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Natural Foods Merchandiser

Fermentation Farm reinvents retail

Yasmine Mason, owner of Fermentation Farm

About four years ago, a new “farm” opened in Costa Mesa, California. More of a specialty retail shop than a farm in the traditional sense, Fermentation Farm cultivates unusual crops—bacteria and yeast—to help its customers and community increase their wellness.

As far as we can tell, this is the only business of its kind. This unique retail model is really connecting with consumers—more than 150 shoppers a day, in fact—and Fermentation Farm has already expanded four times in its short history.

Undoubtedly, there is rabid interest in fermented products, as seen with the strong and growing market for kombucha. We were impressed to learn, however, how a store specializing in this unique area of nutrition created a viable business model.

Fermentation Farm was founded by Yasmine Mason, a holistic chiropractor and passionate messenger about the health benefits of the 6,000-year-old practice of fermenting foods. The fermentation process preserves foods in a rich mixture of beneficial bacteria and yeast, creating products that are loaded with probiotics and nutrients that support gut health and the immune system. Mason often uses the phrase “culinary medicine” to describe her fermented products, which sit at the crossroads of food and science.

Fermentation Farm’s layout is very unique. As nearly all products are made onsite, an immaculate commercial kitchen is a very large and visible part of the store. The products are made only with top-quality ingredients. All vegetables are certified organic, and everything is sold in glass containers.

Because many potential customers are unfamiliar with fermentation and its health benefits, Mason strongly emphasizes education in her store. All products can be sampled before purchase, and Fermentation Farm offers several classes each month both in-store and online. Each class is limited to 12 attendees so each person can participate. The company shares additional education and information with its community via regular social media updates and a monthly newsletter.

Another unique element of Fermentation Farm’s business model is that it requires membership to make a purchase. Membership is quite inexpensive, just $5 for one month or $25 for a lifetime, but it helps reinforce the notion of community and create a sense of belonging.

And just like many other independent natural products stores, a key element for success at the Fermentation Farm is its staff. Each of the 16 team members working in the store earns high praise from Mason.

Asked what advice she’d give to retailers who want to focus either on fermented products or another specialized, niche area, Mason offers these words of wisdom:

Understand local laws. If you are going to do food production onsite, be sure to learn and follow local laws. Know what is required for a commercial kitchen and ensure that you are following standards.

In her case, Mason had to teach the local health department about fermentation so that it understood the processes and storage requirements for fermented products.

Educate. Start with yourself—make sure you know as much as possible about your products and be ready to constantly learn more. Next, educate your team. This multiplies what you know and allows your business to reach more customers. Finally, educate your customers. Mason is even willing to share with her shoppers how to ferment products at home. This has not resulted in a decrease in sales; rather, it has increased the size of the community she serves and enhanced her reputation within it.

Look to grow but do so wisely. While Fermentation Farm has had four expansions, it remains in one location. Mason realizes that opening a second location would change the store’s dynamic since she wouldn’t be able to interact with customers and staff in two (or more) places like she does in one. While she is currently exploring how to go about adding locations for the future, for now, the store is adding local delivery and shipping to its service offerings.

Mason and the Fermentation Farm are another great example of a successful independent retailer finding a consumer need that aligns with her passion—and creating success.

Natural Foods Merchandiser

John Pittari: Representing independents’ past, present and future

John Pittari, president of New Morning Market and Vitality Center in Woodbury, Connecticut

If you want a colorful history of natural foods stores on the East Coast, just sit down with John Pittari. The president of New Morning Market and Vitality Center in Woodbury, Connecticut, has been immersed in the scene since 1976, when the young idealist began working among the bulk bins and grinding flour to order.

“Originally it was New Morning Trading Company, somewhat of a cooperative, but there was really only one person who had any business sense,” Pittari says. “It was an interesting beginning, but not an unusual representation of those heady late ’60s and early ’70s.

Eventually, he and his wife, Jane, purchased New Morning, kicking off a decades-long story that’s still being written. Under Pittari’s ownership, the store has grown, relocated and reinvented itself to best serve its shoppers while remaining rooted firmly in Woodbury. Natural Foods Merchandiser had the pleasure to chat with Pittari recently about his store and the industry’s past, present and future.

How did you first become interested in natural foods?

John Pittari: In sixth or seventh grade, my science teacher spent maybe one class talking about food systems and artificial colors and preservatives, and the suspected health concerns. After that, I remember sitting at the dinner table saying we needed to get General Mills and Kraft to change what they were doing. Then life went on. Then, while majoring in chemistry at [the University of Connecticut], I discovered natural foods at the Golden Harvest in Storrs, Connecticut, and that’s when a lightbulb went on: Oh, we don’t have to change the conventional, industrial food system; we can create an alternative food system.

What led you to work at New Morning Market?

JP: I had dropped out of college because I couldn’t see myself working in a chemistry lab with toxins—that was my naïve, youthful view. I worked at General Electric’s corporate headquarters for 2.5 years, and in thinking about how I wanted to live, I had a crisis of values. I wanted to leave the world a little better than I found it. My interest in the natural world and natural foods fit well with this idea, so I decided I’d like to open a natural foods store. Because I shopped at New Morning, I asked for a job there, figuring that’s how I would get my education in the natural foods industry. One thing led to another, and I was managing the store within a year. Then in 1981, the owner wanted to sell the store outright and we bought it.

What did New Morning sell in those early days?

JP: The store was maybe 400- or 500-square feet and was mostly barrels of ingredients: nuts, seeds, grains, dried fruit, dried pastas. We had bulk maple syrup, eight kinds of honey, bulk tofu that we’d pick up from Chinatown, stone-ground flour to order, and raw milk produced in Woodbury. Every day the dairy would bring in sour cream, cottage cheese, yogurt and butter made from that day’s milk. Not long after I started, we got into fresh produce. In those early days, the organic produce distribution network was also just being built.

Were there any other stores like this in the area?

JP: The amazing thing is there were dozens in Connecticut, which isn’t that big. There was this rising up of natural food stores along with the existing network of health food stores, and there was an overlap between the two. Natural food stores had this philosophy of “This is good for the world and the people, and we’re going back to the way humans are meant to eat and live.” Health food stores, on the other hand, were more like Jack LaLanne and “Eat these foods and have an active lifestyle because it’s good for you.” There were also silver bullets involved. As the industry grew, there was a bit of a clash between the two, or at least a distinction that needed to be made. A community of natural food stores developed OM, the Organic Merchants Association, to bring these like-minded business owners together.

How has New Morning grown and changed over the years?

JP: We’ve always been one storefront, always in Woodbury. But as we’ve grown, we’ve relocated and reinvented ourselves. Now in our fourth location, we’re a full-service store with a community room and vitality center. We have fish, dairy, a very large organic produce department and a full-service butcher that gets in whole carcasses from local farmers. Our foodservice department, specialty coffee bar and beverage bar are all organic. We have a phenomenal selection of artisanal cheeses and a great wellness department with the largest selection of organic and non-GMO supplements in Connecticut.

Have you had some big challenges along the way?

JP: The challenges of staying valid throughout the years have often centered around being able to handle growth. The first real crisis/opportunity was the alar scare on apples [in 1989]. This created overnight demand [for organic apples], beyond what we could meet. Then the challenge became how to navigate this—reassuring customers, securing supply and making sure the integrity of our supply was good.

Another challenge came when I knew we needed to add more prepared foods and animal proteins. We were in our second location, only 1,200 square feet, and already busting at the seams. We are very, very committed to the community in Woodbury, but Woodbury is not a bustling with development, so it took a while to find our next location without leaving town. We finally found one; added prepared foods, fish, poultry and more produce; and our sales took off.

Any times when you didn’t know if New Morning would make it?

JP: The store had always grown, until 2009, and that was a challenge in terms of perseverance. We purchased property in 2005 that we wanted to develop and spent two years going through regulations, but then we got hung up with financing during the economic collapse. We had the building partly done and had to carry it unoccupied until 2012. This was very challenging certainly for our business, but also for my ability to persevere through hardship and remain a leader.

How has the natural products industry changed since the ’70s?

JP: There is an extreme amount of funding and venture capital now, which I don’t see as negative, but it is a significant change. Overall, this rapidly consolidating food industry brings growth and opportunity that hadn’t been there before. It’s exciting that all these new brands have stories of starting in a shack, going to a farmers market and now doing millions in business. These next-gen companies are much more interested in sustainability and authenticity, although as a retailer, you still have to do your vetting.

Why do independents still matter in this age of Amazon and chain supermarkets selling organic?

JP: Independents are more important than ever because of the close, intimate, trusting relationships we have with our guests and communities. The exchanges that happen at our stores are really deep and meaningful, and that can’t be done on Amazon. Amazon says, “Look what others have bought.” That isn’t expertise—that’s artificial intelligence. But with independents, it’s not just about business transactions. These are relationship transactions, which are part of the web of life.

What is your involvement with the store these days?

JP: My role has evolved. Nowadays, because we have grown, I’m more involved with our vision and strategic plans and in the community as the public face of New Morning. Yet I’m still in the store six days a week. Right now, I’m very involved in the grocery department, and I like that. It grounds me to be on the sales floor fronting shelves, talking to customers and doing on-the-job trainings with staff to demonstrate retail excellence.

Natural Foods Merchandiser

Amplify your store’s mission with brands that support people, planet and profit for good

Brad Bartholomew Brands with values

In his book Conscious Capitalism: Liberating the Heroic Spirit of Business (Harvard Business School, 2014) John Mackey, co-CEO of Whole Foods Market, says that when launching the now-supernatural chain in Austin, Texas, he learned that when done right, business can result in “societies that maximize societal prosperity and establish conditions that promote human happiness and well-being—not just for the rich, but for the larger society, including the poor … I had become a business person and a capitalist, and I had discovered that business and capitalism, while not perfect, were both fundamentally good and ethical.”

A lot about Whole Foods has changed since Conscious Capitalism appeared on shelves. In 2017, Amazon purchased Whole Foods Market for $13.7 billion, prompting immediate changes at the shelf. Amazon gadgets such as the Echo, Echo Dot, Kindle e-readers and Fire tablets appeared among produce and Amazon Prime members got discounts on food.

While Mackey continues to serve as CEO of the brand and says he’s committed to upholding its initial values, Amazon doesn’t have the cleanest track record when it comes to treating warehouse employees well (read: impossible targets to meet and timed bathroom breaks). And rumors of watered down product standards, such as considering to stock Coca-Cola, at Whole Foods have circulated on the Internet.

Even a whiff of lessened business values can spook particularly mindful consumers from Whole Foods. And that’s an opportunity. Doubling down on your mission-based business practices can attract customers—and keep them coming back.

Magnify your mission

You likely already have some sort of in-store, community-benefit program, such as donating close-to-expiration products to food rescue organizations or incentivizing your customers to bring their own cloth bags. Stocking conscious brands across categories can amplify your efforts.

More shoppers than ever are interested in buying mission-based products as a way to live their values of protecting the environment and advocating for human welfare. Finding statistics on mission-based sales is notoriously difficult, as “mission” has numerous definitions. While on-package seals and certifications such as Fair Trade USA, USDA Organic, 1% For The Planet and Certified B Corporation can offer guidance to consumers, brands often have worthy charitable values that elevate people, planet and profit that aren’t constrained by a single certification.

That said, there’s ample research showing that being a responsible business is good for your bottom line. According to a 2015 study by Nielsen, almost three out of four millennial consumers are willing to pay extra for sustainable product offerings. Seventy-two percent of people aged 15 to 20 (also called Generation Z) were committed to buying products with a reputation of environmental or social values. People ages 50 to 64 were interested in purchasing environmentally friendly products, too. “Fifty-one percent of Boomers surveyed are willing to pay extra, an increase of seven percentage points since last year. This segment will remain a substantial and viable market in the coming decade for select products and services from sustainable brands,” reports the study.

Likewise, a 2017 report conducted by the Natural Marketing Institute that engaged more than 4,000 U.S. adults, found 58 percent would be more likely to try a product if it has a positive impact on the environment or society, and 54 percent would be more likely to buy their products repeatedly. “Consumers are also more interested than ever in aligning their personal values with the brands they buy, raising the bar for companies to clearly define and articulate their values,” reports the study. “If consumers are aware that companies are mindful of their impact on society and the environment, it positively impacts their trial and repeat purchasing behavior along with price insensitivity.”

Certifications are helpful in proving to consumers that the practices companies say they are doing are actually being done. But communicating brand story is equally important in helping consumers connect with the mission at hand. For example, Just Water, the conscious bottled water brand sold in bio-based paper and cane-sugar packaging, features an infographic on the side panel showing how the company values sustainability and community. The packaging uses 74 percent less carbon than plastic water bottles, and pays six times the municipal rate for water—indicators that resonate with shoppers.

“Our customers believe in the collective power of voting with their dollars for products that align with their personal ethos, both around sustainability and social responsibility,” says Kara Rubin, vice president of brand and product strategy at Just Water. “They opt for Just Water because by doing so, they actually make a difference for the better and they’re joining a community that’s aggregating and amplifying that positivity ... we believe a significant number of people purchase Just for the positive environmental attributes of the product and mission behind the company.”

Rubin adds that Just Water’s brand story is best told through a variety of mediums ranging from in-store signage and messaging to events, key brand partnerships and social media engagement.

Jeff Ragan, founder and CEO of the nutrition bar brand Kize, is actively working to better communicate his company’s work of supporting a school in Haiti through a free food program (Kize supports feeding 1,000 kids every day). It also builds resources such as medical clinics. He has found that videos of the company’s annual mission trips to Haiti garner online traction, and that once shoppers learn about his brand’s values, they become loyal, repeat shoppers—which helps grow his business, enabling him to have a greater impact.

“At the end of the day, this is why we started," says Ragan. "If we’re not helping people, then why do our lives matter?”

[email protected]: Truelove Seeds saves culinary legacy | Illegal pot grows tainted with lethal pesticides

Truelove Seeds/New Hope Network Truelove Seeds collage

Truelove Seeds offers a connection to culinary heritage and food justice

A community garden in Brooklyn, New York, is filled with produce that most people won’t find at their local grocery stores or even their favorite farmers markets. Marlene Wilks grows her own callaloo there, because she could not find the leafy vegetable in her neighborhood. Now, however, the organization that runs the community garden is offering varietal seeds to ensure that others can grow the produce they seek. Read more at CivilEats.com

 

Report: Most illegal pot farms tainted by toxic pesticides

Researchers and federal authorities found this year that 90 percent of illegal marijuana farms in California had traces of dangerous pesticides. One researcher discovered that carbofuran used at some grow sites is so lethal that a quarter-teaspoon (1.25 milliliters) could kill a 300-lb. bear. Last year, 75 percent of illegal farms were treated with toxic pesticides; in 2012, only 15 percent were. Read more at the Daily Democrat

 

Donated Sandpoint orchard becomes first University of Idaho organic center

The University of Idaho will open a new Organic Agriculture Center at the site of an orchard in Sandpoint, Idaho. The property owner and his family donated the 48-acre parcel and the existing office building, residence and dormitory. The center will be used for education, research and public outreach, the property owner said. The orchard grows 68 varieties of apples, including many heirloom varieties. Read more at Capital Press

 

Stamford food company gets fresh $1M from state fund

Fresh Nation, a Stamford, Connecticut, company that connects local farmers with large grocers, has received a commitment of up to $1 million from Connecticut Innovations, a publicly financed venture fund. Read more at The Hour

 

Plastic straw ban? Cigarette butts are the single greatest source of ocean trash

During the past 32 years, more than 60 million cigarette butts have been collected from beaches around the world—the single largest contaminant for the past 32 years. The plastic in the filters can take more than a decade to decompose, and they often end up in the oceans. Now, a California lawmaker want to ban cigarette filters, and he’s looking for help from both environmentalist and health care activists. Read more at NBC News

Natural Products Expo

9 reasons why you should attend Natural Products Business School at Expo East 2018

Expo East Business School

We all know that many of our best ideas aren’t created in a vacuum—they are collective and built on community. As a part of Natural Products Business School at Expo East, you’ll have the opportunity to join a tribe of entrepreneurial peers and form connections that can take your brand to the next level. On Sept. 12, 2018, we’re bringing together the best entrepreneurs, investors and experts we can find to take you on a journey to build a standout brand from ideation to impact.

Here are our top nine favorite reasons why you can't miss this day.

1. You'll hear from Kavita Shukla, CEO of The FreshGlow Co.

Kavita Shukla is the inventor of FreshPaper, a groundbreaking product she developed when she was just 12 years old that helps keep produce fresh for two to four times longer. Shukla will kickstart the day with a healthy dose of entrepreneurial inspiration by sharing how she launched an internationally distributed product with just $300 dollars.

2. You’ll learn how to identify brand vision.

Alicia Potter, founder and creative director of Faven Creative, will help you discover how to identify your company’s vision, and communicate your brand ethos to consumers quickly and effectively.

3. You'll break bread with the best.

As a part of Natural Products Business School at Expo East, you’ll have the opportunity to join a passionate tribe of entrepreneurial peers and experts with a delicious networking lunch.

4. You’ll decode the power of packaging.

Join a live conversation with a branding and packaging design firm, private equity investor and angel investor to help you understand how critical packaging decisions can help or hurt your chances of attracting investment. Learn where packaging ranks in determining investment decisions, how to choose the right pack structure and important environmental considerations.

5. You'll get a crash course on cultivating retail relationships.

Retailers are the boots-on-the-ground advocates between your brand and your consumers. How will you push a new product and fresh perspectives while helping to grow the category? You’ll join Blake Mitchell of Interact Boulder, Jeremiah McElwee of Thrive Market and Elena Rosenblum of Union Kitchen in a session that will improve your relationships with buyers and consumers through strategic branding.

6. You'll have fun!!

Natural Products Business School is built on a community of entrepreneurs, focused on learning and networking.

7. You'll make great connections.

Get your business cards ready to roll—this is your opportunity to connect with peers and experts the day before the show floor opens!

8. You'll have a world-class Master of Ceremonies.

New Hope Network’s senior food editor Jenna Blumenfeld will MC Natural Products Business School, and will likely tell hilarious jokes … not that the author of this article is biased or anything.

9. We're almost out of seats! Reserve yours today.

To ensure the best balance between connection and learning, we try to keep the room at a cozy size. We hope you'll join us!

What: Natural Products Business School (sponsored by 301 INC and Moss Adams)
When: 7:30 a.m.-4:30 p.m., Sept. 12, 2018
Where: Hilton, Key Ballroom 7/8

[email protected]: Food fight starts in Missouri | Hodo’s tofu lands in Whole Foods

Thinkstock/nito100 plant-based beet burger

'Fake meat' producers are challenging Missouri over new advertising law

The Good Food Institute, the Animal Legal Defense Fund, the American Civil Liberties Union of Missouri and Tofurkey are suing the state of Missouri for the right to use the word “meat” on labels for  plant-based and clean-meat alternatives. They are fighting a law that prohibits companies from labeling any product that does not come from a slaughtered animal as “meat.” Read more at St. Louis Post-Dispatch

 

The California startup selling America on tofu

Hodo’s organic soybean tofu, which is sold in plain cakes or as part of ready-to-eat-meals, is sold in restaurants, markets and health food stores across the country. Founder Minh Tsai began selling his organic tofu at farmers markets, then founded Hodo in 2004. Within a few days, all Whole Foods Market stores will be stocking Hodo products. Read more at Bloomberg

 

Letter from the editor: E. coli O157:H7 still threatens beef, but not so much

Massive recalls of ground beef for E. coli have been rare recently, where they were once routine. Even the recent Cargill Meat Solutions recall covered only about 25,000 pounds—“a small amount compared to what was normal in the bad old days.” The news is worth celebrating. Read more at Food Safety News

 

Food scientists create healthy probiotic drink from soy pulp

The residue from producing soy milk and tofu could become a beverage featuring live probiotics, dietary fiber and more to promote gut health, thanks to the research of food scientists at the National University of Singapore. The zero-waste product can be stored at room temperature for up to six weeks. Read more at Phys.org

 

Chick-Fil-A pecks its way into the meal kit game

Imagine going to a fast-food restaurant to purchase raw meat for you to cook at home. Chick-Fil-A customers in the area of Atlanta, Georgia, can do just that, as the chain becomes the first to sell meal kits. With five recipe choices, the company is testing the idea at 150 locations. Read more at NPR

Hain Celestial reports net loss, lower net income for fourth quarter

Hain Celestial collage

The organic and natural products company Hain Celestial reported on Tuesday that net sales for the fourth quarter of fiscal 2018 increased 3 percent from fiscal 2017, but the company saw a net loss of $4.6 million.

On a constant currency basis, sales decreased 1 percent.

The net loss is $3.1 million larger than the net loss for the fourth quarter of fiscal 2017.

After the fourth-quarter earnings were released, Hain Celestial’s stock fell 5.4 percent.

For the fourth quarter, the company’s gross margin was 20.2 percent, a 3.7 percent decrease. The adjusted gross margin was 21.1 percent, 2.9 percent lower than the previous year.

Net sales in the United States for the fourth quarter decreased 5.5 percent or $15.6 million.

The net sales decrease was due in part to the company’s earlier decision to cease the sales of lower-margin products. Over time, the move is expected to increase the gross margin. In the U.S., the company is focusing on its top 500 products.

Adjusted gross margin in the United States was 22.4 percent for the fourth quarter, down 5.5 percent from fiscal 2017. Operating income was $23.2 million compared with $42.3 million for the same time period a year ago.

“There is a tremendous—and I mean, a tremendous—amount of progress happening throughout our global organization. We believe the results of our efforts will become increasingly apparent as the rate of financial improvement and growth accelerates in fiscal 2019,” Irwin D. Simon, founder, president and chief executive officer of Hain Celestial, said during Tuesday’s earnings call.

Simon, who announced in June that he would be moving into the role of non-executive chairman, noted this was his 101st earnings call in the 25 years since he started the company. He expects the board of directors to choose a new CEO soon, he said.

“In the U.S., we faced a number of challenges during the year. Our U.S. team continues to diligently work on simplifying our business to focus on and invest in the top 11 brands and the top 500 SKUs, while continuing to execute on Project Terra SKU rationalization, cost reduction and efficiency initiatives,” Simon said.

Project Terra savings should take effect in fiscal 2019

Project Terra, introduced in 2016, is designed to cut costs and increase productivity to generate $100 million in savings. This year, the company reported a total of $63 million in cost savings, he said.

For fiscal 2019, Hain Celestial expects to see cost savings of $90 million to $115 million, said Gary Tickle, chief executive officer for North America.

“The SKU rationalization is an important component of our efforts to reduce complexity, simplify the supply chain and drive sustainable long-term margin expansion,” Tickle said during the earnings call.

Another aspect of Project Terra is price increases to offset increasing costs in transportation and warehousing, thus improving profit margins, Simon said. The impact of those price increases will begin to take effect in the first quarter of 2019.

However, company officials still expect net sales and gross margin to be lower in the first quarter of fiscal 2019 than they were in the first quarter of fiscal 2018.

“We acknowledge that our stockholders would like to see year-over-year improvement in Q1. However, we are confident we will see continued top line and profitability improvement throughout the year,” said James Langrock,  executive vice president and chief financial officer.

“We have already won the distribution, and the benefit of those distribution gains will be reflected in sales in 2019 based on the timing of when they occur,” Langrock said. “And on the bottom line, we have a detailed cost reduction plan that the organization along with Alix Partners is working intently on every day.”

Already, Hain Celestial has secured 49,000 new locations—including six major retailers and 10,000 convenience stores—to sell its top seven brands, Tickle said, including Imagine Soup, MaraNatha, Earth’s Best and Alba. The other four, which he declined to identify, could also see new locations soon.

For the fiscal year, Hain Celestial experienced mixed results:

  • Same-store sales for fiscal 2018 increased 5 percent from 2017 to $2.46 billion.
  • Net income increased $16.9 million to $82.4 million; adjusted net income dropped $3.8 million to $121.3 million.
  • Gross margin was 21 percent, 1.2 percent lower than in fiscal 2017. The adjusted gross margin fell 0.4 percent to 22.1 percent.
  • Operating income dropped $3.4 million to $106 million; adjusted operating income fell $14.5 million to $186.1 million.

Langrock said the company expects net sales in fiscal 2019 to total between $2.5 billion and $2.56 billion, an increase of 2 to 4 percent. The United States and the United Kingdom are predicted to see sales growth in the low- to mid-single digits, while growth elsewhere is expected to be in the mid- to high-single-digit range.

IdeaXchange

9 beverage industry trends for 2019 and beyond

Emily Page, Pearl Resourcing

Consumers are moving away from sugary, caffeine-laden drinks and looking for healthy alternatives that are both healthy and environmentally friendly. Increasingly, start-ups are filling the void that traditional beverage companies haven’t yet reacted to.

Emerging brands are grabbing market share at record-breaking speeds, dwarfing the traditional five-to-seven-year lead time and minimizing the usual multimillion-dollar investments behind new beverages.

These start-ups are ramping up through nontraditional sales routes such as e-commerce and promotions via social media and word-of-mouth. To compete, established brands must adapt and become more nimble.

Pete Grego, director of contract manufacturing for Nor-Cal Beverage co-packer, shared the top trends he expects to see through 2019 and into 2020.

Organic and non-GMO means regulated and guaranteed clean ingredients, and today’s consumers are willing to pay a premium for them. They don’t want boring, healthy foods, though: “treat-yourself” dessert and energy drinks are faves.

Naturally low sugar or low-glycemic carbohydrates might have started trending with the paleo and keto movements, but now there’s a widespread belief among nondieters that such ways of eating are better for overall health. Sweet low-calorie options such as agave, stevia and monk fruit are replacing high fructose corn syrup and pure cane sugar. People also prefer natural juices over synthetic or “bad for you” sugar alternatives.

Plant-based ingredients—specifically soy, pea proteins and Lentein— have grown in popularity as plant-based ingredients of choice. Ingredients such as these offer a creamy texture that can make a drink satisfying, plus they naturally add fiber and protein to the drink's nutritional value, a bonus for a busy person who can’t always sit down to eat a full meal.

Marine-based collagen, previously associated only with beauty products and skin applications, is cropping up as an ingredient in not only supplements and vitamins, but matcha teas and protein powders. Seaweed or seagrass taste better than Americans tend to believe, and they are rich in protein and antioxidants, although they can add odd green, blue or black colors to your product.

Turmeric, a rhizome similar to ginger, is known for its superb anti-inflammatory properties. This bright yellow and orange superfood is high in antioxidants, low on the glycemic index and supports an even blood sugar response associated with reduced cravings. Some people even claim it enhances cognitive abilities.

Ingredients with tart flavors, such as apple cider vinegar and hibiscus, can reduce or replace sweeteners in beverages. The tart flavor has become increasingly popular with the rise of kombucha and IPA sours. The acidity of these ingredients also helps maintain proper beverage pH, which makes meeting food safety standards easier and allows a company to market a preservative-free beverage.

Botanical ingredients—such as lavender, coriander and elderflower—add unique flavors and some are known to aid digestive health. Not all claims on botanical ingredients can be scientifically supported, but customers are eager to try something new and exotic.

Alternatives to dairy are increasing as consumers turn to nondairy milk and plant-based nutrition. Since 2012, the sales of nondairy milk have grown 61 percent. Although cow’s milk is still the most commonly consumed form of milk, nondairy milk is closing the distance. Popular podcasters and health influencers can’t stop talking about food allergies and possible digestive disorders exacerbated by milk, so adding a nondairy option to your line will keep you on trend. The most popular kinds of nondairy milk are almond, soy and coconut, although other dairy alternatives such as hazelnut, pecan and flax milk are also becoming more popular.

Cannabidiol (CBD), one of the compounds found in cannabis and hemp, is the hottest trend in beverages right now. Researchers have long been interested in the therapeutic uses of CBD, which does not include enough THC—the compound that gives marijuana its mind-altering effects—to cause euphoria. Proponents of CBD tout its potential in treating a wide range of ailments including epilepsy, chronic pain, anxiety and even the side effects of cancer treatment. However, many medical experts caution that more research is needed to ascertain CBD’s uses and side effects.

While CBD is not intoxicating, its legality varies by source and from state to state. And even source distinction has caused confusion for some enforcement agencies.

CBD is appearing in cold-brew coffee, tea, beer, lemonade and more. Manufacturers claim that CBD beverages will provide “functional chills,” “natural” ways to destress, and strong but mellow buzzes. If your state allows the use of CBD, be aware that emerging brands using this ingredient are seeing their sales heat up.

Knowing the latest trends will help you orient your product in the market, keep an eye on your competitors and stay abreast of any wide-reaching changes in the industry. If your company isn’t capitalizing on these trends, it’s not too late to begin considering them.

Emily Page, CEO of Pearl Resourcing, has managed and launched multiple seven-figure brands in Costco, Williams-Sonoma, Kroger and Amazon.

[email protected]: Whole Foods attracts Prime members | McCain understood climate change

Whole Foods Market's flagship store in Austin, Texas

Amazon’s Whole Foods is starting to steal Trader Joe’s shoppers

Discounts for Amazon Prime members attracts customers to Whole Foods Market stores, but the online behemoth has yet to disrupt the $800 billion grocery industry, reports Sense360, a Los Angeles, California-based research firm. CEO Eli Portnoy says the company’s findings show that Amazon’s 2017 purchase of Whole Foods will, eventually, have an impact. Read more at Bloomberg

 

John McCain was an American climate hero, too

U.S. Senator John McCain, who died Saturday, was perhaps the last conservative official who believed conservation is important and that human activity causes climate change. He began looking into the issue after his failed presidential campaign in 2000. In a 2008 speech, he urged Americans to stop arguing and start acting to mitigate climate change. Read more at Grist

 

Farmworkers are dying from extreme heat

Farmworkers who are exposed to extreme heat while picking vegetables or spraying pesticides are at risk of developing heat-related illnesses that, if not cared for, can kill them. Nearly 70,000 workers suffered serious heat-related injuries—often damaging their kidneys and brains—between 1992 and 2016; 783 of those workers died. And that only counts the ones we know about, as undocumented immigrants are less likely to seek medical help. Read more at Mother Jones

 

Meat group seeks regulatory compromise on cell-based meat

The U.S. Food and Drug Administration and the Department of Agriculture should share the job of regulating cell-based meat companies, the North American Meat Institute and Memphis Meats said. Their written request, sent to President Donald Trump on Thursday, pointed out that both agencies “have roles to play in regulating cell-based meat and poultry products.” Read more at DTN The Progressive Farmer

 

Bye-bye vegan, hello ‘plant-based’

Companies trying to attract American consumers who want to eat lighter fare are scrapping the term “vegan” for the less-polarizing “plant-based” description. Even Impossible Foods urges restaurants to avoid using vegan or vegetarian on their menus. “Plant-based has a more positive connotation because it explains what is in a food,” said Michele Simon, executive director of the Plant Based Food Association. Read more at The Columbian

Natural Products Expo

'Just take the first step,' advises Expo East's Natural Products Business School keynote speaker

Kavita Shukla, Freshpaper

It’s rare that a middle school science fair innovation can launch a young inventor on a lifelong path of world-changing entrepreneurship. But if there’s one thing you should know about Kavita Shukla, this year’s keynote for Natural Products Business School at Expo East, it is that she’s anything but ordinary.

Shukla started developing her flagship product FreshPaper when she was just 12. She was inspired by a homemade beverage her grandmother gave her to stave off waterborne illness, and thought the special combination of spices in the drink could inhibit the growth of common bacteria and mold on fruits and vegetables.

Her hunch was right.

Infused with organic spices, when placed in your refrigerator drawer, fruit bowl, berry carton or salad bag, FreshPaper keeps food fresh two to four times longer. Like a dryer sheet for your produce, each compostable, maple-scented sheet lasts for a month, and is designed to reduce food waste.

Shukla’s invention has received international acclaim. The recipient of the 2013 INDEX: Design To Improve Life award (the world’s largest prize for design), Shukla is now helping to get FreshPaper into organizations that need it most—food banks, where extending the life of almost-past-their-prime fruits and vegetables for even a couple days can make a big difference. Such work has placed her on Forbes’ “30 Under 30” list. She was also named to TIME Magazine's "5 Most Innovative Women in Food."

Here, learn more about Shukla’s entrepreneurial journey, and how she hopes FreshPaper can drastically reduce food waste across the globe.

Do you have a business philosophy? How did these principles inform your decision to launch FreshPaper?

Kavita Shukla: Our mission is “Fresh for All”—we believe that fresh, healthy food should be accessible and affordable for everyone. FreshPaper actually began as my middle-school science project, inspired by a home remedy that my grandmother in India once gave me to drink. 

As a child, I wanted to build a non-profit to bring FreshPaper to the developing world. I created FreshPaper for use in communities where refrigeration was not an option (over one billion people live without access to electricity). After several years of trying and failing to get my idea off the ground, I finally brought a handmade batch to my local farmer’s market. I was amazed by the response—I started to realize that reducing food waste was a universal need, and that we could build a social enterprise to scale the technology and make it more accessible for all. 

What do you attribute to the success of your business? 

KS: We started with $300 in paper-making supplies—we had no funding and no experience. What began in my grandma’s kitchen sparked a movement that took me and my simple idea to places I could never have imagined. 

Within a few months of that first day at the farmers market, we were shipping wheelbarrows of FreshPaper across the country from our tiny local post office (sometimes making it shut down for hours)! In less than two years, I went from worrying about if my credit card would be declined while buying paper cutters at Staples to worrying about how to make millions of sheets to meet the demand worldwide.

Today, FreshPaper is on the shelves of retailers across the globe from Whole Foods to Walmart, and available in over 180 countries.

Our unlikely story was made possible by all those along the way who, when I was ready to give up, showed up to take this idea one step further. From my high school teacher who believed that this idea was more than just another science project, to our earliest supporters at the farmers market who started a grassroots movement that took FreshPaper global. At every step, when we least expected it, someone took a leap of faith to support us.

Chris Durkin at the Harvest Co-op in Cambridge, Massachusetts, was our very first retail customer. Tony Russo, a third-generation farm stand owner showed us how to build a business from the ground up. Bill McGowan from Whole Foods looked at my handmade sheet of FreshPaper and saw its potential as a consumer product even before I did. I still think about how those moments changed the trajectory of this idea.

Running a business in the natural industry can get pretty gritty. What keeps you going when the going gets tough?

KS: Not a day goes by when I don’t think about how all of this almost didn’t happen at all. 

Although as a child I really believed that I had discovered something that could help millions and take on global hunger, as I grew up, my mind started to tell me that I would never be enough to bring my invention to the world. Like many young women, I kept hearing that I needed more money, more degrees, more experts on my team—more than I had and more than I was. 

Standing in the farmers market that first day, sharing my idea, I began to overcome my own doubts, and the entire narrative of my story shifted. 

Entrepreneurship is all about persistence and showing up. Even on the really tough days, I try to remember how that first day at the farmers market changed my life, and that showing up and taking another step forward, no matter how small it may be, is the most important thing that any entrepreneur can do.

What are the most pressing problems in the food industry today, and where do you see opportunities to mitigate these issues?

KS: Today, despite all the technology we have, a third of our world's food supply is lost. While the world's farmers harvest enough to feed the planet, 800 million people go hungry every day, and over a billion people live without access to refrigeration.

Simple, sustainable innovations that address the massive global challenge of food waste can make a huge impact in the food industry by reducing the tremendous water, energy, land and human costs associated with food waste.

What excites you most about participating in Natural Products Business School at Natural Products Expo East?

KS: I love meeting other entrepreneurs! I can’t wait to meet everyone and hear stories of what inspired them to bring their ideas to the world.

What's your biggest piece of advice to entrepreneurs just entering the natural industry?

KS: Just take the first step.

And because most folks attending Expo East are doing so due to a deep love of food, if you had to choose one food to eat for the rest of your life, what would that be and why?

KS: Bananas! I think they are the perfect food.

Before my first live TV appearance on HSN, I was so nervous I couldn’t eat anything. My mom told me to eat bananas, and I had an amazing day. So now, when I’m in the studio I survive almost entirely on bananas. I just did a 24-hour live TV marathon fueled by bunches of bananas!