innovation in nutrition

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Innovation in Nutrition

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Executive Summary There are a number of emerging trends that are driving new Innovation and growth opportunities

Demographic trends – aging population and the rise of the Millenials

Public link between chronic/ “lifestyle” diseases and diet leading to higher awareness about food types

Growing adoption of transparency/ labeling standards supported by mobile technology

Discovery, sourcing and proliferation of new “healthy” ingredients (grains, superfoods, micronutrients)

Increasing shift towards simplicity-authenticity-exclusivity-experiences (especially with Millenials)

At InnoAction, our experience and our results convince us that Innovation happens at the intersection of three highly interconnected business domains:

Understanding of underlying science, technology and IP trends and futurescapes

Deeply understanding unmet, unarticulated, underserved and latent needs

Acutely understanding the industry economics & modeling opportunities for successful business models

We can bring a unique perspective on identifying, unlocking, and building new and innovative food products for your firm by leveraging our depth in science, behavioral economics, and identifying successful business models


MARKET & CONSUMER TRENDS

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The Passionate Interest in Foods Being Led By The Millenials Will Continue For a Long Period

• This is led by their desire to understand food heritage, where foods come from, food preparation

and how food is served; but with a twist (labeling, simplicity, authenticity)

• Millenials are deal seekers: over 86% seek the lowest everyday prices for foods. Almost one-third

of Millenials (50+ million people born between 1978 and 1994) have difficulty affording their

weekly groceries as compared to 22% of the general population (price)

• Millenials are the most ethnically diverse generation in our American history – approximately 19

percent are Latino, 13 percent are black, four percent are Asian. One in five have an immigrant

parent and one in 10 have a parent who is not a U.S. citizen (exclusivity, flavor, quality)

• Clearly they are the foundation for the rise and desire for ethnic and more flavorful foods

• This generation will be the most educated with 63% predicted to have or expect to graduate

college by the year 2016, however, many report low paying or no jobs and a quarter of them have

moved back home with their parents (higher awareness, labeling)

Source: factsfiguresfuture.com


Surveys in Developed Markets Show a Growing Concern About the Price, Composition & Ethics of Food


Simple, Local and Fresh are Growing Needs that Complement Growing Health & Wellness Trends

Middle and upper class trends in developed markets are pointing towards: price, simplicity, authenticity, and exclusivity


A Significant Portion of Consumer Spend on Food & Beverages Occurs in Restaurants – An Opportunity?

• What “job” is being done by restaurants?

• Can the restaurant spend be substituted?

• Is there an opportunity for “packaged”

fresh foods?

• Is there a business model for social/

communal experience?

• Can digital experiences compliment and

enhance real-life ones?


Global Population Growth in the East and the South Combined with a Rising Middle Class is a Big Opportunity

• World population will grow 35% in next

35 years – what is the role of nutrition?

• Significant opportunity with emerging

middle class and high income earners

who will be more focused on health

• Asia, LATAM and MEA big population

growth centers

• Do you anticipate social norms around

food (healthy, labeled, functional)

changing?

• Is there an opportunity to capture

lucrative niche markets today that can

emerge into global mass markets 5-10

years from now?

Population Change

Share of Middle Class


In Addition, The World Population is Also Getting Older Presenting a New Set of Health and Functional Needs


Non-Communicable Diseases Account for Over 60% of Global Deaths Now, With CVD, Cancer, Diabetes, COPD, & Mental Health Leading


World Authorities Attribute the Problem of Rising Chronic/ Non-Communicable Disease Burden to Poor Diet, Tobacco & Alcohol

From WEF, Harvard, UN Study


These Diseases, Many “Lifestyle” Diseases, Account for Trillions of Dollars in Direct & Indirect Healthcare Costs

From WEF, Harvard, UN Study

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These Social, Economic and Health Factors are Driving a Set of Mega-Trends that Can Unlock Significant Innovation Opportunity …

More frequent snacking with smaller portion sizes

Boomer reality with Diabetes & CVD (50% of Grocery Food Spend in the US)

Rising interest in non-meat protein, micronutrients, & functional foods - chickpeas, quinoa, “superfoods,” (goji berries, chia seed), flaxseed (omegas) yogurts (pre- & pro-biotics), etc.

Increased interest in breakfast as an important meal (on the go)

Simple, authentic, flavorful foods that deliver experiences and voice identity (multi-sensory experiences, healthy frozen, exclusive/ identity foods, “responsible” foods, etc.)

More men in the supermarket and in the kitchen

Transparency: mobile apps and sensors to verify authenticity, origin, & composition of foods

Source: factsfiguresfuture.com, synthesis of secondary research


… As Witnessed by The Size & Growth of The Functional Food Market at ~$250B (21% CAGR, Organic at 13% CAGR)


SCIENCE & IP TRENDS

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Major Categories of IP Technology Trends for Functional Foods & Beverages

• Function (GI health, cognition, stress, etc.)

• Form (beverage, bar, dairy, etc.)

• Active Ingredients (probiotics, natural extracts, protein, etc.)

• Manufacturing (delivery systems, packaging, etc.)

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Functional Ingredient IP Trending (2005-current)

Prebiotics and probiotics have been a major area of interest in recent years focusing on the following functions/conditions

Delivery systems and controlled delivery by ingredient formulations have been a major area of interest looking at the following areas

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• Irritable Bowel Syndrome/Crohn’s Disease

• Autoimmune function

• Weight management/Diabetes

• Chronic pain

• Food and beverage product incorporation

• Intact delivery to lower GI tract• Micellization/microencapsulation of

ingredients• Treating gluten intolerances with gluten-

targeting microorganisms


In Addition, Technology Development in High Pressure Processing is Leading the Way for More “Natural” Foods

2010 Euromonitor report suggests that raw food could be one of the next “food craze” – although there is no strong evidence yet with regards to the benefits

High Pressure Processing (HPP) uses pressure instead of heat to eliminate microbes from the food or drink which allows for a pasteurized product with greater vitamin and mineral retention (more nutritious)

These technique are already being applied to high-priced juices, organic baby foods, fruit and energy bars – and there is a lot of room to be creative with milk products and vegetable products

Love GraceBlue Print

Evolution

"The $30 billion health & Wellness food category is the fastest growing category in consumer goods made up of hundreds maybe thousands of local companies each exploiting a niche … HPP can change that allowing us to boost food safety, extend shelf-life and improve margins, while providing all consumers with fresh, wholesome, natural food at an affordable price. It is our goal to become the largest holder of HPP capacity in the country.“ – CEO Stakool Inc. 2013

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Regulators Also Seem to Be Jumping on the Bandwagon of the Benefits of Functional Foods

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