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The trends shaking up the beverage industry today – what you need to know

Every industry across the globe has faced unprecedented challenges over the last two years and the food and beverage industry is no different.

A row of bottles on a manufacturing line
Market Insights
Consumer Brands

As a market, the food and beverage industry has always been susceptible to fast-moving, dynamic consumer trends; more recently, these trends have become increasingly intertwined. 

Customers are now looking for products that are more beneficial to their mental and physical health, while also seeking products that guarantee sustainability – often simultaneously. This article will examine the key topics related to ingredient innovation covered in Wunderman Thompson’s Future 100 Trends and discuss how these trends are affecting the investment landscape.

Two trends outlined in Wunderman Thompson’s report were that of liquid immunity – this is where consumers look to supercharge their immune systems via functional beverages - and metabolism. Although these two trends were covered in separate capacities, by taking a deeper dive, it’s evident that there is a clear connection between the two. A slowing metabolism has often been described as the root cause of weight gain as we grow older. However, recent research has come up with alternative hypotheses which place factors such as overall immunity and gut health with much higher prominence. Although this is only a single example of the increasing overlap between mental and physical health trends, it is representative of the wider development in the space. If you want to find out BTV’s take on liquid immunity, be sure to check out Peter Wozny’s previous LinkedIn post here

Ingredient innovation isn’t driven solely by demand factors; innovation of production, diminishing availability of productive land and changing climates are examples of prominent supply variables. For example, the VTT Technical Research Centre of Finland has developed a lab-grown coffee that is made in a bioreactor using culture cell technology. A key benefit of such technology is that it combats against the deforestation of virgin rainforests and other damaging environmental consequences caused by coffee production. Although the technology is in its adolescence, further development is inevitable. However, its ability to make a substantial impact is dependent on whether the technology can hit a suitable price point and if consumers are willing to adopt this new method of production – especially when it comes to the production of meat. 

To take another example, let's look at microalgae. Microalgae, which are microscopic organisms typically found in freshwater and marine systems, are growing in popularity as an ingredient; they are one of the increasing amounts of new environmentally friendly, natural and sustainable ingredients that have been claimed to have health benefits. An example of this is Ful® Foods, who produce sparkling spirulina drinks. Spirulina, as a microalgae, not only creates a mesmerising blue-green colour, but has also been claimed to provide immune system support, antioxidants, anti-inflammatory effects, improved brain function and higher energy levels. 

The increasing popularity of such products runs in parallel with growing consumer desire to consume beverages that have a positive environmental impact. Microalgae can generate biomass rapidly, whilst also absorbing one-and-a-half to two times their weight in carbon that is then photosynthesized, releasing oxygen. They have also exhibited promising potential for resolving the most urgent needs of the agricultural and industrial sectors; biofertilizers and the decomposition of industrial waste are naming two examples. Microalgae undoubtedly has a high appeal on numerous fronts and represents further evidence of the intertwining ingredient innovation. With the global market for microalgae is estimated to grow to a market size of USD$1.3 Billion, it appears markets are responding to the promise of microalgae.

The trends covered in Wunderman Thompson Future 100 Trends align with BTV’s own convictions. They demonstrate why the emergence of new technologies and innovative practices means there is great potential in the food and beverage industry. As we have seen above, both supply and demand mechanisms are driving the rapid innovation of ingredients. But it will be the start-up ecosystem that will deliver it.

Written by
Jamie Price
Sustainability Investment Associate
Written by
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