Rising cost of living creates new demands and opportunities

Global provider of natural food colours, Oterra, uses extensive market data to inform its colour solutions for the food and beverage industry.

Global provider of natural food colours, Oterra, uses extensive market data to inform its colour solutions for the food and beverage industry. Food & Beverage Industry News reports.

When it comes to the addition of food colours into food and beverage products, natural ingredients have become even more important than in the past thanks to the changes in consumer demands.

Demand for safe, natural food is at an all-time high – and consumers want food and beverage manufacturers to offer ingredients that are naturally sourced and free from anything artificial.

Australia is a leader in clean labels and consumers are demanding more transparency in the ingredients used in food and beverage products.

Innova market insights shows that for on pack claims Australasia has the most claims regarding no additives/preservatives at 36.5 per cent more than double any other region.

Secondly, Australasia on pack claim for natural is at 8 per cent and is the highest on-pack claim when compared to our regions.

But with the rising cost of living what are consumers looking for in the food and beverages?

Well, they want it all.

The more that is known about the spending habits of consumers the better placed a food and beverage manufacturer is to meet those demands.

FMGC Gurus recent report, “Cost of Living and Price Sensitivity Asia-Pacific Report” in March 2023 highlights the changing demands of consumers, finding 72 per cent of respondents remained concerned about the rising cost of living.

Importantly, consumers continue to search for ways to save and stretch their money further and this is translating into different dynamics and changing shopping habits.

Some of these captured behaviour changes include:

  • Consumers are becoming less loyal to retailers to find better value for money.
  • Consumers are reducing their overall food and beverage spending to try to absorb the effects of inflation.
  • Consumers are cooking from scratch more often and eating more meals at home.
  • Consumers are snacking less, drinking more water, reducing meat and dairy intake and even drinking less alcohol.
  • Consumers are reducing spending on foodservice eating occasions or trading down in restaurant type eating takeaway instead of mid-priced food service.

However, it is not all downsides for food and beverage manufacturers. Some of these changes in consumer behaviours bring new opportunities especially in the retail space.

  • Consumers still want to enjoy small moments of indulgence and escapism with 72 per cent of consumers surveyed still consuming food and drink indulgences weekly or every couple of days or daily, opening NPD opportunities.
  • Over 1/3 of consumers surveyed are seeking out nostalgic products to remind them of the past and simpler times.
  • Over half of consumers surveyed are willing or very willing to try new food and drink products/brands that they have not tried before.
  • Over 70 per cent of consumers have reduced the amount that they spend in restaurants and cafes in the last 6 months and two in five consumers admit they have replaced visiting restaurants with ordering takeaway in the last year. And, importantly, 50 per cent of consumers surveyed are seeking more premium products and treats at retailers to compensate for reducing spending in cafes and restaurants.
  • When consumers were asked what type of premium products and treats, they have sought more of these are the top categories; cakes and pastries (42 per cent); fresh food (41 per cent); soft drinks (38 per cent) ready meals (35 per cent). This opens NPD opportunities in grocery that may not have been considered before with restaurant quality and or jointly branded products at the higher end of the price points.

So, what’s next for food and beverage manufacturers.

In this survey, the same respondents said they still sought out ‘experiences’ with food and beverages to deliver ‘a momentary escape from day-to-day pressures of life’, but the choices they made were severely impacted by the cost of living.

This is where the three key trends in the report come into play.

Consumers want ‘more for less’, which is to say they will still seek out premium products for a specific, and often a celebratory occasion, with the right balance between naturality and price being a key driver behind choice.

For example, ‘personalised nutrition’, which details how, due to inflation concerns, people aren’t eating out as much but still want the best product at the best value when they do.

“It’s no longer enough to look or taste good, the product must have a positive impact on their health. Physical health has primarily been the main driver in this category, but mental health concerns are growing and will need to be addressed,” the report stated.

“When comparing products in the supermarket, they are more likely to compare ingredient labels and choose the best option that they can afford,” the report stated.

“It will be key to address these needs with more classic products, which might not have the premium appeal of more expensive products but will still need to be made from premium natural ingredients.”

It’s advantageous to employ the services of a food colours provider such as Oterra as they use natural ingredients to create vibrant colours for food and beverage products.

Oterra promises access to extensive portfolios of natural food colours, and a commitment to consumer insights and research and development, as indicated by the trends report.

A prime example of Oterra’s approach to the food and beverage colouring space is its application of the Hansen Sweet Potato, which Oterra developed over a decade to make it the industry’s first vegetable specifically developed for its unique colouring properties.

And since its launch in 2018, the Hansen Sweet Potato won three clean label innovation awards across Europe, the USA, and Latin America. The Hansen Sweet Potato launch demonstrates the cutting-edge approach Oterra takes to the food and beverage colouring sector.

It’s also heat and light stable and is the best anthocyanin for maintaining red and pink colour in products with a >5 pH level.

Hansen Sweet Potato is used in a variety of applications where manufacturers require anthocyanins that are water soluble and are less sensitive to oxidation and pH than other anthocyanins.

They are the most optimal clean label replacement for carmine and used in a wide variety of applications including desserts, ice cream, confectionery, beverages, and pet food.

Achieving a ‘clean label’ recognition is one-way food and beverage manufacturers can position themselves as ‘better-for- you’, meeting consumer demands for minimally processed colours for simple, and clean label ingredients.

Among Oterra’s extensive product portfolio are unique food colouring solutions such as FruitMax, CapColors, I-Colors, DairyMax, and the award- winning Strawberry Fragaria.

There’s also the Pantone Colour of the Year, Viva Magenta, which is another great example of the innovation Oterra brings to the colouring space.

“In this age of technology, we look to draw inspiration from nature and what is real,” said Leatrice Eiseman, executive director for the Pantone Colour Institute “PANTONE 18-1750 Viva Magenta descends from the red family. It is inspired by the red of cochineal, one of the most precious dyes belonging to the natural dye family as well as one of the strongest and brightest the world has known.”

Oterra’s latest offering in achieving violet shades also brings new capabilities for its customers.

“This is a culmination of hard work from the entire team at Oterra, from R&D to production,” said industry business manager, Phillip Cook.

“Our new violet carrot solutions ensure the perfect shade match for Viva Magenta empowering our customers to achieve shades previously not possible with natural colours in an application.”

This is true of all of Oterra’s offerings, the company works extensively on research and development, and backed by market data from leading research companies, to provide the natural colouring solutions most needed by food and beverage manufacturers to meet emerging consumer needs.

With consumer demand focusing on more for less, and premium ingredients. Oterra’s colouring portfolio offers a perfect solution to remain as natural as possible, which in turn will stand out on the label.

Oterra will have a stand at foodpro with an exciting colour showcase of food and beverage application products across major food and beverage categories including confectionery, beverages, plant based, bakery, savoury snacks and pet food.

Be sure to visit Oterra or their newly appointed distributor Brenntag (also at foodpro) to see the latest colour sensations.

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