Prepared by the Daniel J. Edelman Global Food and Beverage Sector March 2018 Thank you to everyone who contributed to this year’s 2018 Food and Beverage Trends. This project takes months of researching, curating, synthesizing and defining a clear POV. In addition to thanking those listed below for their help in bringing a “glocal” approach to this report, we owe our design team – Ryan Faszcza and Karen Tian - a tremendous amount of gratitude for helping to bring the trends to life via beautiful de sign work and strong visuals. Our special thanks to Isabelle Furth for bringing her fresh eyes into a review.

APAC EMEA LATIN AMERICA NORTH AMERICA

Laura Cario () Yu Matsuzaki () Olivia Adebo () Juanita Barros (Colombia) Lindsay Anthony (New York) Kimberly Francis (New York) Nicole Murphy (San Francisco) Navreet Dhillon () Jamie Read (Singapore) Amélie Aubry (Paris) Susana Castañeda () Chip Bates (Atlanta) Heidi Gengler (Seattle) Erin Myers (Dallas) Lisa Dominguez (Tokyo) Hidehiko Sakai (Tokyo) Emely Bitmead (Hamburg) Jaqueline Januzzi (São Paulo) Josh Baze (Chicago) Katie Goldberg (Seattle) Rachel Nemerovski (Chicago) Kate Ferguson (Sydney) Tiernan Silcock (Tokyo) Mariella Boger (London) Nubia Matos (São Paulo) Carrie Becker (Chicago) Tegan Harris (Atlanta) Amy Notestein (Los Angeles) Rachel Ho (Singapore) Tara Subba (Jakarta) Annabelle Bould (London) Alejandra Quiroz (Mexico City) Andrea Braunstein (New York) Gennifer Horowitz (New York) Diana Nuno (Chicago) Alicia Kim (Seoul) Kathryn Tanquary (Tokyo) Rossella Camaggio (Milan) Sergio Sanchez (Mexico City) Cameron Canova (San Francisco) Dhwani Jain (Chicago) Raphael Rochette (Montreal) Sean Kwon (Seoul) Carla Webb (Sydney) Anna Capella (Milan) Mary Catherine Iles (Atlanta) Mallory Jensen (Atlanta) Taylor Rodriguez (San Francisco) Thomas Landers (Sydney) Intan Wibisono (Jakarta) Patrick Chastel (Paris) Caroline Chevrier (Montreal) Lynn Johnson (Calgary) Kristin Rohlwing (Chicago) Sucy Lin (Taipei) Koki Yamashita (Tokyo) Kamal El Aoufi (Paris) Lauren Corsaro (New York) Pheniece Jones (Seattle) Bridget Ryan (Chicago) Jacqueline Finke (Hamburg) Mariana Cotlear (Washington DC) Nabeelah Khan (Los Angeles) Reid Schwartz (Austin) Rebecca Gleeson (Dubai) Ciara Dixon (Atlanta) Katia Kononova (Montreal) Brad Simon (Orlando) Laurène Hug (Paris) Pauline Draper-Watts (Chicago) Amy Kull (San Francisco) Stacy Spector (Atlanta) Charlotte Kircher (Frankfurt) Sushma Dwivedi (New York) Samuel Lessard (Montreal) Amy Verhey (San Francisco) Lara Luten (Amsterdam) Annie Eadon (New York) Chloe Leuthaeuser (Chicago) Stephanie Walker (New York) Jana Mergenthal (Frankfurt) Erin Farkaly (San Francisco) Kim McAndrews (Chicago) Kristin Wooten (Atlanta) Deepika Nookala(Amsterdam) Adelaide Feuer (Chicago) Ellen McGrew (San Francisco) Regina Wu (Los Angeles) Annelies Peiner (Hamburg) Liz Foster (San Francisco) Courtney McNamara () Alex Simmons (London) Salma Tokali (Dubai) Silvia Warkentin (Hamburg)

Finally, special thanks to our friends at Mintel Analytics.

Clean eating. Flexitarian. Gluten-free. Lacto- And in our fast-paced, ever-changing mobile and So instead of saying “You are what you eat”, we vegetarian. Lacto ovo-vegetarian. Low carb. Paleo. digital environment, our diets have become a way may want to proclaim “We are who we eat with”. Pescatarian. Vegan. Vegetarian. Our diets of connecting us with our broader communities. What to Consider: increasingly define not only what we eat, but how Students of ancient history or anthropology know For communicators and marketers, think about we think about – and define – our community and that tribes provide instinctual comfort and pride, how our tribes, and the values and behaviors they our world. As our diets have developed into based on common descent, culture, language and champion, reflect micro-segments that can be lifestyles, they provide a lens into our peer groups, ideology. Now we can add diet to that list of targeted and tapped into for engagement. our values, and even our politics. commonalities. Under pressure to meet the needs of new to the side of the industry’s plate by countless What to Consider: consumers who don’t just want to eat food, but start-ups, many have turned up the heat on Expect even more disruption in the year ahead. want to experience it, use it to discover new innovation, incubation and investment. Look for legacy food and beverage companies to cultures, and let it define who they are and what The result will be continued sell-off of older lines; continue to innovate, invest, and imitate the they value, brands and the companies who make more incubation and aggregation, healthier and communications and marketing approaches of them have faced a choice in recent years: disrupt more sustainable product lines and a whole host of their disrupting peers. or be disrupted? Rather than be pushed new products and services from iconic players. As our climate becomes more volatile and less crops in China, and hurricanes threatened the by 7%. According to an Intergovernmental Panel on predictable, our food system stressed. Droughts, Florida citrus market. Staples like avocados, cocoa, of between 10 and 25% by 2050. typhoons, wildfires and inordinate temperature coffee, tropical fish and lobster, maple syrup, What to Consider: changes are putting some of our regional and global beans, cherries and wine are all on the endangered As endangered foods hit the consumer radar staples at risk of disappearing from our tables. list. With 60% of the world’s diet coming from through increased discussion and pricing, expect Typhoons and heatwaves, and a decline in the corn, wheat and rice, scientists are raising alarm. increased debate around how technology can help number of dairy farmers led to butter shortages in They predict that a one-degree Celsius drive solutions and ensure the food supply we need Japan, mudslides impacted last summer’s mushroom temperature rise will slow the growth rate of corn to feed our growing population. The palette of food colors is changing; the more The next attraction on this parade of What to Consider: the novel, the better. Why? We’re all looking for sensations is texture , pleasing not exclusively Visual and textural satisfaction are more something to frame and share on social media. the eyes, but also the palate. As VR becomes a important than ever to the consumer experience, Exotic, intense and beautiful. Bright pops of reality, brands and chefs around the globe play so we need to be factored into marketing efforts. color are a must on every plate coming out of with a mix of sensations to attract curiosity and In addition, flavor and ingredients companies restaurant’s kitchen – and every post, pin, snap provide consumers with interactive — and must help stakeholders understand the value and or story that accompanies them. It’s all about documentation-worthy — experiences. benefits of their work to meet customer and surprising and delighting. consumer demand. Gut health is no longer something we’re shying away With science showing the link between gut and pickle and sauerkraut juices, there’s from. In fact, we’re openly talking about our health and everything from obesity to diabetes, increasing demand for these anti-inflammatory, stomachs and how we can make them feel better. allergies, cancer, eczema and asthma, it’s no health-benefiting foods and drinks. We are also more aware of the role that the wonder that the promotion of good bacteria in What to Consider: microbiome plays in our overall health, with some the gut is taking center stage. Both probiotics As our appetite grows around food as medicine, considering the gut to be the second brain, given its and fermentation products continue to build look for more innovation, more investment and ability to control hormones and promote various stature in the maintenance and promotion of possibly more regulatory discussion. aspects of physical, emotional and mental health. health. From yogurt to Kombucha, kimchi shots, The road to plant-based food and drinks seems to the mainstream. And longtime favorites like pizza What to Consider: have no U-turn. Whether because of health, the now come with cauliflower crusts, scrambled eggs Should companies start making commitments to environment or both, we are demanding more are made with mung beans and hamburger meat start using less animal-based ingredients or plant-centric products. And the industry is is “grown” in a lab or blended with plant proteins. more plant-based products? Look for CPG/FMCG responding. A wider range of ‘veggie’- and plant- Look for more CPG/FMCG product plant-based companies talking about plant-based products based FMCG/CPG options are everywhere. Foods offerings in everything from entrees to drinks, and ingredients as a value proposition from both like mock schnitzel Milanese, faux fish, and plant- snacks and desserts. Also, watch the shift in both a corporate reputation and brand promotion based protein bowls are finding their way into food service and restaurant offerings. standpoint. Cocktail culture is following food culture and been decreased in foods, but now it’s time to do alternatives. In other cultures, this is due to religious shifting to drinks that are healthier and more the same to drinks. So the focus is on adding beliefs. sustainable. Mixologists are stepping up and flavor instead of sweeteners or alcohol. Drinks What to Consider: meeting the demands of younger consumers who lists routinely offer lower alcohol organic wines, Expect the thirst for low- and no-alcohol drinks to are more health conscious – but no less sociable – gluten free beers and low- or no-sugar cocktails grow. Look for more innovation in this space from and want to enjoy lower alcoholic beverages made based on healthy ingredients. both the non-alcoholic beverage and distilled spirits from organic or gluten-free ingredients. It’s not just In some regions where cannabis is legal, vaping companies. In the culinary space, look for more alcohol content that’s changing. Sugar has already and edibles are becoming the preferred pairings between foods and lower-alcohol drinks. There’s no doubt that the greatest disruption is consumers interact with products that sit on their data companies that happen to sell foods and happening in the retail and grocery space, which shelves or e-commerce platforms. Food retailers beverages. is finally fully embracing technology. E-commerce are combining consumer insights on purchases What to Consider: has officially transformed the way we shop and and other online activities to target consumers According to Edelman Digital’s 2018 Trends ‘devising the way grocers think of the role they play in the based on their habits and preferences both in- the best possible end-user experience is a must.’ So vast food and beverage landscape. Now, grocers store and online. So instead of thinking about to retain customers, grocers must underscore can capture new data like never before – and they grocery stores and food markets as places to buy relevance, efficiency and affordability. Without it, can use that data to help companies understand food, perhaps we should be thinking of them as customers will take their loyalty elsewhere. Think of foods – be it a piece of produce or an and another on culinary creativity, this trend we’re all enjoying in new ways. animal. The possibilities they offer, in terms of means not only using all parts of a fruit, What to Consider: flavors, textures and combinations are endless. vegetable, pig, cow or fish, but also combining This evolution of farm-to-table allows new In a world with increased interest in leftovers to create tasty meals that both reduce experiences for culinary exploration while sustainability, root-to-stem and nose-to-tail waste and introduce us to new foods and contributing to sustainability. Trend leaders have cooking is a natural shift for consumers to make, ingredients we may not have been familiar with an opportunity to steer the conversation with driving culinary experimentation in kitchens in the past. So, be it an unfamiliar cut of meat or mainstream consumers and the push to use “the everywhere. With one eye on sustainability the roots or leaves of a vegetable, it’s something whole food” and therefore reducing waste. Functional mushrooms have mostly been used in Not only is the mushroom push about flavor; it’s Finally, mushrooms also blend well with meat to dietary supplements, but now their nutritive (and also about health. If you’re looking for a meet consumers’ plant-based aspirations. non-hallucinogenic) properties are said to show wellness booster, Maitake is said to help What to Consider: up in ingredient lists everywhere. With their regulate blood sugar levels, while Chaga Functional foods are more common on consumers’ umami-rich flavor, Reishi, Chaga, Cordyceps and neutralizes the acidity in the stomach. shopping lists. Brands have the opportunity to Hedgehogs are being put to use in bottled drinks, Mushrooms’ rich flavors also lend themselves to ‘introduce’ this next superfood by leveraging coffees, smoothies and infusions, enriching our broths, and their creamier brethren work well benefits that may still be unknown to many. tastebuds in surprising ways. with cocoa, chocolate and coffee flavors. Long a tradition in Europe and other parts of the outlets around the world in places like Sao Paulo, and take home, their culinary creations. world, food halls have debuted, expanded and Monaco, Seoul, Japan and Istanbul. In addition, What to Consider: been updated across the globe, providing high- grocers have found new ways to use empty aisle When it comes to food, the experience rules. quality, cultural food experiences. Showcasing a space, and have developed their own form of Differentiation will come from offering consumers variety of vendors, they are a destination for food halls, or “grocerants.” For up-and-coming what they can’t get online – letting them see, smell foodies willing to experiment while representing chefs who are looking for options to survive and taste their foods. Food halls and “grocerants” a ‘push-back’ on the e-commerce trend by mounting restaurant and retail pressures, food are now the places where consumers experience humanizing the experience. Now, plans for new halls and ‘grocerants’ allow them to build their foods for the first time, take that experience home, and bigger halls are on the rise. Eataly now has careers and reputations while consumers can try, and come back for more. In many regions of the world, we’re settling down Similarly, as more people move into cities, hectic urban What to Consider: later – or not at all. In addition, there has been a rise lifestyles are leaving less time for meals. So, it’s not just As households populated by one person are in the number of elderly living alone. For the food about the packaging that’s being down-sized. Everything rapidly increasing around the world, companies industry, this is leading to a need to adjust portion from kitchen appliances and even kitchens themselves can use single packs as a marketing advantage. It’s sizes and packaging – offering smaller versions of are getting smaller. Expect this trend to grow with also a way to contribute to food waste solutions. products to attract new and different types of continued population shifts and increased GDP in newer For communicators and marketers, there is an customers who want delicious and nutritious foods, markets. advantage to understand the nuances of this but they need it for one instead of a family of four. audience segment and answer their needs. Floral flavors are popping up, with chefs using floral-flavored mixers available through food sweet infusion of shungiku petals and the sweet- edible flowers in everything from drinks to retailers. So instead of admiring beautiful blooms oniony flavor of allium. garnishes, and spice rubs to snacks. Cocktails or enjoying their fragrance, consumers will taste What to Consider: featuring floral flavors – such as elderflower, flowers in a whole new way: latte coffee with As the search for healthier options for drinks violet, hibiscus, lavender and rose – are lavender, rose hibiscus tea, violet cakes and and foods keep increasing, floral flavorings can particularly popular. Amateur mixologists can try sparkling elderflower wines will soon be help make food both more pleasing to the eye their hand with the trend at home, with a commonplace. In the coming year, look for these and more pleasing to the taste buds. growing assortment of edible flowers and and others such as clove-scented dianthus, the As consumers demand more from the brands they them feel part of a brand “family”, lift their moods, part of both the brand’s purpose and its packaging. consume, they’re certainly putting pressure on food and even personalize the brand experience. For What to Consider and beverage brands. Brands have been responding example, Nissin cup noodles collaborated with popular Expect to see even more engaging ways of by establishing connection and engagement with Japanese animation film Kimi No Na Wa, and designed connecting through packaging - especially the use consumers in fun, emotional and sometimes packaging so that a secret message appeared on the of mood-based and color psychology to convey provocative ways. Packaging has been the most lid as hot water was added. Further, Lay’s global products’ benefits. Also, look for continued use of interesting channel for this connection. It’s been purpose campaign, “Pass the Smile”, engaged packaging to convey, and engage consumers in, transformed in ways that engage consumers, make consumers in ways that allowed them to become brands’ purpose platforms. According to Edelman’s 2017 Earned Brand Study, role in this effort, providing what is necessary for food and What to Consider: 30% of consumers worldwide say that they make beverage manufacturers to go beyond transparency, As consumers demand more accountability, belief-driven purchase decisions more than they did democratize traceability and build trust. This allows voluntary and based-on-trust-technology is a three years ago. In a world driven by such behavior, consumers to be not only aware of what they are eating, higher form of transparency to which companies consumers require complete and total transparency but also where it comes from, how it’s made and how it’s aspire. That will put more pressure on ingredient from their food and beverage brands – and the kept safe. Now, by simply scanning the food item’s label, and flavor manufacturers. It will also create companies that make them. So, there is no choice for technology allows us to trace every aspect of the foods we more discussion and understanding of brands but to evolve. Technology plays an important consume – from field, lab or the sea, and into our pantries. blockchain’s potential in building trust. Copyright ©2018 Daniel J. Edelman, Inc. All rights reserved. All information contained herein is confidential and proprietary to Daniel J. Edelman, Inc. (“Edelman”).