In today’s newsletter:
Hunger No More: How a new drug will upend the weight management industry
Just the Right Mix: SKU Variety from a Consumer POV
Is Camping Cool? Why trail food might be your next product
Counter Space: The rise of niche appliances
Home Flicks: Why the death of the theater could be a big opportunity for snacking
Tidbits: Quick links to fun food news
Did you miss last week’s newsletter? Find it here
Food in the Time of Ozempic
Keto-freindly company Catalina Snacks has launched two new limited-edition products. Catalina Crunch Triple Berry Blast cereal is a low carb, zero sugar, keto-friendly cereal with flavors “reminiscent of a freshly made berry pie.” The product contains 11g of protein and 9g of fiber per serving. It is currently available at select retailers and soon online. The company has also launched keto-friendly Lemon Crème Cookies, with 4g protein, 3g fiber and 1g sugar per cookie. All products in Catalina Snacks line, including savory and sweet snack mixes, are made with the company’s non-GMO blend of plant proteins and fiber, “… designed to keep you full longer and promote gut health.”
Plant-based company RDCL Superfoods has launched Super Cocoa, a zero sugar beverage mix containing 2 types of cocoa, plant-protein (6g per serving), organic fruits, veggies and greens, as well as ancient grains. Consumers add hot or cold water or plant-milk. Available on the company’s website.
Dole Packaged Foods is launching Digestive Bliss canned fruit drink. The 8oz cans each have 4g of plant -based fiber to help with gut health and “macronutrient support.” Varieties include Pineapple Banana and Tropical Passion.
Texas-based Wella Foods is introducing a new grain-free cereal. Made from a mix of almonds, dates, chia, flax and coconut, the gluten free, organic, no added sugar cereals are meant to be enjoyed hot or cold with the addition of water or milk. Wella claims that their new cereal has 3X the fiber, 2X the protein and ½ the sugar of leading oatmeals. Varieties include Original, Cranberry Pecan, Pumpkin Spice, Snickerdoodle and Apple Cinnamon.
So What? Whether we call them diets, lifestyles or ‘wellness plans,’ 52% of the world’s population is actively trying to lose weight. That’s not new; dieting has been a constant in our society for centuries (even though they rarely work). However, what is new is a novel class of drugs that does appear to help people take off significant amounts of weight.
What surprises me is that food and beverage companies (a significant piece of the $254.9 billion global weight loss industry) are not talking more about drug. All of heard, clients and conferences, is that “its a fad” that won’t affect them. I think that is extremely short-sighted. In fact, I believe this new class of drugs has the power to dramatic reshape consumers’ thoughts on weight, dieting, and upend the entire food and beverage weight management industry.
Semaglutide, marketed under brand names like Ozempic or Wegovy, is a newly approved hormone-mimicking drug that ‘tricks’ the brain into thinking it’s not hungry—making users disinterested or even digusted by eating. On-label these drugs were developed to treat Type 2 diabetes, but off-label they have helped people lose 20,30, even 50 pounds (Wegovy is approved for weight loss, Ozempic currently is not) . The rumor mill in Hollywood says that ‘everyone’ is using it, not surprising for celebs and models that feel the constant pressure to stay thin (although many are deny it, except Elon Musk). Meanwhile, TikTok is pushing its popularity mainstream (at the same time shaming people with Ozempic face). However, with a price tag north of $900/month, and the need for the drug to be injected, these drugs are currently being used only by the wealthiest and most committed consumers (although pharmacists across the country are saying they are already running low). That being said, falling drug prices and innovation could easily make these products much more common.
These drugs have known side effects (nausea, vomiting, constipation, changing sense of taste), but barring any devastating news (a ’la fen-phen), I can see a near future where Wegovy, or something similar, will become as familiar as Botox or Viagra. Just last week, the World Obesity Federation reported that more than half of the world's population will be overweight or obese by 2035, and the week before that, the American Academy of Pediatrics started recommending bariatric surgery and weight-loss drugs (like Wegovy) for children as young as 13. My question is, when hunger and interest in food can be instantly shut off with a weekly injection, how does that change consumers’ attitude toward traditional weight management methods? I see two major ramifications:
1. Ozempic-assistive Products: Dieticians and nutritionists that work with people on these drugs are recommending lean protein, high fiber, plant-forward diets. Because people just aren’t hungry on these drugs, small, nutrient-dense snacks or beverages are prioritized that aren’t strong in flavor (to help with nausea). Personally, I can see a lot of nutrient-dense, keto-friendly snack bar or beverage companies potentially pivoting (at least through targeted messaging/marketing) to reach these consumers. In addition, I’m sure we will see diet clinics pop up to assist people in their journey, selling not only the drug but also the foods and supplements to go with them. Will mainstream brands start inserting their products into TikToks talking about these drugs?
2. Ozempic-enlightened dieting: I don’t know if we will see a future where Ozempic is as common as multi-vitamins. However, I know we will reach a point in the next few years where most consumers either know someone that is taking these products OR they themselves were on them previously (stopping because of cost or side effects). But either way, I believe the ubiquity of these drugs will radically change consumer’s perceptions of dieting. While we have spent the last decade talking about ‘wellness,’ wellbeing’ and body acceptance, the allure of the thin body without diet and exercise may reverse all of that. As more people in their TikTok feed are losing weight, I can’t believe it won’t affect consumers’ psyches. Most likely, we will see these drugs change the way consumers think about hunger management for weight management, subsequently breathing new life into concepts like the satiety index, glycemic index, and the role of protein and fiber. Net-net: I think we will see more brands using Ozempic-like language in their marketing, talking about ‘shutting off hunger’ or dialing up satiety.
Solving the Variety Puzzle
Liquid Death, known for their canned water, have introduced a new line of canned teas. The line-up currently contains three teas, each with 30 calories, 6g sugar from agave, a 30mg ‘microdose’ of caffeine, and B vitamins. Flavors include Grim Leafer, Rest in Peach, and Armless Palmer.
Startup brand Sea Monsters will be debuting at Expo West this week. The brand offers a new, healthier savory snack for kids in the form of crunchy, seaweed and supergrain puffs. Made with a combination of regenerative seaweed and carbon-neutral sorghum, the puffs are packaged in bags emblazon with kid-friendly characters. Flavors include: Sour Cream & Onion, Cheese Pizza, Sweet Chili, and Spicy Korean BBQ.
It looks like General Mills has launched an early-stage frozen meal brand called Sage Kitchen. The online-only, DTC offering consistent of frozen mains and side dishes that consumers can mix-and-match. Varieties include Grilled Chicken or Beef Skewers, Mac & Cheese Bites, Broccoli Florets, Brussels Sprouts, Seasoned Waffle Fries and more.
Mason Dixie, makers of frozen biscuits and biscuit sandwiches, is launching a new line of Liege-style frozen waffles and waffle sandwiches at Expo West. “Scratch-made with real pearl sugar,” the waffles will be available in Maple or Apple Cinnamon or made into sandwiches with chicken sausage.
Siete Foods is launching a new line of Totopos corn chips. These “heritage-inspired nixtamalized maiz” chips are made with organic corn that has been soaked in alkaline water (aka nixtamalized). Siete claims that this traditional process creates better tasting, crunchier chips. Available as Sea Salt, Lime or Blue Corn.
So What? No matter if you are a large established brand or a new startup, you must deal with a common tension: managing variety. Whether building a portfolio and deciding what SKUs should be included or removing SKUs and rationalizing, every brand manager questions what’s their right mix.
Of course, there are two overarching parts to this question. One comes from the consumer side (i.e., how much variety do they want), and the other from the manufacturing side (i.e., how much can you produce and still make money). While the manufacturing side is critical, it is unique to each brand and production, so I’ll leave that aside for this discussion. Instead let’s stay focused on the consumer side, which really should be driving your choice either way. What constitutes the ‘right’ variety for a brand?
Research shows that consumers view variety (at shelf or online) in two stages: the assortment stage and the choice stage. The assortment stage is the first glance, when consumers first approach and see a wall of your label. Here, the data show that consumers are drawn to large variety, it gives them confidence that they will find something they and their family will like. However, research also shows that a large variety at this stage can be dangerous because it might raise consumer expectations too high. The lesson here is don’t use a large variety to draw consumers in unless you can guarantee satisfaction.
The choice stage is when the consumer is actually dialed in and making their selection. Here it pays to have real knowledge and empathy for your consumer. In my experience, there are four factors at play that should impact your variety decisions:
1. Range of tastes to satisfy: When consumers are looking at your variety, they need to know it has the breadth to fulfill their specific taste needs. This might mean satisfying different people within a family (e.g., younger kids, older kids, parents) or an individual (e.g., various levels of experimentation throughout the week). A product line that is too one dimensional won’t satisfy this diversity. On the other hand, a product line that is too radical will work only for extreme palates. Therefore, the ideal variety has a core of ‘safe’ flavors that appeals to the specific consumer target, complemented with fewer products that provide flavor stretch, then finally even fewer that serve as experimentation For example, if a startup ice cream company could only have four varieties in their portfolio and were aiming for an average family (with little children), they’d have to have vanilla and chocolate (because they need to please the most people in the family). However, they should also have a ‘familiar with a twist’ option (e.g., chocolate peanut butter) and a more radical’ option (e.g., blueberry cheesecake). Of course, if your target is a more taste adventurous couple, your ‘safe’ flavors would be very different, but the philosophy would be the same.
2. Avoid Use Fatigue: Realistically, how often will your consumer use your product line? What role does it play in the overall occasion (i.e., is it mixed with other components, does its taste make it stand out, or is it the main attraction)? Both factors must be considered when weighing how much variety is the correct amount. For example, say you are a maker of canned beans. For most consumers, canned beans aren’t entering the meal every night, nor are they the main attraction (instead mixed with other components each time to make a ‘new’ meal). Therefore, you’re likely able to offer fewer options in your range initially. However, if either factor changes (e.g., you switch your target to a consumer group that eats beans more frequently or you add flavored beans that become more distinctive in the meal) you will need to consider expanding your varieties.
3. Consumer Categorization: Another thing to consider is how your consumer mentally buckets your products. For example, imagine if you sold four different side dishes (potatoes, carrots, green beans, and corn) and you were looking to add an additional SKU. What would you add? I would suggest first understanding how your consumer conceptualizes and uses these products. Some consumers may see the ‘job’ of the side dishes as adding color to a boring meal. Therefore, you might add another color, like red peppers, to your portfolio. On the other hand, your consumer may see the side dishes as adding nutrition, with carrots and green beans adding vitamins, but the corn and potatoes being classified as filling starches. In this case, perhaps adding a SKU that combined vitamins and nutrition (e.g., sweet potato) would be the best addition.
4. Complexity and distinctiveness: Finally, variety is also impacted by how complex your offerings are perceived to be. The reason this can affect variety is that it impacts how easy it is for consumers to compare at shelf. Ideally, your offerings will be distinct from one another, with their attributes not easily overlapping. For example, imagine if a soup brand offered both an Italian Tomato Bisque and a Tomato Soup with Basil. The similarity of these two SKUs as presented will likely lead to confusion at shelf. If SKUs with similar attributes must be offered, it is best to make an ‘alignable’ assortment (i.e., give the consumer a definable scale to compare SKUs, for example heat level).
TL;DR Variety is important to both small startups as well as large brands, often for different reasons. However, how you decide on your final mix should ultimately come down to knowing your consumer and how they will use your product. In the end, the rules of thumb are: (1) Ensure your range centers first on sure hits for your target but provides some experimentation; (2) Gauge how often and how your product will be consumed and provide enough variety to avoid fatigue; (3) Structure your variety based on how your consumer categorizes; and (3) Keep your varieties distinct from one another to allow for easy choice.
Things I’m Watching
Mountain House, the wildly popular trail food brand, has launched a new vegetarian chorizo scramble to their Adventure Meal line. Salsa Queen has introduced a new line of freeze-dried salsa. Consumers add cold or hot water to reconstitute or sprinkle the mix as a seasoning. Trader Joe’s now has Meatless Ground Plant-Based Crumbles made with dried, textured pea protein and spices. Each pouch takes only about ten minutes of cooking with water to rehydrate into the equivalent of approximately one pound of ground meat.
So What? There was a time when a consumer in a focus group saying “This would be good for camping” would kill a project. However, that might be changing. Post-COVID, the number of people camping in the US is at a record high according to a 2022 report by The Dyrt. Interestingly, the demo/psychographics of these campers is unlike previous eras. New campers are 40% BIPOC, up by 68% from the previous years. Additionally, new campers aren’t exactly “roughing it, “with 23% admitting that they’ve worked remotely from a campsite, brought along craft beers and made multi-course, gourmet meals in their RV. In fact, the subreddit /trailmeals has rocketed from ~30K members a few years ago, to nearly 200K today. So, whether people are actually taking products (like those above) camping, or just into ‘camping chic,’ we may be seeing more camping products on the horizon.
Artie is a new ‘home-cooked’ meal solution for dogs. The meal service, yet to be launched, will deliver freeze-dried, nutritionally balanced meal cups made of whole proteins, vegetables, fruits & grains. The dog owner uses a Keurig-like device to rehydrate and gently heat the product before serving. Almond Cow is a an at-home (now at-restaurant too) device that makes alternative milk making easier and faster. In addition to the Milk Maker jug, Almond Cow also sells pouches of coconut, cashew, almond and oats to use. Following the surge in popularity of nugget ice makers, we are now seeing the rise in other specialty ice machines, such as the new Juniper crystal clear cocktail ice maker. This Kickstarter has reached 3X its goal in just a month. The device creates clear cube or sphere ice fast for home mixologists.
So What? The pandemic was good for small appliance sales. While those purchases may have slowed down, there is still a spike in specific appliances, especially among the wealthy. The pandemic saw a rise in specialty kitchen remodels as people invested in their homes. Now that trend is bearing fruit as butler’s bars, sculleries and back kitchens get utilized. With the success of appliances like air fryers, Instant Pots and specialty toaster ovens (e.g., June), we are seeing a renewed openness to these devices, and the CPG products sold with them.
AMC is launching a line of RTE and microwave popcorn at Walmart. Panera is debuting a new Everything Seasoned Cheese Crisps.
So What? Movie theaters are in trouble. AMC has reported 14 consecutive quarters of declines, and they aren’t alone (Regal Cinema’s owner said last week that shareholders will be “wiped out.”) While theaters are trying to change their business model (e.g., variable pricing for different seats) and include more/better attractions (e.g., better food, better seating, etc.), it appears that consumers are choosing to stay home. This opens up new opportunities for snack makers. “Watching TV” is the #1 occasion for snack eating, could a company make snacks that ideally fit this niche?
TIDBITS
Unilever Tries Reformulating Its Ice Cream to Survive Warmer Freezers
Why the UK has no fresh vegetables
Whiskey Fungus Fed by Jack Daniel’s Encrusts a Tennessee Town
Sold out Girl Scout’s Raspberry Rally cookie being sold on eBay for $80 per box!