Special Announcement
3Squares is going live!
Presented by the Center for Food Integrity, 3Squares Live is a monthly version of your favorite podcast but now broadcast as-it-happens. Why is that important for you the listener? It’s interactive! Now it’s your chance to ask questions to the 3Squares and our guests during the show.
Join us this month (September 30th, 12:00pm Central) as we talk to leaders at Opopop, the Denver startup that’s changing the world of popcorn. We’ll be joined by Opopo’s President, Sarah McDowell, and Alec Hopkins, VP Product and Insights. Register to listen in here.
Biotech is the Future of the Food Industry
Precision fermentation company Perfect Day is partnering with Finnish company Onego Bio to help the latter in their ongoing effort to create more useable animal-free egg proteins. Even more interesting is that this business model (i.e., Perfect Day helping a company stand-up their bio-tech arm) is something Perfect Day is aiming to do more of in the future. The company is creating an enterprise biology unit called nth Bio that will provide biotech as a service (BtAAS?) to other companies. Perfect Day will run nth Bio out of their newly expanded Utah plant.
According to a recent report in the Wall Street Journal, the cost of butter has risen at twice the rate of other grocery items in the same period (i.e., butter is up 24.6% while the average grocery item is up 13.5%). A complex combination of decreased milk production and labor issues has dropped the current US butter supply to its lowest level since 2017. While this directly impacts consumers (the holidays are fast approaching), this also affects manufacturers that will need to pass along or ‘eat’ the resulting high costs in their products.
Beyond Meat, the high-flying plant-based meat manufacturer, has seen their stock dip 70% in the last 12 months. McDonald’s has canceled their vegan burger experiment (McPlant) test with the Beyond Meat and the company has laid off 4% of employees (not to mention last week’s firing of its COO for biting another man on the nose after a road rage incident or the subsequent resignation of the company’s chief supply chain officer).
Totino’s Pizza Rolls, made by parent company General Mills, now has 25 formulas for its production. Due to COVID-related supply chain issues, war in Ukraine, and labor issues across the country, the availability of necessary ingredients for the snacks (e.g., oil, starch, cheese, etc.) was constantly in flux. Instead of pulling the product from shelves, the company has reformulated the recipe for the iconic rolls to keep up with the unpredictable market.
So What? Most reports today appear to show that the ‘bloom is off the rose’ in the alt-meat category. As financial markets turn bearish, investments in food-tech startups are drying up (overall food tech investment is down 23%, alt-protein down 9%).
The problem with this decline is that it makes some leaders in the overall food industry dismiss alt-everything as a fad. I’ve recently been in conference rooms with people who compared it to activated charcoal and the Hollywood Diet. In other words, wellness booms that quickly busted.
Is alt-meat collapsing? Maybe, but its original rise signals the emergence of something much more important: food biotech. Biotech is the future of the food industry. What in-line freezers, twin screws and retorts were to the 20th century food industry, biotech will be to the 21st. Here are just three reasons why:
1. Supply-chain resilience: The world is not going to calm down anytime soon. Between global conflict, labor disputes, economic recessions and climate change, the food industry needs a way to bring resilience to stabilize prices; biotech will help. There are dozens of steps in between planting a soybean and its constituent parts making it into a food product. A disruption in any of them means big trouble for manufacterers. But imagine if that soybean’s oil (or starch,or protein) was made in a tank right outside your production plant? If it is key to your production, and the technology becomes predictable and cheap, imagine what that would do for forecasting?
2. Sustainability: Major CPG and retail companies have recently re-positioned themselves as ecological champions, making substantial green pledges that are coming due rather quickly. While carbon credits and packaging reformulations will get them part of the way, some will need massive pivots in ingredient procurement to meet their goals. Biotech may be the answer. By focusing on the most carbon-intensive ingredients in their portfolio, companies may be able to find biotech created solutions with a fraction of the footprint.
3. Speed to Market Innovation: The speed of trends is increasing as fast-paced social media platforms like TikTok rise to prominence. From Pink Sauce to Nyquil Chicken, consumers are bombarded with dozens of ‘must try’ foods every day (please don’t try the Nyquil Chicken)—most of which go nowhere, but some gain sudden traction. Large CPG companies, no matter how agile their innovation methods, can’t keep up. Coming up with ideas is one thing, but creating and manufacturing them in record time is another. However, I see a future where tech will bridge the gap. Using a combination of AI (to speed up trend identification and formulation/processing development) and biotech (ingredient and processing optimization), I see big CPG companies soon going from lab to launch in under 60 days on breakthrough new platform products.
Missing Flavor
Campbell’s has launched their first new brand since 2016. FlavorUp is a line of concentrated, liquid flavor additions that consumers can add to dishes. The company says that the new products will likely be stocked next to the herbs, spices and seasonings in-store. The debut line contains the following varieties: Rich Garlic & Herb, Savory Mushroom & Herb, and Caramelized Onion & Burgundy Wine.
Philadelphia Cream Cheese UK, a Mondelez brand, is launching a new Intense line of their product. The new products are being positioned as a recipe addition, an add to pureed soup or chicken alfredo. The line has two varieties: Garlic & Herbs and Herbes de Provence.
The popular New York Times Cooking section has launched cooking kits, bundles of pantry ingredients (shelf stable only) that allow home cooks to prepare several meals from a specific cuisine. The three kits contain ingredients and a chef-curated cookbook for the following cuisines: Donabe (Japanese clay pot), Caribbean Creole, and Indian. Each kit is $95.
So What? I’ve spent many hours in-home, cooking with everyday consumers. In that time, I’ve learned a few things. (1) Consumers actually cook more than we give them credit for. In fact, the less their household income the more they cook (contrary to stereotypes, the higher your income the more likely you are to eat fast-food ); (2) Most home cooks have only a set repertoire of 5-7 dishes that they know how to cook with confidence; (3) Home cooks have a surprisingly diverse knowledge about culinary trends because of social media; and (4) The average home cook has an extremely limited vocabulary when it comes to describing how food tastes.
While that last point might seem inconsequential, its actually the most important. That’s because without a vocabulary to describe how a food really tastes, but a hunger for new exotic flavors that they see on social media, home cooks can’t describe (even to themselves) what’s wrong with a dish when it doesn’t taste good. Instead, they default to generalities like “its missing something,” or “it needs something.” And therein lies the opportunity that spice and seasoning companies are seizing on.
Its no surprise that Campbell’s new product is called FlavorUp. It’s a direct translation of what consumers want—more flavor through some magical add. This is the allure of popular seasoning blends and other dish add-ins. By having a flavor booster at-hand, the home cook might have the confidence to branch out into new dishes, or at least make their current go-to’s that much better.
Time to Get Serious About the Metaverse?
A virtual/metaverse farmer’s market has launched on Gather. Called the The MetaMarket, it urges people to walk from stand to stand, looking at virtual wares and striking up chats with CPG company reps. On his website, Michael Wolf of The Spoon describes his first visit and has a quick video clip of his experience. If you’d like to be part of the next MetaMarket, as a consumer or a vendor, you can sign up here.
Chipotle has announced that they are making Web3 history by being the first restaurant to formally announce a new menu offering in the metaverse before doing so in real life. On Roblox last week, the company announced the launch of their new Garlic Guajillo Steak. In addition, fans that visit the in-universe restaurant and join the Chipotle Grill Simulator, can meet the company’s head chef and Vice President of Culinary Nevielle Panthaky (at least his virtual avatar) and do a virtual taste test (whatever that means).
So What? If all you know about the metaverse is from Mark Zuckerberg’s renaming of Facebook to Meta, you have a right to be confused. What Facebook and Zuckerberg did was called ‘cookie licking’ in tech circles. That’s when you make a big show of claiming something is yours (i.e., we are Meta(verse)), even when you can’t really do it yet (i.e., Meta is losing $1 billion a month to stand up their version of the metaverse). Akin to a kid licking a cookie so that others don’t take it.
In other words, the metaverse’s fate is not defined by Meta’s ability (or inability) to successfully launch something. It also shouldn’t bias your company’s thoughts on the fate of the metaverse (especially if your target is Gen Z). In fact, company’s like Roblox are already winning in the metaverse. Roblox has 52 million active daily users, with over half of all under 16-year-olds in the US visiting their gaming universe. Nike alone claims that they’ve had 21 million visitors to their Roblox virtual store.
Is the metaverse ready for prime time? Well, its not pretty yet and all the bugs haven’t been worked out. However, its far enough along for your company to actively experiment in. In fact, some early work that I’ve conducted shows that it might be an ideal place for consumer discovery and co-creation and inspiration.
Brands I’m Watching
Nutrition company Kram has launched an extension to their frozen sandwich line, a nutrient dense version of Uncrustables. The sample pack contains the company’s OG PB&J sandwiches (13g-17g protein; 72 minerals) as well as their Beast PB&Js (19g protein; 72 minerals). The all-organic sandwiches are made with peanut butter, sprouted wheat bread, low sugar jam, healthy fats and a mineral complex.
High protein coffee company Chike has launched a pumpkin spiced ice coffee flavor to their lineup. As with their other flavors, this powdered coffee mix contains 20g of whey protein, 2 espresso shots and 1 g of sugar per individual serving packet. Other flavors include Birthday Cake, Chocolate Peanut Butter, Mocha, Chocolate Caramel and more.
So What? Have you ever spent any time in the world of acting or modeling? Through friends, acquaintances and work obligations, I’ve seen enough behind the scenes of this world to know a strange fact: talent and looks don’t translate to success. For a business that seems to be obsessed with the superficial, you quickly notice that a lot of extremely attractive people don’t get picked for gigs. Same goes for talent. The acting world is full of amazing actors and actresses that never leave dinner theater.
So, what makes some actors break big? According to an agent friend of mine, luck plays a big part. Right place, right time. However, even more important (and rarely discussed) is being wealthy before you become famous or having a wealthy/influential benefactor. Only these folks can continue to go to small gig after small gig and work for peanuts, getting seen and making a name for themselves. Without this funding and support, even the best actors usually quit before they ‘make it.’
Small brands and ideas are a lot like up-and-coming actors. We like to believe that the most attractive and talented will just JUMP to immediate success. That’s why so many big CPG company execs have bought into the idea that they can grow a small brand inside their company. They think it will be a billion dollar brand overnight. However, the truth is, every small brand needs adequate growth time, solid, consistent investment and a supportive benefactor—something big companies can’t always provide for the required time it takes for brands to catch hold in the market.
I look at these two small brands above and I see solid potential. The ideas are directly in-line with the needs of their core consumers . Can they make it big?
Oded Brenner (founder of the original Max Brenner chocolate empire) is back after his exile with a line of upcycled cacao products called Blue Stripes. The brand makes chocolate, but also takes spent cacao from chocolate manufacturing and creates granola, dried fruit, and (now) cacao water. The brand recently launched their line-up in Whole Foods.
So What? Is there a future where every major CPG company has a Blue Stripes brand in their portfolio to serve as an upcycling repository? Having a brand that serves as a counterbalance to your other brands potential excess seems like a great narrative internally and externally. Companies could claim that they are working toward ‘net zero waste’ because they have a brand committed to counteracting the negatives of their other brands (or at least the negatives the brands themselves can’t address). If I were Mars and Hershey, I’d be watching Blue Stripes carefully to see if it could be replicated in-house. However, the same goes for Campbell’s, Kellogg’s and Danone—what’s your Blue Stripes?
HSY watching Blue Stripes for sure - their corporate venture fund has put a little money in