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2 key trends to watch in 2019

Presence Marketing’s Tracy Miedema talks about the two key trends she sees leading the way in 2019: Keto and CBD.

As the Vice President Innovation and Brand Development at Presence Marketing, Tracy Miedema keeps a keen eye on the marketplace. Presence is the largest natural and organic food broker, so it’s imperative that she and her colleagues stay on top of trends. Although she admits she might sound like a broken record, two key trends are on her mind for 2019: CBD and Keto.  

CBD: From "banned" to brand

With the Farm Bill signed off on, hemp finally can move forward in the marketplace after having its status as a controlled substance removed. While companies and entrepreneurs were once wary to enter this space, not knowing if they were treading in potentially illegal waters or not, now Miedema says, there is a very large number of companies ready to jump into this marketplace. “No one that has become interested in this space in 2018 is sitting on the sidelines. They are getting buttoned up and ready to hit send on these brands. We are going to see a vast myriad of CBD brands in the tinctures, oils, capsules and other supplement delivery systems, along with pet care, body care, beverage and snack products—they all are going to literally come flooding in like a tsunami.”  

Not surprising given that the Brightfield Group (which tracks data on the cannabis industry) is forecasting that this could be a jaw dropping $22 billion business by 2022. Others, says Miedema, are estimating it to be more like a $6 to $10 billion business. Either way, she says, “If you look at Spins data today, which is not even where the majority of product is moving in the natural channel—the majority is in the mom and pop stores that don’t report into Spins—it is already north of $40 million, which has surpassed baby food.” In other words, says Miedema, CBD has had a tipping point even before the descheduling language hit the Farm Bill.

While there are entrepreneurs who are actively in this space, she says leading brands are also investing. A looming question, however, lies in integrity and transparency in supply she says. “People who are sophisticated are grappling to make sure there is integrity and transparency in supply. Sourcing and extraction methods are key. There are a range of extraction methods. There are companies that are being extremely careful about sourcing and there is even a hemp verified seal that is developing. But that doesn’t validate the location of the source, things like GMOs or the extraction method.”

With the market and its opportunities still a bit like the wild west, Miedema says, sophisticated companies know they need to build from the ground up to be impervious from a regulatory standpoint (even with illegal status removed, the FDA still regulates products). They also know, she says, that consumers have been reporting benefits in several key areas, including anxiety, sleep and pain. “We also know that the demographic makeup of who is using CBD is really starting to broaden. It is no longer relegated to cannabis friendly people but migrating to the CBD curious. People who are looking for alternatives who live with conditions or are treating their conditions with pharmaceuticals.”

The Industrial Hemp Research Pilot Program, which has been a government-backed, fully regulated, research and development program has helped some products get off the ground she says. “Not every state has participated but it has provided a legal framework for hemp-derived products in the market today.” But the real problem has been that as long as CBD was attached to marijuana, many retailers and distributors have remained risk adverse, waiting to see what would happen.

Now, as the gates open, food and beverage can serve as a gateway for consumers that felt nervous about CBD, says Miedema. While questions about potency remain for food and beverage, the verdict or the brands that will win are the ones that will prove to work, says Miedema. At the same time she says, “It will take careful treatment to come up with products that are not shelf stable or highly processed.” She adds, “Processing will just break down the ingredients and then it’s just fairy dust and there is a risk of it coming across as gimmickry.” She adds, “There will be a lot of gimmicky stuff and impurities, and hopefully the best brands with the integrity will rise to the top and there will be a sifting out of products that don’t have potency or don’t work.”

Keto's good energy

Keto products—those based off the Ketogenic Diet and which contain low-to-no carbs and sugar and are high in good fats and protein—says Miedema, have yet to reach their full potential. “Right now there is more demand than supply for keto products. Consumers are absolutely clamoring, so products that are available online can become overnight run away successes. Retailers are deviating from category reviews to do a one-off look at keto products,” says Miedema. And, she says, it’s not because millions of people are adhering strictly to keto’s 20-30 grams of carbohydrates a day, it is because they are finding benefits with a major caloric shift away from carbohydrates to healthy fats.

With this success, the consumer mindset is shifting as people realize healthy fats are really a super fuel in a way that the Atkins Diet wasn’t able to help people understand, says Miedema. In this marketplace, Miedema says, it’s not about following keto religiously, like some cross-fit enthusiasts follow the Paleo Diet, rather people will dip in and out of this diet. “Generally there are three types of fuel: proteins, carbohydrates and fats. Protein is still winning in a big way, but with keto, protein levels are slightly moderated and people are understanding that fat doesn’t make you fat and are seeing immediate results around their waistline when they cut down on carbs.” Consumers, says Miedema, are eating more fat than they at one point thought was reasonable and are feeling satiated and satisfied as it burns slow and strong. “Healthy fats don’t give you the ups and downs of carb spikes.”  

In traditional categories, Miedema says, she continues to see things like whole milk and whole milk yogurt be on an upward trend. “Full-fat, low-sugar categories are trending very well. Similarly, categories that are high sugar and nutritionally low are not fairing as well.” Miedema is just starting to see keto appear in bars, a category, she says, which is ripe for transformation. “It’s a wall of carbs. There is a lot of really cool stuff that will be hitting the market in 2019 that starts to diversify the nutritional profile in the bar set.”

In addition, as consumers look more critically at the food supply system, more enlightened consumers want transparency in their products, says Miedema. Products made with healthy fats like coconut oil, and natural sweeteners such as monk fruit or erythritol, which pair well with fats, are selling at a high ring, she notes. A typical $3 to $4 product made with these ingredients and keto-focused is selling at $9 or $10 and recognized as valuable because it’s keto, says Miedema. “Consumers understand that these products are nutrient dense and made with healthy fats instead of useless fillers.”

The way people feel with this nutritional caloric shift creates great opportunities and now innovation has stepped in with keto friendly beverages or snacks. Some brands, says Miedema, are repositioning their products because they were ahead of the curve and hadn’t called keto out in their product lines. “I recommend brands use the name right now. It may become de rigueur in the long run, but that shift in calories will transcend keto. It’s a great way to eat and people don’t feel like they are losing out. It helps weight management, mental clarity, energy and an overall sense of feeling good. Sugar is associated with brain fog and keto uses very modulated amounts of sugar. People are finding with a keto diet, they have brighter mental acuity during the day and it doesn’t take long for these benefits to show up. A week in and people are pretty sold this is working for them.”

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