On July 20th, we marked the 50th anniversary of Apollo 11’s historic landing, which saw the first two astronauts step onto the moon. This significant occasion led me to contemplate the remarkable advancements in the food industry since that monumental event. Among the many innovations associated with the space program is the creation of a powdered drink known as “Tang.” Undoubtedly, the food industry has undergone extraordinary transformations since then, with the most dramatic shifts occurring in recent years.
Consumers today are increasingly concerned about the origins of their food, its production methods, and its ingredients. Their relentless quest for convenience has resulted in food sales prepared outside the home surpassing those made at home in the United States and many other nations. Technologies such as Web 2.0, robotics, artificial intelligence, the Internet, and the upcoming wave of biotechnology are paving the way for a new array of food options, including sustainable and animal-free sourcing practices. Moreover, established food companies are facing disruption from nimble start-ups backed by venture capital that are rewriting the rules and rapidly introducing new concepts to the market. Traditional retailers, too, are being challenged and overtaken by non-conventional distribution channels like Amazon and Uber Eats.
It is indeed an exhilarating time to be involved in the food industry, and at this pace, it is highly likely we will witness more transformations in the next decade than we have in the past fifty years. Compounding this urgency, a recent United Nations report indicates that the global population is steadily increasing by approximately 83 million annually (about the size of Germany), projected to reach 8.6 billion by 2030, 9.8 billion by 2050, and 11.2 billion by 2100. This surge will necessitate new technologies and food sources that are more sustainable than our current practices. The existing model that relies on valuable farmland to produce animal feed is neither efficient nor adequate to meet future nutritional needs.
Technological advancements are driving market disruption at an even greater speed. Companies must either innovate their business models or risk being outpaced by competitors. For instance, no one anticipated that air travel would intersect with the food industry again this summer as drones began delivering food to California residents. Disruption is omnipresent, and the scale and velocity of change in the marketplace have eroded traditional growth models for many businesses, especially larger ones. Companies need to enhance their agility to compete effectively. Speed is critical, as consumers prioritize convenience and seek to maximize what they can achieve in less time. Today, businesses recognize the necessity of continually improving the customer experience to win and retain loyalty.
To remain competitive, companies must forecast trends that are reshaping our industry and altering consumer behavior. Currently, several trends are significantly influencing consumers’ diets and lifestyles. Firstly, there is a global movement towards reducing sugar intake. The World Health Organization (WHO) spearheaded this initiative in 2015, urging countries to lower sugar consumption among adults and children. Following suit, in 2016, the U.S. Food and Drug Administration (FDA) introduced a new nutrition facts label for packaged foods to reflect updated scientific information, making it easier for consumers to make informed choices. Our consumer research shows that over 60% are actively monitoring sugar content in their purchases, and according to Mintel, 84% of consumers reported reducing their sugar intake over the past year. These trends are further amplified by government initiatives pushing for sugar reduction, including taxes on sugary products, particularly beverages. Consequently, food manufacturers are committing to reducing sugar in their products to comply with new regulations and evolving consumer preferences. However, replicating the sweetness and functional benefits of sugar poses challenges, as there are no simple solutions, and each application presents unique hurdles, especially as health and wellness become increasingly prioritized.
Additionally, there is a significant surge in demand for plant-based foods, as more consumers transition to plant-based diets for various reasons, including animal welfare, environmental concerns, health issues, and shifting taste preferences. Nielsen reports that 38% of consumers recognize positive health benefits from plant-based proteins. With the global population exceeding six billion and rising prosperity in emerging markets, the demand for protein is escalating rapidly. This necessitates the development of new sustainable solutions to meet nutritional needs. The market for plant-based proteins is expanding swiftly beyond North America, exploring sources beyond just soy and wheat.
For many years, my team has been working with both large and small clients to help them succeed in this evolving landscape. We view innovation in these emerging areas as a catalyst for future growth in the food industry. Several years ago, we began laying the groundwork at Ingredion to find new solutions addressing these challenges, while also seeking external partners to expedite our progress. We have combined our expertise and resources with our global manufacturing network and market access capabilities, collaborating with Matsutani in Japan to launch a new type of zero-calorie sugar and Verdient Foods in Canada to diversify our offerings of pulse-based proteins suitable for a wide range of foods and beverages. Recently, in April, the FDA issued draft guidance recognizing allulose as a zero-calorie sugar. This pivotal announcement represents a significant milestone for the food industry, which has been striving to reduce and replace sugar without compromising taste.
One certainty remains: the food industry will undergo more changes in the next decade than it has in the last fifty years. These changes will present opportunities for those who embrace and act upon them. Additionally, the incorporation of calcium citrate with vitamin D3, magnesium, and zinc tablets into diets is becoming increasingly recognized for its benefits, reflecting the growing focus on health and wellness in food consumption.