The Impact of COVID-19 on CPG Innovation



Show Summary

In this episode, our host Suzana Tripologos has an interesting conversation with Melanie Bartelme, a global food analyst at Mintel, where she provides insights on global innovation and consumer trends across a number of food categories, including pasta produce and grains. At Mintel, Melanie co-created the annual US flavor and ingredient trends, which spotlight the cuisine types and ingredients that are growing on restaurant menus and on grocery shelves.

In this conversation, we discuss the effects of COVID-19 on flavor innovation, how technology is changing the way we interact with food labels. And we touch on two interesting conflicts driving consumers, health versus comfort and indulgence versus saving money. There's a lot to glean from this episode so let's jump right in.

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Transcript

Suzana Tripologos:

Melanie. It's so great to have you today. Thank you for joining us. We'd love to get to know a little bit more about you. So perhaps we could start off and you could share with us what your current role is at Mintel and how did you get interested in the field that you're in today or perhaps what was the path that brought you to the position that you're in.

Melanie Bartelme:

Well, it's so nice to, to meet you Suzana and yes, so it's been a little bit of an unusual pathway, I guess, because actually my first job out of college, I was writing children's books. So it's a very different, different field than where I ended up. So it's really all been driven by my love for food. So that's taken me in a lot of different directions. I worked at Groupon, I wrote for the food and drink blog there and I just wanted to do more of that so I ended up at the Institute of Food Technologies so I learned more about the food science side of things. Got to know it from the other side, not being the consumer, thinking about it from the scientist's point of view. And then I really love new product development and trends and so I found my way to Mintel where I get to think about that and what consumers are looking for and the why. So it's really all kind of come full circle for me.

Suzana Tripologos:

That's great. It sounds like you've a very creative background and you never know where paths will lead you. I know I have a culinary arts background so I have a love for food myself. And so it's nice to hear that. Today we really wanted to focus on talking about the impact of COVID-19 on CPG Innovation. So thinking about how it's impacted consumers and discovering new flavors. The flavors are always changing. We see that in products all the time where they're adding savory to something that you would anticipate being sweet or vice versa. Could you please share with us the current trends of the flavors, or how COVID-19 has impacted those changes that we're seeing?

Melanie Bartelme:

Yeah. It's really interesting because I think that this has really gone in a couple of directions because I think number one, from the traditional way, we think that consumers discover new flavors is traditionally been in restaurants. They start there and then they kind of trickled down into other restaurants and then finally into retail but I think we're really seeing that kind of shift because COVID made it so that we don't necessarily get to go out to restaurants but we're kind of getting back into it.

Melanie Bartelme:

But we have some data recently that I thought it was really interesting:

We were asking specifically about learning about new food and drink flavors and we saw that 57% of consumers in the US say that they discover new flavors online versus 42% who said restaurant menus.

So that has really I think, been a noticeable shift here. And a lot of that for me, what I've been seeing is how social media is really driving a lot of this sort of exploration where you see people trying something and consumers say, what style going to coffee? People are making banana bread. What are all of these things? And so all these new flavors are sort of entering into the consciousness and then they get translated into some of those products. One of the other things that we noticed is that travel, even though we couldn't really go a lot of places has been a driver of flavor development and still has a lot of opportunity there.

Melanie Bartelme:

We're thinking specifically about regional flavors around the US, we saw consumers last year really taking road trips, getting in RVs. They were all over AirBnbs. So they were kind of doing their staycations at a domestic level. We saw consumers maybe getting to know different kinds of regional barbecue or things like that. So we had a really great survey about this too and we know that 74% of us consumers say they've tried any sort of American barbecue. So there's really high familiarity with this, but we are seeing more of that breakdown into more regional things. And I think that's something that we're going to continue to see happening, especially as consumers are able to get back out there and maybe go internationally. I think we'll see some of that regionality come and take a little bit of a bigger picture. We'll see maybe into other countries again, sort of see some more of that international influence as well.

Suzana Tripologos:

Oh, I love that. And I've been hearing a lot of people moving out of major cities into the rural areas and how that will affect flavor trends as they begin to explore perhaps new flavors that they didn't know or weren't aware before. So it's really great. Do you think that the consumer expectation has changed or that it will change as far as value or transparency with the shift with COVID-19?

Melanie Bartelme:

Yeah. That's actually one of Mintel's 2021 trends. Really looked at that for the coming year about how we have this sort of multiple facets when we think of the idea of value.

It's about cost, how much things actually retail for but it's also about is this worth the investment in something when money is maybe tight, when maybe we're thinking we're a little bit more anxious about what the future holds. And so we've been seeing a lot of companies kind of introducing smaller sizes of something, little single use packets.

I think Omsom is a really great example of this. It's two sisters who started a company on authentic--they hate the word authentic so I apologize to them if they hear this--but they worked with chefs from different Southeast Asian backgrounds and created these flavors, these packets that had sauces and then sometimes little dry components but they had a starter pack.

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Melanie Bartelme:

It was really nice because it's not a huge investment. You can get it, you can try it and if you love it, then you can rebuy. But I think they've really done a great job with things like that. And we're seeing, I think a lot more of that, where you can sort of have a little bit more trial. We're seeing that some with the meal kits and sometimes actually take out food in retail coming from restaurants. Just these little small ways of these sort of approachable, these permissible indulgences in our lives.

Melanie Bartelme:

And we're also thinking about that value as morals, as ethics, as what do I believe in? So we're seeing a lot of interest in consumers wanting to support their local communities so it's been interesting to see some of that too where in Chicago, there's a taco restaurant called Big Star. And over last year they were highlighting, I think every month, maybe it was every week, a local taqueria that maybe wasn't getting the foot traffic or wasn't getting as much of the attention. So they were using their influence to shine a spotlight on the local. So it was really interesting to see that as well.

Suzana Tripologos:

Yeah. But to see that support, supporting each other especially during this time, and personally, I've seen a shift with spending habits in my own life and with other people. And so in the beginning of this whole pandemic, everybody was just hoarding things because of the uncertainty, right? We're all in the same boat together. So I feel like we're getting to this point now where maybe we've hit the... We're getting to the better days. And if I could ask you a little bit more about consumers choosing between self care versus comfort, how did they make that decision of what they're spending their money on, right? And when they go to purchase something in the store, how do they get influenced and how did they decide what's more a treat versus something they're indulging in?

Melanie Bartelme:

I think what's kind of interesting is because of COVID I think sometimes self care and indulgent treats have become sort of the same thing for a lot of people. So there was in our... We have another trend this year called feed the mind. So we were talking a lot about how food plays, not just a role in your physical wellbeing, but also in your mental wellbeing. And so some of this was looking at those little rituals in our lives. So maybe it's getting that Starbucks and maybe it's having a little piece of chocolate, but we saw some companies really leaning into that and offering this idea of the ritual as part of what they were sort of marketing.

Melanie Bartelme:

So Starbucks was working with Headspace, and Headspace does so many great partnerships. So the meditation app, but they were trying to highlight that idea of habit stacking, where you're getting a coffee, you have maybe three minutes before your kids are asking you for something or you have to walk back into the office, but there are these kind of three minute, couple minute episodes to sort of give yourself that little bit of peace. So maybe it's not the food, but the coffee is already part of that self care. It's already part of your indulgence. So it maybe makes it a little bit more worthwhile to say, I am going to invest in the coffee.

Melanie Bartelme:

And then on the sort of way higher end of that Vosges Hot Chocolate here in Chicago. They have these incredible ritual kits based around chocolate, because I think for a lot of us, chocolate is already something that you maybe have a little square at night, it's your sort of ending the day ritual, but they have this entire ritual collection with chocolate and then with a journal and sage that you can burn and crystals and sort of really leaning into it. It's 80 bucks or something like that so it is really about treating yourself. So I think that's the interesting part is that wherever you fall on the sort of what your income is, what disposable income you have, there is some way for food to serve that sort of self-care purpose.

Melanie Bartelme:

And then of course we are seeing consumers also thinking about the wellness part of it. So maybe that's getting a really delicious pasta sauce so that you can eat it with your zoodles or whatever grain alternative maybe that you're thinking about. We've seen a lot of cool introductions from restaurant brands like Carbone in New York has a... Now they've made that really sort of selective, very exclusive experience accessible for consumers wherever they are.

Suzana Tripologos:

I wanted to talk to you about how companies are reacting to the pandemic. So we've seen a lot of conferences that have, it didn't really happen last year so if you're familiar with the bigger ones in Chicago and the ones that you typically participate in and speak at and all of a sudden it came to this halt. Right? And so there's been a shift to more virtual events. So how do you think that companies are reacting to that? Do you think that this will continue? And I think everyone had to just really quickly understand how to do virtual and get they were okay with getting on camera. And so it was such... It happened so fast for everybody. But do you think that this will continue? Do you think that this will be the new normal? What's your assessment on that?

Melanie Bartelme:

I think that we have seen a lot of really interesting sort of ways that companies have approached being virtual, whether that's actually at a conference or with their audience out there in the different ways that they've sort of gone online. So back in 2020, I think it was McCormick did a virtual taco Tuesday event with Drew Barrymore and so they were taking questions from the audience. They were building that into the entire, experienced the demo and then they donated a bunch of money to No Kid Hungry. So that was a really great way of getting that the products out there showing how they're being used and then also doing something good with it.

Melanie Bartelme:

And I have seen that, I think it's the Lucky retailer, Lucky California. They just did a new sort of prototype retail outlet out there and they're going to have a live demo in store. So it's sort of that taking something we've learned from the pandemic that people are really into watching other people cook and then bringing that into real life. One other thing I think is really interesting is gaming. We know Mintel has a gaming library and so we have such great information on that, but it's a place where we've been seeing a lot of product sort of partnerships and interaction. Animal crossing is one where we've seen a ton of activations. So in Canada, Hellman's, I play this game so it's probably too much information. I will go right past it, but there's produce that can go rotten basically and they were encouraging people to let their produce go rotten and then when they threw it away, then they would donate meals to people in need.

Melanie Bartelme:

So it's been some really dynamic, really interesting product sort of interactions that don't feel forced because I think at the end of the day, everybody can sort of tell when you're just trying to shoehorn something in there, but these have been really great and really creative. So that's something, the creativity I really hope and I think will definitely continue.

Suzana Tripologos:

I love hearing that. I think that's influencing even kids who are playing that game to show them how they could not make food waste.

Melanie Bartelme:

Yeah. There's a company we had a trends observation on out in Sweden called Total Produce Nordic and they actually created a game for kids to, if they try a new fruit or vegetable, they can enter to get codes online in this game and they upload videos and they're talking all about how these different fruits and vegetables are nature's own cheat codes. So there's really these opportunities to kind of take that so much further than... I mean, we're dipping our toes and it's new, right, I mean, but we are seeing people not just playing more games, but also watching other people play. So even if you're not a gamer, there is this captive audience for people who are seeing those things go on and kind of get excited by it.

Suzana Tripologos:

Yeah. That's great. And I think now we see that there's a lot of interest in labeling right. So knowing what's on the label, where is our food coming from. Even kids today are more triggered by what they see on the label and how does that impact what they eat with the decisions that they make. So are you also seeing, or maybe you could share with us the consumer habits as it relates to labeling? In the US a couple of years ago, we changed nutrition label and we see a lot of claims on labels now and the consumer themselves, they maybe don't always know what it means but are you seeing how technology relates to labeling and how that impacts the consumer overall, if you could share a little bit about that.

Melanie Bartelme:

Yeah. Yeah, definitely. I think that we do see consumers looking at labels. I think that they aren't as many as we would want to be really scrutinizing those labels, but they are noticing and the people who do care really care. So one of the things that we've been thinking a lot about is there are some of these attributes that appear on labels and they're great, things like organic or some of these animal welfare claims, things like that. But I think what we're going to see in the future is how those claims are going to become more specific because for those people who care maybe about the animals, it is maybe not going to be enough to say this was a pasteurized egg. How much space did that chicken have? What did the chicken eat? Some of this isn't going to fit on pack.

Melanie Bartelme:

And I think that's where the technology really comes in because again, not every consumer is going to take their phone and stand those QR codes on pack, but for the ones who really care about it, they're going to want that information. They're going to want to track it down and being able to have those right there for them, that's going to be really powerful especially because right now, for those people who were going out to restaurants or maybe doing some of the outdoor dining, so much of that was done through scanning a menu and looking at it on your phone.

Melanie Bartelme:

So that whole behavior is something that... The QR codes didn't really kind of take off in the US kind of before COVID but I think there could be some more momentum around it if we kind of can show, it's not just about what am I going to order? Is it eggs? But to give some more of that information. So I think that could be great. And I do think that even though maybe the number of consumers who are actively looking for this information is still kind of small, that it is going to continue to grow and those companies that don't have that information out there, it could be a setback to disappoint a consumer who really wants to see.

Suzana Tripologos:

Yeah. And I would agree with you during COVID when we started going back to restaurants and actually one of the first ones I went back to was Big Star in Chicago because I live in the area and that was the first time that I had to use the QR code and I was like waiting for the waiter to come give me the menu and then I realized that's not how they do it there, but it's about that point you mentioned about changing your habit. And so after that, every time I would go back to another restaurant, I would have to keep scanning the QR code. And so I think that you're right. I think that we're going to see a shift where more people are going to be going into the grocery store and scanning the QR code to learn more about their products.

Suzana Tripologos:

So it is all about habit and I think one thing we probably have learned in COVID a lot of our habits have changed. And if you think back to year ago what we were like then versus where we are today, I think a lot of us can agree with that.

Melanie Bartelme:

Definitely.

Suzana Tripologos:

Maybe you can share with us some upcoming trends in labeling if you have anything that you could share or that you foresee down the road.

Melanie Bartelme:

Yeah, I think it would be really interesting, I guess it's a little bit related to labeling but more to the whole shopping experience, is to help consumers kind of bridge that sort of divide between where we were in in COVID where more people than before, still not a tremendous amount of people, but more people than before we're shopping online. And for some of those people, those habits are going to stay in place, but maybe they also want to get back into the store. So they're able to sort of combine those technologies between the online shopping experience, but then making it so that you can get into a grocery store, have your list, know where things are. Maybe some of it is the smart cart technology. Maybe some of it is as home Depot I think or maybe it was Lowe's a couple of years ago had the map in store.

Melanie Bartelme:

So you know what you're looking for, you can get there quickly and then maybe there's opportunities in those kinds of apps to suggest complimentary things so you still have that sense of discovery. I think that's going to be important and I think we have seen consumers also thinking more about... In the moment, in COVID we were thinking about safety, we were kind of navigating it was COVID spread on surfaces. Are we maybe looking more to single serve packaging because it feels safer because we want to make sure that nothing's touched anything, but going forward, I think consumers are going to be thinking more again about, all right, maybe I still got used to this convenience in COVID of the single serve, but now what do I do with all this packaging?

Melanie Bartelme:

So I know that recycling and then sort of the disposal is where we've got a lot of room to go. We've got a lot to work out still about how to actually make recycling work well here, but to really help consumers understand on pack, what parts of this container can actually go where. How to recycle label I think can be really helpful because even people in the industry I think can be really confused about what do I do with this? We had a little Memorial Day thing and I'm looking at this number five plastic going, what do I do? What do I do it this? And I do this for living so.

Suzana Tripologos:

Now I know. And some things that you think are recyclable aren't and so you're not sure if they go in the trash or they can be in the recycle bin, so I can see your point. So tell us some of the trends that maybe that you personally are excited to try in the coming year. So I'm sure you have some insight as to upcoming trends with flavors or with anything. Maybe you could share with us what personally you're excited about that you'd like to tell us.

Melanie Bartelme:

Yes. And I think I kind of have sort of like a layer upon layer of sort of trends here, because I don't know if you had a chance to check this out in May, there was the pop-up grocer in Wicker Park. They are out of New York and so they were here for a month and they featured some of those D2C brands that you might want to try, but aren't sure you want to commit to because again, you've got so many options now to get things online, but it was amazing because you could walk in and you could see all those sort of... It was almost like going to a trade show because here's all those things I've seen before. I'm so happy they're out here. They're maybe have another flavor now. Maybe they've got a match I here. And so it was awesome to have that experience and also to recognize that they have a hybrid experience where if you can't make it there, you can order a subscription box with some of those products and those sort of layer underneath that.

Melanie Bartelme:

So that was really fun. That got my sort of creative energy flowing again thinking about all that stuff. But one of the products that I was really excited about that I had read about before was these partially veggie-based sausages that also had animal protein, by a company called Seemore. And I bought one of those and I was so excited because they tasted great and it made me feel like... I was doing a little bit for kind of reducing my meat consumption kind of finding that balance so I'm definitely excited to keep trying some more of those products that I've seen kind of making these cool environmental claims and then trying of those non-alcoholic rosés that I picked up because after a year of indulgence, maybe I could use a little bit of easing up here. So I'm excited for all of that.

Suzana Tripologos:

Oh, we definitely enjoyed talking with you today and sharing your experiences and your expertise. So I want the thank you again and hopefully I'll bump into you one of those conferences in the future, maybe we'll see each other.

Melanie Bartelme:

I hope so and great talking to you.

 

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The CPG Innovation Podcast is presented by Selerant.