How Food & Beverage Companies Can Fatten The Bottomline

It’s that time of year again: New Year’s resolution season. But new year or not, more Americans are resolving to do something with a big impact on the food and beverage industry: going on diets, from Weight Watchers (now WW) to Jenny Craig, Flexitarian to gluten-free, Keto and more. Americans’ appetite for diets is surging, making these regimens a bigger force in food and beverage.

Plant-based, Volumetrics, the Mediterranean, the MIND diet (Mediterranean-DASH Intervention for Neurodegenerative Delay) and Mayo Clinic are just a few. When Americans shop for groceries, they increasingly want items that fit their food plans, as dieting becomes a bigger force when it comes to dividing the food and beverage pie.

There are, really, two types of diets: formal dietary programs (often for weight loss) and “special diets” (often less formal) designed to provide specific health benefits, such as battling dementia for instance. Taste matters. But so does health. Many companies can harness this force to grow sales.

A numbers game

Dieting is about as American as apple pie, even if obesity remains a national issue. Nearly 20% of Americans say they are on a “special” diet, up from 14% in 2007-2008, according to a study by the U.S. National Center for Health Statistics. Losing weight remains the biggest motivator, with nearly 10 percent of Americans 20 and older on a weight-loss or low-calorie diet. More women are on diets than men, and more adults aged 40 and older than aged 20–39. Younger people are more likely to eat what they want, while older people more often opt for what they “should.”

Marketing around calorie count is one way to cash in on this trend. About 45 million Americans start a diet each year, spending $33 billion annually on weight loss products, according to Boston Medical Center. That’s a big market and, for many, a big opportunity.

Diets focused on reducing diseases or allergies also are catching on, providing an opportunity to market foods around particular benefits. About 180 million Americans have food allergies that affect the way they shop, according to Label Insight. About 55% of shoppers say allergies and intolerances influence their shopping choices, up from 44% in 2018, according to that company.

Searching for sales

On the most basic level, food and beverage retailers can let consumers sort foods and beverages online based on diet needs, yet Label Insight found many don’t. That company found that nine out of 30 retailers—nearly one third—offered no way to search and filter items on their websites based on dietary requests, such as gluten-free, Keto or others.

Label Insight also said, “The data shows that retailers need to adapt to how the modern consumer searches for products.”

Each formal diet is a potential market, with Keto-friendly foods as one particularly popular category. Perfect Keto makes Banana Bread Keto Bars, Rhythm Superfood makes Keto-friendly Kale Chips, and CHOMPS makes Grass Fed Beef Jerky Meat Snack Sticks. You can create a product for the Keto market, or market an existing product toward these consumers. Manufacturers of ingredients also are trying to cash in on the Keto crowd. Glanbia Nutritionals makes ingredients like KetoSure MCT for a Ketogenic diet.

Plant-based profits

Other popular dietary trends, including plant-based, also are turning into big opportunities.

Plant-based diets and a desire for more plant-based options are fueling spending on and investment in meat substitutes and plant-based milks. Glanbia makes plant-based ingredients, and Beyond Burger is king of the beefless burger business (for now). We’ve gone from “Where’s the beef?” to “Where’s the beef substitute?”

Plant-based food sales rose 27 percent in 2020 to $7 billion, according to the Plant Based Foods Association and The Good Food Institute. Plant-based meat sales in 2020 rocketed 45% from $962 million in 2019 to well above $1 billion as 18 % of U.S. households bought plant-based meat, up from 14% in 2019. Plant-based milk sales rose 20% in 2020 as 39% of U.S. households bought plant-based milk.

Tastes and trends are changing, and companies that keep up with those changes can benefit and profit.

While vegans and vegetarians still represent a small slice of the consumer market, a more flexible version of vegetarianism is catching on. The Flexitarian or semi-vegetarian diet with occasional meat is becoming more popular, according to Univar Solutions, a distributor of chemicals and ingredients. Immune-supporting diets, focusing on fruits, vegetables and foods that boost immunity, are proliferating amid the pandemic. They typically rely on vitamin C and D, zinc and probiotics, while products with echinacea, turmeric and ginger are also getting a big boost here.

Data’s role in diet

The desire to diet also is fueling a hunger for information. The more you know about foods, the more informed your choices can be. And government is obliging as the FDA strengthens labels. The agency required manufacturers with $10 million in annual sales to update labels with more information by January 1, 2020, and bigger companies to update by January 1, 2021.

Weight loss giants are working to win over customers amid competition as well. WW reported $293 million third quarter 2021 revenues with 4.5 million subscribers, and updated full-year guidance to about $1.2 billion. WW announced a new PersonalPoints program, seeking to better serve clients and sell its services through its subscription model. Winning the diet war

Dieting is also fueling related industries. About one third of U.S. children and adolescents now take dietary supplements, according to a national study. All of this is leading to more services such as diet counseling and exercise with personal trainers, despite concerns about the COVID-19 pandemic. There’s also behavior change support and bariatric surgery, as many Americans fight (not always winning) a war against excess weight. 

It’s clear that Americans’ appetite for diets is only growing – and businesses can beef up sales by capitalizing on this trend.

Tapping into the weight loss market can help companies gain sales – even if they are not in the diet business, or don’t realize that, like it or not, they already are.