Are you prepared for the shift in consumer demands?

• Advancing greenhouse gas (GHG) levels.
• Accelerating impacts of climate change.
• Our GHG emission-heavy meat and agricultural production system.
• Evolving consumer expectations and food choices linked to climate outcomes.
• Global food scarcity.
• Are all these issues inter-connected? Yes.
• Is the consumer about to grasp this and connect these dots?

Yes.

• Food, beverage and lifestyle categories are ground zero on a major culture shift now underway that redefines the meaning of sustainability and will recast the value proposition for nearly every brand in the business.

Can you see it coming?

You already know sustainability has been a growing issue for consumers. However, as a purchase consideration sustainability is morphing to focus on climate threat impacts. This will change the value proposition and strength vs. weakness of brands both CPG and retail. A new class of Eco-Sumer is emerging that sees the checkout counter as a voting booth to signal their demand for change and flag their activism on these vital quality of life issues. Their significant purchasing power will put pressure on companies to act. Are they on your strategic planning radar?

The early stages of change

Sustainability has moved past its teenage years and is maturing. In 2018 Nielsen predicted consumers would spend $150 billion on “eco-friendly” products by 2021. However, the sands of adoption are shifting underneath as the rapidly rising consumer concern about agriculture and food production’s link to GHG emissions gets traction.

Soon the consumer will come to understand that agriculture is the second leading producer of greenhouse gas. Specifically, meat production accounts for 65 percent of the world’s nitrous oxide, a gas with a global warming impact 296 times greater per pound than carbon dioxide. What’s more, total emissions from agriculture are forecasted to grow 80 percent by 2050 due to a significant increase in demand for meat and dairy products.

Emergent’s research barometer is tracking the evolution and expansion of consumer sentiment on sustainability. This issue increasingly has bearing on brand value propositions. The consumer view of sustainability’s relevance has already expanded to include assessments of transparency, ingredient sourcing, food safety, animal welfare, employee treatment and now carbon footprint. Important for you to consider: this is quickly becoming a standard yardstick of product and retail experience quality.

Culture shift leads to behavior shift

According to Forrester research, half of U.S. adults are operating now in various shades of green and are demanding accountability from brands and retailers, while 32 percent of consumers are going out of their way to purchase brands that are dedicated to reducing climate impact.

Meanwhile the Edelman Trust Barometer reports that 72 percent of consumers are concerned about climate chaos and 40 percent are even fearful of it. The Pandemic has shined a spotlight on vulnerability between human health and the ongoing destruction of our wildlife eco-system which helps tamp down disease spread as more and more land is repurposed for industrial agriculture and meat production. Rainforest, the world’s largest carbon sink, is disappearing at the rate of an acre a second for this reason.

A 2019 Kearney study concluded 71 percent of consumers take protecting the environment into consideration when shopping. By mid 2020 that number had run up to 83 percent. With increased awareness of our food systems’ culpability in climate threat, consumers will be looking for guidance and direction from brands on their efforts to mitigate the problem.

Increasingly popular “Net Zero” commitments are only the beginning. Consumers will soon begin to scrutinize those moves, looking for consistency across the waterfront of company operations not only on energy and water use, but also how the food ingredient supply chain is factored into carbon footprint.

• Climate and sustainability initiatives, commitments, practices and standards are about to become a launch pad for business competitive advantage.

The coming moment of truth: shopping friction

How do brands and retailers help consumers make a sustainability decision? There is no credible mechanism for determining how climate positive a brand or retailer is. When rules are drawn up internally by companies, the metrics applied around different definitions of climate impact will inevitably vary brand to brand.

Lack of any central oversight or common benchmarks makes consistency nearly impossible to achieve. Consumers are going to have a hard time assessing which claims are meaningful from those that are not. When a best practices vacuum like this exists, there will always be third parties wading in to fill it. Pundits and self-styled experts will offer their views on good vs. bad and so the race to secure credible guidance will begin.

• We know consumer expectations are already on the rise. Now is the time to create a set of industry-wide standards on carbon footprint and define which elements of performance need to be included in assessing climate impact scores.

First step: holistic analysis

This isn’t just about clean energy. Or mitigating water resource over-use. A 360-degree evaluation will be required to consider supply chain, ingredients standards, operations, manufacturing, company culture, employee policies, brand higher purpose, cause relationships, plus the communication of standards to stakeholders, consumers, retailers and investors.

Investor and regulatory change coming

The Kearney study also revealed that 77 percent of investors now see climate change as a consideration in their valuation decisions. Further 79 percent of investors believe that regulatory changes will be a factor in their decision-making over the next three years.

There’s no question the new Administration is making climate a top priority and public policy will favor companies that get ahead of this. The Securities and Exchange Commission has already set up a task force to monitor ESG (Environment, Social, Governance) misconduct of publicly traded companies. At some point there will be regulations aimed directly at disclosing emissions.

Where to go from here

It’s time for the Climate Audit, a thorough evaluation of company operations, good and bad, that contribute to (or remove) emissions either directly or through vendors, distribution and supply chain.

• Greenwashing is going to be a key area of vulnerability for organizations that take a half-baked stance on emissions and simply try to ride the wave of consumer sentiment by invoking climate faithfulness. Half measures are likely to be exposed so it is important to get it right and leave no stone unturned in evaluating where emissions might come from and how best to turn it down or off.

The rationale for these changes and shifts is compelling:

“Carbon dioxide (CO2) and methane levels in the atmosphere continued to rise in 2020, with CO2 level reaching their highest point in 3.6 million years, according to calculations by the National Oceanic and Atmospheric Administration. The barrier was broken despite a reduction in expected emissions caused by the COVID-19 pandemic.” – Jordan Freiman, CBS News

This CBS report was startling given the slow-down in commuting and travel due to the pandemic. It underscores that GHG emissions from fossil-fueled transportation are still only a portion of contributing factors to global warming. Agriculture is a big one and getting bigger. This revelation will put food choice at the center of the bull’s eye for consumers who use their wallets and brand preferences to vote their values.

If you find this conversation meaningful and would like to discuss how climate impact can be properly and successfully addressed in your organization, use this link to open a conversation.

Looking for more food for thought? Subscribe to the Emerging Trends Report.

Culture change impacts food and beverage brand relevance

There’s a new sheriff in food and beverage town now. A consumer on the hunt for climate- friendly choices. They have a hankering to use the checkout counter as a ballot box to vote their beliefs. Are you prepared for them? Just who is this new cohort rapidly gaining momentum?  As an audience of influencers and advocates how significant will their impact be on the future fortunes of food businesses and retailers in 2021?

Read on.

Five years ago, a great dot-connecting moment transpired when consumers determined that the quality of what they eat has a direct and tangible impact on the quality of their lives. Food retail saw a marked shift in shopping patterns to the perimeter fresh departments as preference for fresh, real food overtook the decades-long infatuation with convenient, inexpensive, highly processed packaged foods and snacks. The aftermath of this transformed ‘what does healthier mean’ calculus and fed the innovation skate ramp of new, entrepreneur created food products flooding the store. These super premium brands-with-deeper-meaning and made from higher quality, ethically sourced real food ingredients have captivated consumer attention and retail shelf space. How many brands of artisanal beef jerky are there now competing for a slice of the snack dollar?

We reminisce on this point just to remind us all that change comes quickly. Our collective goal as marketers is to stay ahead of these transformative shifts. Thus able to help define the state of the art for your brands, rather than scrambling to re-acquire relevance after observing share erosion in the quarterly results report.

Rise of the Climatarian

Another dot-connecting transition is underway. A growing number of bellwether consumers are grasping the connection between the food production system and its out-sized impact on greenhouse gas production plus the climate change threats that accompany it. According to our insight research partner Brand Experience Group, their ground-breaking study on sustainability, estimates the current number of consumers who are passionate about or committed to the importance of “sustainable consumption” at 34% and rising.

The role of meat production and industrial agriculture processes contributing to the planet’s warming is changing the food choice value proposition to invoke a claim that defines carbon footprint. While the word sustainable has gained traction in recent years as a formal player in marketing lexicon, it is acquiring a more specific meaning. Sustainability and climate change are getting married and we’re all invited to the reception.

What’s driving this? In his stellar New Yorker magazine feature “After Alarmism: The War on Climate Denial Has Been Won,” climate advocate David Wallace-Wells paints the picture.

“In California in 2020, twice as much land burned as had ever burned before in any year in the modern history of the state — five of the six biggest fires ever recorded. In Siberia, “zombie fires” smoldered anomalously all through the Arctic winter; in Brazil, a quarter of the Pantanal, the world’s largest wetland, was incinerated; in Australia, flames took the lives of 3 billion animals. All year, a planet transformed by the burning of carbon discharged what would have once been called portents of apocalypse.”

Increased media attention on the issue has circulated data revealing the significant top box role beef and lamb production have in methane creation. Global agriculture practices and meat collectively contribute more to climate threat than all fossil fuel transportation combined. The impact of climate on people and society is being played out in prime time through recurring news coverage of raging wildfires, droughts, super storms, increasing Hurricane impacts, melting glaciers, rising water levels and flooding worldwide.

We’re about to see a shift towards carbon footprint as a definer of sustainability. Those with an attractive, relevant brand story to tell are manifesting this attribute in product label scoring while legacy food and beverage companies swarm to announce “Net Zero” emission commitments. Meanwhile there will be growing scrutiny of supply chains to root out sources of greenhouse gas. The decarbonization of our food system is getting underway. Consumers will demand it. It will be juiced by new food technologies and a cohort of emerging brands that pioneer ways to create food without built-in climate deficits.

Digital innovation will be eclipsed by bio-degradable everything

Alongside global warming is a related developing trend – an innovation heat map swing from digital technology to significant advancements in bioengineering and biofabrication.  A complementary view of sustainability looks hard at the role of plastics and other trash dump materials in so many facets of our lives with a convincing argument that recycling isn’t the best answer. Creating products, packaging, even clothing, from materials that simply disappear harmlessly is exponentially better for the planet.

In 2019, nearly 500 million plastic toothbrushes were sold with the majority of them ending up in landfills and the ocean. They cannot be recycled. Since plastic was first mass-produced in the 1950’s, 9.1 billion tons of it has been created and landfilled – an astonishing 91% of this massive plastic tsunami isn’t recyclable, according to Fast Company magazine. On the toothbrush front, Colgate owns 30% of the entire category and in an effort to end the proliferation of plastic they are introducing “Keep” – the first planet-friendly brush that employs a reusable aluminum handle. The replaceable brush head is still plastic but the design represents an 80% reduction in plastic material use.

Steve and Nick Tidball’s Vollebak, a futuristic brand of men’s fashion, is re-writing the rules and process for clothing creation. Their plant and algae t-shirt is made from plant-based linen and wood pulp fibers decorated with ink from algae. The shirt can completely decompose in 12 weeks when tossed into the compost pile. A shirt that literally disappears. “Sustainability is easier to understand when it involves feeding your clothes to worms,” said founder Steve Tidball in an overview article on their technology showcased in The Future Normal newsletter.

Key to this coming movement of planet friendlier foods, products, processes and ingredients is a revealing focus on the impact of lifestyle and consumption habits on our planet’s health. The realization that what we buy is a reflection of our values rises as a functional and viable path to signal those preferences and beliefs. Consumers’ wallets are used to vote their preferences. This new path to purchase will require brands to look deeply across the organization to determine where improvements and changes can be made to align with this sea change.

Undoubtedly yet another generation of new brands will emerge with carbon footprint claims and planet-friendly packaging as the lead in their brand voice. More innovation is coming. There are, however, business challenges ahead for these upstarts.

• What is the secret to scale-able and sustainable growth, the path to sales homeruns not base hits? We reveal it here.

80% of CPG start-ups will never get past $1 million in sales

Some new emerging brands have well-connected founders and are able to attract investment that creates resource advantages. “Money can buy distribution. It can buy advertising. It can buy huge field marketing events. But it can’t by consumer enthusiasm. It can’t buy cultural relevance for the brand’s attribute-outcome symbolism,” exhorts Dr. James Richardson, of Premium Growth Solutions.

After an initial, well-funded launch with a strong velocity report card, things start to stall or plateau. What’s wrong is often embedded in the product itself. It just isn’t that remarkable. Or, importantly a narrow, niched positioning causes the brand to stall. It simply runs past its ability to attract an audience sufficiently large enough to keep the velocities on a northward trajectory. Enthusiastic users, perhaps, but a narrow, smaller fan base nonetheless.

Scaling beyond the mid-range isn’t an outcome of more funding or the awareness that can buy. It is delivered by steering the brand towards the right and largest addressable market. Beyond Meat famously did not create a better vegan burger for vegans. They opened the aperture wide by casting themselves as a meat made from plants for meat lovers. They threw down the gauntlet of crave-able taste experience and asserted they were as good as a beef burger. Bold to be sure. The product delivered on its promise under that scrutiny.

The genius was casting a wide net to meat lovers and in doing so working to build relevance and resonance with a very big audience of meat department beef shoppers. It wasn’t because there was this giant standing pool of people representing themselves as “flexitarian.” No, instead they invoked meat lover and by that they meant anyone and everyone who loves hamburgers, the most popular sandwich on earth. The outcome was a rapid rise to hundreds of millions in sales.

Largest. Addressable. Market.

Don’t make vegan cheese for vegans. Instead craft extraordinary, delicious plant-based cheese for cheese lovers. A high taste bar to be sure, but then that’s what separates the extraordinary product innovation from the merely average.

Climate change and bioengineering will reshape the food, beverage and lifestyle brands business more quickly than anyone imagines. Venture capital and innovation will quickly chase these dreams. More higher-purpose brands will be invented. Some will be out-sized winners while some will remain small or fail altogether. The difference maker won’t be the size of the budget and the awareness that can acquire. Sound strategy will play a decisive role in the fortunes (or lack thereof) of these businesses based on the quality of the innovation itself, the size of its potential market and the alchemy of how and where its relevance is expressed.

If this thinking strikes a chord and you would like to brainstorm further the implications for your business, use this link to start an informal, no-charge conversation.

Looking for more food for thought? Subscribe to the Emerging Trends Report.

Is your brand’s higher purpose dialed in?

“Food is now so much more than food: It’s this representation of the self. We’ve managed to use it as a signifier for so many virtues, whether that’s obvious ones like health or indulgence, but also ancestry and connection to kin and family, or the fact that you’re just a unique person out in the world.” – Benjamin Lorr, The Secret Life of Groceries, Grocery Business interview.

To successfully build and grow a base of enthusiastic brand fans these days consumer relevance is everything. In the absence of a high-quality consumer connection and a valued relationship, food, beverage and lifestyle brands can be cast out of the economic Garden of Eden, forced to wander in the wilderness of commodities interchangeably bought on price.

Now a new challenge is emerging to creating relevance that must be weighed carefully if brands are to retain the attention and support of a growing an influential new base of users. Here’s what’s coming fast and hard:

The Socialization of Brands

Six years ago we tracked a cultural shift indicating consumers were leaning heavily into deeper, meaning, values and mission in assessing the merits of their preferred brands on the path to purchase. This condition is rapidly evolving and is accelerated farther and faster as a result of Pandemic induced upheaval in mindset and evolving personal priorities.

COVID-19 presents an out-of-control social and economic environment. It is enhanced by the absence of effective readily available solutions and clear public policy guidance from previously respected sources of social organization, government and educational institutions. Into this societal vacuum comes a new form of behavior we call brand activism.

• “COVID-19 has forced communities to grapple with how individual behavior impacts collective health and social wellness, and it has elevated the mandate that companies demonstrate how their products, practices and systems positively impact the community and support the greater good.” – Hartman Group, Value in the Time of COVID 19” whitepaper

Brands are now expected to be social actors.

“My Wallet is My Vote”

Imagine the checkout aisle at your supermarket or drug store transforming into a form of voting booth. The wallet and purchase performs the role of ballot-enhanced virtue signaling as consumers cast a vote on their brand candidate’s values through the purchases they make.

• Purchases are largely symbolic gestures now, intended to telegraph what people want others to know about their priorities and identity. That said, the nature of this beast is evolving further with emergence of pressing issues that are forming on the horizon of our food system, how it operates and what it represents beyond abundance, indulgence and health.

The cultural shift taking place is a pervasive belief among people, Gen Z especially, that they are unique and empowered to help create change. Rather than relying on the performance of others or institutions, people look at their own relationships, networks and voices as opportunities to activate their advocacy on a larger canvas.

Alignment reaches a new level

Awhile back people discovered alignment between the quality of what they ingest and the quality of their lives. The impact of this revelation was seismic. Enter the fresh food revolution, the move to perimeter shopping at grocery, the emergence of preference for locally-sourced foods, and the decline of heavily processed packaged products.

Healthy food was no longer defined as addition by subtraction (or food science at work) to remove fat, sugar, salt and calories in order to achieve a better-for-you claim. In its place came higher quality real fresh food solutions that impacted the course of emerging food brands from large cap CPG line extensions to entrepreneurial, new food brands with an ethos and higher quality, small batch formulation.

Now another revolution is in the works as alignment evolves yet again.

The relationship of food to climate change threat

The alignment emerging now is awareness of a relationship between our current food system and the over-production of greenhouse gases that sit at the foundation of the climate change crisis. The increased pace of super storms, wildfires, droughts followed by floods, topsoil erosion, and the threats to shorelines advanced by higher water levels, serves as evidence the earth has its problems.

Now comes the realization that meat and industrial agricultural practices are the largest contributor to greenhouse gas creation on earth. The revelation: food production enabled by increased consumption by an ever-growing global population could endanger the planet. The food system specifically meat production and large-scale industrial agriculture, is producing greenhouse gas at a level exceeding the contribution of all forms of global transportation combined. Current GHG levels outstrip any prevailing public policy or naturally occurring solution that would lower it sufficiently to address rising earth temperatures and their impact.

• As this knowledge becomes more widespread it will usher in a new era of calculation on favorable brand attributes, specifically carbon footprint. Advantage will go to brands that provide evidence of their sourcing and production processes that work to mitigate contributions to greenhouse gas creation.

Many plant-based brands have already stepped into this arena by invoking climate change in their stories. Some brands have already begun including carbon footprint claims on their product packaging or menus (Panera, Chipotle and Flora plant butter).

Fast on the move is another generation of new product concepts that employ the latest techniques in fermentation and microbe use designed to step away from the agricultural production chain entirely and thus advancing a new cadre of claims and benefits associated with climate change.

Brand activism and brand voice

We have long lauded those incredibly advanced brand ethos players like Yeti who have injected new-found lifestyle associations and deeper meaning into their brand personas. These companies take consumer lifestyle very seriously and operate as mirrors of people who, in Yeti’s case, are devoted to outdoor adventure – or at least aspire to do so.

Now a new battlefield emerges for brands that take the socialization of food and food production to a new level. These informed brands work to answer both the coming tide of planet-level food scarcity and the impact of our global agricultural system on greenhouse gas creation.

Thus we envision a new phalanx of emerging brands that weigh in on such important topics, working to associate themselves with the activist mindset of consumers wishing to vote their preferences via the food purchases they make.

Supporting regenerative agriculture practices will be one area we expect to rise in importance in the year ahead. The potential exists now to help support a new view of farming practices that can help turn farmland into the world’s largest carbon sink. These kinds of stories and the behavioral moves by brands to embrace this new thinking will mark a new era and opportunity in brand communication.

• As consumers increasingly view purchases as a flag of their beliefs, it is vital that brand communication strategy advances to lead this conversation and facilitate the dialogue in social channels.

It’s coming faster due to the cultural shift now underway that aligns food production with climate change, making activism a part of the purchase decision. Failure to recognize this coming shift could put brand relevance at risk and hand competitive advantage to those who are already moving to answer this form of brand activism.

• If further guidance on this evolving path is of interest to optimize your brand’s higher purpose-related messaging and story creation, we can help you determine the right path and create the right story.

Use this link to start a fresh conversation around questions you have about this emerging change-in-motion.

Looking for more food for thought? Subscribe to the Emerging Trends Report.