All the digital forces that are influencing food trends

Richard Yao
Jan 24 · 12 min read
Image courtesy of Daily Harvest, one of the D2C brands disrupting the food space.

The food industry is going through an interesting time, with multiple intersecting trends that are working together to change how and what Americans choose to eat.

Similar to other industries disrupted by digital upstarts, the food industry is also being reshaped by Amazon and Instagram across the value chain, along with a rising number of direct-to-consumer (D2C) brands popping up in the space. These new entrants emerged in response to a growing need for wellness-oriented food products, partly born out of the influencer culture. And as digital healthcare and wellness continue to become commercialized products, wearables and smart kitchen appliances are set to reshape the way we think about meal planning and grocery shopping. When you can get all kinds of the food you want right from your phone, the line between food delivery, grocery shopping, and home cooking starts to blur and merge into one unified experience.

We’re now choosing a data-driven, lifestyle-based approach to eating. Lifestyle brands seek to inspire, guide, and motivate people, and their consumption reflects how a consumer chooses to live the rest of their life. Responding to these trends and their market implications, the food industry is quietly undergoing a rebranding as it aims to elevate the often casual choices of food to become part of a meaningful lifestyle.

This gradual behavioral shift may not seem apparent now, but given time, its implications will start to show across multiple industries such as agriculture, CPG (the food & beverage sector), grocery retail, and restaurants. Let’s take a look at these trends one by one and explore how they intersect and influence how consumers are choosing to make food a lifestyle, not only nutritious, choice.

The Digital Forces behind Healthy Eating

There is no denying that health and wellness-oriented eating is becoming a big trend in the food space. Granted, government-led campaigns to get people to eat healthier food have been going on for decades, usually as a response to the high obesity rate in the U.S. that just keeps climbing. Former FLOTUS Michelle Obama was widely recognized for her Let’s Move campaign against childhood obesity. But in recent years, things felt a little different, for the healthy eating movement no longer feels top-down, led by regulatory bodies looking out for public health. Instead, the demand feels bottom-up as part of the booming wellness economy that aims to turn “being fit” as a new status symbol.

Source: Instagram

As with the spread of $4.2 trillion-and-counting wellness economy, social media and the rise of influencer culture has spread awareness for healthy eating. The fact that many celebrities have also jumped in on this trend with their own fitness and wellness products in recent years is a testimony to how widespread this phenomenon has become. Suddenly, what you eat is no longer just about what food you enjoy; it has been rebranded as a lifestyle choice that defines what kind of person you are, such as the wellness gurus and #EatClean influencers that dominate social feeds.

Studies have shown that Instagram can contribute to negative body image, motivating consumers to follow diet and fitness influencers for the latest paleo or carb-free tips. And consumer demand drives branding and products — “superfood” and “organic” are today’s “sugar free” and “low carb”. And it’s not stopping anytime soon: Technavio analysts forecast the global health and wellness food market to grow at a healthy CAGR of around 6%, with an incremental growth of over $280 billion in market value from 2017 to 2022.

Aside from the influencer culture driving consumers to healthier diets, the rise of fitness wearables and digital healthcare options are making consumers more acutely aware of what’s going into their body. The cheaper fitness-oriented wearables flooding the market are giving, consumers easy access to devices that can track their health and quantify the results of their workouts into calories burned. This naturally increases consumers’ attention towards monitoring nutrition and calorie intake, and a whole crop of nutrition-tracking app popped up to help people monitor their food intake.

Granted, that nutrition information is labeled on back of CPG food packaging, but people don’t usually bother to check when they are busy getting groceries. But now, with all the digital tools available to track everything for us, obsessing over what kind of food we choose becomes just a little easier, as those devices and apps remove the friction of calorie-counting. Premium salad chain SweetGreen, for example, integrated its app with Apple’s Health app so that when users orders something via its app, the total calorie count of that order is synced to their personal database in the Health app.

For now, most nutrition-tracking apps still mostly rely on self-estimation for cooked meals, but we are already seeing early indications of how visual search can help with nutrition tracking. For example, Nestle’s Wellness Ambassador program, currently live in Japan, does this for users based on the photos of food they send via messaging app Line, but it still requires to human coach to make the recommendations. Perhaps one day soon, there will be a reliable visual search tool that will tell us exactly how much calories are on our dinner plates, thus further removing the friction in calorie counting and nutrition tracking. .When so much of what we eat is becoming easily trackable and quantifiable, it is no wonder that a lot of people have started to change their diets.

Responding to this growing trend of bottom-up healthy eating, food brands are picking up wellness-oriented branding. Adopting a wellness trend that first hit the beauty market, food brands are coming out with beauty-boosting products and experimented with new packaging design that either emphasizes the health benefits over flavor or ingredients, or lists all the (healthy) ingredients in a clear, bold font. Some food incumbents like General Mills have launched new wellness-focused brands that bury their affiliations with the parent company, so as to promote them as some unknown healthy food upstarts that borrow the aesthetics of D2C brands.

Moreover, the arrival of brain-enhancing supplements like Nootropics, numerous meat alternatives that are gaining mainstream traction, as well as the rise of CBD-infused food are all emerging trends in this ongoing lifestyle rebranding of food that will bring new opportunities in treating food as a recreational product. After all, food consumption is not just about nutrition and energy. It is also about the joy and the experience of eating. Embracing the multitude of food is one way that food brands could successfully transform themselves into lifestyle brands.

Speaking of meat alternatives, the vegan/vegetarian diet is perhaps the O.G. example for food-as-a-lifestyle, it is easy to see that plant-based diets are on the rise. Part of it (some would argue most of it) is due to the growing demand for a healthier, more balanced diet, but it is hard to deny that the growing environmental consciousness among people, especially the younger generations, also played a part in the growing efforts to reduce meat consumption. Food production plays a big part in we use natural resources, and a plant-based diet is proven by studies to be more environmentally friendly than one based on animal products. The vegetarian movement used to be more of an animal welfare issue; now it is about saving the earth.

This rebranding of the vegetarian lifestyle is breathing new lives into the food market, with many legacy players looking to meat substitutes as the next growth area. Within the last few weeks, Aldi launched their own private label plant-based burger while Costco started rolling out Don Lee Farm’s vegan burgers in 15 global markets. Nestle is also preparing to launch plant-based protein products, and Beyond Meat is now a $550 million brand as it partners with Carl’s Jr. to add its meatless burger to their menu. All these recent moves to bring meatless products to more consumers is a testimony to the growing demand for alternative protein sources. It is also the best evidence that most food brands are becoming, at least partially, lifestyle brands that cater to the personalization demands of vegans and vegetarians.

The Personalization of Food

Fueled by the growing healthy eating and quantified self movement, there is strong market demand for personalized diets, tailored to our individual dietary preferences and even genetics. For example, Habit is a startup that promises to create unique “nutrition blueprint” for its customers based on their genetic testing. Then the company pairs them with a nutrition coach and sends custom-made meals, each containing an individually optimized ratio of carbs, fats, and protein, straight to their home. Most meal kit services and restaurants now offer vegetarian and vegan options, with some even catering to specific diets such as gluten-free diets or paleo diets. Food allergy and food intolerance are also a high-priority consideration, as many dairy alternatives also popping up in the market. Personalizing your diets according to your lifestyle has never been so easy.

According to Gallup’s data, sales of plant-based food grew 8.1 percent in 2017 and exceeded $3.1 billion last year. But it is not necessarily that the vegetarian market is growing — the number of self-identified vegetarians has remained steady around 5% of total U.S. population for the past two decades — because this is not about getting people to give up on meat products completely. Rather, it is about offering them on an alternative that they can flexibly personalize their meals with. After all, personalization requires options, and those plant-based products offer an alternative to the existing options for protein.

In addition, the explosion of on-demand food delivery services and fast casual restaurants is also catering to the shifting lifestyle needs of the urban populations. You can now personalize whatever you eat with just a few taps of buttons, or you can choose to get the ingredients delivered to you as you choose. According to a recent New York Times report, more than a third of adults in the United States patronize fast-food restaurants and pizza parlors on any given day. It is clear to see that the convenience of getting food is key to a lot of people‘s busy lifestyle, and that is another big area in which food brands should offer personalization.

Moving forward, the biometric data that our wearable devices and advanced sensors collect could be used to further enhance the personalization of food. In March 2018, a team of researchers from Tufts University School of Engineering developed a wearable sensor small enough to stick on a human tooth virtually unnoticed. Remarkably, it’s capable of wirelessly transmitting data on any chemicals it comes in contact with, which means it could be used to track what you’ve been eating, drinking, and smoking. Now imagine that paired with a digital assistant that knows who you are, which restaurant you like to frequent, what grocery items you usually put on your shopping lists, and what food your body is genetically unfit for, suddenly you have a very data-driven lifestyle that monitors and guides you to the food that is “right for you,” all in the name of hyper-personalization.

The Amazon Effect, Enhanced

As we pointed out in our analysis of rising consumer control in food retail (grocers and food services), the rise of private label products and D2C food brands is giving the traditional food brands a run for their money by going directly to consumers, by virtue of being owned by the distributor or via owned online and social channels. Responding to the healthy eating movement, the private label products found on Amazon adopt the same wellness-oriented branding found with the D2C brands, and they are quickly changing consumer expectations around food quality and price.

As is happening in many other industries, major tech companies like Amazon and Uber are disrupting the food value chain by taking control of the various integration points from point of sale to distribution to product development. Amazon and Alibaba, for example, are both leveraging their dominance as the primary ecommerce platform (in the U.S. and China, respectively) to control CPG points of sale and expand into offline grocery channels (Amazon Go and Whole Foods for Amazon; Hema stores for Alibaba). Meanwhile, companies like Uber are aiming to disrupt food delivery with UberEats, as it comes out with a paid restaurant ranking system incentivized by discounts and freebies and a new loyalty program that rewards both spending on rides and take-out orders, essentially playing both sides of the market.

The ripple effect of Amazon’s blockbuster acquisition of Whole Foods is still playing out in the food industry, with many established food retailers doing their best to update their in-store and online shopping experience. While brands like Kettlebell Kitchen and Daily Harvest leverage ecommerce-optimized branding and packaging design, social media targeting, and optimized sales channels to appeal to modern food shoppers and bypass the traditional sales channels, most traditional food brands are still seemingly content being tied to the physical confinement of shelf space placement. Although all the major food brands operate their own websites, many don’t actually sell their products through them, but instead tend to outsource ecommerce operations to their retailer partners and, in some cases, Amazon.

For Amazon, the fact that many food brands willingly sell their products online via its platform is not only a great testimony to its aggregating power and strong customer base (it is where half of all U.S. online shoppers start their shopping journey, after all), it also provides Amazon with an underrated competitive advantage in the data it collects. Amazon gathers valuable insights on sales trends and shopper behavior from the data on brand performance on its site, which it funnels into design and marketing for private label, making those products even more competitive..

As if that wasn’t enough, Amazon is also testing a new program that allows CPG brands to send free product samples to potential customers in hope of converting them into a fan. The sell for brands is that because potential consumers are targeted with samples based on their purchase history, conversion rates are bound to be higher than traditional sampling. This underscores Amazon’s strength as an aggregator: they leverage their immense pool of data to offer an effective new marketing tool to CPG brands who are eager to harness the consumer shopping and intent data that Amazon holds, while also generating more data for Amazon to figure out exactly what its customers like. And this way, Amazon is able to aggregate data from all the campaigns, as compared to the few campaigns that individual brands would collect data from themselves.

Similar to Amazon, D2C brands are able to capture interesting behavioral data on their consumers that are currently unavailable in most brick-and-mortar settings, which they can use to deliver more personalized consumer experiences, refine product strategy, and build long-term loyalty. In addition, going directly to consumer first can dramatically enhance the chance of success when these brands expand into brick and mortar retail, because they’re not bogged down by traditional 3rd party selling models and have the data to make better retail decisions from the outset.

Furthermore, Amazon is also looking to conquer the food market by conquering the kitchen. As various smart home devices, such as Echo speakers and the Alexa-powered AmazonBasics microwave oven, start to infiltrate the kitchen, they create new digital touchpoints that offer Amazon a chance to learn more about their customers and their food and cooking habits. And the more Amazon learns about them, the better Amazon can reach them with value offers and services. By controlling the future interface of the kitchen, Amazon would be able to heavily influence what kind of food products consumers buy when they get used to simply asking Alexa for a healthy recipe or add some beef patties into their shopping cart. If that happens, Amazon would become the platform where food brands will have no choice but come on board as a commoditized supplier if they wish to reach an Amazon household.

What Brands Can do

To fight for their rightful places in the digital kitchen, food brands are starting to become better service brands that engage their customers beyond the point of sale. Innovative packaging, branded voice skills, and partnerships with smart home appliance makers are all viable options for food and food-adjacent brands to pursue as they extend their customer relationship beyond the shelves at the grocery store. In a word, they need to become lifestyle brands that cater to the rising demand for wellness-oriented, personalizable food.

As emerging technologies like autonomous vehicles and blockchain continue to mature, they will continue to bring forth new integration points in the food industry (i.e. food delivery and supply chain management, respectively). There are still many new points of integration and potential business models for food brands to explore as new customer channels emerge.

Unlike other industries that have been fully digitized, digital forces will always have to contend with the physical realities of food production, transportation, storage, and delivery. As much as we have digitized our lives, eating ultimately remains a concretely physical experience. This means that food brands will have to stay connected to and always deliver on that physicality of food, no matter which digital channels they use to reach their customers. And any services that enhance the experience of buying, storing, cooking, and tasting of products should be actively explored to establish your brand as a consumer-oriented lifestyle brand.

The Lab is closely monitoring disruptions in the food industry and charting the future of food. To learn more, and discuss how your brand can leverage these opportunities, reach out to Josh Mallalieu at josh@ipglab.com.

IPG Media Lab

The media futures agency of IPG Mediabrands

Richard Yao

Written by

Senior Associate of Strategy and Content, IPG Media Lab

IPG Media Lab

The media futures agency of IPG Mediabrands

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