Top 7 food and beverage industry trends for 2023
For food product developers, food scientists, and formulators, the challenges faced are constantly evolving. Whether in the first stages of creating a new product or rethinking old favorites with more sustainable ingredients, manufacturers and brands must adapt to one of the most unpredictable factors regarding the food product life cycle – consumers.
From how they shop to the ingredient innovations they seek, consumer choices impact the food and beverage industry at every step of production. Grocery pickup and delivery found new life during the pandemic lockdowns and have since become normalized shopping routines with increased emphasis on product qualifications to make “the list” for digital shopping carts. Functional ingredients and clean label products that promote healthy lifestyles have taken over grocery store shelves in recent years, and brands are well-positioned to continue introducing more sustainable ingredients, new formulations, and food innovations during 2023.
For suppliers and formulators, keeping up with trends in the food and beverage industry can be daunting, and identifying your customers’ needs is poised to be trickier than ever. Which ingredients will consumers actively seek out next year? How will meeting the demand for customers’ dietary needs change if impacted by unforeseen logistical or economic circumstances?
1. Security of supply for food and beverage ingredients
Supply chain challenges are still ongoing. Those same challenges from recent years will continue into next year, according to a recently released SAP survey of 400 U.S.-based senior decision makers. Critical factors such as political unrest, financial recovery, and diminished raw material availability in the United States remain prominent concerns with potential supply chain disruptions.
Combined with the energy crisis and climate change, formulators and procurement teams will need to focus on the security of supply for ingredients and stay ahead of those challenges in the upcoming year. Doing so is especially vital when there is a global emphasis on responsible sourcing across multiple major industries, creating competition for highly sought-after ingredients and materials.
2. Cost engineering
One of the biggest hurdles consumers on healthier nutritional journeys can overcome is the price tag. Nutrition and affordability will continue to remain top-of-mind for consumers around the world. Value-conscious customers know the importance of macronutrients, vitamin and mineral intake, and eco-friendly products. However, they also want to avoid exceeding strict household budgets, especially with rising food costs while economic uncertainty looms. Although consumers will explore cost-cutting strategies, they will still be willing to spend on new experiences and products that promote personal well-being. The pressure is on brands and manufacturers to deliver this value while meeting broadening public expectations.
Food and beverage brands must make nutritional information and satiety messaging transparent to help customers find the right balance between product selection and budget management. Cost engineering and reductions will be significant focuses for food formulators in 2023.
For manufacturers, employing cost engineering to deliver increased nutrition affordability and help budget-conscious consumers nourish themselves and their families should be a recipe for success.
3. Clean label plant-based foods
Health and wellness trends, accelerated by the pandemic and heightened public awareness, continue driving consumer decision-making for food purchases and should for the foreseeable future. Fueling those decisions are clean labels and positive nutrition claims, particularly in some regions. Mintel data demonstrates that roughly 60% of new food and beverage products – including confections – launched in the Asia-Pacific region have at least a singular clean label claim.
Clean label claims about the plant-based meat market have recently garnered significant attention. In 2022, the volume growth in the plant-based market decreased comparatively to 2021. Some of this decline is attributed to the previously mentioned supply chain issues with ingredient availability and a record growth year outpacing supply over the last two years.
However, a shift in consumer views of the category regarding health and wellness and taste is also a significant factor. Commonly used ingredients in all plant-based meats – such as methyl cellulose, gums, starches, and carrageenan – are primarily used as binding agents and texturizers but skew the “clean label” perception. Instead, the products made with these ingredients are categorized as “heavily processed.” This categorization presents a new challenge for formulators, who must now find other solutions to better support clean label claims for the process involving how plant-based meat is made. Cleaner alternatives to the texturizers and binding agents for plant-based meat include:
- Citrus fiber
- Lentil flour (including garbanzo flour)
- Potato flour
- Pregelatinized corn starch
4. Functional foods and beverages
What are functional foods?
Functional foods provide extra health benefits for shoppers beyond their inherent nutritional value. It can be considered an add-on bonus for the product’s original purpose. Foods with added fiber, minerals, probiotics, nootropics, and fortified foods (such as eggs enriched with Omega-3 or tuna enriched with vitamin B) are examples of this trend galvanizing the food and drink market recently. The added benefits of functional foods are attractive to health-conscious consumers looking for the convenience of fulfilling general nutritional needs while also making healthy strides toward gut and heart health, boosting energy, and reducing fatigue.
During the pandemic, the demand for immunity-focused food and ingredients surged (with zinc seeing a 161% year-over-year growth in 2021 from 2020) and remains popular among consumers today. These products will likely see even further development in 2023 and serve consumers searching for sustainably healthy food options under microbiome health, plant-based, low-glycemic, and nutrient-dense categories. Niche functional ingredients such as turmeric, collagen, and spirulina will continue to penetrate mainstream products such as beverages, snack bars, pastas, shake powders and mixes, cereals, and more.
5. Healthy indulgence foods
The long-villainized dessert aisles and bakery shelves seemed like forbidden places just a couple of decades ago when brands promoted “diet culture” throughout the 80s and 90s. Before the pandemic, consumer awareness focused heavily on the physical effects of the most common indulgence ingredients like sugar, salt, and fat while remaining mindful of their health. Additionally, these ingredients drive the taste and texture in a wide array of food products, making them reliable staples in toolkits for all food scientists.
While numerous pandemic restrictions and behaviors have relaxed globally, consumers have retained at least two wellness-centric behaviors: paying attention to healthier food options and how to improve immune system health naturally.
When formulators can add healthy ingredients like fiber, protein, and probiotics to indulgence ingredients, it’s a game changer. If consumers see healthier offsets such as vitamin or fiber boosts in their indulgence foods, they are more inclined to purchase those products from brands that offer that transparency. This is especially true when shoppers’ behaviors are driven by convenience and products promoting even minimal health and wellness benefits.
The good news for manufacturers: Consumers are still looking for permissible indulgences to help lift their mood while navigating turbulent times, but still keeping watch on their health simultaneously.
6. Food and beverage sustainability
One of the past trends in the food and beverage industry continues into 2023! To some, it might still seem like a buzzword, but there should be no dismissal of sustainability as an essential purchasing decision-driver for all consumers – even more so with food products. The “better for me” approach to health and wellness has begun shifting to “better for us” as shoppers incorporate sustainable elements into every facet of their lives to protect planetary health and the nutrition of future generations. Consumers are looking to brands to help mitigate personal environmental impacts and reduce the overall consequences of products they’re adding to shopping carts.
This includes a deeper focus on eco-conscious production processes, agriculture practices that preserve soil health, and eco-labeling designed to help inform consumers about the brand’s sustainability efforts, such as restoring and rebuilding.
Brands must start thinking critically about long-term strategies to strengthen their commitment to maintaining sustainable practices that benefit the planet, communities, and businesses.
They’ll also benefit from honest and open communication with shoppers – transparency that transcends food safety dialogue and instead focuses on connections with food and the community that manufactures or grows it.
According to ADM, a leader in human and animal nutrition, 49% of people around the globe claim to have made dietary changes within the last two years that promote more environmentally friendly lifestyles. This same mindset extends to the companies they purchase items from with higher shopper demand for sustainable practices. The research also states that 42% of worldwide consumers are putting more trust into products’ and brands’ environmental claims. These insights present a massive opportunity for brands and manufacturers to meet that moment and build on this milestone of earned consumer trust.
7. New product categories boost: Healthy pet food and alcohol-free beverages
Two new product categories are poised to ramp up production and fill up more grocery shelf space than in years past: healthier pet food options and the alcohol-free beverage market.
The pandemic made everyone examine more closely what they were putting into their bodies and spurred demand for food and beverages that promoted healthier nutritional benefits. The same is true for every family member – including our much beloved furry ones!
Pets are considered an integral part of the family and their nutritional intake to support their physical and mental well-being is vital to pet owners. These concerns have driven consumers to pay more attention to their pets’ diets even before the pandemic.
A pre-pandemic PetMD article explored the benefits of proper dog nutrition and identified digestive health, immunity strength, and disease prevention as notable standouts – the same needs consumers will look to fulfill for themselves and their families in 2023. Formulators must pay even greater attention to the formulation ingredients used in pet food products, as consumers will carefully assess them to make the best nutritional choices for their pets.
One of the most rapidly emerging food and beverage trends includes mocktails and alcohol-free beverages, which are steadily gaining the same wider, everyday acceptance as decaf coffee. The lockdowns turned consumers into at-home mixologists overnight. YouTube and TikTok became sources of DIY drink recipes and inspiration that educated social drinkers on what balanced cocktails should taste like, spiking interest in higher quality, better-sourced ingredients.
Whether motivated by these newfound personal preferences or health consciousness, consumers are either reducing the amount of alcohol in their servings or seeking alcohol-free alternatives in social settings. Moreover, years before the pandemic, the pressures and stigmas attached to sober lifestyles were already declining.
The challenge for formulators is that consumers will still expect the same flavorful experience delivered from non- or low-alcohol beverage options. Brands and manufacturers will need to increase production to meet these demands, especially as sobriety, alcohol-free social gatherings and at-home DIY mixology continue to grow in popularity among younger consumers.
A shared responsibility: Shaping the future of food
One of the common factors that influence trends in the food and beverage industry is trust. From food product developers trusting that they’ll have the necessary ingredient supplies to consumers trusting that their purchases can help provide the wellness and sustainability solutions they’re looking for, trust is the most crucial ingredient throughout every aspect of the production process in 2023. The public wants to trust in the product formulations and transparency from brands to help inform how to provide the best nutrition for every family member, including pets.
While there are constants, predicting future food and beverage industry trends will depend mainly on how the upcoming challenges are met. For millennial and Gen Z consumers, the food items they choose and the brands they buy from directly reflect their lifestyles, values, and shared beliefs. Can brands continue to build on the current benchmark of consumer trust through clean label claims and ingredient transparency? Will cleaner alternative ingredient choices lead to a resurgence of plant-based meats? Will restaurant trends continue to see growth in the alcohol-free beverage space? We’ll find out soon enough.
Food and beverage trends will always be dynamic, dictated by ever-evolving shifts in how the public consumes. However, the responsibility to meet those new or resurfacing challenges is shared by formulators, manufacturers, and brands. All should be flexible and ready to adapt – for 2023 and beyond.