Top 5 Thriving Better-for-You Product Categories and their Growth Drivers
By Trisha Arancon
We’ve established in this previous article that the better-for-you F&B CPG industry is continuously on the rise and making its way to penetrate more markets in different parts of the world.
There’s a thriving global movement of people shifting to greener lifestyles and becoming proactive in creating a healthier version of the community, and consequently, more is demanded for the better-for-you F&B CPG industry.
However, brands are facing numerous barriers. With everyone trying to have a stake in the better-for-you F&B CPG industry, competition has become saturated. We know that there’s a lot of science and food engineering that go beyond the façade of bright and meticulous labels that go on packets and bottles, but the same messaging comes across each one – that they’re healthy. No doubt to it, but the redundancies encourage choice fatigue among consumers. The differentiation game comes on a bit stronger and more challenging for most brands.
This alone makes it more difficult for brands to stay on top of trends and keep their businesses afloat because of the struggle to become unique and get those messages to the right people while generating impact.
Back to Ground Zero
For brands to recalibrate their strategies, it’s best to backtrack and see key areas that could be of leverage, starting with knowing which product categories are making it big in the scene.
Category analysis is an overlooked premise that most brands miss. By scanning the market’s top-performing product categories, they can understand what drives purchases, see competitor insights, look into in-demand product ranges, and ultimately, where they stand on their brand equity.
5 Projected Successful Better-for-You F&B CPG Product Categories This 2023
Organic Food
More people nowadays are now focusing their awareness on heightening concerns with overly processed food. This means that they’re wary of artificial preservatives and additives that are being incorporated in most fast food, canned goods, and packaged meat. Organic foods are products that have only used natural substances like fruits and veggies, and are free of artificial food additives – including artificial sweeteners, preservatives, and the like.
Most people are skeptical if organic food is really “organic” and healthy, but it really boils down on how these products are made – highly processed ‘organic’ food can still be high in calories, added fats, sugar, and salt. An article by Healthline, supported by different studies, have shown that low processed organic food may contain more nutrients, less chemicals and resistant bacteria, and pose more health benefits.
According to Grand View Research, organic food and beverage sales reached USD 188.35 billion in 2021, and are expected to grow by a compound annual growth rate of 13.0 % from 2022 to 2030. While by 2030, organic meat, fish, and poultry products are predicted to register the highest CAGR of 14.9%.
Plant-based Food
For those who are quite conservative in their meat and dairy consumption, plant-based food options have been their “holy grail” especially when the pandemic began. The awakening of people to go beyond their usuals and choose more healthy food meals has empowered the better-for-you F&B CPG industry and fueled its demand up until today.
People who have digestive problems such as hyperacidity and lactose intolerance, which account for Asian people who are 90% lactose intolerant, benefit heavily from plant-based food products.
The Plant-Based Vegetarian Meat Market Size, as published in a report by 360 Research Reports, is expected to surpass multimillion USD by 2028, exhibiting an unexpected growth rate (CAGR) from 2022 to 2028.
Functional Beverages
In today’s market, people are now fond of discovering new drinks that are both good in taste and beneficial for their health. Functional beverages, aside from their compact structure and encouraging convenience, also have ingredients that serve to maintain one’s health and body. An amazing example would be Ultima Replenisher – a brand that sells products that are vegan, non-GMO, Keto, Paleo, and free from soy and gluten. They sell drink powders that are hydrating and has electrolytes just most leading sports beverages but without the sugar.
There were just under $130 billion in global functional beverage sales last year. TechCrunch reports that by 2030, that figure will reach $279.4 billion, representing a growth of nearly 9% per year. Due to consumer consumption of flavored tea and coffee, the coffee and tea segment is expected to see the highest CAGR of 16.2% during the forecast period.
Healthy Snacks
A number of better-for-you F&B CPG brands take healthy up a notch to make normal, daily knick-knacks to eat on the side, and it’s working. Looking at the market, people are now slowly trying the healthy route – to equally make it fun and interesting. There’s a real lot that brands can play with this concept especially when snacks can be a delight at any age.
From 2022 to 2030, the global market for healthy snacks is expected to grow at a compound annual growth rate (CAGR) of 6.6%.
Guilt-Free Desserts
Another great way to push forward the healthy movement is to turn guilt-free goodness into desserts. There’s a rising trend in flexitarian diets – a mix of vegan and vegetarian foods. Brands that specialize in this product category rely on the innovations of new products and wider ranges to potentially acquire more new customers, enlarging market share.
Desserts have been a discussion over health-conscious individuals, whether they’re ever healthy or not entirely. The thing is, desserts that are consumed on a daily basis can be healthy but in moderation. Desserts can be blinding and a bit tricky to limit especially when they’re THAT yummy – that’s when it becomes unhealthy. That’s why brands have now thought of a way to provide consumers a guilt-free route where they don’t have to be so limiting of the amount of desserts they’ll intake such as products that steer away from artificial sweeteners, flavors, and ingredients that contain high calories and added sugar.
According to a report published in 2020, the global guilt-free desserts market is worth USD 909.7 million. During the forecast period, the valuation of this should increase at a rapid rate if the CAGR is calculated at 7.3%.
The question in line for now is what drives the growth of these products in the market? This can enable brands to identify useful growth opportunities in order to formulate ideas that their competitors may have failed to see or project.
Magnifying Better-for-You F&B CPG Opportunities
Taking a close look at what’s driving the demand for these products is the massive shift of people considering healthier options. As the pandemic hit, numerous people had been very health conscious – whether it’s with the food that they eat or the activities that get their bodies in shape and well-protected from diseases.
The green movement is not only limited to their personal health but also globally in terms of improving Mother Earth. Studies show that having a healthier diet prolongs the sustainability of the environment, further improving climate change conditions. These range from people patronizing metal or paper straws to brands that have biodegradable or compostable packaging, and down to consumables that are all-natural. These have become trends over the years and many businesses, even outside the better-for-you F&B CPG industry, are jumping in because of the seen advantage of this movement.
Rationalizing this into feasible joint strategies, better-for-you F&B CPG brands must provide valuable insights that could tie in to their brand and their purpose, tapping into the emotions of their audiences. This includes making use of channels that could feature the product benefits and how that can potentially impact the environment and the community. Brands must also encourage people to learn more about the benefits and influence them to join in on advocacy-driven activities.
Aside from the heightened awareness of health benefits, convenience is one of the main drivers of the said product categories. People want something to nibble on that’s very handy and that’s on-the-go. A crucial factor for drilling this down is pinning a brand’s right target market. Profile demographics may enable brands to see a heightened preference of packaging and containers that are practical and potentially, recyclable. Convenience also coincides with accessibility. During the start of the pandemic, consumers have shifted their means to purchase online. Most better-for-you F&B CPGs traditionally put their products on the shelves in grocery stores and supermarkets. But because of e-commerce platforms, this has empowered consumers to buy products in the comfort of their homes or even outside, whenever and wherever they want. Better-for-you F&B CPG brands must consider growing their efforts online that will lead customers into their e-commerce pages and drive sales.
Ultimately, the bottom-line here is identifying what is it that better-for-you F&B CPG brand customers desire? What are their aspirations, challenges, and goals? Consumers nowadays, dictate the market and its direction. Better-for-you F&B CPG brands must be able to collect these valuable insights in order to craft products, innovate ideas, and communicate messages that can help their customers fulfill what they want to achieve and bring down obstacles that can hinder this progress. The better-for-you F&B CPG space has room for growth in order to resonate with more people to be healthy, make the right choices, and help the environment in a more grander scale — further making them the norm of consumer choices.
Preferences have shifted and opportunities have been paved. With the rising demand for the healthification of food and beverage products tied in together with the higher desires of consumers to upgrade their lifestyles, it’s high time to leverage these into brand strategies that can transform brands and the community.
