Welcome to 2020!

From blended proteins to the continuing power of private label and greater urgency around sustainability, here’s a quick peek at what’s in store in the year ahead.

PRIVATE BRAND MOMENTUM
Rising prices are putting pressure on Canadians' spending power. According to Nielsen, 70% of consumers are looking to trim their spending on fast-moving consumer goods with 49% indicating they plan to buy more private-label items to achieve this. At Canadian Grocer’s recent Thought Leadership Conference, Nielsen's VP of consumer insights, Carman Allison, said where consumer behaviour and private label is concerned “the hand is following the head.” Private label is growing at 3% according to the research firm's latest figures and now has an 18.6% share of the market—outpacing national brands, which are growing at just 1%. Private-label goods are also shedding their inferior to name brand reputation; according to NPD Group and research firm Technavio, “premium private label” products are becoming increasingly popular with consumers.

EATING PRETTY
Innova Market Insights predicts more focus on foods that can help boost physical appearance—items it says “border on the cosmeceutical.” These may include things like probiotics for skin health and matcha tea for hair growth and appearance. According to Innova, one in three Chinese consumers are increasingly consuming food and drinks that support their physical appearance, and this trend is expected to keep spreading globally.

THE CBD CRAZE
Although the therapeutic benefits of cannabidiol (CBD)—a non-intoxicating compound found in cannabis plants—is debatable, with some in the medical community rolling their eyes over the purported ability of CBD to help with everything from arthritis to anxiety, this hasn’t dimmed consumer interest. Retailers, those with a license to sell it, have struggled to keep CBD on shelves and it is expected the market for CBD will hit $1 billion in Canada over the next five years. The Canadian Health Food Association is advocating for the government to change the rules around CBD, allowing it to be sold without a license, opening up its sale to a wider swath of retailers. A new development in CBD in the U.S. (where CBD sales are expected to reach US$13 billion this year) is the Food and Drug Administration’s late November Consumer Update cautioning that “CBD has the potential to harm.” Whether this will dampen consumer interest in CBD remains to be seen.

MOOD FOOD
THP, the Toronto-based food marketing agency, has included "mood food" on its 2020 Trend Forecast, referring to food designed to influence emotions. According to THP, this is related to “gastrophysics,” a term coined by food psychologist and professor Charles Spence. This new “science of eating” examines how behaviour, emotions and food are tied together. Innova Market Insights also included a “focus on mental and emotional well-being” on its list of trends for 2020, noting that more mood-enhancing food and drinks are expected to launch next year, which could incorporate anything from CBD to stress-reducing herbs like ashwagandha.

THE GREEN WAVE
As talk of the climate crisis becomes more urgent and consumers demand more action on the issue, retailers and manufacturers will step up their sustainability efforts on every front from food waste to plastic use. Sustainability has landed on many of the lists of trends for retailers to prepare for in 2020 (and beyond). According to Innova Market Insights, “consumer expectations around sustainability are higher than ever,” pushing companies to prioritize eco-efficiency. Meanwhile, Trend-Watching identified “green pressure” as a top trend in the year to come. According to the firm, in 2020 consumers will seek products and services that help them alleviate rising “eco-shame” as eco-consumption becomes less about the status of opting in and more about the shame of "opting out." And “regenerative agriculture” topped Whole Foods Market's list of predictions for 2020. The natural foods grocer said everyone from farmers to government agencies and retailers are taking a closer look at how to improve soil health and increase carbon capture.

MEAT/PLANT BLENDS
In 2020, consumers will continue to be concerned about the impact of meat on both the environment and their health—but that doesn’t mean they want to cut it out altogether. The increase of “flexitarians” is giving rise to more product launches that are meat/plant blends. These are typically traditional meat-based product like burger patties or chicken nuggets that blend meat with plant protein to significantly reduce the meat content. Meat/plant blending was one of the hot topics discussed at the Global Summit on Plant Powered Menus in Toronto recently; and Whole Foods has included it on its top trends for 2020, citing several examples of burgers it sells that swap out 25% to 30% of the beef for plant-based blends such as wheat, mushrooms and barley yeast.

RISE OF DISCOUNTERS
Canadians are feeling the pinch, with 27% saying they only have money for essentials, according to Nielsen. One of the strategies they’re using to save money is to switch stores. Where are they turning? Discounters. The discount channel, with its low prices and low assortment formula, has grown by 5% (conventional grocers only grew by 2%) according to Nielsen’s latest figures, with market share now at more than 41%. And the discounters are proliferating; in Canada, Sobeys has converted Safeway stores in the West to its FreshCo discount banner while in the U.K., German discounter Lidl has announced bold plans to open another 230 stores by 2023, bringing its total store count to 1,000 in that country.

ZERO-PROOF BEVVIES
In Mintel’s forward-looking Global Consumer Trends 2030 report, the research firm says in 2020 we should expect to see “alcohol consumption continue to decline among young people.” It makes sense, then, that Whole Foods would also include “Zero-Proof Drinks" in its roundup of trends to watch. This goes beyond just near-beers and booze-free wines (although those are clearly growing in popularity), to include more innovative, upscale alcohol-free spirits. “Think alt-gin for gin and tonics and botanical-infused faux spirits for a faux martini,” according to Whole Foods.

And there are many more trends forecast for 2020. Retailers, for instance, will continue to experiment with artificial intelligence; we can expect more innovation around e-comm grocery delivery and pickup; and creating exceptional in-store experiences will be even more crucial for brick-and-mortar stores in the year to come. Interesting times ahead!

This article appeared in Canadian Grocer’s December 2019/January 2020 issue.