America's Original Food-Tech Genius

 by Clark Driftmier

by Clark Driftmier

We are all dazzled by the exciting innovations in today’s food industry. New ideas are rushing into the market, from lab-grown meat to milk made from peas to root-extracted heme to burgers made from crawly creatures. Stellar tech and finance names such as Gates, Soros, Page and Khosla are investing in new food ventures. Today is indeed a rich period for food innovation in America - - but it’s not the first.

 

After the Civil War, a wave of new ideas in plant breeding and hybridization swept U.S. agriculture, creating a wealth of new productive plant resources, including many foods we consume today. The most famous leader in this wave of plant innovation was Luther Burbank (1849 – 1926). At the peak of Burbank’s fame early in the 20th century, he was listed alongside Thomas Edison and Henry Ford as one of America’s giants of innovation.

 L to R: Thomas Edison; Luther Burbank; Henry Ford (1915)

L to R: Thomas Edison; Luther Burbank; Henry Ford (1915)

Today, if we eat a baked Russet Burbank potato, savor a succulent Santa Rosa plum or plant a dazzling Shasta daisy in our garden, we are benefitting from plants developed and introduced by Burbank. From his plant breeding lab in Santa Rosa, CA and field trial farms in nearby Sebastopol, Burbank developed thousands of different varieties of foods, ornamental plants and industrial crops. Of these, more than 800 varieties were introduced across America during five decades of horticultural innovation.

 High-tech Food lab circa 1890 - the Burbank Plant Breeding Greenhouse

High-tech Food lab circa 1890 - the Burbank Plant Breeding Greenhouse

In Burbank’s day, there was no gene splicing, no tissue culture, no enzymatic extraction of proteins or other food components. New foods and plants were created by finding natural variations of other older forms –  for example, the discovery of the first red delicious apple – or by cross breeding different sample plants and looking for promising offspring. The hybridization of plants via cross breeding was Burbank’s main method in developing new forms, colors and flavors. Burbank admired Charles Darwin and studied Darwin’s book The Variation of Animals and Plants Under Domestication. Burbank carefully pollinated and cross bred thousands of different samples, planted the resulting seeds, kept the most favorable offspring, then repeated the process over multiple iterations. He also used numerous techniques of grafting that he learned in his youth working in New England apple orchards.  For Burbank, horticultural enterprise was not purely academic: he wanted to be financially successful and he developed licensing and purchase agreements with different commercial nurseries so that his new plants could find the widest and most lucrative pathways to the market.

Newspapers and magazines regularly described Burbank as a “wizard” and a “genius,” and his fame spread internationally. Notable personages of the early 20th century made the pilgrimage to visit Burbank’s research grounds, including author Jack London, lecturer and humanitarian Helen Keller and spiritual visionary Paramahansa Yogananda. Jack London was so admiring that he asked Burbank to help identify the best plants for his nearby ranch, and Yogananda wrote extensively of Burbank in his bestseller Autobiography of a Yogi.

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Not all of Burbank’s botanical innovations were “winners” in the market. He worked for years to hybridize and optimize a spineless form of prickly pear cactus to use as cattle feed on ranches. Although the cows ate the smooth, spineless cactus with gusto, the plant never demonstrated superior animal feed economics and was bypassed in favor of better feeds such as alfalfa.

 Burbank with his cactus - a labor of love but unsuccessful

Burbank with his cactus - a labor of love but unsuccessful

Whether the innovations succeeded or failed, Burbank always pursued a unique, inquisitive and creatively contrarian style of entrepreneurship, informed by a broad, humanistic world view. He delighted in succeeding with projects deemed “un-doable” by others, such as hybridizing two disparate plants that the “experts” said were incompatible. He also frustrated and bedeviled the academics by focusing his time on market potential and pathways to commerce rather than writing up and publishing his data and research for peer review and publishing in academic journals. In part, Burbank felt that time spent publishing research papers was not in his economic best interest. The academics sniffily labeled Burbank as “unscientific,” but he had plants to cross-breed and new varieties to invent. Of equal importance, Burbank was reluctant to openly publish his methods and findings because he wanted to protect his propriety IP, this in an era with no plant patent system and no IP protection for new plants and technologies. In fact, Burbank’s struggles to protect his IP helped stimulate his friend Thomas Edison to lobby the U.S. government to establish the plant patent system to protect innovators such as Burbank. Burbank died prior to the launch of the U.S. plant patent system, a system which functions today to protect the IP and innovations of plant pioneers and hybridizers.

 

At the time of Burbank’s death in 1926, he was universally hailed as the greatest horticulturalist of his time. Today in downtown Santa Rosa one can walk past the Luther Burbank Center for the Arts and the Luther Burbank Savings, then visit the original Luther Burbank Home and Gardens, which has been preserved as a National Historical Site. This home and garden acreage, including the greenhouse where Burbank conducted his research, is maintained by the city and by a not-for-profit foundation. There in the Santa Rosa soil and sunshine, described by Burbank as “the chosen spot of all this earth as far as Nature is concerned,” the visitor can see many of the plant innovations that Burbank gave us, including the Russet Burbank potato, the Santa Rosa plum and the Shasta daisy. Visitors can even firmly grasp one of Burbank’s original spineless cactus plants, now huge and rambly after 100+ years - - nary a prickle.

 Luther Burbank - an innovator for his age and for the ages

Luther Burbank - an innovator for his age and for the ages

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CLARK DRIFTMIER is Managing Director of Strobus Consulting (www.strobusconsulting.com) which develops new brands and go-to-market business strategies. He has been a food entrepreneur and start-up specialist for nearly 3 decades. Clark’s new product and management initiatives include hundreds of new products in several dozen food categories.  A published author of articles on natural and organic foods, Clark has also spoken at numerous conferences and has served on several national and regional not-for-profit boards. He and his family live in Northern California.

What We Saw at the 2018 Natural Products Expo West

by Clark Driftmier

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The Natural Products Expo West trade show and conference has cemented its position as the leading food show in America for brands, trends and innovation. This year the show has grown to more than 85,000 attendees and 3,500 booths, including the show’s expansion into the new North Hall at the Anaheim Convention Center.

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We recently walked the aisles of Expo West, an exciting (and daunting) enterprise requiring several days due to the huge crowds, jammed aisles and the show’s expansion into new exhibit areas. More than ever, Expo West is the definitive venue for food innovation in America, and the show has become a more than a little crazy as in “crazy exciting.” Below are a few of the trends that we notices as we walked the show:

1.       Plant-based milks go artisanal

·       The lifecycle of plant-based milks has progressed from the basic (quarts and half-gallons of soy & rice milk) , to the flavorful (almond milk) to the more exotic (hemp and cashew milk). The newest stage has seen a number of new artisanal plant-based milk products, unique packages, smaller sizes and greater variety in flavors. Brands tout their hand-crafted and artisanal qualities.

2.       The Beet Generation

·       Beets are hot, even when they are cold (as in the beet & goat cheese salad at your favorite café). The surging popularity of beets has led to an expansion of natural foods that feature beets prominently, especially snacks. There are also new varieties of beet-based frozen entrees and drinks.

3.       We all scream for ice cream

·       An ice cream obsessive with the goal of sampling every brand of frozen dessert at Expo would need to visit more than 100 booths. Natural frozen desserts have surged in popularity and include a wide array of both dairy-based and non-dairy options.

4.       Munching on Mochi

·       Mochi has always been a favorite in U.S. Asian markets and restaurants and to a certain extent in natural foods. This delicious food has now benefitted from expanded distribution and a more evolved consumer palette, leading mochi to a position closer to the center of the mainstream U.S. diet. Many natural food retailers now feature mochi in frozen coolers with multiple flavors. Mochi is also found at room temperature in the dessert section.

5.       Plant-based and Meat-based opportunities both abound, but mission-wise are they in conflict?

·       So, which banner should the industry fly? Perhaps it is - “In Plants We Trust!” a motto we saw at the show. Or maybe it is - “Animals Rule!” Wandering the show, there were hundreds of brands with strongly developed messages promoting both sensibilities. We found plant-based products in one aisle with strong messaging regarding the benefits of plant-based foods and the negative burden of animal agriculture on the environment. This was followed by several new meat snacks in the next aisle discussing the benefits of ruminant animals to regenerative agriculture. Around the corner in another aisle we found dairy free cheese companies promoting the benefits of plant-based cheese as a better option v. dairy-based cheese for personal health and the environment. In the next aisle we found several grass-fed dairy and cheese brands that were thriving. Gosh, is there a unified message in all of this!? Perhaps the duality of messaging with plant-based v. animal-based agriculture demonstrates commerce in action and the democracy of consumer choice. Then again, maybe it’s indicative of an industry that has several competing messages and missions without central tenets. Or perhaps it’s just a manifestation of our crazy society and the near-infinite variety of foods, forms and brands.

6.       Looking Beyond the Barnyard

·       Speaking of meat, we notice that the expansion in variety of products and sku’s has also increased the availability of wild “beyond the barnyard” meats and species such as elk, venison, wild boar and wild (or American) turkey. We predict that the variety of flavors and types of meat will continue to expand as brands look for new ways to bring excitement to the meat snack category. Wild Paraguayan anaconda jerky, anyone?

7.       Sales are Sprouting

·       Sprouted products have long held a place in the bread category, but we also noticed several brands of cookies and crackers made with sprouted flour. Additionally, we saw sprouted flour itself in 1 to 5-pound bags, ready for a new generation of bakers.

8.       Hemped Up

·       With the mainstreaming of cannabinoid-based products as rightful members of the natural living industry, sales of these products have skyrocketed, especially for CBD oil. Numerous CBD brands were on display, and there was a day-long CBD business summit at the convention center during the week of Expo. What we did not see were any of the hallucinogenic, THC-based products, such as edibles, due to the significant legal hurdles still threatening the industry at the Federal level and in many states. Indeed, the Justice Department’s hostility to any and all products derived from cannabis keeps the industry’s prognosis and growth trends highly unstable, with brands not exactly sure how open the market will be or how broadly across America the products will be legal and shippable.

9.       When Your Brand Name is your Mission

·       For a number of years, Starbucks customers have purchased “Ethos” water, which promotes water, sanitation and hygiene initiatives in water-challenged regions. We also note the long success of “Endangered Species Chocolate,” which supports the initiatives of its eponymous name. These have been joined recently with “No Evil” plant-based foods, “This Bar Saves Lives” brand energy bar and “Good Citizens” Mac & Cheese. For these brands, marketing is not just messaging but is intrinsic in the brand’s very identity. Branding your mission as your name also set a high bar for conscientious action, mandating that the brands continually uphold the mission which is their brand as well as their purpose.

10.   Coconut Champions and Challenges

·       There were several new coconut-based products at the show, especially in the area of snacks. These products champion coconut as a flavorful and healthful signature ingredient.  However, there were also challenges in the category, with sales downturns for certain coconut products, especially coconut oil, which has seen a sales decrease in excess of 25% over the past year. Critical reports about coconut oil in medical journals and elsewhere have affected sales negatively, though many consumers still buy and love coconut oil for a variety of recipes and uses.

11.   Dear Acai, we had such a wonderful time together, but . . .

·       Amid our updates on booming categories and emerging product trends, we should also acknowledge troubled categories such as acai, which has suffered a precipitous decline over the past several years. Once a star category at the show, acai now has a much smaller footprint and very little new product activity. A small number of the leading acai brands are still present, with a few sku’s here, a few flavors there, but nothing like the surging, buzz-worthy product category of the early 2000’s. And don’t even get us started on Goji berries!

12.   Food v. Natural Living – Who’s got the mojo?

·       Historically, the Natural Living portion of the Natural Products Expo has always had the highest excitement or ‘mojo’ factor. Bigger booths, brighter lights, longer lines at the book signings, custom-built stages in the booths with pulsing music, multi-story cantilevered meeting spaces, and the like. However, we observe that the food side is currently capturing a lot of the buzz. There is a huge burst of innovation, investment and growth in natural & organic foods. Entrepreneurial ventures and incubators abound. Financial and strategic investors are driving growth and innovation. Silicon Valley leaders are joining the boards of disruptive start-ups such as the plant-based meat developers. As Phil Lempert the “Supermarket Guru” states, “For the first time in my career, Food is now Cool.” This is not to “shade” the Natural Living side, which is also very exciting with many new products, but we would conclude that now is the most exciting time ever to be in natural & organic foods. Looking at the industry overall, many of us think that the natural products community is a swell place to spend the first few decades of the 21st century.

13.   Celebrating the Food Itself v. the Apps Around the Food

·       Meal kits. Door Dash. Self-serve grocery stores. App-based ordering. Amazon lockers. Much of the current buzz in the food and business media is about the apps and technology that surround food and serve as enablers between consumers and their food choices. That being said, Expo is all about the food itself. How it tastes. The textures and flavors and colors and forms. What it’s made of. How it nourishes the body (or not). How it sustains the Earth (or not). How it upholds cultures and culture. A walk through the Expo halls is a food sensory experience, not an app-centric experience. During the Expo. Whole Foods Market ex-CEO Walter Robb gave a keynote address at the Disruptive Retail seminar. In his talk, Walter reminded attendees that whatever the changes in retail, the most important part of grocery retailing will always be the food itself and the qualities of excellence in food and flavor which will delight consumers and bring them back to the store.

14.   Private Equity and Strategic Investment – The Jet Fuel of our Industry

·       Walking among the “Big Natural Food” booths of the natural food leaders, especially in Expo Halls A and B, and comparing how they look today v. those same companies in former years, one must simply say “WOW.” The overall look is dramatically brighter, bigger, fresher, newer and more exciting than ever before. So many new booths, enlarged booths, enhanced booths. One can almost feel the investment, the money, the commitment of new owners, the talent and enthusiasm. Capital from financial and strategic (food company) investors has definitely added jet fuel to our industry. Additionally, the criteria for investment are changing. For example, the threshold in brand size and development to attract investor interest has gotten progressively smaller and earlier in the brand lifecycle, due in part to investor interest to get into “the game” closer to the beginning. This earlier investment window allows newer brands with young, formative business plans to attract investor interest which in general was not previously seen. As a result, younger brands today near the incubator stage are garnering investment that facilitates growth from the earliest stage of the company lifecycle. This too is adding fuel to the natural foods “flame” of innovation and growth.

The growth and leadership of the Natural Products Expo and the brands it represents have become worthy participants in the larger food economy. Natural Products comprise only about 10% of the food industry, but they currently seem to be getting about 90% of the positive buzz. We might call this the “90 / 10 ratio” of buzz to revenue. Of course, natural & organic products have historically “punched above their weight” in terms of capturing the hearts & minds of consumers and the media, even with much lower sales than conventional food counterparts. The way that Natural products are developed and taken to market, the way they tap into the contemporary direction of society, are serving as a model for entrepreneurship.

And yet, as we chart our future course, there is so much more to do. Sustainability programs are admirable but are just scratching the surface. Organic farming systems have demonstrated important tangible benefits but still comprise only a small portion of US agriculture. Natural products have greatly increased distribution but have not dented the problem of food deserts or unhealthy diets among so many citizens. Initiatives in our industry have launched to fight climate change, but we still use the same greenhouses-gas-producing trucks and warehouses and freezers (and Expo airline flights) as any other sector of the economy.

The natural foods industry has many of the elements in place to make even further progress towards a sustainable future, and the Natural Products Expo is an invaluable platform to facilitate change and growth. True change requires a motivated group who is unafraid to mix things up and do it a different way.  Building a sustainable future requires thought leadership, rigor and hard work. Creating better products requires a willingness to throw certain methods and ingredients out the window and replace them with more innovative alternatives. Rallying the industry to action requires bringing our community together to speak, listen, learn, share, debate, brainstorm, enhance, revise, and ultimately to craft a new narrative for the future of the greater food industry.

Looking at all the above, we think that a fine way to make progress is to gather together on a certain morning in March, at a certain location in Anaheim CA, with 85,000 of our closest friends.

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CLARK DRIFTMIER is Managing Director of Strobus Consulting (www.strobusconsulting.com) which provides clients with new product development and go-to-market business development strategies. He has been a food entrepreneur and start-up specialist for nearly 3 decades. Clark’s new product and management initiatives include hundreds of new products in several dozen food categories.  A published author of articles on natural and organic foods, Clark has also spoken at numerous conferences and has served on several national and regional not-for-profit boards. He and his family live in Northern California.

What We Saw at the 2018 Winter Fancy Food Show

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by Clark Driftmier

A bay. A bridge. A conference hall filled with thousands of delicious indulgent delights.  This is the Winter Fancy Food Show, which was held this week at the Moscone Center in San Francisco.

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We toured the halls and aisles of the Winter Fancy Food Show, looking for the key trends and areas of growth in this dynamic event. Below are several of the products, categories and trends that we observed:

1.       1,001 Variations on Familiar Themes

·       The key quality of the Fancy Food show has always been “gourmet” in all of its forms. This quality continued in 2018 with multiple new variations on gourmet products that are mostly familiar to folks in the food industry.  These “variations on a theme” include multiple versions of: salamis and meats, cheeses, olive oils and other oils, gourmet mustards and condiments, crackers, chocolates and other confectionary, nuts, soups and the like. There were also multiple versions of familiar foods in the international exhibits (multiple Italian pastas, multiple French brie and other cheeses, etc.). More on that international trend later in the blog.

2.       Plant Based? Not exactly - - Meat and Dairy Still Rule (for the most part)

·       One aspect of the “gourmet but familiar” theme highlighted at Fancy Food was the continued dominance of meat and dairy products.  This heroic position for products from animal agriculture contrasts, somewhat, with a greater focus on plant-based products seen at the Natural Products Expo’s. Here at Fancy Food, meats, cheeses and dairy products were proudly on display in every aisle. While there certainly were plant-based products, (e.g. mushroom Jerky) those products were in the distinct minority.

3.       Glass-jar Fermented Products

·       The popularity of fermented and glass-jar brands has increased, and many of these products were on display.  While glass usage is declining in most of the food industry (e.g. your popular mayo and ketchup are almost certainly packaged in plastic these days), at Fancy Food the glass packaging was an essential part of the branding. Glass helped to emphasize the feeling of being hand-batch, artisan, “just from my kitchen stovetop” (or alternatively, “just like Grandma made it.”)

4.       All Things Handcrafted + Artisan

·       Speaking of hand-batch, it seemed that just about every-other booth had branding and imagery communicating “handcrafted” or “artisan.”  From sodas to soups to savory snacks, products throughout the show emphasized the quality of being handcrafted. This quality signifies care, provenance (“yes, we ourselves made this product”), attention to detail and a greater connection between the food, its makers and its customers.

5.       A Brand Grows in Brooklyn

·       Thinking of provenance, the “capital” of handcrafted + artisan foods in America is definitely Brooklyn. Products throughout the show proudly displayed their Brooklyn origins. Being from Brooklyn elevates a brand’s profile from “just food” to “something more than just food.” This quality raises an intriguing question: since all NYC boroughs have amazing food, when will we start to see food products and cuisine branded as Queens, Staten Island or the Bronx? Attention New Yorkers - - it may be time for you to develop a complete “5-Borough” strategy for your innovative food start-ups!

6.       Coconut on a roll – from meats to waters to oils to butters to sweeteners to snacks

·       Coconut products have been increasing in popularity for a number of years, and coconut has evolved into multiple products across several very different categories. This year we saw more coconut-based snacks than ever before. There were also more coconut sweeteners featured, as well as products sweetened with coconut. And of course, lots of coconut water brands and coconut milks.

7.       Mucha Matcha

·       Matcha tea is having a “moment” (or maybe a decade) as consumers discover its health and flavor benefits. At the show we saw various forms of matcha tea as well as products such as breath mints made with matcha. Go Green !

8.       Mellow Mallows (and Krispies)

·       No longer limited to S’mores and campfires, marshmallows have expanded significantly as a specialty gourmet or artisan type of food, both as a snack and as a cooking ingredient. More than 10 gourmet marshmallow brands were on display at the show. Along with this trend, the traditional Rice Krispy treat has gone upscale, more adult and more gourmet with multiple artisan versions on display at the show.

9.       Natural Fruit & Veggie Snacks

·       As snacks have exploded, there is also a desire to limit fat and sodium. Filling this need is the growth of natural snacks made with fruits & veggies, which have expanded as a less-processed alternative to fat and sodium rich snacks. Whether baked, air-dried or freeze-dried, fruit and veggie-based snacks have increased their profile at the show, with new brands in display as well as flavor expansion from current category leaders.

10.   Spreading the Flavor – Expansion of Spreads & Butters

·       The growth of Nutella and other flavored spreads has led to an expansion of flavored spreads brands at Fancy Food. There is also an expansion of nut butters, both with peanut butter and with other types of nuts including walnut.

11.   Gifts of the Levant – Middle Eastern Flavors Expand

·       All of us enjoy hummus and falafel, Middle Eastern foods which have entered mainstream American food culture. However, companies exhibiting Middle Eastern foods at the Fancy Food show went beyond the familiar to a fuller and richer set of products highlighting the culinary traditions of Turkey, Lebanon, Syria, Jordan and the countries of the Levant. We predict that Middle Eastern flavors will continue to expand as consumers broaden their palettes and embrace a wider range of culinary delights from this region.

12.   Even Further South of the Border – Growth of Central American Cuisine

·       Geographically, the growth of Latin American cuisines (and there are many) has led to a greater presence of foods from Central America, especially Costa Rica and El Salvador. From Salvadoran Papusas to Cost Rican Gallo Pinto, the foods of Central America are becoming more important to the flavor innovation found in American supermarkets and restaurants.

13.   Clearly Southeast Asian – Expansion of Pho, Clear Broth Products

·       Our culinary tour of Fancy Food continues to Southeast Asia, where we noticed a number of brands and foods representing the cuisines of Vietnam, Cambodia and Philippines. Clear broth soup brands with spices such as lemon grass were featured, as were pho brands and Filipino flavors and dishes such as Adobo and Sinigang.

14.   Thin is (Still) In

·       We have been in the “thin” snack era for a number of years, and that trend continued on the Fancy Food show floor. There were products explicitly with “Thin” in the name, both the familiar brands and new brands. We also saw other products, though not named “thin,” which nonetheless had thin or wafer-like forms. Being “thin” communicates the quality of “slenderness” both visually (“it’s thin therefore I will be thin”) and nutritionally (“it’s thin therefore each unit has fewer calories, which helps me limit calories to stay thin.”)

15.   “Picture Postcard” Foods – International Products Stay True to Iconic Favorites

·       One quality we noticed at the international pavilions and booths is that the foods on display were almost entirely those traditional foods we think of from each country. In each booth, the food company displayed foods that we might call “iconic” to that country’s traditional food culture. Thus, the French booths had French cheeses, baguettes and yummy pastries (but not the West African and Asian foods currently sweeping the street food scene in Paris and other French cities). The UK booths feature Stilton cheese, shortbread cookies and English teas (but not the explosion of curries and South Asian foods which have revolutionized the British palette). Same for Spain - - lots of traditional hams and mancheco cheeses, but not the North African or Latin American food that one actually sees regularly on the streets in Spain.  In every case, the booths seemed to cater to what Americans have in our minds as the iconic food of that country, rather than representing the current food scene occurring right now in that country. In a way, we Americans want the foods we import from UK, France, Spain etc. to be the “picture postcard” foods we love and identify from that country, irrespective of the actual dishes being prepared and enjoyed daily in the homes and cafes of those countries. There is certainly much traditional French food in France, but French consumers are also reaching out to all types of new foods and flavors. Will these newer and evolved foods from France (and other countries) make their way to US store shelves – interesting question.

Two principles seemed to emerge from our tour of the halls of the Winter Fancy Foods show – Reassurance and Innovation. Reassurance was found in the delightful array of familiar foods and forms, presented in gourmet, mouth-watering food experiences. With Reassurance, consumers can say “Yes, this is the dark chocolate I love, and my favorite brand does it magnificently.” Innovation was found in the interesting new foods which might not be familiar to consumers but which fulfill the need for variety. With Innovation, consumers can say “You know, I’ve never tried Matcha breath mints before, but they look interesting. I’ll try one.” On balance, the Winter Fancy Food show is a gourmet foods showplace, and it will steer towards Reassurance, presenting familiar foods in marvelous and delightful ways. But Innovation also has a role, as consumer tastes evolve and food-makers create foods to meet that evolution.  We look forward in anticipation of both the reassuring and the innovative offerings at the next Fancy Food show.

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CLARK DRIFTMIER is Managing Director of Strobus Consulting (www.strobusconsulting.com) which provides clients with new product development and go-to-market business development strategies. He has been a food entrepreneur and start-up specialist for nearly 3 decades. Clark’s new product and management initiatives include hundreds of new products in several dozen food categories, with combined annual sales of nearly $2 billion. A published author of articles on natural and organic foods, Clark has also spoken at numerous conferences and has served on several national and regional not-for-profit boards. He and his family live in Northern California.

"Many Hands Make Light Work" - The Art & Science of Broker Management

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by Clark Driftmier

Teams and teamwork make food companies great. Leadership teams; operations and supply chain team; sales & marketing teams; all kinds of teams. For emerging food entrepreneurs, most of whom must grow using finite resources, it’s beneficial to leverage limited company resources by adding a motivated team of outside partners who can extend the reach of the company to the broader market. In this effort sales brokers are key, and the successful management of brokers combines both art and science.

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The “science” component of broker management involves creating a good strategy, communicating with clear direction and implementing with top-notch execution and daily broker management. The “art” component relates to the nuances of personal interaction, motivation, feedback, recommendations for improvement, etc. which are used when managing partners such as brokers. Below are 8 key insights that we have gained leading and managing brokers:

1.       Manage brokers actively, meaning “early & often:”

·       In broker management, it’s important to engage with your broker team actively and repeatedly. Brokers have dozens or hundreds of clients. They work diligently to serve all of them, but your brand and your sales plan is just one of many in their client portfolio. To help your brokers, you should meet with them at every opportunity, schedule frequent calls, send emails notifying them of any and all changes, and provide regular updates on your brand’s progress.

2.       Clarity & Documentation:

·       The working environment for you and your brokers with retailers and distributors is driven by documentation, forms, new item paperwork (NIP), online databases, firm deadlines and long lead times for changes. There are also rather severe repercussions for missing deadlines or failing to provide an important piece of documentation. The key to success in this environment is to pre-plan everything, document everything, write it down, codify due dates and deadlines and take every deliverable seriously. There is no forgiveness or a “mulligan” for missing a key date or being sloppy with any aspect. If you say to your retailer: “Gosh, I’m sorry, I’m a little late with that paperwork” the retailer is likely to respond: “Gosh, we’re sorry, but you missed the deadline for this year. Please come back next year.” Yikes! Your broker can help manage these key commitments, but they work for you, and it’s up to you, the brand, to assume full responsibility and ownership of the process.

3.       Follow-up & Accountability:

·       Good sales managers have a regular, formal process to manage broker reps using 4 steps:

#1 – establish goals, accountabilities and next steps for each program for retailer

#2 – set a day & time for the next review

#3 – summarize and memorialize the deliverables, next steps and timelines in writing

#4 – During the next review, go through each deliverable one-by-one to check progress

We see good sales managers keeping multiple written progress lists for each broker rep, checking and re-checking each deliverable.

4.       Request to attend all meetings set up by your broker with retailers:

·       We recommend that you try to attend all meetings that your broker books with retailers, rather than delegate those meetings to the brokers alone. No one can tell your brand’s story like you can, and the “One-Two” combination of the client and broker together in a meeting sends a strong positive signal to the retailer. Some retailers won’t allow the brand to attend certain meetings, but you should push to attend retailer meetings whenever possible.

5.       Meet brokers in their home territories, not in your company office:

·       We also recommend that you put the “field” in field sales by meeting your broker teams in their home markets, rather than rely on emails, phone calls or to ask the broker to travel to your office. You will benefit from the “ride-alongs” with the broker rep to learn about the market, and the broker will share important insights into markets, retailers and consumers in her or his home market which will give you a more granular, tangible sense of the market.

6.       Listen:

·       Sales managers are supposed to be good listeners, but we notice many salespeople doing mostly talking to and directing their brokers vs. listening to them. Remember that your brokers have multiple clients and years or decades with other brands, working through and solving every issue that your brand might experience. Brokers have a wealth of knowledge and experience which can guide your success, provide valuable counsel and prevent missteps.

7.       Manage with “Honey” not “Vinegar:”

·       Brokers, like all people, respond best to encouragement, positive direction and a sense of partnership. That said, we regret that we hear of clients who scream and yell at their brokers, display hostility or disrespect, off-load responsibility (“it’s the broker’s fault not mine”) and create an atmosphere of negativity. Gosh - - isn’t it self-evident that a positive, encouraging relationship leads to better results? Enough said.

8.       Take advantage of expanded services offered by brokers:

·       Many brokers have expanded their services beyond sales representation to offer a fuller range of sales and marketing services. These services include graphics, point-of-purchase materials, off-shelf display design, marketing messaging, assistance with PR and social media and the like. Broker resources can also improve presentations with better formatting, language, graphs, videos, brand messaging and other enhancements to make the retailer meetings more impactful.

With a good broker team and effective management, brands can significantly extend their reach beyond the brand’s limited team to implement sales programs in multiple geographies and sales channels. The broker team becomes the advocates for the brand, representing you in the market and sharing their guidance and insights.

Not to get too “Kumbaya” about all of this, but when you are an emerging and possibly still-small natural products company, it’s very reassuring to have a strong broker team at your side, fighting for you and helping your brand to wedge its way into the hearts and minds of distributors, retailers and consumers.

Let’s hear it for the team!

#  #  #  #

CLARK DRIFTMIER is Managing Director of Strobus Consulting (www.strobusconsulting.com) which provides clients with new product development and go-to-market business development strategies. He has been a food entrepreneur and start-up specialist for nearly 3 decades. Clark’s new product and management initiatives include hundreds of new products in several dozen food categories, with combined annual sales of nearly $2 billion. A published author of articles on natural and organic foods, Clark has also spoken at numerous conferences and has served on several national and regional not-for-profit boards. He and his family live in Northern California.

Incubating Success - The Growth of Food Incubators for Emerging Entrepreneurs

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by Clark Driftmier

We often hear the saying: “It takes a village to raise a child.” In the world of food start-ups, we might also say: “It takes a village of supporters and resources to raise a new food company.” Fortunately, food entrepreneurs of today have the unique and valuable resource of Food Incubators to provide a range of essential infrastructure and support services to help facilitate growth and success. During the 2010’s, the presence of these incubator resources and facilities has grown dramatically, from fewer than five to more than twenty. Incubators can now be found in major metro regions and urban food hubs across the country.

 "The Hatchery" Food Incubator, Chicago (rendering)

"The Hatchery" Food Incubator, Chicago (rendering)

Why Use an Incubator?

For emerging food companies, their founders and teams, food incubators can provide a wide range of resources and services, at costs that are affordable and/or underwritten. These resources fall into six primary “buckets” of activity:

1.       Infrastructure:

  • Kitchen working space, tasting rooms, food production areas which meet state and federal food safety requirements, co-working space, meeting areas

2.       Outsourced services:

  • Package design, graphics, marketing, sales, legal, accounting, insurance, banking

3.       Mentorship:

  • Food thought leaders, chefs, investors, food executives, consultants, leadership coaches

4.       Education opportunities, events and workshops:

  • Seminars, programs, tours of food facilities

5.       Community:

  • Informal discussions, get-togethers, networking, sharing of ideas and goals

6.       Investment:

  • “Accelerator” funds, state and local development funds & grants, support from food companies, angel investors, private equity

Emerging companies typically reside within food incubators for much of their early life, eventually growing sufficiently to open their own dedicated offices and facilities. The food incubator does just as it’s named - - it “incubates” and nurtures the business during the early vulnerable stages of development. Bonds and friendships forged during the heady but difficult first stage in the food incubator often last for years as the entrepreneurs grow together and chart parallel but unique pathways to the realization of their plans and ideas.

Here is a brief overview of several of the current food incubators which collectively are helping to foment entrepreneurship with hundreds of start-up businesses:

Pilotworks (www.pilotworks.com) The original facility for Pilotworks is in Brooklyn, NY, with additional kitchens now operating in Chicago, Dallas, Newark NJ, Portland ME and Providence RI. Pilotworks provides kitchen workspaces, equipment, mentoring, outside services

 Kitchen facilities at Pilotworks, Brooklyn NY

Kitchen facilities at Pilotworks, Brooklyn NY

Union Kitchen DC (www.unionkitchendc.com)  Union Kitchen operates two kitchens in Washington DC, a distribution center, two retail grocery locations and a food accelerator program. Beyond its current base of start-up clients, more than 200 additional aspiring start-ups are on its waiting list for a spot in the program.

 "Meet the Makers" night at Union Kitchen DC

"Meet the Makers" night at Union Kitchen DC

The Hatchery (www.thehatcherychicago.org) Located in an economic development zone near Chicago’s Loop, The Hatchery has received funding from state and city agencies as well as from food giants including Kellogg’s and Con Agra. One of the largest incubators at 67,000 sq. ft., The Hatchery has 56 food grade spaces and can serve 75-100 companies.

 Networking space at The Hatchery, Chicago (rendering)

Networking space at The Hatchery, Chicago (rendering)

NOFFN (www.noffn.org) NOFFN, the “New Orleans Food & Farming Network,” has a number of programs, both kitchen-based and farm-based, designed to support sustainable agriculture and the unique food culture of the great New Orleans region. NOFFN’s “Edible Enterprises” program is the kitchen-based food incubator. The organization also runs the “Growing Back to the Roots” farming program and the “Grow Mo Betta” education workshops, among other initiatives.

 NOFFN "Edible Enterprises" kitchen facilities, outside New Orleans, LA

NOFFN "Edible Enterprises" kitchen facilities, outside New Orleans, LA

Kitchentown (www.kitchentowncentral.com) This initiative in the Bay area of California has a kitchen facility in San Mateo and a Learning Lab in the Mission District of San Francisco. The kitchen facility has 10,000 sq. ft. of space, numerous food prep areas, co-working spaces, a food storage warehouse and a café for members and visitors.

 Member foodmakers at Kitchentown, San Mateo CA

Member foodmakers at Kitchentown, San Mateo CA

Kitchencru (www.kitchencru.biz) Kitchencru has helped nurture Portland OR food startups since 2011, making it one of the most established food incubators with hundreds of alumni firms. Its primary 4,800 sq. ft. facility has a wide range of food production systems and equipment.

 Making artisan cookies at Kitchencru, Portland OR

Making artisan cookies at Kitchencru, Portland OR

Benefits

The benefits of food incubator participation are numerous. Promising-but-struggling food enterprises gain access to many different areas of infrastructure and service which would otherwise be unavailable or unaffordable. Mentorship and coaching opportunities help to stimulate professional growth as emerging entrepreneurs hone their leadership and management skills. The friendship and affiliation with other entrepreneurs helps build community, the sharing of ideas and the bonds of mutual support and encouragement among peers. Additionally, many of the incubators link emerging food brands to investors and accelerator funds which can greatly enhance the financial viability of the venture during its early vulnerable stages.

Challenges

The biggest challenge for a new firm in an incubator is really the underlying risk for any startup food business - - the pure risk of failure and the possibility that the venture will not gain a sustainable share or position in the market. However, this risk is present for all startups, and the incubator can help to mitigate the risk in a number of ways.

Another challenge is the potential risk to proprietary Intellectual Property (“IP”) due to the communal, open environment of the incubator. Unique and breakthrough ideas can be co-opted or copied by others. One wonders if an incubator-bred brand can fully protect any truly significant, proprietary IP. There is one level of risk to have others see a new flavor of cupcakes; the risk is entirely different with, say, a breakthrough formula for plant-based proteins that can be widely viewable and discoverable by 75-100 other ambitious entrepreneurs. We recommend that emerging food company leaders take all possible precautions to guard and protect their unique, proprietary IP, which can be challenging in an open, communal incubator environment.

A third challenge is to find the right financial partner among the accelerator funds, private investors and angel funds which are available in some incubator programs. It’s important for the founders and stakeholders to evaluate different financial partners to select the best partner with similar goals, expectations and investment timelines for the business.  Investors can be inspired and sincerely helpful, but they also are in the program for the financial gain they hope to realize. The key is to find investors who are aligned with the founders and can serve as a beneficial resource in terms of both financial support and strategic guidance. We also recommend that emerging food company leaders do everything possible to retain the highest level of ownership, so that they can reap the highest portion of its future value if or when a financial transaction occurs down the road.

Summary

The current environment of the food industry is very favorable for creative, emerging new brands and ideas. Consumers continue to embrace all kinds of new flavors and forms of food. Retailers need new brands to build excitement for their shoppers. Investors and large food companies need new and emerging brands to provide platforms for future growth and products that future consumers will embrace. To address this opportunity, there are more emerging food entrepreneurs than ever, creating new brands and foods which speak to the needs and interests of a new generation of consumers.

The combination of these factors means that the demand for food incubator resources is likely to increase significantly in metro areas and food hubs across the country. We predict that the Food Incubator movement will become a robust industry in its own right, with dozens of facilities across most major U.S. metro areas. Some of these incubators will follow the path of Pilotworks to roll out their model to multiple markets using equity investment. Others will stay independent but will increase in the size of facilities and range of services to serve a burgeoning list of clients and member companies. This growth will parallel the growth of the co-working office industry, which in ten years has blossomed into a major part of the office working infrastructure of most major cities.

Starting a food enterprise is a daunting proposition, but with the infrastructure and support of Food Incubators, exciting new businesses are hatching.

# # # #

Additional Food Incubator Resources:

Food-X (www.food-x.com) New York, NY

HBK Incubates (www.hotbreadkitchen.org/incubates/) East Harlem, NY

La Cocina (www.lacocinasf.org) San Francisco, CA

Commonwealth Kitchen (www.commonwealthkitchen.org) Boston, MA

Fund the Food (www.fundthefood.com) Birmingham, AL (the Kirchner Food Fellowship, created and managed by Kirchner Group, Merchant Bankers)

Forge: Food (www.forgeportland.org) Portland, OR

Chobani Food (www.chobanifoodincubator.com) New York, NY

Shoals Entrepreneurial Center (www.shoalsec.com/specialty-food-production/) Florence, AL

The Good Food Business Accelerator (www.goodfoodaccelerator.org) Chicago, IL

The Yield Lab (www.theyieldlab.com) St Louis, MO

# # # #

CLARK DRIFTMIER is Managing Director of Strobus Consulting (www.strobusconsulting.com) which provides clients with new product development and go-to-market business development strategies. He has been a food entrepreneur and start-up specialist for nearly 3 decades. Clark’s new product and management initiatives include hundreds of new products in several dozen food categories, with combined annual sales of nearly $2 billion. A published author of articles on natural and organic foods, Clark has also spoken at numerous conferences and has served on several national and regional not-for-profit boards. He and his family live in Northern California.

Regenerative Agriculture, Organic and the Climate Connection

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by Clark Driftmier

Readers may have seen an article in last Sunday’s New York Times entitled “Soil Power! The Dirty Way to a Green Planet.” (1)  In the article, contributing writer Jacques Leslie reports on new findings in the field of Regenerative Agriculture, specifically regarding the ways in which regenerative agricultural practices can sequester carbon in the soil.

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We all know that the buildup of carbon in the atmosphere is a major contributor to climate change.  There are increasingly active studies on methods we can employ to sequester carbon to mitigate the effects of climate change. As Mr. Leslie reports, Soils comprise one of the Earth’s five major storage pools for carbon, the others being: Air, Oceans, Forests and Fossil Fuel reserves. In this context, Soils are one of the most promising areas for carbon sequestration, and Regenerative Agriculture is one of the best ways to store carbon in the soil over the long term.

According to research done by the Carbon Management and Sequestration Center at Ohio State University under the direction of Rattan Lal (2), Soils can capture and store anywhere from 0.9 to 2.6 gigatons of carbon per year, representing up to 25% of all carbon emissions. As Mr. Lal described in the NYT article, “Putting the carbon back in the soil is not only mitigating climate change, but also improving human health, productivity, food security, nutrition security, water quality, air quality – everything.” (3)

There is other encouraging news – Organic agriculture is one of the best farming systems for capturing and storing carbon in the Soil. A recent study, directed by The National Soil Project at Northeastern University in collaboration with the Organic Center, demonstrates that Organic ag. systems have superior ability to sequester carbon. (4) The study shows that the components of carbon-storing humic substances – fulvic acid and humic acid — were consistently higher in organic than in conventional soils.

The research found that, on average, soils from organic farms had:

  • 13 percent higher soil organic matter
  • 150 percent more fulvic acid
  • 44 percent more humic acid
  • 26 percent greater potential for long-term carbon storage

Dr. Tracy Misiewicz, Associate Director of Science Programs for The Organic Center, discusses how this research helps to establish the connection between the carbon-storing properties of organic soil and the practices employed by organic farmers.  According to Dr. Masiewicz, “A number of studies have shown that practices commonly used in organic farming increase soil organic matter and soil health. Some of these practices include the use of manure and legume cover crops, extended crop rotations, fallowing and rotational grazing. These same practices are likely also involved in increasing the important humic substances in soil.” (5)

Recapping all of the above, here’s what we know:

1.       Climate change is a threat to our future.

2.       Carbon sequestration in the Soil is key to mitigating climate change.

3.       Regenerative agriculture helps to sequester carbon in the Soil.

4.       Organic agriculture and organic practices are particularly effective in carbon sequestration and building long-term soil health.

The challenge of climate change is creating a catalyst for innovative solutions. Regenerative agriculture and organic practices show significant promise in the effort to build a more stable and sustainable future. That’s something we can all Dig.

# # # #

PS - Readers are encouraged to watch the Organic Center’s informative YouTube video explaining the research findings and the carbon-storing benefits of organic agriculture:

https://www.youtube.com/watch?v=F84uDOsWpK4#action=share

  (1)  https://www.nytimes.com/2017/12/02/opinion/sunday/soil-power-the-dirty-way-to-a-green-planet.html    (2) http://oee.osu.edu/ohio-state-energy-in-the-news/    (3) https://www.nytimes.com/2017/12/02/opinion/sunday/soil-power-the-dirty-way-to-a-green-planet.html    (4) https://www.organic-center.org/study-finds-organic-soil-captures-holds-more-carbon/    (5) ibid.     CLARK DRIFTMIER is Managing Director of Strobus Consulting (     www.strobusconsulting.com     ) which provides clients with new product development and go-to-market business development strategies. He has been a food entrepreneur and start-up specialist for nearly 3 decades. Clark’s new product and management initiatives include hundreds of new products in several dozen food categories, with combined annual sales of nearly $2 billion. A published author of articles on natural and organic foods, Clark has also spoken at numerous conferences and has served on several national and regional not-for-profit boards. He and his family live in Northern California.

(1)  https://www.nytimes.com/2017/12/02/opinion/sunday/soil-power-the-dirty-way-to-a-green-planet.html

(2) http://oee.osu.edu/ohio-state-energy-in-the-news/

(3) https://www.nytimes.com/2017/12/02/opinion/sunday/soil-power-the-dirty-way-to-a-green-planet.html

(4) https://www.organic-center.org/study-finds-organic-soil-captures-holds-more-carbon/

(5) ibid.

CLARK DRIFTMIER is Managing Director of Strobus Consulting (www.strobusconsulting.com) which provides clients with new product development and go-to-market business development strategies. He has been a food entrepreneur and start-up specialist for nearly 3 decades. Clark’s new product and management initiatives include hundreds of new products in several dozen food categories, with combined annual sales of nearly $2 billion. A published author of articles on natural and organic foods, Clark has also spoken at numerous conferences and has served on several national and regional not-for-profit boards. He and his family live in Northern California.

Top 25 Poll and Power Rankings - - for Veggies !

 by Clark Driftmier

by Clark Driftmier

America is well into the 2017 Fall sports season, with team rankings and analyses of all types. We have Polls for the Top 25 NCAA teams. Power rankings for NFL and NBA teams. Handicaps and probabilities for bowl appearances and playoff berths.  Office workers across America preparing for any number of brackets and betting pools.

Powerhouse Veggie Group Photo.png

Here in the food industry, we have our own special Power Ranking - - for highly nutritious or ‘Powerhouse’ Veggies. This ranking is brought to us by the folks at the Centers for Disease Control (“CDC”). The CDC recently published a research report that ranked 47 leading vegetables and fruits using a statistical analysis of healthfulness and the association of each veggie and fruit with reduced risk of chronic disease. The report gave each vegetable and fruit a composite numerical score from 1 to 100 (1).

 

So, in the spirit of sports polls, here is our Power Ranking of the CDC’s ‘Top 25’ Powerhouse Veggies:

Top 25 Veggie Ranking.png

Beyond the cheekiness of a Top 25 poll, there are several important insights that we gained from our analysis of the CDC’s study of Powerhouse Veggies and other related research, which are relevant for food industry professionals:

1.       The healthfulness of the top-rated veggies really is impressive:

·       Multiple studies of each of the top Powerhouse Veggies shows a strong association with reduced risk of several serious diseases including heart disease and several forms of cancer.

2.       The traditional wisdom to ‘eat your greens’ is backed by solid science:

·       For decades if not centuries, traditional American diets have encouraged the incorporation of generous portions of healthy greens. The latest scientific studies now confirm what traditional wisdom has taught us – name, that eating greens really is a great way to stay healthy and thus happy.

3.       There is tremendous variety of flavor and form in the Top 25:

·       Almost any modern cookbook increasingly incorporates veggies and plant-based ingredients in its recipes. Five fabulous cookbook authors which immediately come to mind in regard to delicious recipes incorporating Powerhouse Veggies are Deborah Madison (“Vegetable Literacy”), Mark Bittman (“How to Cook Everything Vegetarian”), Melissa Clark (“Cook This Now”), Yotam Ottolenghi (“The Jerusalem Cookbook”) and David Lebovitz (“My Paris Kitchen”).

4.       Americans still aren’t getting enough of these wondrous foods:

·       According to research published by the CDC in 2015 (2), only 9% of Americans are regularly consuming the recommended daily servings of vegetables. This shortfall continues despite the robust and growing body of evidence demonstrating the multiple benefits of a more plant-based diet with more consumption of Powerhouse Veggies.

5.       Food manufacturers have a significant business opportunity if we incorporate more of these plant-based superfoods into the CPG industry:

·       Americans need tasty, compelling food solutions which incorporate more Powerhouse Veggies. We in the food industry are the ones who can make the delicious foods which can deliver this nutrition to the public.

Food industry observers know that we are in the midst of a long-term societal trend toward a more plant-based diet. That said, the general public still lags in the adoption of veggies in the diet, as witnessed by the recent CDC research. More needs to be done to bring tasty plant-based solutions to the market to give consumers more and better plant-based options. As food professionals, it’s our opportunity to use our product development and branding skills to create plant-based products which surprise and delight consumers with the savory flavor of Powerhouse Veggies.

(1)  Di Noia J. Defining Powerhouse Fruits and Vegetables: A Nutrient Density Approach. Prev Chronic Dis 2014;11:130390. DOI: http://dx.doi.org/10.5888/pcd11.130390

(2) http://www.cdc.gov/vitalsigns/ fruit-vegetables

CLARK DRIFTMIER is Managing Director of Strobus Consulting (www.strobusconsulting.com) which provides clients with new product development and go-to-market business development strategies. He has been a food entrepreneur and start-up specialist for nearly 3 decades. Clark’s new product and management initiatives include more than 350 products in 32 food categories, with combined annual sales of nearly $2 billion. A published author of articles on natural and organic foods, Clark has also spoken at numerous conferences and has served on several national and regional not-for-profit boards. He and his family live in Northern California.

What We Saw at the 2017 PLMA Private Label Show

 by Clark Driftmier

by Clark Driftmier

This week we attended the annual PLMA Private label conference and trade show in Chicago. More than 2,800 exhibitors and thousands of attendees from around the world braved chilly November winds beneath bright Midwestern skies as they entered the show hall to partake of the latest developments in the private label & store brands world.

PLMA hall & attendees.jpg

This year’s PLMA show was a mixture of both “tried & true” and “something new.” Longtime exhibitors displayed their established products and categories but incrementally added new flavors and combinations.  New exhibitors brought excitement with innovative approaches to store brands. Among the thousands of products and hundreds of categories on display, we found several key trends that stood out at the show:

1.       PLMA is evolving, but is still dominated by established “center store” products and categories:

·       An evolution to newer forms and flavors is occurring as retailers expand their private label strategies and product lines to “elevate” their product profiles and bring new delightful products and flavors to consumers.  PLMA exhibitors, in turn, are freshening and evolving their product ranges to better serve these retailers.

·       That said, the aisles and booths at PLMA are still largely represented by well-known and veteran “center store” categories and products packaged in cans, bottles and stand-up pouches. There are also frozen products in trays and pouches and numerous offering in refrigerated gourmet and specialty products, dairy and beverages.

2.       Expansion of “free-from,” plant-based and clean-label products:

·       As PLMA evolves, there is a definite expansion of “free-from” products such as gluten-free, dairy-free and allergen friendly.

·       Plant-based products are also expanding across many categories including beverages, frozen, dry-mix products, powders and the like.

·       In the general heading of “clean label” or natural, many booths featured products displaying logos for USDA Organic, Non-GMO, Fair trade and 3rd party certifications such as GFCO.

3.       Premium private label brands were featured in the “Idea Supermarket” pavilion at the show:

·       Albertson’s – “Signature Select” line

·       Aldi (US) – “Specialty Selected” line

·       Aldi (UK) – “Mamia” brand baby & toddler foods

·       Asda (UK) – “Scratch Cook” premium spices & herbs

·       Carrefour (FR) – Premium baby & toddler line curated by noted chef Ghislaine Arabian

·       Lidl (US) – “Preferred Selection”

·       Migros (CH) – “Migros Selection” line

·       Wakefern – “Wholesome Pantry” line

·       Walmart – “Sam’s Choice Italia” line of premium pastas and sauces.

·       Whole Foods – “Whole Foods” brand artisanal pasta, olives, frozen entrees

4.       Seasonal and Limited Time Offer products:

·       Ahold – “Limited Time Originals”

·       Marks & Spencer (UK) – “Summer Seasonals”

·       Metro (CA) – “Winter Seasons” food line, including the highly anticipated “Ugly Sweater” decorated sugar cookies

5.       Cooking up Sales in Home Baking:

In the UK, the USA and other countries, the wild success of “The Great British Baking Show” (whose obsessive viewers include this writer and his family), has measurably lifted interest in baking and sales of baking products. Several of these products have found private label product lines, which were featured at the show:

·       Auchan (FR) – Line of baking and decorating products

·       Morrison’s (UK) – Line of baking and frosting products

·       Kroger – “Cocinaware” line of cookware specifically for Mexican cuisine, and “Chef Style” brand of blenders, slow cookers and other cookware

·       Meijer – “Grand Gourmet” line of cooking utensils

6.       Flavors of the World:

·       Sainsbury’s (UK) – “Sainsbury’s” Line of Thai inspired products

·       Topco – “Culinary Tours” line in a diverse range of products from pasta sauces to gelato

7.       eCommerce brands on display:

·       Amazon – “Wickedly Prime”

·       Boxed – “Prince & Spring”

·       Thrive Market – “Thrive Tribe”

8.       International Exhibitor Representation:

·       Italy – Major presence with pavilion and 75+ exhibitors

·       Canada – Major presence with pavilion and 50+ exhibitors

·       Also, pavilions from: France, China, UK, Turkey, Mexico, Greece, Chile, Peru

9.       Natural & Organic – Definitely present at the show, but not the star of the show:

·       A large percentage of PLMA exhibitors now have natural & organic products, which represents an evolution of product offerings v. prior years. In general, the natural and organic products are sub-sets of larger, more prominent, conventional food portfolios.

·       In many or most instances, exhibitors market organic product lines using imagery and descriptions which communicate: “yes, we can do this product in an organic form.” However, one rarely sees what might be called the “banner of organic” such as: “our company is all organic and nothing but organic.” Organic is a valuable product contributor but not a mission, and organic fits as an available alternative within an otherwise non-organic range of products.

·       This role speaks to the mission of a private label manufacturer, which is to serve the retail customer. If the customer wants organic, the manufacturer makes organic. If the customer wants non-organic, the manufacturer makes non-organic. The manufacturer is “agnostic” regarding organic (“Yea” v. “Nay”), but is fiercely dedicated to a different mission, namely; serving the client customer with highest quality, customer service, responsiveness, flexibility, competitive pricing, efficiency and 100% on-time-in-full performance.

The private label manufacturing world is evolving in tandem with retailers. Those retailers, in turn, are bringing out new store brand products, brands and category opportunities to serve the needs of their consumers.  This change is happening incrementally, built on a base of well-known categories, products and packaging forms. In many cases, private label manufacturers are marketing new products side-by-side with veteran products unchanged for years, if not decades (e.g. multi-serve lasagna packaged in aluminum trays). The private label world mirrors and emulates the growth and development of branded categories and products. As brands evolve and innovate with new categories and products, private label store brands are there to bring additional value to shoppers and to enhance consumer loyalty to the retailer and its mission. In the end, consumers and the trade both benefit from this robust combination of brands, categories and product offerings.

CLARK DRIFTMIER is Managing Director of Strobus Consulting (www.strobusconsulting.com) which provides clients with new product development and go-to-market business development strategies. He has been a food entrepreneur and start-up specialist for nearly 3 decades. Clark’s new product and management initiatives include more than 350 products in 32 food categories, with combined sales of nearly $2 billion. A published author of articles on natural and organic foods, Clark has also spoken at numerous conferences and has served on several national and regional not-for-profit boards. He and his family live in Northern California.

Food Waste - "The Forgotten Feast" (1)

 by Clark Driftmier

by Clark Driftmier

Let’s begin with a few sobering statistics. We waste a LOT of food. 2.9 trillion pounds worldwide annually, to be exact (that’s “trillion” with a “t”), according to the United Nations Food and Agriculture Organization (FAO) (2). This lost treasure represents more than 1/3 of the entire world agricultural production. In developed regions such the EU, North America and elsewhere, the wastage is even higher. The U.S. Department of Agriculture reports that American families throw away up to 51% of the dairy products and fruits that they purchase, 44% of the vegetables and 40% of the fresh fish, meat and poultry (3). FAO documents that in poorer countries, food is lost primarily post-harvest due to inadequate storage, logistics and shipping infrastructure. In more developed countries, most of the food loss occurs in the stream of processing, in the supply chain, at retail and in the home. Those of us in developed countries also are less attentive to conserving food sources relative to the rest of the world; our per capita rate of food waste is up to 20x higher than for residents of poorer regions.

 Attendees at a London festival enjoying a meal made entirely of discarded food.

Attendees at a London festival enjoying a meal made entirely of discarded food.

And yet, the potential to save our precious agricultural bounty represents a gigantic untapped resource with enormous positive implications for the health of humanity and of the planet. In a world soon to reach 9 billion inhabitants, where agriculture takes up more and more land, using more of our water resources as well as the many inputs needed to grow crops, the most efficient and sustainable action we can take is to preserve and utilize the food we have already grown rather than to allow that resource to go to waste.

In the U.S. food industry, innovative companies both large and small are taking action to address the problem of food waste. At the larger end of the spectrum, Quaker Oats is participating in an ambitious new program, spearheaded by the James Beard Foundation (JBF), called “More Taste. Less Waste”. (4) According to Kris Moon, vice president of JBF, “The chefs supporting our JBF Impact Programs have taken on the issue of food waste because it is inherent in a chef’s DNA to minimize waste in their restaurants. They are not only advocates for a more sustainable food system. They have the knowledge and creativity around shopping storing and full utilization of food.” (5)

JBF More Taste Less Waste Launch & logo.png

At the smaller end, many natural foods companies have put the elimination of food waste into the heart of their mission by using waste and leftover food as their main ingredients. These companies, as reported by Joey Portanova of New Hope Network in 2016 (6), include the following:

  • Snact develops fruit jerky made from rejected produce for being either "too big, too small, too ugly or simply too abundant."
  • Imperfect Produce delivers custom boxes of fruits and vegetables that don’t fit cosmetic standards directly to homes in the Bay Area.
  • Barnana reduces food waste of organic banana farms in Latin America by upcycling "imperfect" organic bananas that don’t match size or ripeness standards, using bananas that would otherwise be left to rot.
  • Misfit Juicery offers cold-pressed juices made with 70 to 80 percent recovered "ugly" fruits and vegetables (based on shape, size or color) in a variety of flavor options like strawberry/pear/lemon/ginger and pear/cucumber/spinach/lemon.
  • Forager project utilizes wasted vegetable pulp from its cold-pressed juice development to produce organic tortilla chips.
  • WTRMLN WTR produces cold-pressed juice using watermelons with blemishes, sunburns or other imperfections that make them otherwise unfit for commercial sale to retail

Along with innovative products and food company campaigns, food advocates are building awareness of food waste with public campaigns and events. In the UK, author and food advocate Tristam Stuart has spoken eloquently about the problems of food waste and the promise of making improvements. Readers are invited to read Mr. Stuart’s book, “Waste: Uncovering the Global Food Scandal” (Penguin, 2009), and to view his 2012 TED talk on the issue:

https://www.ted.com/talks/tristram_stuart_the_global_food_waste_scandal?utm_campaign=tedspread--a&utm_medium=referral&utm_source=tedcomshare

 Photo: Tristam Stuart presenting at TED Conference in London, 2012

Photo: Tristam Stuart presenting at TED Conference in London, 2012

UK food waste advocates have produced a series of public events in London called “Feast on the Bridge” in which thousands of chairs and endless rows of tables are set up on Southwark Bridge on the Thames River, and more than 35,000 eager diners are fed with gourmet dishes sourced 100% from discarded food. These events drive home the message that it’s possible to re-purpose millions of pounds of food waste into delicious and perfectly edible food, as reported by Matthew Fort for The Guardian. (7)

 Photo: "Feast on the Bridge" event for 35,000 diners on Southwark Bridge, London

Photo: "Feast on the Bridge" event for 35,000 diners on Southwark Bridge, London

London has also been the scene to several mass public events called “Feeding the 5,000” in which Trafalgar Square in the heart of London is filled to the brim with enormous quantities of edible but discarded food, as reported by Mark King for the Guardian. (8)

 Photo: "Feeding the 5,000" event in Trafalgar Square, London

Photo: "Feeding the 5,000" event in Trafalgar Square, London

In all of these activities, the goal is to mobilize society to embrace and utilize foods which are usable and nutritious but which are currently being discarded, often due to size, crooked shapes, off-colors, blemishes or other minor imperfections. The creators of the UK campaign “The Forgotten Feast” seek to generate support for nutritious foods which have been deemed unacceptable. The authors call these foods: “The Ugly, the Unwanted and the Unloved.” (9)

It’s clear that food waste is an enormous global challenge – one that needs a comprehensive solution and action plan for success in our hungry, growing and increasingly resource-constrained 21st century. The question for humanity overall, and for each of us individually, is the same: namely, what should we do, and what can we do?  A lot, actually. Each of us has a role to contribute, whether it be via food innovation, via food advocacy or in something as simple as regularly using 100% of the food currently in our own refrigerators. For those of us who work in the food industry, the call to action is even more direct, because we work every day somewhere in the food supply chain, where most food waste occurs in developed countries.  We each can examine how waste occurs and how systems we manage can be optimized - - in processing and packing, in distribution and logistics, in warehousing, at retail and everywhere in the system.

A hungry world with a rapidly-increasing population will put pressure on all aspects of agriculture and the environment as we strive to develop the food resources for the 21st century. Food waste is a glaring problem – and an opportunity – that presents itself for our attention and effort. We in the food industry can do much to improve the efficiency of our systems to reduce waste. We can educate and advocate to raise awareness and stimulate the public to action. We can also create new products and new processes which utilize the foods that are “Ugly, Unwanted and Unloved.” And of course, we can examine our own lives and the changes we each can make to reduce the rate at which nutritious food is discarded.

After all, a global food supply is a terrible thing to waste.

Clark Driftmier is Managing Director at Strobus Consulting, which assists clients with new product development and go-to-market business development strategies.

(1)  The title “The Forgotten Feast” comes from the food advocacy program “The Forgotten Feast” created by UK food waste activists Eloise Dey and Emily Elgar and eco-chef Tom Hunt, as reported on Mr. Hunt’s website: www.tomsfeast.com

(2)  www.fao.org/save-food/resources/keyfindings/en/

(3)  Robert Lilienfeld; (Sustainable Packaging; November 01, 2017)

(4) Josh Sosland; "Quaker Foods in partnership to fight food waste" (Food Business News; October 2, 2017

(5)  Stephen Daniells, “Food waste and function forward; Quaker’s new campaigns celebrate nutritional power of the oat” (Foodnavigator-USA; November 2, 2017)

(6)  Joey Portanova, “Fighting food waste: Companies at the forefront” (New Hope Network; December 13, 2016)

 (7)  www.theguardian.com/lifeandstyle/2008/sep/06/foodanddrink8

(8)  www.theguardian.com/uk/2011/nov/18/waste-food-feeds-5000-trafalgar

(9)  www.tomsfeast.com

Keys to Success in New Product Development

 by Clark Driftmier

by Clark Driftmier

 “To put one’s thoughts into action is the most difficult thing in the world”

                            Goethe

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Many of us have dreams about creating fabulous new products and introducing them into the market. The promise of entrepreneurship in new products is exciting, even intoxicating. At the same time, new product development can seem like a daunting, risky, and downright scary enterprise. There are indeed many complexities, risks, twists and turns on the road to new product success. However, experience has provided a few important “should-do’s” and keys to success that are relevant to almost any new product process. In this blog, we look at several keys to successful new product development, especially as it relates to natural, organic and clean-label foods.

1.       Study Consumer Culture – relentlessly:

·       The successful product developers that we know are generally quite well read and attuned to contemporary consumer culture. These folks are students of modern society. They follow trends daily, visit stores, look at products, taste samples, buy interesting products, analyze packaging, read articles, view ads, study commercials, attend conferences, kibitz with colleagues, etc.

·       The study of culture is a constant process - - every day and multiple times per day. During this study, the developer continually asks and re-asks the question “Why?” in order to gain meaningful insights into the infinitely complex nature of behavior.

·       From this development of knowledge and insight, the developer then applies key learnings to the new product development project at hand, seeking to bind the attributes of the new product to the key learnings about consumer culture.

2.       There is no replacement for your personal passion and commitment:

·       American writer Ralph Waldo Emerson said it best: “Nothing great was ever achieved without enthusiasm.”

·       In our experience, new product development is most compelling and successful when the leaders / creators are personally impassioned and invested in the mission of their products.

·       Enthusiasm is a vital, propelling force. It cannot be faked, nor can it be inhibited or suppressed. The passion for your products and the mission of your enterprise will flow from your heart, from your inner drive to bring your product to life and your desire to bring something new into the world.

3.       To develop great ideas, stare out the window, daydream, and don’t be afraid to let your mind wander.

·       Creative thinking is non-linear. It’s a process in which the mind synthesizes a broad and diverse range of ideas and thoughts, often with “jumps” from one seemingly unrelated idea to another idea that is highly relevant to the creative process.

·       Creativity is not helped by our overstimulated, SmartPhone addicted, “always on” culture and environment. We seek to be busy, we often crave it, but “busy” is the enemy of Creativity. In fact, we generally do our best creative thinking during quiet solo moments, often while engaged in repetitive or mundane actions like walking, driving, cleaning the dishes etc.

·       For example, many of Beethoven’s best musical ideas came to him during his regular daily walks through Vienna.(1)

·       Research into creativity has shown that periods of quiet daydreaming, even boredom, are linked to greater creativity.(2)

4.       Work very small groups, or even alone, to develop your ideas, but use larger groups to achieve consensus and buy-in:

·       Often, large interdisciplinary teams are formed to develop new products. However, the best work in new product development often occurs in much smaller groups of 2-3 key individuals, or even by a single creative driver.

·       Researchers have found that speed, productivity and quality of ideas are greater when individuals work alone or in very small groups.(3)

·       Thus, the actual creative and productive work on a new product project will often be done by one lead or champion, perhaps with 1 or 2 other key co-creators. A larger team generally does not move faster, create better ideas or have a substantially better outcome.

·       That said, there are almost always larger groups and key leaders in the organization whose buy-in is required for the project to be “green-lit” or approved to move forward. Thus, the individual or the small development team should engage and solicit the larger stakeholders “early and often” to keep all key constituents supportive and to ensure continuous enthusiasm and support for the project.

5.       Develop 5 times as many prototypes as you think you need – Then double it.

·       We often find that new product teams stop their prototype development too early in the process. For various reasons they slow down or cut short the process, not pushing the product sufficiently through all of the steps needed to create some truly outstanding.

·       Prototypes begin in what we call Zone 1, which we might describe as: “Has potential but isn’t right yet; not at all good enough to introduce.” With more development and improvement, the prototypes progress and enter Zone 2: “Looking better and has promise, but not ready for Prime Time.” Unfortunately, many development projects stop in Zone 2 and never progress to something that is truly excellent in taste, texture, color etc. The truly “wow” products are those which are taken much further into what we call Zone 3, with truly excellent results, based on many additional prototypes.

·       We know of one small organic brand that developed more than 85 prototypes for its formula before the team finally said, “Yes, we are ready.”

·       Looking again to Beethoven, the famous first movement to his 5th symphony (“Da-Da-Da-DUH”) was published only after Beethoven had made more than 20 complete rewrites. Beethoven’s written notes and scores show massive crossing out, eliminating sections, adding sections, re-doing, re-doing the re-do, frustrations, inspirations, further frustrations, etc. until the finished masterpiece was ready for performance. Indeed, the continual iterative process of evaluation and improvement changed a very good work into a masterpiece.

·       The need for extensive, iterative enhancements and improvements applies to branding and package design as well as to formulas.

·       We recommend that development teams be self-critical, brutally honest, relentless and somewhat obsessive in this process, pushing continually to reach the very highest state of product development.

·       Consider this: it’s challenging enough to succeed even when everything about the product is outstanding, so why would one choose to stop short of attaining the highest level of development and the greatest promise for the product?

6.       Recognize both the values and the limitations of consumer research:

·       Consumer research is vital to help optimize the organoleptic qualities of the product and to help create a final prototype with broad appeal.

·       Consumer research can be done with a range of formats, but at all times the protocols should be set up to ensure valid results and to prevent bias or groupthink.

·       One challenge with natural and organic products is that the product itself is sometimes “ahead” of the understanding of most consumers, who may not be familiar with the product or its benefits and thus cannot make good judgments. Examples of this would include products such as acai drinks and kombucha, both of which were entirely unknown to mainstream consumers at the time of their introductions. Consumer testing the first acai and kombucha products with mainstream consumers would result in blanks looks, misunderstandings, confusion and rejection. In these cases, acai and kombucha products actually began their roll-out very modestly among a small cohort of savvy early adopters, in a limited high-knowledge natural foods environment, then built distribution into a broader, more mainstream retail environment as the products became known to a wider audience. This progression follows the “Diffusion of Innovations” theory, developed by E.M. Rogers in 1962 (4) and widely known in the tech world. This theory maps out the process by which innovative ideas diffuse out over time from a small core to the broader society.

7.       Once the Herculean task of new product development is complete, it is followed by the Olympian task of market roll-out. This topic is worthy of its own blog post, which we will provide to readers in the near future.

New product development is inspiring, infuriating, challenging and utterly essential. Many difficulties and roadblocks will occur during the process, but surmounting those roadblocks helps to separate “the wheat from the chaff” and ensure that the final product is unique, of highest quality and of value to the market. In the words of one of our business professors: “Be glad that it’s difficult. If it were easy, everyone would be doing it, and there wouldn’t be any money in it.”

Clark Driftmier is Managing Director at Strobus Consulting, which assists clients with new product development and go-to-market business development strategies.

(1) Maynard Solomon, "Beethoven." G. Schirmer, Inc. 1979

(2) Mann and Cadman, “Does Being Bored Make Us More Creative?” (Creativity Research Journal, May 2014)

(3) University of Calgary, "Working Alone May Be the Key to Better Productivity, New Research Suggests." (ScienceDaily, 21 February 2008)

(4) Rogers, Everett, "Diffusion of Innovations." Simon & Schuster, 1962.

Big Food Embraces the Values of Natural Food

 by Clark Driftmier

by Clark Driftmier

On September 26, Nestle S.A., the world’s largest food company, held its annual investor summit in London.  As reported by FoodNavigator (1) on September 27, Nestle leaders at the summit outlined six important consumer trends that, when translated into new Nestle products and initiatives, will fuel Nestle’s strategy for growth going forward.

 Nestle S.A. Corporate Office, Switzerland

Nestle S.A. Corporate Office, Switzerland

The six key food trends driving strategy at Nestle include the following:

1.       Natural is King

·       As reported by FoodNavigator, Nestle plans to shift all of its food brands to formulas and brand platforms that are more natural in character. The company also plans to focus on natural brands in its M&A strategy. Recent acquisitions such as organic frozen food brand Sweet Earth Foods fit into this strategy.

2.       Organic

·       Nestle plans to integrate organic ingredients and certified organic SKU’s into many more of its brands.

3.       Free-From

·       Nestle is planning to expand its offerings of gluten-free and lactose-free products.

4.       Reduced Sugar

·       Nestle is addressing sugar concerns in two ways: a) formulating products with a lower sugar content; b) Introducing a new breakthrough natural sweetness innovation that will deliver a sweet flavor profile with significantly less sugar content.

5.       High Protein

·       Nestle has increased the number of its new products in several different brands and categories which feature high-protein formulas.

6.       Plant-Based

·       Nestle sees the consumer interest in plant-based foods and a long-term trend, and the company plans to accelerate its introduction of plant-based options.

Veterans of the natural foods industry will immediately notice a strong parallel between Nestle’s current strategies and the principles that natural industry leaders have embraced and developed. Those principles have long focused on the benefits of natural & organic ingredients, “free-from” products, products with no sugar or lower levels of sugar, and plant-based alternatives to meat and dairy. What we now see is that the long-held principles of the natural products industry are being incorporated in the strategies of the largest international food companies.

Hockey hall-of-famer Wayne Gretzky was asked how it was that he consistently scored so many goals. His oft-quoted answer: “I skate to where the puck is going to be, not where it has been.” The leaders of the natural foods industry, over the years, have successfully used insight and forward thinking to position the industry and its products at the place where consumers are going to be.

Nestle is well-known as a leading food innovator with enormous resources, amazing talent and experience and formidable research capabilities. The company’s embrace of natural foods values serves as a strong validation of the values and the prescience of the natural food industry’s founders and pioneers. Those natural industry founders developed products which were originally very small and somewhat “on the fringe” compared to the mainstream offerings of the broader food industry. These natural foods have now proved to represent exactly what consumers want in their diet for healthful, sustainable living.

All of us owe a huge “Thank You!” to our natural foods industry founders for their vision, dedication and guidance. We also need to thank the current cohort of natural products entrepreneurs for continuing to “burn bright” with new and innovative solutions that meet consumer needs. So too should we thank the folks at Nestle for their commitment to organic products and natural values, as articulated in their forward-looking strategy.

The entire food industry is catching the natural and organic wave, from the smallest start-up at a local tabletop show to the executive offices at Nestle S.A. It’s up to each of us (and all of us working together) to continue to push to create products and consumer solutions that move the food industry ahead on the pathway of sustainability.

1Kate Askew: Six Trends Nestle Hopes Will Deliver ‘Industry-Leading’ Growth; FoodNavigator; September 27, 2017

Clrk Driftmier is the Managing Director of Strobus Consulting

How to Create a Mission Statement and Set of Guiding Principles for your Business

 by Clark Driftmier

by Clark Driftmier

In the midst of the daily “slog” of our businesses – the calls, meetings, the expense calculations, follow-ups and the like – each of us should also take time to address the topic of creating a Mission Statement and set of Guiding Principles for our brands and companies. This topic often falls into the category of “very important but not so urgent,” meaning that we can choose to address it tomorrow instead of today. However, taking time for this important business development step will yield benefits that are both tangible in terms of business results and more vision-oriented in terms of building team cohesion and a sense of purpose.

Why have a written Mission Statement?

·       The Mission Statement provides a succinct written summary of the business purpose for the company – essentially, it says why you are doing what you are doing.

·       For the company team, the Mission helps serve as a direction or a compass to bring the team together in unified action and purpose. To use rowing as the analogy, he Mission helps steer the boat and ensure that all team members are pulling together on the oars.

·       For the outside world, the Mission serves as a statement of “this is who we are” to help outsiders understand the character of the company, its purpose and direction, and whether the company can be trusted to be a valued partner.

How to Create the Mission Statement

·       A good Mission Statement is both practical and altruistic.

·       The practical side links the Mission to the tangible business strategies of the company.

·       The altruistic side links the Mission to the greater needs of the society and the broader issues within which the company operates.

·       Words matter; the number of words matter; in general, the shorter the better; sweat the details when writing; extensive editing and refining are often required; don’t be afraid to edit or change after “living” with the Mission for a while.

·       It is beneficial to find a balance in the Mission which avoids both over-reach and under-reach. Over-reach means being so “over the top” or world changing that the Mission loses believability. Yes, your new veggie burger is good, but your claim to “solve all world hunger” might be an over-reach. On the opposite end, a mission that is too narrow, tactical or numbers-based loses emotional impact. Yes, your goal of 9% SG&A expense is admirable, even crucial, but in a mission statement the audience wants you to reach beyond business metrics into a somewhat more emotional and aspiration realm.

Guiding Principles

·       A set of Guiding Principles is often included alongside the Mission to add several more specific statements regarding how the company operates and how its members treat each other.

·       Guiding Principles form the social contract of the team with itself and with the world. They establish the ground rules of conduct between team members and identifies the ways that the company engages with its partners and stakeholders.

·       If internal or external conflicts arise, the Guiding Principles help to guide appropriate actions to keep the company “on course” with the Mission.

·       The Guiding Principles can also establish appropriate boundaries, delineating what the company will not do as well as what it will do as it moves forward.

·       The Guiding Principles are often written jointly by the team, and the writing exercise gives the team an emotional and managerial investment in the outcome.

To the Doubters

·       At this point, doubters might to tempted to retort “Why bother? We all know what we need to do. The business of business is business. Our purpose is to generate earnings and profit for the company and its investors.”

·       To which we respond, “Yes; Absolutely! Profit and earnings are the lifeblood of any business, without which it withers and dies, and investors must be given an attractive return on their investments - - - BUT”

·       There is more to business than profit, and the team require more returns than financial returns.

·       The team also requires a sense of purpose, a vision and direction, a feeling of unified team effort that builds cohesion and comradery and a hopeful sense that our efforts are worthwhile.

A business is an entity, but it is also a journey. Team members, investors, customers, partners and stakeholders all take this journey together, hopefully with the destination of success and prosperity. As we take this journey we will need to know: Who are we? Why are we doing this? Why does it matter? How do we treat each other? How do we treat our partners? Can we be trusted? A good Mission Statements and set of Guiding Principles can help to answer all of these questions for the benefit of the company, its team, stakeholders and the broader society.

Clark Driftmier is the Managing Director of Strobus Consulting

What We Saw at the Natural Products Expo East

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by Clark Driftmier

This past week we attended the Natural Products Expo East, held each Fall in Baltimore. Amid the crab cakes, the shimmering waters of the Baltimore Inner Harbor and the Tall Ships, Expo East provided ample evidence of the growth and dynamism of natural, organic and clean-label products. A compressed blog post cannot do justice to this burgeoning show and its 1,500 exhibitors and 30,000 attendees, but below are 13 trends and observations about Expo East and some of its key trends and products.

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1.       The “Snackification” of Expo

·       More than ever, new products at Expo mean new snacks. The explosion of natural, organic and clean-label snacks extends to every type of ingredient and formula, packed in a wide range of convenient snackable formats. These introductions mirror the increasing snacking in the American diet as well as the ongoing evolution toward multi-occasion food consumption each day in a variety of forms and flavors.

2.       Rising Ingredients – Chickpeas; Nuts; Quinoa

·       Chickpea-based products were everywhere at Expo in a myriad of permutations. There were also multiple brands made with nuts combined with various blends, spices, flavors and coatings. Quinoa is also exploding in popularity, driven by its healthful properties and protein, but also by the significant increase in supply from North America farms, expanding supply beyond quinoa’s traditional home in South America.

3.       Bringing Up Baby

·       Millennials have moved into both prime parenting years as well as prime business & entrepreneurial years. This confluence of family and professional growth is leading to a spike in new and innovative baby and toddler products, from foods to clothing to diapers to baby-centric supplements to personal care products.

4.       ‘Til the Cows Come Home

·       Organic and non-hormone dairy continues to expand, not only with established leaders such as Organic Valley and Stonyfield Farm, but also with a new herd of small-scale start-up dairy brands. These smaller artisan or “craft” brands have introduced new products in all of the major dairy categories such as milk, yogurt, cheese and frozen desserts. Many of these brands focus on “grass fed” as a key product attribute and differentiator.

5.       New Proteins on the Block

·       The continued consumer interest in proteins in all forms has helped to spur new forms of proteins, including mushroom-based proteins, new sources of plant-based proteins and derivative items such as protein powders made from bone broth.

6.       Protein Product Transformations – From Powders to Drinks & Drinks to Powders

·       Speaking of protein, several protein powder brands have extended their products into shelf-stable drinks, while at the same time other protein drink brands have expanded into powders. Protein is expanding from here to there, from there to here, and everywhere in between.

7.       Charcoal Makes its Mark

·       Natural-style charcoal products are expanding in well-known formats (e.g. briquets for barbecue), in newer ways such as for purifiers for personal water systems to filter out contaminants and toxins, and in really new ways including as an ingredient in toothpaste.

8.       Chunks of Pink Rock

·       Himalayan Pink Salt is now found throughout the store (and on the Expo show floor), including as an ingredient in foods, as a branded retail product in the spice aisle, as a personal care product in the supplements section and as a bulk product sold by commodity suppliers.

9.       New Products for New Personal Appearance Trends

·       The popularity of tattoos has created a new specialty market in skin care items specifically for tattooed skin, while the popularity of beards and hirsute fashion has led to growth in beard and facial hair care products such as shampoos, conditioners, gels and creams.

10.   Keeping it Young

·       The strong desire to maintain youth and vitality continues to fuel new product introductions. We noticed 4 sub-sets of “stay young” products: 1) Brain health products to retain & improve memory & brain function; 2) Joint health products to aid mobility and reduce the effects of inflammation; 3) Skin health products to retain skin suppleness and clarity; and 4) “Calming” type products to reduce stress, improve sleep and improve mental well-being.

11.   Regenerative Products – For Me; For the Earth.

·       “Regenerative” is a growing term for natural products, both for the Self (“helping me regenerate my health, vitality, diet, alertness, nutrition”), also for the Earth (“I want to support products that nurture the earth and replenish resources”).

12.   “Quiet” Branding – Names, Imagery, Colors, etc that are Simple, Personal, Minimal

·       Amid the “loud & proud” branding of many natural products, which shout the benefits and reasons to buy, other products have intentionally developed quiet themes, simple names, muted colors, minimal graphics and a sensibility of quietly talking - not shouting - to consumers. Sometimes a quiet truth speaks louder than a bullhorn.

13.   A bundle of Reusable Grocery Bags.

·       The passage of “no disposable bag” laws in hundreds of municipalities, along with the desire of consumers to end the dumping of used bags into the environment, has helped to create a growing category of reusable shopping bags, which stores buy for their customers and which consumers purchase directly. There is also a growing promotional market for branded logo bags, which brands buy to hand out at sampling events, 10K and marathon races, music concerts and such. We are all converting from “disposable bag” people to “sturdy reusable bag” people.

Pioneers! O Pioneers!

 by Clark Driftmier

by Clark Driftmier

“Have the elder races halted?
Do they droop and end their lesson, wearied over there beyond the seas?
We take up the task eternal, and the burden and the lesson,
Pioneers! O pioneers!”

      Walt Whitman, from the poem “Pioneers! O Pioneers!” in Leaves of Grass (1855)

As each of us engages in the exciting and challenging task of building the organic and sustainable foods industry, it’s important to look back for inspiration to the pioneers who laid the foundations of the organic movement. There are certainly many accomplished and dedicated organic stewards today, but everyone in organic in 2017 stands on the shoulders of giants. Below are 5 such giants upon whose work we have all prospered and grown as we work to create a more organic and sustainable future.

Rudolf Steiner (1861 - 1925)

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·  Philosopher, educator and founder of the Biodynamic Agriculture movement.

·  Extremely wide-ranging and broad field of interests, with over 40 books and more than 300 collected lectures. Also designed buildings as an architect and contributed to advances in medicine.

·  After WW1, developed and brought to the public the principles of Biodynamic Agriculture, the first systematic program for organic agriculture.

·  Conducted the first public lectures on the principles of organic agriculture in 1924, published in 1928 as “The Agricultural Course.”

Sir Albert Howard (1873 - 1947)

Sir Albert Howard.png

·  Worked as an agricultural adviser, lecturer and teacher for decades, including over 20 years as Imperial Economic Botanist to the Government of India.

·  Considered the father of modern composting. Studied the depletion of soils and the importance of building soil health. Identified superior systems to conserve and build soil health, including composting and soil improvement programs in Indore India which he expanded in India and brought to Europe as “The Indore Method.”

·  Emphasized the connections between healthy soils, plants, animals and people.

·  Published “An Agricultural Testament” in 1940, in which he presented the principles of organic agriculture to the general public. In this book Howard emphasized the importance of maintaining humus, keeping water in the soil, and the beneficial role of Mycorrhiza.

J.I. Rodale (1898 – 1971)

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·  Born in NY City; moved to rural Penn; founded the Rodale Press in 1930.

·  Inspired by the writings of Sir Albert Howard, he established the Rodale Organic Farming Experimental Farm in 1940, which operates successfully to this day conducting important research in organic farming. The farm is listed on the National Register of Historic Places.

·  Founded Organic Farming and Gardening magazine in 1942, followed by other successful publications.

·  The Rodale organization created and operated one of the first functioning organic certification programs, decades before the passage of the National Organic Program. A number of current organic farms were first certified organic by Rodale.

·  Many of today’s organic industry leaders got their inspiration from Mr. Rodale’s publications.

Lady Eve Balfour (1898 - 1990)

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·  Despite the comforts and privilege of her family (her father was an Earl and her uncle was Prime Minister), she moved to a farm and dedicated herself to sustainable farming methods and improving agriculture.

·   In 1939, she created and managed the Haughley Experiment, the first long term side by side comparison of organic and chemical agricultural systems.

·  Published “The Living Soil,” her best-known book, in 1943, which had a major influence on organic farming pioneers in the UK and was a catalyst for the founding of the Soil Association in the UK.

·  Co-founded the Soil Association in the UK in 1946 and was its first president. The Soil Association continues today as the leading UK organic association and organic certification agency.

Rachel Carson (1907 - 1964)

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·  Trained as a marine biologist and worked for the U.S. Fish and Wildlife Service; became a full-time nature writer in 1950.

·  Began to seriously question the efficacy of chemical pesticides by the 1950’s and gathered significant evidence regarding the environmental problems created by chamical pesticides.

·  Published “Silent Spring” in 1962, an inspirational (and controversial) book which jolted the public out of complacency, gained a wide public following and was a major trigger in the eventual banning of DDT.

·  “Silent Spring” also helped inspire and motivate a generation of food and ag leaders to create our modern natural products industry.

7,000 Food Crops vs. 3

 Clark Driftmier

Clark Driftmier

The World Bank recently published a fascinating and important new report on global trends in food, diet and health, with a focus on the rise in obesity in poorer as well as richer countries. In the World Bank report, the authors note that there are 7,000 food crops which have been used for worldwide diet and nutrition. However, 50% of the entire world’s total nutrition comes from just 3 crops: Rice, Wheat and Corn. These 3 crops have formed the foundations of different regions and civilizations for millennia. Modern agronomic forces have also led the increased dominance in these crops, including their primacy during the Green Revolution as production and on-farm productivity skyrocketed. These 3 crops have also garnered the lion’s share of all research projects and funding, with corn alone receiving 45% of research funds. Additionally, these 3 crops are core components in much of the world’s processed and packaged foods. There is also a price-related imbalance between these 3 crops and the hundreds of other foods, in which the efforts given to the 3 major crops have led to price declines, whereas the other crops not benefitting from research and support have become relatively more expensive.  This imbalance, in turn, leads to greater consumer purchase of rice, wheat and corn and less purchasing of legumes, fruits and vegetables.

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Link to Report

What the World Bank report notes is that the traditional two leading deficiencies in diet in poorer countries, under-nutrition (too few calories) and a shortage of micronutrients, have now been joined by a new phenomenon of over-nutrition (too many calories), obesity and overweight populations. Indeed, in some poorer countries, part of the population is under-nourished while another part is overweight. There are even situations in which children start out as malnourished but become overweight over time. Obesity is no longer a “rich country’s” disease; populations throughout the developing world are also experiencing increases in overweight and obese adults and children.

In many regions, traditional diets that formerly utilized dozens of local nutrient-rich legumes, vegetables and fruits have been supplanted by highly processed packaged foods made from (unsurprisingly) rice, wheat and corn. Additionally, these processed foods have introduced higher levels of unhealthful ingredients into the diet such as saturated fats, hydrogenated oils, sugars, sodium, refined flour and other starches. These foods also have lower levels of micronutrients and less fiber than more traditional diets. In these regions, there has been a narrowing of the overall complexion of the diet and an intensifying of the calories and consumption of highly-processed foods.

The result of this change is the growth of non-communicable, diet-related conditions including diabetes, high blood pressure, heart disease, stroke, lack of exercise and mobility and poor joint health. These problems have risen during the same period when rates of absolute starvation and malnutrition have decreased due to greater overall food access and the benefits of the Green Revolution. However, on a worldwide basis, diet-related diseases are the third-highest social cost on society, behind only smoking and the conditions of violence including wars and terrorism. More than 2 billion people globally are overweight, and over 640 million are obese.

Amid the enormity of these challenges, the individual might feel ill-prepared to make any meaningful difference. However, there are many actions at all levels which are both available and necessary for positive change to occur. Each of us can and should be aware of and supportive of diet improvement efforts occurring at the international level, where the World Bank report recommends several solid action steps to help improve the diversity and health of the diet:

·       More international support and research focus for high-quality, under-served foods such as legumes, vegetables and fruits

·       Improvements in the storage and transport systems of these under-served foods to improve their availability while lowering their cost in poorer regions

·       A change in research focus away from purely looking at yield (kg and calories) to overall nutrition, measuring yield + calorie density + vitamins + minerals + fiber

·       Engage the private sector to increase focus on development of higher-quality, under-served foods

·       At the governmental level, change the structure of subsidies and price support policies so that a broader range of food groups is supported rather than just a few high-yield cereal crops

The report highlights several large international food companies, including Unilever, Nestle and Group Danone, for the efforts in building a better food system to improve the lives of people in developing and poorer regions. These efforts include:

·       Unilever has implemented a strong Nutrient Profiling System against which the global product portfolio is checked for levels of key nutrients

·       Nestle stands out with a clear corporate nutrition strategy that is approved at the highest levels of the company and includes a comprehensive set of objectives that cover: a) the reformulation of products to make them healthier; b) access to healthy foods; and c) responsible marketing

·       Group Danone includes nutrition goals in its business strategies as well as its processes. The company’s focus includes having affordability considerations in its product R&D programs and for its stakeholder engagement

The challenge of obesity and the health of the diet affects all regions and populations, including domestically in North America. For us in the U.S. food industry, there are a number of tangible and implementable steps that we can take to do our part to help improve diets. Among these steps are:

·       Continue to develop healthier new foods which incorporate legumes, vegetables and fruits along with high fiber and elevated nutrient levels

·       Work to reduce the levels of unhealthy ingredients such as excess sugar, sodium and saturated or trans-fats

·       Use communications to build greater consumer awareness of the importance of a diverse and healthy diet

·       Support the expansion of farmer’s markets and other systems that increase availability of local and regional foods

·       Focus on longer-term needs, not just short-term deliverables, and work to build a truly robust, resilient and sustainable food system that will nourish and support our children and their children

Creating a healthy, diverse and sustainable food system, supporting a healthy diet, is one of the biggest of the "really big" challenges for society in the 21st century, This challenge occurs at the international level as addressed by global institutions such as the World Bank and at the closest-in local local level at the supermarket or market stall where each of us buys our food. Everyone has an investment in developing healthy foods for healthy lifestyles. If this challenge at the global level seems daunting for the individual, it might be proper to ask: "If not us, then who? If not now, then when?"

 

The Most Important Question in Marketing

"Why?"

This simple 1-word question - succinct, pithy and provocative - is the essential question in marketing.

Why do consumers do what they do, buy what they buy, prefer what they prefer, decide what they decide and feel what they feel?

Why do consumers readily accept lime green packages in one category but utterly reject lime green in another? Why does consumer acceptance of one brand of Greek yogurt skyrocket while another brand stalls and another declines? Why does one brand of boxed mac & cheese communicate to consumers a sense of “fresh and contemporary” while another brand, with nearly identical ingredients, communicates “old and dated?” Why do shoppers make huge purchases based largely on emotion – for example, cars – then proceed to create, after the fact, a series of seemingly rational reasons for their emotional decision? The infinite variability of consumer dynamics makes the marketer’s task both exciting and daunting.

The spirited and continuous study of the “Why” of marketing is a key driver in the successful marketing of consumer products. Understanding “Why” compels to marketer to explore – relentlessly – the behaviors and decision processes that consumers use to make their choices. The pursuit of “Why” makes the marketer’s visit to the supermarket or the mall a sociological safari. Marketers are teased by their families for the five-minute quick trip to the food outlet that somehow becomes a one-hour marathon as the marketer surveys the entire store, aisle by aisle and shelf by shelf, looking at different products and gaining new insights into the consumer mind.

In order to explore the “why” of consumer behavior, marketers need to cultivate one skill above all others: curiosity. The curious marketer is always observing, always noting and comparing, always keeping track of the evolution of consumer dynamics. Marketers speak of “connecting the dots,” but in order to do so one must first identify and understand the dots themselves (i.e. the key trends and elements of consumer behaviors), then make the connections between dots. Identifying the dots means being continually observant with a sense of curiosity and an intense interest in consumers and what makes them “tick.” From the furthest shelf in the back of the store to the front checkout counter to the shopping basket and what’s in it, every consumer purchase and interaction provides the marketer with information that builds a useful body of market knowledge. Good marketers also take the time to read articles, industry news feeds, weekly and monthly publications, and other materials, webinars, trade shows and conferences. There are multiple methods with which to learn and grow in knowledge and understanding of the complexities of consumer behavior.

The marketer's knowledge of consumer behavior increases via observing, reading, thinking, connecting and synthesizing ideas and implementing these key insights in the market. This process if followed by more observations and studying, along with further revisions and enhancements to make products and programs more effective. A virtuous cycle, always growing, always improving, and pursued with a relentless curiosity and a drive to answer the essential question - "Why?"

Getting Ready for a Clean-Label Future

A generational change is currently underway regarding how consumers think about food and make their daily culinary and dietary choices. On the culinary side, there is an evolution from past traditions and familiar styles of food previously preferred by families, to a wider-ranging experimentation in foods from diverse cultures and regions. We are truly becoming a world food culture; foods and flavors once reserved for "them" (meaning others, not ourselves) are now being embraced by "us." On the dietary side, a newer generation of Americans is seeking foods that are simpler, less processed and closer to the perception of being local or regional, versus products and ingredients perceived as "more processed" or made in big impersonal factories.  The irony, of course, is that many of the newer, simpler, seemingly "farm-fresh" foods are actually made in large food processing facilities utilizing the QA procedures, gleaming chrome food-making systems and food safety protocols that are required by modern food safety protocols.

One major challenge facing the food industry is how we can meet / exceed the desires & expectations of consumers for simpler, clean-label foods, while still meeting all of the safety protocols demanded by both regulators and by consumers themselves.  Yes, consumers want food that, for example, feels like it was made yesterday on a stove top and displayed today at the local farmer's market. At the same time, those consumers also want assurance that they will not be at risk for food-borne illness, nor that the food will degrade or separate or lose color or suffer any diminishment in quality, taste, texture, mouth-feel, etc.

What we propose is that the sweeping generational change in consumer culinary and dietary preferences needs to be accompanied by an equally sweeping change in the industry itself. Older processing systems made for a different era and a different diet need to be changed out. Highly-processed and "multi-syllabic" ingredients need to be replaced with newer, simpler but still-functional alternatives. Colors maintained by non-natural color additives need to be changed to natural alternatives. Formulas made with 22 ingredients need to be re-invented and re-introduced to the market with 6 ingredients.

The need for this change is widely but not universally acknowledged by the industry. On the one hand, there is a noticeable evolution in how the industry perceives natural and clean-label products. For example, industry ads, articles, sessions at conferences, posters at trade show booths, etc. clearly spell out the growth of more natural, clean-label products and the increased use of more natural, clean-label ingredients.  On the other hand, there is still widespread skepticism on the part of many in the industry regarding this change to simpler, clean label foods. Food scientists and others express concern that the "ground rules" of food, as it were, are changing away from known systems to an unknown system with unknown cost and unknown benefit. These concerns are valid, because established food-makers cannot change out massive, expensive systems on a whim or a fad, nor can they reverse direction based on a whip-saw of shifts as consumers jump from one culinary fashion to the next to the next.

That said, when the broader generational aspects of society are fully considered, the arc of evolving consumer trends is moving permanently in one direction - the direction of simpler and clean-label foods. Trans fats are vanishing formula by formula; they aren't coming back. Artificial food dyes are being de-listed. Modified food starch is being replaced. High-sugar formulas are changed out for lower-sugar alternatives. Artificial sweeteners, while still widely used, are called out in more negative press every day, with a decrease in consumer acceptance. Foods with dozens of ingredients are on a "watch list" for simpler reformulations.

Is this change good? Is it bad? As with most complex issues in society, there are no pat answers or easy fixes. However, we think that the "smart money" will place its investments in those changes and innovations which assume a much greater and more prominent role for clean-label foods. History sometimes indulges in nostalgia but it does not fundamentally reverse direction. After all, not so long ago much of our grandparents' food was fried in lard; today we see that and think "Huh? How could they do that?" Our guess is that, someday in the future, our descendants with simpler, clean-label diets will look at much of what we put in our products today and think likewise.