Big Food, Beverage Launches “Scarce and Scarcer,” Says Industry Analyst

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Food and beverage marketers will continue shifting focus from big, mass-market launches to niche product launches instead, says one industry analyst. Even food giants like General Mills are heeding the call for smaller, compartmentalized launches, according to Julian Mellentin, director of New Nutrition Business and author of 10 Key Trends in Food, Nutrition, and Health 2016.

“In the future, smart companies will only rarely launch mass-market brands aiming to rapidly get high volume,” his organization writes. “Instead, they will build portfolios of small brands, finely targeted at an ever-more fragmented consumer market.”

As an example, Mellentin points to General Mills’ formation of a new business unit, 301 Inc., which looks to “collaborate with emerging food brands.” In turn, 301 Inc. will leverage General Mills’ food business expertise to help developing companies with product development, marketing, supply-chain management, and channel development. “Tremendous opportunity exists…to partner with and foster emerging brands,” New Nutrition Business quotes 301 Inc.’s general manager John Haugen as stating.

“A few of these will become big brands, some will be big niche, most will remain niche,” New Nutrition Business adds.

A “massive fragmentation of consumers’ beliefs about health” is driving the call for a diversified product range to meet many customer demands, Mellentin adds. Take the protein market. More consumers are now using both plant and animal protein sources, reflecting the open mindset consumers have toward diversified diets. “This trend is not driven by beliefs in veganism or vegetarianism, but rather by consumers’ love of variety and novelty. We’re all flexitarians now, using cows’ milk on our cereal, almond milk in our smoothies, and coconut milk in our cooking as it suits us.”

“Big food companies are being forced to rethink their business models,” he says, adding that all this means more opportunities for start-ups and small brands. As large food corporations look to acquire smaller brands and start-ups, it will be interesting to see the food and beverage business model further evolve. Mergers and acquisitions activity continues to skyrocket in the food and beverage sector, as Nutritional Outlook recently reported.

Read more about what Mellentin had to say on this topic in an article he wrote for Nutritional Outlookmagazine. For more on New Nutrition Business’s new report, 10 Key Trends in Food, Nutrition, and Health 2016, visit www.new-nutrition.com.

Also read:

The Dietary Supplements Market in 2015: Business Is Good

Millennial Marketing Strategies: SupplySide West Report

Editorial: Do Acquisitions Mean Natural Brands Are Gaining Power?

Healthy Food Sector Nourished by Mergers and IPOs

Healthy Food Sector Nourished by Mergers and IPOs

Jennifer Grebow
Editor-in-Chief
Nutritional Outlook magazine
jennifer.grebow@ubm.com