Mondelēz and Kellogg harness small player mindset at Future Food-Tech

22 Oct 2019 --- The lucrative snacking space is proliferating, especially regarding indulgence and wellbeing. This was the general consensus reached by speakers at Future Food-Tech London (October 17-18), where FoodIngredientsFirst observed how big players in the food industry are harnessing the research tactics and missions of smaller start-ups to access a market that is increasingly concerned with “a story” behind a product.

SnackFutures, a new Mondelēz International innovation hub, is behind emerging brands such as Dirt Kitchen, which specializes in vegetable snacking and CaPao, which uses cacao fruit to create smoothie balls and jerky strips in collaboration with Barry Callebaut. “One of our big realizations is that we don’t have, and we don’t need to have all the answers in-house. We can also lean on outside partners and collaborations to address these consumer needs,” Gil Horsky, Director of Innovation at SnackFutures, tells FoodIngredientsFirst. 

Gil Horsky, Director of Innovation at SnackFutures, Mondelēz.“We don’t hide that we are Mondelēz, but these brands run independently. It is the best of both worlds and consumers can connect with an authentic brand that is meeting their specific needs. Later on, we can possibly scale them up slowly into bigger brands,” he continues.  

Meanwhile, Jonathan Webster, Vice-President of Global Growth Strategy at the Kellogg Company UK, observed that consumers are bored of corporations following the same paths over and over again. “There’s a huge surge in new brands. As a big company, we study smaller ones very closely. Consumers are buying into the mission, and for start-ups, their technology and food is only half of it.”

Innova Market Insights pegged the “Small Player Mindset” as a top trend this year. Start-ups’ strength as thought leaders has driven multinational companies and legacy brands to invest in them. These companies also have a marketing advantage. A 2018 Innova Market Insights trends survey found that two in five US and UK consumers prefer small brands “because they are more dedicated to their products and have a personal story.” This is on trend, as 20 percent growth has been reported in food and beverage launches with a social ethical claim (Global, 2017 vs. 2016).

Webster continues that consumers are seeking a level of insurgency and that the passion should drive every element of the brand, thus steering markets toward it. Furthermore, he explains that the most common mistake for big companies is using their marketing muscle at the wrong time in an attempt to generate groundswell. “Instead, markets should be tapped into first with tactics like field marketing, which then creates the right environment for corporations to access the scene and use their major budgets effectively,” he says.Speakers from companies including Mondelēz and Kellogg took to the stage to discuss how consumption habits are changing the food system.

Field research is also important for Mondelēz, with SnackFutures testing consumers in an agile, real-life setting. “We use transactional learning, where we are partnering with five independent stores, farmers’ markets or gyms. Essentially, we are just standing there and offering our products in a minimal product proposition. We are putting it out there to consumers to see if they have an interest in buying it. What we learn can then be applied to refine and improve the proposition,” explains Horsky.

Instead of the two years that it can take traditional research processes to see products to market, this approach can get offerings on shelves in as quickly as ten months. This smaller time investment means that there are reduced losses if a proposition is found to be fundamentally flawed. 

The snacking paradox
Consumers are increasingly looking for indulgent and premium products, as well as those that target wellbeing or have functional elements. Horsky further highlights how ready-to-eat care and food-as-medicine are growing fields that target physical, mental or emotional needs. Meanwhile, Webster notes that the split in demand between indulgent and healthy products isn’t being driven by people moving between one segment to another. 

Instead, he estimates that while 5 percent of consumers are very concerned about what they eat and 20 percent do not care at all, it is the middle 75 percent who are driving change as they simultaneously seek foods that tap into wellbeing and indulgence. He cites how Kellogg has brands such as Pop-Tarts and Froot Loops that are firmly positioned in indulgence. However, the company also accesses the wellbeing market with offerings such as MorningStar Farms. The brand recently added Incogmeato to its plant-based portfolio, which features alternatives to burgers and nuggets. Kellogg's pop-tarts are firmly positioned as an indulgent food, but the company is also appealing to wellness markets.

Overall, Horsky puts the worth of snacking at over a trillion dollars globally. “More than 75 percent of consumers are probably actively snacking around the globe. If you go back to the fundamentals, they are shifting away from three meals a day to snacking four to seven times daily. One of the biggest reasons is that they have less time. People are working longer days, and in some metropolitan areas, they might be commuting for an hour or two on each side of work. They don’t have the luxury of sitting for three full meals a day.” 

Horsky continues that consumers have different needs throughout the day. They may have a dip of energy in the afternoon and are looking for a boost, or are working out and want something before or after. They could be having trouble falling asleep and want something to help with that. “Snacks can help address many of these needs. Furthermore, as a company, we believe that snacking is a consumer behavior that will continue to expand. The snacking category is also growing faster than any other,” Horsky concludes.

Leaders in cellular agriculture also attended Future Food-Tech London, where they explained how the burgeoning technology of the cultured meat space could help address the sustainability fears of a generation that is increasingly vocal about the urgent need for an overhaul in traditional agriculture.

By Katherine Durrell