyrocket with consumers, so did the volume of wasted coconut flesh discarded at production facilities. The creators of Coconut Jerky turned this byproduct–which is packed with vitamins, minerals, antioxidants and plenty of fiber–into the first vegan beef-jerky alternative, with satiating flavors like Chili Lime and Ginger Teriyaki.

The creators of Coconut Jerky turned this byproduct into the first vegan beef-jerky alternative.

Sir Kensington’s Fabanaise

With a rising demand for vegan products, Sir Kensington’s set out to come up with a mayonnaise alternative that didn’t rely on processed starches or pea/soy powders. After several failed ideas, the innovation team turned to aquafaba: the liquid byproduct from cooking chickpeas in water. Sir Kensington’s partnered with a New York-based hummus manufacturer who agreed to sell them their waste stream, and the country’s first food-safe supply chain of aquafaba was born.

With a rising demand for vegan products, Sir Kensington's set out to come up with a mayonnaise alternative that didn’t rely on processed starches or pea/soy powders.

Uglies

Millions of pounds of produce are passed over each year by farmers and food companies because of mild cosmetic flaws or irregular sizes that most manufacturing plants aren’t equipped to process. So Pennsylvania snack purveyor Dieffenbach’s Potato Chips created Uglies, kettle-cooked potato chips made from rejected potatoes.

Pennsylvania snack purveyor Dieffenbach's Potato Chips created Uglies, kettle-cooked potato chips made from rejected potatoes.

 

1Analysis of U.S. Food Waste Among Food Manufacturers, Retailers and Restaurants.” Food Waste Reduction Alliance: A Joint Project by the Food Marketing Institute, Grocery Manufacturers Association and the National Restaurant Association. 2017.

Lessons From Organic Water

This past July, Vermont businessman Adam Lazar celebrated a remarkable achievement: getting USDA organic certification on his new line of bottled water, Asarasi.

Asarasi; the USDA's first certified-organic water

Asarasi; the USDA’s first certified-organic water

Yep, you read that right. Organic water.

Because water has no carbon molecules and is therefore technically inorganic, the USDA has previously excluded water as an ingredient making organic claims. But Lazar’s company found a loophole: because the water is naturally filtered through, and extracted from, living maple trees, Asarasi meets the definition of organic.

Quite possibly more remarkable than Lazar’s new certification is the level of customer demand. According to its 2016 Bottled Water Category Report, Mintel found a whopping 25% of Americans say their ideal bottled water would be organic.

WHY IT’S HAPPENING

While the customer demand for organic continues to increase, so does the confusion around what organic really means. In its 2016 Healthy Eating Consumer Trend Report, Technomic found that when it comes to “natural” vs. “organic,” the majority of consumers understand these labelings as umbrella terms for better-for-you.

Consumers see "organic" and "all natural" as umbrella terms

WHAT WE THINK

Brands should go beyond “natural” and “organic” to better communicate the value of better-for-you products to customers.  

It’s not to say that “organic” and “natural” do not hold value; these umbrella terms are still the most widely recognized and sought-after by customers. Rather, brands have an opportunity to bolster their credibility by providing additional clarity around these terms to ensure customers can make more informed choices.

WHAT’S NEXT

Customers have become much more savvy in their ability to pick out meaningful claims vs. marketing fluff when it comes to their food and beverage purchases. As food marketers we must consider the following when crafting better-for-you narratives:

Be judicious

If a brand or product narrowly meets a specific better-for-you classification–or falls within it due to a little-known loophole–proceed with caution. We risk jeopardizing customer trust when we exploit technicalities in the labeling process.

Be specific

Provide context to broad claims by getting specific about your practices and production methods. Rather than just using “antibiotic free” as a claim, provide details on whether it’s a judicious use of antibiotics, no human antibiotics, or no antibiotics ever.

Be consistent

Customer confusion occurs when manufacturers use different terms to describe the same thing, such as using “natural” and “all natural” interchangeably. Create tightly defined parameters to determine whether an item meets a specific classification, but also enact strict guidelines on the words used to describe them.

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

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