Figuring Out Where The Food Industry Is Going Takes Expertise—And Imagination

By Andy Rice, Nerac Analyst

Trend-spotting the food industry can be as complex as deciphering the Da Vinci code. The industry is multifaceted, spanning from farmer to ingredient manufacturer to processor and ultimately to consumer. Everyone has a method for sorting it out, and here are four things I like to look at.

Where have all the Hippies gone?
Gone to AARP everyone. The baby boom generation saw the modernization of the food industry. It grew up with frozen TV dinners and sugar-free drinks with the new wonder ingredient Cyclamate. While many believed that fluoridation of the water was a Communist plot, others developed awareness for what the food chain was really all about.

As a group the 70 million-plus boomers now have a huge influence in purchase decisions, and they control a large part of our economy. They also have evolved into knowledgeable consumers, with diverse tastes, particularly for products that are all natural, organic, or vegetarian. And, for the most part, they also are into environmental movements and support sustainability.

One thing that makes this group unique is that it is so varied as to be impossible to quantify with standard demographic statistics. Pigeonholing any group by income, education, or ethic background is to miss the target completely. So you go beyond the statistics and dig deeper to get a valid picture. That means understanding the generation’s sociological makeup and looking closely at diets, culinary preferences, and social conscience.

What Drives Trends?
New technologies impact the food industry, but so too do special interest groups, such as the American Heart Association, American Cancer Society, or even the Sierra Club. Each has its own agenda on issues ranging from obesity and carcinogens to the environment. They support research and develop publicity programs in their areas of interest, which often creates pressure on the food industry and on lawmakers.

Other outside influences can come from unrelated industries. Take the current fascination with biodiesel and ethanol production. The competition for corn and soybeans as a raw materials has had a significant impact on what farmers are planting, as well as the availability and cost of grain for food and animal feed.

So no matter where you are in the food chain, from farmer to flavorist to manufacturer, you have to be constantly aware of the world around you and how advocacy groups and other phenomena can directly impact your business.

Lies, Damned Lies & Statistics
With all the resources available today, it’s not so much what information you gather, but what you do with it once you have it. That makes the art of interpretation critical. Improper assessment of the facts can cause all kinds of problems.

In 1958, the Delaney Clause was enacted to ensure all food ingredients and food contact surfaces were free of cancer-causing agents. Extensive testing was done before something was deemed “generally recognized as safe,” or GRAS. Even so, there is a trail of failed testing, with previously approved ingredients being removed from the market after years of use. A classic example is Cyclamate, the non-calorie sweetener of the 1960s, which was determined to cause cancer in mice long after it had gained general acceptance.

Or, maybe the issue isn’t cancer, but heart disease and obesity. Trans fats, which have been used for decades with few people noticing, are now at the center of dietary consciousness. It was only a few decades ago, during the ’50s and ’60s, that oleomargarine and partially hydrogenated fats were touted for their health benefits because they contained no cholesterol.

Other issues seem to crop up daily, ranging from acrylamides forming in fried foods to the negative effects of some nutritional supplements. We must take care in interpreting information so as not to take the wrong road, and end in up the middle of a disaster.

The Bottom Line
If you want to get an accurate picture of the food industry, you have to look at what seems an increasingly complex array of factors. You have to take in all outside influences, existing technical knowledge, and various human factors. While the internet is loaded with a wealth of information, facts, figures, and free data, you cannot Google your way to success. As the saying goes, “You get what you pay for.”