There’s room to grow for companies trying to win with healthy foods in America. The billions in sales growth from fresh foods (+$4.6 billion), organics (+$925 million) and foods that support plant-based diets (+982 million) (1) can often be mistaken as signs of health-food saturation. But the reality is, consumers aren’t eating as well as they’d like to. And that’s an opportunity for growth in consumer packaged goods (CPG).
The gap between intention to eat better and action isn’t from lack of trying. Nearly all (99% of) Americans have purchased a low-fat food or beverage item this year, but households only do so about twice a month. Similarly, U.S. homes are only buying organic, sugar-free and high-protein foods about once a month in each case (2).
Statistically speaking, a dark cloud looms over eating patterns in America. In 2018, one in five Americans identified as obese (3), and one in nine homes lacked access to enough food at some point in the year (4). Perpetuating these problems, nearly one in four (23%) admit to never or rarely exercising (5). Yet, Americans have bright intentions for the future, and this presents manufacturers and retailers with a golden opportunity to capitalize on this optimism by removing the barriers that separate what people want to eat and drink with what they actually consume.
Two-thirds of Americans say their eating habits have changed over the last five years. That’s a lot of shifting behaviors that could be monetized. But this change in intention is only valuable if manufacturers and retailers can fulfill consumer intentions with available products. When surveyed about their eating habits today and into the next five years, Americans say they want to eat and live more healthfully. Three in 10 say they are making more healthy food choices than they were a year ago (6). Consumer intentions like these can help manufacturers and retailers spot gaps in ways products are not meeting evolving consumer needs—so they can close them.
Our research confirms that consumers, particularly younger ones, have a new set of expectations for food products.
There’s no single definition for what constitutes healthy food today. And, Millennials have certainly indicated that health is not the sole factor driving changes in eating habits. Millennials are most likely to define healthy eating in practical ways, whereas surveyed Boomers, Greatest Generation consumers and even Gen Xers indicate their eating habits are more heavily guided by health maintenance or specific health conditions. For example, Millennials think about healthy eating more holistically than other generations, placing a rising importance in food for the mind. More so than any other cohort, Millennials feel healthy eating isn’t just about nutrition and diet; they believe it extends to mental wellness, stress management and saving both money and time. Millennials are 2-3X more likely than the oldest generations to change their eating habits in order to manage mental health, finances and time.
But translating these ideals into products on the shelf is a tall order to fill. And so, we center on Americans’ cry for dietary help today. To put it simply, consumers, especially Millennials, want to buy foods that work ‘harder’ for them and their lifestyles. But the values and desires that drive their lives make for a seemingly impossible equation companies must solve:
To answer the equation, we’ve broken down the behaviors surrounding food affordability, time-savings and products that promote healthy lives and minds:
Americans are drinking, not just eating, their snacks, and beverages can help bridge the gap to time savings with healthier eating. In fact, beverages are among the top trending consumable categories today. And while things like value-added water and energy beverages may not be the most filling when it comes to a snack occasion, for many consumers, drinks aren’t typically intended to serve as a meal replacement. More so than many other reasons, three in 10 Americans say they are more likely to drink beverages “as a way to revive or sustain energy levels.” (7)
Many companies have already tapped into the potential of value-added beverages. Sales of beverages infused with marijuana, for example, have grown nearly 50% since 2018 (8). Beverage sales are also booming in the digital space, with more consumers opting to shop online, as e-commerce sales of beverages are up 45% in the last year (9). The path to consumption can be as simple as untwisting a bottle cap with drinks, yet beverages can still provide the functional or frictionless shopping access to meet consumer needs.
Mental health and stress management are another part of the ‘impossible equation’ that food and beverage products must solve for. And it’s not just beverages that are innovating to bridge the gap to healthier eating in America. The future of food is grounded in uniting the health of the body and the mind.
Mental illness is a prolific health concern in America, as is the related struggle to get sufficient and restful sleep. The CDC reports that an estimated 50% of all Americans have been diagnosed with a mental illness or disorder at some point in their life, and over one in every three adults fail to get enough sleep on a regular basis. This needs to change, and CPG consumables can play a key role in the therapy process.
Already, you can find billions worth of products with marketing claims or proven ingredients that indicate support of brain health, anxiety, sleep or depression. In fact, the top “brain foods” in American stores today include tuna, fresh beef and non-dairy yogurt. Consumer awareness and care for mental wellness has certainly improved. Therefore, companies need to prioritize mental health just as much as they do physical health in encouraging dietary changes in America.
But even foods that save time or improve mental health must be reasonably priced. This is an ultimate barrier to closing the gap between what Americans want to consume and what they actually end up buying. Consumers won’t try what they don’t believe they can afford.
Packaged frozen and shelf-stable produce, for example, are well-positioned to capitalize here. Without sacrificing on many health benefits, options like frozen raspberries or packaged bean sprouts cost nearly half as much (per pound) as the fresh equivalents and can be stored and used when it suits the end user. A busy family can stock frozen and packaged produce for quite some time, and with the right reminders and ideas for use-cases by companies, they can become regular and price-conscious access points to healthy food consumption. Companies playing in this space need to exploit the wallet-friendly nature of these options and inspire meal occasions using back-of-the-freezer or pantry produce.
Manufacturers and retailers also have an opportunity to promote the price efficiency of certain fresh meats as healthy protein options. Where trendy and convenient protein sources like jerky (25 cents per gram), nutrition bars (20 cents per gram) and nuts (13 cents per gram) suit on-the-go consumers, they are sold at 6-12X the price per gram of chicken, pork and turkey (2 cents per gram, respectively) (10). For the 55% of Americans who prioritize high-protein content when deciding what to buy (11), this message of protein price accessibility could draw renewed attention to traditional meat-based goods. Distracted by power messaging about nutrition bars or meat snacks, many consumers could be swayed by re-education on the protein content actually in a serving of fresh meat for example. For the price affordability per gram, there may be opportunity to direct protein-seeking consumers back to a meat-based source.
Convenient products that save time and smart foods that cater to more than just physical health are only effective when sold at accessible price points.
Companies must tackle concerns directly and consistently in order to lower barriers to entry with healthy food consumption. And according to Americans, price matters most when it comes to future food and beverage consumption. For both initial trial and long-term adoption, careful price management can make all the difference between landing in a basket and staying on the shelf.