Shallow Dive: Clean up in aisle F&B

A quick read of interesting titbits from the F&B universe that will drop every other week. Skim through this in less than a ☕break.

The market for clean label ingredients was worth US$44.1 billion in 2023 and is expected to grow to a whopping US$169.0 billion by 2033.

Last week, we looked at how emerging chocolate brands are leveraging clean label features to take on big players. Clean label has become a defining trend for consumers and the F&B industry alike, but what exactly is it?

Too broad a definition

The general consensus is that it refers to minimally processed foods with recognizable ingredients and no artificial additives, having grown out of the clean eating movement.

Consumers have become increasingly health conscious and associate clean label with healthier foods (check out the data from our piece on chocolate). They also want to know exactly what is going into the foods they eat and how the different elements were sourced. This has forced brands to rethink product development and formulation, and look into “clean” alternatives to the additives standard to mass production (like preservatives, colors, flavors, and so on). And this shift has, in turn, driven the clean label ingredients markets.

However, the reality is that there is no standard or legal definition for it as of now. Over the years, the definition has expanded to encompass so many aspects:

• Shorter ingredient labels

• Fewer “chemical-y” sounding ingredients

• No GMOs

• Supply chain transparency

• No preservatives, additives

• Natural and whole foods

• Natural sweeteners

• Organic food

• Allergen-free

• Sustainable food (which itself is a maze of definitions)

In fact, the way it is looked at and used leaves way too much room for misinterpretation. There are calls for a more formal definition for clean label, but that may be a while, given that “natural” still doesn’t have one.

But clean label is here to stay, and so are a number of challenges linked to this still-emerging megatrend at its current stage of evolution.

Challenges

• Cost: The cleaner version of standard ingredients in food processing are significantly more expensive. 

• Formulation expertise: Reformulating the products with these cleaner alternatives can be challenging.

• Shelf life: Some clean label ingredients may also impact the shelf life and stability of the final product.

• Supply: In many cases, alternatives are still being developed or don’t exist at all. Base ingredients may not have a strong enough, well-developed supply chain, which could impact availability. 

The main impact of these challenges is the final product prices for consumers is likely to be higher, which can be a deterrent to buying clean label food. And companies are worried about how this will impact their own business. Food inflation across the world has seen consumers change some of the food purchasing behaviors towards more affordable products. An Innova survey from 2023 found that 36% of US and Canadian respondents expected to spend less on F&B purchases in the following 12 months.

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The silver lining

However, the same Innova survey showed that enthusiasm towards clean label had not diminished despite the higher pricing. 

• Younger consumers – 55% of millennials and 54% of Gen Z – said that clean label had at least some influence on their purchasing decisions, as opposed to 44% of Gen X and 35% of baby boomers.

• 46% of millennials and 45% of Gen Z even said they were willing to pay extra for clean label products, compared to 31% of Gen X and 19% for baby boomers.

This points to a potentially bright future for clean label foods across categories. And there are a number of ways in which solutions are emerging to give F&B launches that much coveted “clean” street cred. 

• Biotech companies Phytolon and Ginkgo Bioworks have been working together to create and scale up the production of cell-engineered natural colors that are also food safe. The first range of colors — yellow to purple shades — from naturally produced betalain pigments have been made through fermentation using two different yeast strains. The fermentation process used to create these colors could help with the challenges of supply and cost. The colors are not yet available on the market, but are expected to soon be.

• In the bakery world, real fruits and nuts are being incorporated into products to highlight a clean label approach. These ingredients can also contribute to color, flavor, texture, and functionality of the baked goods. Real fruits and nuts are also seen as adding a health halo to an otherwise indulgent product, though there are still formulation challenges to overcome. Also, the trend is expected to take greater shape within the bakery sector, with the use of cleaner emulsifiers, gums, stabilizers, and texturizers that are the real workhorses of mass produced foods. 

• There is only one approved natural preservative for meat (nisin). But a Chinese study has explored a number of other natural alternatives and found that these do have scope for meat preservation, though they are far from commercialization at the moment. The natural compounds the study looked at included bacteriophages and their endolysins, bacteriocins, and various plant-derived substances.

• I’m not sure this is entirely clean label, but it is a cheeky and eye-catching way to promote the natural aspect, especially as AI takes over the world. PepsiCo released a limited edition bottle of its Tropicana orange juice with the A and I removed from the brand label – to indicate there’s nothing artificial in the product.

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See you next week for our deep dive into regional alcoholic beverages!

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