Lately, we’ve been seeing more and more groundbreaking technological advances in the world of food, and we find ourselves stepping into a new era. It’s as if the innovative Gilded Age has come to visit us again.

However, it is now the 21st century. The world is different - offering new opportunities and new challenges. The American economy is tackling old mindsets and grappling with new ideas surrounding how we interact with food. 

To understand the general scope of where the CPG industry is currently - and where it is going - we must take into account both static and dynamic variables. It’s important that we look at industry behaviors from all angles - not from a locus of assumption.

Here are some factors that we will discuss:

• Environment 
• Sustainability
• Innovation
• Personalization
• Functionality 

CPG Consumers and Environmental Standards 

The idea of environmental durability is finding its way into the purchasing decisions of mainstream consumers.

Corporations are taking notice of consumer expectations and increasing desires to minimize individual impact on our environment. Because of this, we are seeing an incremental movement toward more compostable and biodegradable products. The biodegradable packaging market is projected to grow by $18 billion worldwide - with a compound growth of 14.3%  [1].

According to the Global Reporting Index, 90% of the largest companies (85% of the S&P 500) are now filing sustainability reports. Even more interesting is the fact that more than 80% of mainstream investors now look at ESG (environmental, social, and governance) info during the investment decision process  [2].

In addition, Harvard Business Review interviewed: 

• 70 senior executives at 43 global institutional investing firms, including the world’s three biggest asset managers (BlackRock, Vanguard, and State Street)
• Giant asset owners such as the California Public Employees’ Retirement System (CalPERS)
• The California State Teachers’ Retirement System (CalSTRS)
• Government pension funds of Japan, Sweden, and the Netherlands. 

And they found the ESG companies were essentially top priority for those interviewed  [3].

Investors are following in the wake of consumer’s needs and wants… that’s where the money is. It seems as though ESG isn’t a flighty “trend”, but a step in a new direction.

Sustainability Standards for CPG Companies

While the concepts of environmental sustainability could technically reside under the ESG umbrella mentioned above, more clarification is needed to observe its effects on the industry.

In short, environmental sustainability refers to regenerative agriculture, soil health, and practices such as environmental “future-proofing.”

But the idea of environmental sustainability isn’t so widespread as some might imagine.

Even the International Food Information Council Foundation (IFIC) states that “interest in sustainability has grown for the past few years, and while in 2020 the topic will mature and evolve, confusion still surrounds the exact definition of sustainability“  [4].

The IFIC releases an annual Food and Health Survey - and from 2012 to 2018, 35-41% of consumers stated that sustainability was a factor in their food/beverage purchasing decisions.

However, the 2019 IFIC survey received different results when it asked whether environmental sustainability was a factor in purchasing decisions, as 27% said it was.

But regardless of the lack of general consumer knowledge and understanding concerning environmental sustainability, it’s still a growing factor in purchasing decisions. NYU Stern’s Center for Sustainable Business found that “50% of CPG growth from 2013-2018 came from sustainability-marketed products”  [5].

So it seems as though 2021 and beyond will be moving further toward educated consumers on sustainable environmental practices in food production.

Packaged Goods Tech Innovation

The push for environmental sustainability is producing more innovative companies and practices.

We are growing meat  [6].

We are growing plants deep underground in land-locked cities  [7].

We are drinking our food at unbelievably low prices  [8].

With the world on track to reach a population of 8.5 billion people by the year 2030, the race is on to figure out how to best adjust to the billion new mouths to feed [9]. We must determine how our lifestyles might change and what we can do best to thrive together.

Currently, innovation is being brought to the table in a couple of different ways:

• with current technologies like vegan replacements and modern gardening
• and with newer technologies like 3D printed food

Current Technology Innovation

In Michael W. Twitty’s book Finding Culinary Injustice, he mentions how “chefs such as Bryant Terry, who concentrates on vegan soul food, who focus their careers on combatting the health problems linked to soul food by transforming recipes and maintaining their flavor and connections to the past.”

He also mentions others who “focus on gardens as a site of resistance and solutions to modern health problems”  [10].

This is a prime example of utilizing existing technology in an innovative way.

Newer Technology Innovation

The world of tasty 3D food printing is projected to reach $525.6 million by 2023. This market is strongly motivated by the demand for customized food products with nutrient specifications made for the individual consumer [11]. The possibilities are almost endless, and the financial gain of technology such as this could be staggering.

3D printing food is an example of newer, less known technology that could innovate the way we alleviate food waste, providing an end-user experience like no other.

Personalization in the Food Industry

Educated consumers continue to have greater control over brand loyalty relationships in the food and beverage arena. Opportunities to have a say in the what and how of their products are empowering for the consumer and increasing companies’ agility to market prospects using AI-powered hyper-personalization strategy.

For example:

• Yelp allows members to update their profiles, “with their dietary restrictions, lifestyle interests, and accessibility preferences” for quick access to restaurant choices. 
• Food delivery services are looking to expand app options such as smart TVs, Google Home, Echo, Apple Watch, and similar devices. 
• Given busy lifestyles and technological options, ordering from anywhere using on-demand delivery apps from a variety of devices is optimal for customers.

But more than most innovative and personable changes we see taking place in the food industry - DNA-based diets hold the spotlight.

DNA meal delivery kits and on-demand food delivery services are massively shaping the personalization landscape.

But these personalized nutrition services platforms vary.

On one hand, you have programs like Pinto - which is as simple as selecting diet or lifestyle choices and allowing a personalized diet plan to be created. Pinto is partnered with Whole Foods and Fitbit  [12].

More complex services can be found with Habit, which requires information such as your LDL and HDL cholesterol, total cholesterol, fasting, triglycerides, and glucose as well as your wellness goals and activity levels  [13]. With Habit, a report is produced informing how well your body manages carbs, fats, proteins, sugars and your susceptibility to allergies and weight gain (along with your nutritional needs and personalized recipes).

We are optimizing food just like we optimize our entertainment viewing experience - or how we optimize our routines in a “life-hacking” manner. Our diets are being catered to what the individual needs, rather than what the general public says is “good” or “okay to eat”.

Food Functionality

The idea of functionality in food is akin to “holistic medicine”. In other words, functionality is akin to utility.

A proper example to further explain is Cannabidiol - otherwise known as CBD.

Its health benefits include: 

• anti-inflammatory 
• pain management
• addressing acne
• anxiety
• drug withdrawal symptoms
• slowing the progression of Alzheimer’s disease 

Most significantly, Harvard Medical School mentions CBD’s “effectiveness in treating some of the cruelest childhood epilepsy syndromes” [14]. CBD like THC (tetrahydrocannabinol) is a compound found in Marijuana. However, CBD is not psychoactive.

You can find CBD in oil form, drinks, edibles, tinctures, and even soaps. CBD products are now mainstream in the CPG industry, and it doesn’t look like that will change anytime soon. 

While the uses of CBD are still being discovered - with over $1 billion in sales predicted by 2022 - it is definitely trending into the second millennial decade.

Other Functional foods include certain approved superfoods and nootropics that provide health and lifestyle benefits.

The Smarter Future for CPGs

The future is ripening, and the joys of innovation are ours to grasp.

At Journey Foods, observing every aspect of the industry, turning it into actionable data, and making valuable, worthwhile changes is our goal.

This industry should thrive on what is to come, and it should be fearful of stagnancy. As purveyors of technology in this world, it’s all of our responsibility to look to the future and make it easier, healthier, and brighter.

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