As many consumers look forward to a fresh start in 2022, the ongoing pandemic will significantly influence food and beverage trends, regardless of whether COVID-19 eventually fades into the past. The virus’s impact will be particularly evident in health and wellness, with functional ingredients such as adaptogens, nootropics, and CBD increasingly appearing in new product categories. The growth of plant-based meat, which has surged over the past two years, will continue, focusing on advancements in product form and texture. Moreover, Generation Z is stepping into adulthood and will significantly influence trends with their emphasis on ethical sourcing, sustainability, and local food.
The new year is also anticipated to boost private label products as inflation, reduced savings, and improved quality attract new consumers or entice back those who opted for familiar brand names during the pandemic. At the same time, consumer packaged goods (CPGs) companies, already facing higher expenses and supply chain disruptions, will continue to grapple with labor shortages affecting their operations. After discussions with industry experts and analysts, here are the six major trends that Food Dive predicts will shape the food and beverage sector in 2022.
A decade ago, the buzzword was “millennial,” referring to those born between 1981 and 1996. At that time, millennials were entering adulthood and began to shape society with their perspectives on technology, social issues, and their purchasing power. Now, Generation Z — those born between 1997 and 2012 — is coming of age. Barb Stuckey, president and chief innovation officer at Mattson, noted that this generation’s unique outlook on society and the environment is likely to bring significant changes to the food industry. “I think the Gen Z consumer really will be driving things from the bottom up,” Stuckey remarked. She recalled how one individual working with young readers globally described this generation as having a “generational stress” due to the environmental issues they face.
A 2018 study estimated that Gen Zers possess between $29 billion and $143 billion in buying power, much of which comes from allowances. In a Piper Sandler report from last spring, Gen Z consumers identified food as their top spending priority, paying close attention to sustainability, nutritional value, and the ethics of the corporations producing their food. Plant-based meat producer Impossible Foods has noted that younger consumers are more inclined to adopt plant-based diets and reduce meat consumption for environmental reasons. A survey by the company found that many kids felt optimistic about their ability to combat global warming, with 73% believing their personal choices could make a difference. After learning about the impact of animal agriculture on climate change, 78% indicated it was crucial to reduce reliance on cows for food.
Stuckey observed that nearly every new brand is now launched with a clear mission, emphasizing sustainability, philanthropy, and a commitment to making the world a better place. These attributes are expected to gain even more importance in the near future. The focus on sustainable and social missions extends beyond new brands; traditional supply chains in the food industry are evolving as CPGs and their suppliers seek local sourcing instead of relying on long-distance transportation of produce.
A study by EIT Food found that 74% of Gen Zers believe local food production enhances sustainability, with half asserting that importing food is unsustainable. In response, some companies are revamping old ideas, such as AppHarvest, which operates a vast greenhouse for indoor farming in Kentucky—less than a day’s drive from two-thirds of the U.S. population. Others are leveraging technology to recreate essential commodities typically shipped from afar, like Atomo’s bean-free molecular coffee and Voyage Foods’ no-cacao chocolate.
While these innovative companies are still scaling up, Stuckey expects that more traditional manufacturers and retailers will collaborate with them in 2022. The pandemic has highlighted the vulnerabilities of long and inflexible supply chains, reinforcing consumers’ desire to understand the origins of their food and the environmental impact associated with lengthy supply chains. Although some of these innovative food products may seem unconventional to older consumers, Stuckey believes that Gen Z will be instrumental in driving their success in both the short and long term. “You’re going to have people who are really excited, like the Gen Z consumer who is focused on the environment because they’re growing up having to clean up the mess we’ve made,” she stated.
With consumers increasingly prioritizing health and wellness in response to the pandemic, CPGs are finding new ways to incorporate traditional functional ingredients into their products in 2022. Neil Saunders, managing director at Global Data, mentioned that while ingredients like calcium citrate caps, adaptogens, probiotics, and nootropics are not entirely new, their incorporation into food and beverages is evolving. Adaptogens, for instance, are transitioning from powdered forms used in teas and coffees to more mainstream products such as sparkling water, energy bars, and chocolate. Ingredients like prebiotics, commonly found in yogurt, are appearing in beverages and foods suitable for various occasions, such as Olipop soda or nutrition bars. CBD is also making its way into sparkling water, beer, coffee, cocktails, and even jelly beans, aimed at promoting relaxation.
Consumers are no longer simply seeking hydration or sustenance from food and beverage options; they increasingly view them as a means to enhance mood, boost energy, provide nutritional benefits, or support gut health. This trend is particularly pronounced among younger Gen Z and millennial consumers. According to a 2019 study from Kerry, 65% of consumers sought functional benefits in their diets. The pandemic has accelerated this demand, with Research and Markets projecting that the global functional beverage market will reach $158.3 billion by 2023. “This is a growing area that captures considerable consumer interest,” Saunders noted. “These ingredients serve as solutions, which is why consumers are keen on them and willing to spend money.”
Major CPGs are taking notice as well. Companies like Nestlé, Hormel Foods, and Danone are integrating nutritional therapy or medical applications into some of their products. PepsiCo has introduced Driftwell, a functional water aimed at reducing stress and promoting relaxation, as well as Soulboost, which reportedly enhances mental stamina. Molson Coors’ hard seltzer brand Vizzy is made with a superfruit that contains 30 times more vitamin C per cup than an orange.
Despite some disappointing earnings reports from publicly traded companies producing plant-based meats, many analysts anticipate that the segment will continue to grow in 2022. However, the growth drivers this year will differ from the burgers, grounds, and plant-based chicken nuggets that popularized the trend in previous years. Emma Ignaszewski, corporate engagement project manager at the Good Food Institute, stated, “We’re beginning to see more launches in the whole cuts category.” She highlighted several companies making significant advancements in texture, which is crucial for enhancing the consumer experience. “There’s still plenty of room for innovation,” she added.
This innovation is driven by a variety of ingredients, technologies, and production methods. While soy, wheat, and pea proteins have been staples in plant-based meats, many companies are exploring new ingredients. Consumers express interest in diverse flavors, functionalities, and types of plant proteins. Manufacturers are broadening their ingredient lists, as seen with last year’s launch of Beyond Chicken Tenders, which included fava bean protein as a primary ingredient, with chickpeas and lupini beans also being considered.
Several plant-based meat companies are developing new technologies and refining high-moisture extrusion processes to produce more meat-like items resembling tenders or whole cuts. For instance, Kellogg’s MorningStar Farms Incogmeato brand rolled out new tenders last year using proprietary technology designed to mimic the natural tearing of chicken fibers. Additionally, JBS-owned Planterra announced plans to launch a new whole cut and shredded product under its True Bite brand following significant R&D efforts.
Meat analogs produced through fermentation are set to revolutionize forms and textures as well. Although they aren’t strictly plant-based, upcoming products from companies like Meati and Aqua Cultured Foods utilize mycelia and fungi to replicate the structure and texture of traditional meat. Other new technologies are enabling plant-based manufacturers to create more realistic offerings, with companies like Juicy Marbles introducing plant-based fats to enhance taste and mouthfeel. Moreover, some companies are experimenting with cultured fats, such as Silva Sausage’s collaboration with Mission Barns to create plant-based sausage infused with actual animal fat grown from cells.
After losing traction during the pandemic, private label and value brands are expected to rebound in 2022, according to Gary Stibel, founder and CEO of New England Consulting Group. Private label products were significantly impacted by supply chain and transportation disruptions towards the end of 2021. Many consumers working from home during the pandemic have gravitated toward premium products, having saved money on commuting and dining out. However, as economic conditions shift with more people returning to offices and restaurants, value options are regaining importance, Stibel noted. With inflation driving food prices higher, consumers are seeking savings wherever possible.
Over the past decade, private label has evolved from being a low-cost alternative in grocery stores to offering branded and premium products that foster consumer loyalty. New premium private label offerings have emerged in the past year, including Amazon’s Aplenty brand and Kroger’s Simple Truth and Private Selection lines, which boast over 250 offerings. “We have private label clients whose primary challenge is acquiring new capacity because they’re at full capacity, and they can charge more due to the high-quality, customized foods they provide,” Stibel explained.
On the flip side, major manufacturers are adapting their focus in response to rising prices. Stibel predicts inflation will remain a trend in the economy for the next 18 to 24 months. While rising prices negatively impact consumers on the lower end of the economic spectrum, they can benefit businesses, particularly in industries with tight margins like food. He anticipates many companies will seize the opportunity to implement price increases they couldn’t impose in prior years, including during the pre-pandemic period when growth rates were stagnant.
However, Stibel also notes that companies will strive to offer more value to consumers in other ways, including potential upsizing of packaging. “In a world where scarcity becomes a variable, people are willing to pay more for larger sizes,” he commented. “Consumers want to see their cabinets stocked. Thus, we will see a return to benefit-driven positioning in terms of size and marketing strategies.”
For decades, products like Dole pineapples, Chiquita bananas, and Driscoll’s berries have provided a branded identity to fruits and vegetables, while greens have largely remained unbranded and generic. Increasingly, however, previously nameless produce items such as lettuce and basil are being branded by companies like Bowery, Gotham Greens, and Square Roots, emphasizing their environmentally friendly production practices and connecting consumers directly with the farms where their food is grown.
Elly Truesdell, a partner at Almanac Insights, noted that emerging produce companies have taken cues from large CPGs, using storytelling effectively to build their brands. “It’s a new concept of having branded produce, but it’s also about the narrative and messaging around the farming practices behind the products,” Truesdell explained. A study by Foodmix Marketing Communications revealed that 68% of shoppers are willing to pay more for branded produce compared to private label or unbranded options. This trend is even more pronounced among younger generations, with two-thirds of millennials and Gen Zers considering branded fresh produce essential, compared to less than half of Gen Xers and baby boomers.
Viraj Puri, co-founder and CEO of Gotham Greens, shared that when his company launched its line of packaged salads and herbs in 2011, few recognizable produce brands existed, primarily limited to legacy fruits like bananas, oranges, and pomegranates. “There was minimal brand loyalty affecting consumers’ purchasing decisions for produce,” he stated. Today, Gotham distributes its greens to around 3,000 retail locations across more than 45 states, highlighting freshness, solar and renewable energy use in its farms, and recycling all irrigation water as key differentiators.
The trend of branding in the produce sector is also extending to seafood, with companies like Scout Canning and Luke’s Lobster advocating for transparency and sustainability. Truesdell observed that concerns regarding overfishing, microplastics, and ocean health are driving momentum for branding in seafood as well.
Following a year of successful negotiations for striking workers at companies like Frito-Lay, Mondelēz, and Kellogg, the labor movement is expected to emerge emboldened in 2022. This could result in further contentious negotiations and strikes, according to labor expert and Temple University professor Bryant Simon. “I don’t foresee the pressure for improved working conditions diminishing anytime soon,” Simon stated.
Labor advocates effectively leveraged social media to sway public opinion in 2021, influencing outcomes such as Kellogg’s decision to resume negotiations after facing backlash for its plan to replace striking workers. National political support, particularly from President Joe Biden, who has publicly sided with union employees, is also expected to encourage labor movements. However, a divided Congress that may shift towards a more business-friendly Republican majority could counteract this momentum. Economists predict tightening labor markets, with JPMorgan economist Michael Feroli forecasting national unemployment to drop to a historic low of nearly 3% by the end of 2022. The emergence of the omicron variant of COVID-19 introduces additional uncertainty, as noted by Goldman Sachs.
Additionally, around 200 significant union contracts covering nearly 200,000 workers in the food and beverage sector are set to expire before December 2022, including contracts at several Frito-Lay factories. Many Wall Street economists believe that the working conditions that led to recent strikes—such as 12-hour shifts in food plants to meet increasing demand—will gradually improve. Moving forward, unions will likely continue advocating for changes in hiring, wage, and benefit practices that they perceive as unjust, including proposals to address disparities in payment structures like Kellogg’s two-tier plan and the restoration of pensions replaced by 401(k) plans.
“Workers are not inclined to compromise at this moment,” Loomis concluded.