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KANSAS CITY, MO — Consumers are likely to put their money where the health halo is. According to The Hartman Group’s Future of Food 2021 report, people are willing to pay a premium when a product claims certain wellness attributes.

The International Food Information Council’s 2021 survey found that of the health benefits consumers are seeking out, weight loss and weight management, energy and less fatigue, digestive health, and heart and cardiovascular health top the list. Immunity-boosting also remains a driving force with 61% of consumers using food as a remedy to treat or prevent a condition according to Hartman Group data.

A plant-based diet is one popular path consumers are taking to support their wellness goals, but it’s not just for vegetarians. According to Hartman Group, 48% of all consumers look for products labeled plant-based, but only 8% of all consumers identify as vegetarian. Taste and discovery, health and wellness, sustainability, and ethical reasons are among consumers’ top motivators for seeking out plant-based products.

Banza’s high protein plant-based pizzas, Seconds’ upcycled crackers featuring carrot pulp and Renewal Mill’s cookie collaboration with vegan company Miyoko’s Creamery are just a few examples of recent innovations in the space.

“We’re starting to see protein claims in the baked goods aisle, and that really shows what a prominent trend it is,” said Jonna Parker, principal for IRI’s Fresh Center of Excellence.

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She also pointed to the impact of the low-carb, high-fat keto diet. According to IRI data, more Americans are following the keto diet than vegan and vegetarian diets combined, and The Insight Partners market research firm projects the global keto market to reach $15.3 million by 2027.

Recent keto-friendly launches like Carbonaut’s keto bagels and Birch Benders’ ready-to-eat keto cookies suggest the trend has staying power.

But whether it’s keto, Whole30, paleo, vegan or otherwise, Hartman Group data indicates that instead of following any diet to the letter, consumers are taking key tenets from different philosophies and applying them to their lifestyle to meet their wellness objectives.

It’s also worth noting that clean labels are top of mind for consumers, with 75% saying they look for foods and beverages that contain only ingredients they recognize (up 6% since 2019).

“A label with recognizable ingredients connotes quality,” said Shelley Balanko, senior VP at The Hartman Group.

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Wellness attributes aren’t the only thing driving consumer behavior and spending. Foods that carry a culinary distinctiveness — artisan breads, for example — are also worth the premium price.

The enthusiasm home cooks found for baking sourdough has eased since the pandemic’s early days, but it may have spawned a deeper appreciation of what goes into the creation of high-quality baked goods — which could very well factor into future purchasing decisions.

Occasions where “price is no object” rose 9 points to 41% in 2021 vs. 32% in 2019 per Hartman Group as consumers place more value on elevated experiences.

Many shoppers, especially millennials, parents and those with higher income levels, significantly value unique offerings and flavor profiles. For CPG companies, Parker said it’s important for brands to tout their uniqueness and quality both in packaging and marketing.

“Words like ‘brioche-style’ speak to ­attributes that the consumer perceives to be premium from a taste standpoint,” Parker said. “We’ve also seen that with things like Hawaiian sweet bread, potato bread, all-butter croissants … these descriptions sound so decadent you could taste them. It’s a cue that it feels special and is something people are really starting to gravitate toward.”

At the American Bakers Association’s 2022 Annual Convention in March, Joe Turano, president of Berwyn, IL-based Turano Baking Company, spoke to this notion when it comes to premiumization and the opportunities he sees for innovation.

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“I think consumers have had time now to really understand food in a more intimate way, especially being at home, cooking themselves more, baking more, and I think consumers want to be more adventurous,” he said during a panel on bakery trend in foodservice. “From a food service standpoint especially, we have to be ready and willing to create, develop and implement high-quality, ingredient-driven food and baked goods.”

Environmental and sustainability practices also have a big impact on the perception of quality, which is something that’s particularly important to younger consumers. Mintel indicated that 58% of Gen Z consumers buy from brands that share — and act on— their values.

As such, Balanko pointed out an important value shift — one from “me” to “we” — that’s taking place. According to The Hartman Group, 30% of consumers said they purchase sustainable products because they are better for “me and my family,” citing health benefits, better taste, etc., while 70% said they did so because they are better for others like the environment, communities and workers.

Balanko suggested that when developing new products, bakeries and snack producers should think about prioritizing ingredients first, rather than making them an afterthought. That includes sourcing and production considerations.

“Companies should ask themselves, ‘Where can we make a difference in the world?’” she said. “‘How can we contribute to the local economy? The community? The environment?’ Start there, then use technology and innovation to support those aims.”

According to IRI, 40% of consumers will look for sales and deals when faced with higher prices for baked goods, but steeper costs won’t significantly curb their purchases. Given the growing income disparity, both the value and premium ends of the consumer spectrum should be considered for innovation.

“Inflation is a key driver impacting consumer behavior in the near-term,” Parker said. “But as it continues, we still have to do some kind of creative promotion to get folks to pick specific items. The role of price promotion is important, but even more so, the only other lever we have as marketers is innovation.”

This story has been adapted from the June | New Products Annual 2022 issue of Commercial Baking. Read the full story in the digital edition here.

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