Global Food Prices Down 3.7% in 2014

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Global Food Prices Down 3.7% in 2014

Judie Bizzozero

January 08, 2015 - Blog

Statistics released this month by the United Nation’s Food and Agriculture Organization (FAO) reveals global food prices fell in December after three months of stability. The decline was largely driven by continued large supplies and record stocks combined with a stronger U.S. dollar and falling oil prices contributed to the decline.

The FAO Food Price Index, measuring the monthly change in international prices of a basket of food commodities, 188.6 points in December 2014, down 3.2 points (1.7 percent) from November.

Looking at prices for the full year 2014, the index averaged 202 points, down 3.7 percent from 2013, with the sharpest year-on-year falls registered by cereals (12.5 percent), followed by dairy products (7.7 percent), oils (6.2 percent) and sugar (3.8 percent). Only the FAO meat price index saw an increase, advancing by 8.1 percent compared to 2013.

The Cereal Price Index averaged 183.9 points in December, up 0.4 percent from November as wheat prices rose on the back of worries that Russia may restrict exports. However, the increase was capped by the stronger U.S. dollar. Moreover, rice prices fell markedly amid abundant export supplies.

The Vegetable Oil Price Index average declined by 2.4 percent to a five-year low of 161 points in December, due mainly to depressed demand for palm oil as a biodiesel feedstock, itself linked to falling global oil prices.
The Dairy Price Index declined by 2.3 percent to 174 points, its lowest level since late 2009, as slowing imports by China and Russia left abundant export supplies for international markets. Price declines were greatest for milk powders, butter and cheese.

The Meat Price Index also declined in December, down 1.9 percent from the previous month, as a stronger U.S. dollar curbed price quotations for beef and mutton from Oceania and pork from Europe. However, at 204 points, this index is near its monthly all-time highs, and on a full-year basis rose 8.1 percent in 2014 from 2013, the only commodity group to post higher average prices over the year.

The Sugar Price Index dropped 4.8 percent to 219 points in December, largely because of ample supplies in major producing countries such as Brazil. Falling crude oil prices, which reduce demand for sugar crops to be converted into ethanol, also weighed on international sugar quotations in December.

HEALTH & WELLNESS GLOBAL SALES UPDATE

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Global Health & Wellness Sales Hit $774 Billion

Judie Bizzozero

October 07, 2014 - Blog

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Rising awareness among consumers toward health benefits of foods and beverages for potential disease prevention and overall wellness are key factors driving growth in the global health-and-wellness market. According to data from Euromonitor International, the sector will witness sales of approximately $774 billion in 2014.

“Healthy food and beverages are once again outperforming their non-health and wellness counterparts," said Ewa Hudson, global head of health and wellness research at Euromonitor International. “Healthy soft drinks will account for half of global soft drink retail sales in 2014 and over the next five years, healthy packaged food will account for one-third of total packaged food retail sales."

In terms of sales, milk formula is the world’s fastest-growing health-and-wellness category, reaching $4.3 billion in 2014. Gluten-free bakery products are the third-fastest growing health-and-wellness category with sales up by 16 percent in 2014. Naturally healthy ready-to-drink tea is projected to grow by $14.5 billion, which is nearly $2 billion more than energy drinks between 2014-2019.

Emerging markets also are driving growth in health and wellness are, adding 87 percent of absolute growth between 2009-2014. Despite this, developed markets still account for 60 percent of total global health-and-wellness retail sales.

“These markets should not be overlooked and instead should be considered an innovation hotspot promoting a more personalized approach to nutrition, with a focus on areas such as brain and vision health or food intolerance," Hudson said.

So as the global market for heath-and-wellness products matures, product designers searching for successful introductions have to carefully position their products to make sure they meet consumer expectations for efficacy and match the flavor of their conventional counterparts. Food Product Design’s free “Functional Foods and Beverages"Digital Issue delves into the market growth for the functional foods and beverage category, formulating functional beverages, protein's role in functionality, as well as demographic cohorts that should be considered when developing functional foods and beverages.

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Bottled Water, Tea Driving Global Beverage Growth

Judie Bizzozero

October 03, 2014 - Blog

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Drink up, there’s good news for the beverage industry. New data from Zenith International reveals bottled water and tea are driving growth in the global beverage market, contributing a whopping 55 percent to the market growth over the past five years.

According to Zenith’s globaldrinks.com online database, tea is by far the largest of the 24 drinks categories in the 72 country database and saw consumption growth of 62 billion liters between 2008 and 2013. Bottled water, the second-largest market by volume, increased sales by an even higher 83 billion liters over the five years. Milk gained the third-biggest volume growth of 20 billion liters, followed by coffee on 16 billion liters.

Five other categories all achieved growth of between 10 billion and 12 billion liters—still drinks with a low fruit content, carbonated soft drinks, beer, fruit drinks with a fruit content between 5 percent and 25 percent and iced tea. Spirits were the last of the top 10 volume growth categories, which is a very strong performance, given their far higher value.

“When you look in more detail at how the category rankings have altered in the last five years, two changes jump out," said Zenith Chairman Richard Hall. “The first is that carbonates have slipped behind milk, which has now risen to third place. The second is that coffee has overtaken beer. The other observation to highlight is a huge increase in the variety of choice available to consumers today, with many more flavors and blends as well as packs and sweeteners, outlets and delivery options."

This latest data supports previous market data supporting growth in the water category. In November 2013, data from the NPD Group found water represents nearly half of all beverages consumed by adults, making it their top beverage pick. Kids, however, drink significantly less, replaced by milk, soft drinks and fruit beverages.

According to the “Bottled Water in the U.S." report from Packaged Facts, as consumers continue to reject carbonated soft drinks and embrace bottled water, many beverage industry analysts and marketers are convinced that the category will soon become the dominant non-alcoholic beverage. Healthy living and the obesity epidemic have been driving factors in making bottled water the zero-calorie/ultra-low calorie beverage of choice for millions of consumers.
Marketers are launching new bottled water products with bold colors, exotic flavoring and fashion-forward packaging. They are also bringing to market a wider range of water enhancers, a category that didn’t exist until 2011 when Kraft Foods launched its MiO brand of water enhancers.

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Global Snack Food Sales Hit $374 Billion in 2014

Judie Bizzozero

October 02, 2014 - Blog

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The competitive landscape in the snacking industry is fierce with annual global snack food sales increasing 2 percent to $374 billion in 2014, according to the just-released “Nielsen Global Survey of Snacking" report.

“Demand is driven primarily by taste and health considerations and consumers are not willing to compromise on either. The right balance is ultimately decided by the consumer at the point of purchase. Understanding the ‘why before the buy’ provides the foresight necessary to deliver the right product to the right consumer at the right time," said Susan Dunn, executive vice president, Global Professional Services, Nielsen.

According to the report, while Europe and North America make up the majority of global snack sales—$167 billion and $124 billion, respectively—annual snack sales are growing faster in the largely developing regions, including Asia-Pacific ($46 billion), Latin America ($30 billion) and Middle East/Africa ($7 billion).

For the report, more than 30,000 online consumers in 60 countries were polled to identify which snacks are most popular around the world and which health, taste and texture attributes are most important in the selection criteria. Here’s what they found.

Confectionery comprises the biggest sales contribution to the overall snacks category in Europe ($46.5 billion) and the Middle East/Africa ($1.9B). Salty snacks contribute more than one-fifth of snack sales in North America ($27.7B), refrigerated snacks comprise almost one-third of snacks in Asia-Pacific ($13.7 billion), and cookies and snack cakes make up more than one-fourth of total snacks in Latin America ($8.6B).

But what are the fastest-growing snack categories? Sales of savory snacks increased 21 percent in the last year in Latin America. Meat snacks grew 25 percent in the Middle East/Africa and 15 percent in North America. Refrigerated snacks rose 6.4 percent in Asia-Pacific, while dips and spreads increased 6.8 percent in Europe.

“Non-sugary snacks closely aligned with meal-replacement foods are showing strong growth, which signals a shift in a consumer mindset to one focused on health," Dunn said. “While conventional cookies, cakes and confections categories still hold the majority of snack sales, more innovation in the healthy snacking and portable food space is necessary to adjust to this changing dynamic."

With that brings a massive untapped opportunity to gain market share in the nutritious, portable and easy-to-eat meal alternative market that snack manufacturers could fill. Seventy-six percent of global respondents eat snacks often or sometimes to satisfy their hunger between meals or to satisfy a craving, and 45 percent consume snacks as a meal alternative—52 percent for breakfast, 43 percent for lunch and 40 percent for dinner.

When it comes to overall favorite snacks, fresh fruit and chocolate reign supreme. According to the report, global respondents say that fresh fruit (18 percent) is the one snack they would choose above all others from a list of 47 different snacking options, followed by chocolate (15 percent). Over a span of 30 days, however, global respondents say they ate a wide variety of snacks, including chocolate (64 percent), fresh fruit (62 percent), vegetables (52 percent), cookies (51 percent), bread/sandwich (50 percent) and yogurt (50 percent). Forty-six percent consumed cheese, potato chips/tortilla chips/crisps (44 percent) and nuts/seeds (41 percent). One-third chewed gum (33 percent) and ate ice cream/gelato (33 percent), while about one-fourth consumed popcorn (29 percent), crackers (28 percent) and cereal (27 percent). Softer offerings like dumplings (26 percent) and instant noodles (26 percent) were also popular with a quarter of global respondents.

Taste preferences for snack options are noticeably different around the world. Exceeding the global averages, large percentages of respondents snack on vegetables in Asia-Pacific (57 percent), cheese in Europe (58 percent), ice cream/gelato in Latin America (63 percent) and potato chips/tortilla chips in North America (63 percent).

“In the dichotomy of snacking, consumers want healthy, but yet indulgent options are still going strong," Dunn said. “A better understanding of consumer demand and the need states that drive demographic profile preferences will help manufacturers crack the code on the right portfolio balance between indulgence and healthy. It will also increase the odds of success in this ultra-competitive landscape."

In May, thousands of new confectionery and snack foods debuted this week during the 2014 Sweets & Snacks Expo in Chicago that featured the hottest new products and innovations from 650 companies. Broader food industry trends, including ancient grains, power foods, herbs and spices, and a resurgence of classic flavors like peanut butter and coconut abound in the candy and snack industries this year. Click here to find out more about the 2014 Sweets & Snack Trends from the National Confectioner’s Association.

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Courting the Specialty Foods Customer

Judie Bizzozero

September 26, 2014 - Blog

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U.S. consumers spend approximately $760 billion food and beverages each year, so understanding your target market is critical to any new product launch. This means food and beverage marketers have to know what consumers want, whether it be organic, sustainable, nutritious or indulgent.

Just look at the organic industry—what began as a niche industry a decade ago, accounted for more than $32 billion in retail sales in 2013. The same can be said for the specialty foods sector that has experienced a rebound as the economy picked up and consumers are willing to spend a little extra money on something indulgent.

According to the “Today’s Specialty Food Consumer Report 2014" from the Specialty Food Association and Mintel International, the specialty foods sector is thriving, experiencing nearly an 8-percent jump in annual sales over last year. In 2014, 145 million people—59 percent of U.S. consumers—purchased specialty foods.

Consumer engagement in specialty foods is broad. Overall, specialty food shoppers are spending 1 in 4 of their food dollars on specialty food, up from 1 in 5 in 2013. At least 1 in 5 specialty food consumers have recently purchased products in each of the total 34 specialty food categories included in the 2014 survey.

Core specialty food consumers are ages 18 to 44 years, earning more than $75,000 annually. Of those consumers, 42 percent said they try new foods in order to eat healthier; 71 percent support companies that practice sustainability; and women are more likely than men to purchase specialty food products. Younger adults report spending more on specialty food than baby boomers and those older, and older consumers buy specialty foods more for everyday cooking at home versus snacking.

Chocolate, olive oil and other specialty oils, and cheese remain the top three categories purchased, with more than half of specialty food consumers buying these products. Tea is a new entrant to the top 10 categories purchased this year, up from No. 15 in 2013.

According to the survey, supermarkets remain the prime location for specialty food consumers to buy specialty foods, largely due to convenience. About one-third of consumers frequent natural food stores and mass merchandisers, while one-quarter of specialty food consumers shop at farmers markets and specialty stores.

“Overall, specialty food consumers have these foods and beverages on hand for regular usage, whether as an everyday snack or meal or as a treat," said Denise Purcell, senior director, content development for the Specialty Food Association. “This daily engagement bodes well for the market as a whole."

The top 10 categories for specialty food sales include chocolate, olive oil/other specialty oils, cheese, coffee, salty snacks, frozen desserts/ice cream, meat/poultry/seafood, non-alcoholic beverages, bread/baked goods and tea. Food and beverage makers have a tremendous opportunity to grow the specialty foods sector with creative new product launches targeting the right demographic. What's more, retailers have a tremendous opportunity to promote specialty food products in a creative and eye-catching manner to attract more consumer interest.

Food Fortification to Fill Nutrient Gaps

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Trending Foods examines the latest news, market trends, surveys and stats that are helping shape the food industry. Managing Editor Judie Bizzozero, a long-time newshound, sniffs out the most relevant issues affecting the food industry and provides a fresh perspective on their impact.

Food Fortification to Fill Nutrient Gaps

Judie Bizzozero

August 11, 2014 - Blog

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Recent insights reveal consumers may be confused about their intake of key nutrients, and thus, may not be receiving adequate amounts. Understanding the consumer gaps surrounding functional foods and beverages can be key to formulating these healthy products.

Marianne Smith Edge, MS, RD, LD, FADA, senior vice president, nutrition & food safety, International Food Information Council (IFIC), recently discussed with Food Product Design’s FoodTech Toolbox the findings of the2013 Functional Foods Consumer Survey during the 2014 IFT Annual Meeting and Food Expo, June 21-24, in New Orleans. The survey is designed to investigate consumer perceptions related to nutrient deficiency, sources of functional nutrients, whether naturally occurring and fortified, role of food processing, and reasons for consuming functional foods.

In the video presentation, she said: “We find that consumers overall have a very positive viewpoint about functional foods, which we identify as those foods that have health benefits beyond basic nutrition."

According to the survey results, more than 50 percent of consumers recognize fruits and vegetable as functional foods, followed by fish/fish oil (8 percent) and vitamins/supplements (7 percent).

While most consumers claimed to be very knowledgeable about nutrition, the results indicate there may be gaps in nutrient intake and knowledge. For example, approximately 6 out of 10 consumers claim they are receiving adequate amounts of vitamin D, fiber or potassium. However, when compared to information from the 2010 Dietary Guidelines for Americans, this is not the case.

“Fiber is a really big issue," Smith Edge said, adding that while more than 60 percent said they are getting enough fiber, it’s really less than 5 percent that are getting the adequate amounts.

“This gives us an opportunity, and especially for food manufacturers, it gives an opportunity to look at how we can best fortify those foods that can provide some of the nutrient needs," she said.

When asked about fortification versus naturally occurring benefits, respondents indicated that while they would like for natural-occurring benefits, they showed no distinct preference between the two.

“The good news is that consumers are really open. We find that overall, they have a high trust level and confidence that foods can provide them with health-promoting benefits, and that they’re really open and think that they can change their diet," she said.

To access the complete video presentation, “Fortified Foods: Filling Nutrient and Knowledge Gaps," visit the Food Product Design FoodTech Toolbox.