To keep up with the ever-evolving times of the food industry, one needs to look ahead. It’s not that you have to alter your menu to accommodate the onslaught of change, or transform your business altogether. These trends are meant to prepare and arm you with the right artillery once the war begins. After all, knowing is half the battle.
Trend 1: Stories, purpose, delivery
New products and establishments entering the market will require these three key elements if they want to connect with today’s consumers. These days, people want to understand why you exist and what you stand for. Transparency, honesty, and authenticity are the three keywords raised by today’s consumers when they make buying decisions.
Expect to see more products, brands, and establishments that push marketing towards tradition, credibility, and quality. There is a rise in new products claiming to be craft, artisan, and handmade, and this stems from consumers’ search for products with meaning. Look out for brands that will delve into the big world of business with stories to share about who they are, why they are doing what they do, and what they stand for.
Trend 2: Health-conscious market
You can’t hide from it. The Philippines—along with the rest of the world—is in a booming health market. This trend will continue not only in 2018 but for the next four to five years at least. From 2015 to 2016, cereals and yogurt food categories experienced double-digit growth of 11 percent and 12 percent, respectively. This growth is going to continue with predictions of over 15 percent expected throughout the rest of the year. We will see new brands and products hit the shelves in both categories as consumers are becoming more and more adventurous and conscious about what they eat.
Ready-to-drink juice sales have risen by over 14 percent over the past couple of years, so expect a wave of new juice brands to hit the market, but also expect many to disappear as competition grows.
Sports drinks and energy drinks experienced amazing sales growth, up to 16 percent in 2016, and continuing through this year. Ready-to-drink juice sales have risen by over 14 percent over the past couple of years, so expect a wave of new juice brands to hit the market but also expect many to disappear as competition grows.
We predict that it will only be a matter of time before we see big companies try to dabble in the market by producing juices for convenience stores, supermarkets, and fitness centers. The big corporations already began trying to take a share of the health market when they released their flavored waters in 2016 and 2017. With two major players in the flavored water scene, it is only a matter of time before someone tries to improve the current juice selection, which leaves a lot to be desired. Currently, the juice shelves are filled with concentrates and poor quality brands, but with the growing demand we foresee one of the big corporations making a jump into the competitive natural juice world.
Trend 3: Superfoods and century-old natural foods
Continuing on with the health theme, we will see growth in traditional foods and what we call superfoods. Some of these have kept civilizations healthy for centuries well before antibiotics existed. We are seeing a large rise in the consumption products such as kombucha, naturally fermented vegetables, kimchi, beetroot (due to its nitric oxide content, which burns fat and allows athletes to increase air intake during exercise), kelp (seaweed), ancient grains, and turmeric.
From 2011 to 2015 (based on the global new products database), there was a 202 percent rise of new food and drink products launched containing the word “superfood.”
From 2011 to 2015 (based on the global new products database), there was a 202 percent rise in new food and drink products launched containing the word “superfood.” At the recent F&B Report Summit, we listened to the young millennial farmers who are driving the charge towards organic and sustainable farming, encouraging people to eat more plants, grains, and vegetables that are produced in a way that still respects the traditional farming methods.
Trend 4: Craft, artisanal, micro, small batch
These are among the most overused words in 2017. And for good reason. Consumers demand it. Craft beers started out a couple of years ago, but the introduction to the Philippine market was unfortunately misrepresented by products that were not ready to be released. Don’t expect the same to happen to craft spirits. Apotheke Craft Spirits, in collaboration with Wine Warehouse, will be bringing in amazing craft products from around the world such as Opihr Oriental Spiced Gin, Los Siete Misterios Mezcal, Michter’s, and Chase Distillery as well as many others. There are also many small startups already dabbling in this territory in the country.
Expect to see more artisanal products on menus, in supermarkets, and in small retail stores, as people are searching for products made with care, time, and quality. Artisanal butchers have started to pop up in major cities elsewhere. Will we get our version in the Philippines? We certainly hope so, as it is very difficult to find a source of meat that is carefully sourced, handled, and respected.
Apotheke Craft Spirits, in collaboration with Wine Warehouse, will be bringing in amazing craft products from around the world such as Opihr Oriental Spiced Gin, Los Siete Misterios Mezcal, Michter’s, and Chase Distillery, as well as many others.
Microbrewers and small batch producers will continue to sprout up with new beverage and products. The one area we predict growth in over the coming years is the development of the country’s very first natural ciders. With the abundance of fruit in the Philippines and with so much going to waste due to blemishes, bruises, or overripening, it is about time for major fruit farmers start turning some into ciders. The cider market has been booming around the world for the past five years, but a tropical country with a sweet tooth like ours still doesn’t have its own cider label.
Trend 5: Grocery and food delivery services
Convenience is top priority among the people. With traffic congestion still ongoing, people are seeking delivery options. Grocery delivery services have had a bumpy start, but we believe the future is bright. Companies like Marketa, Metromart, and Honestbee are slowly gaining ground. As the country becomes more connected and tech-savvy, so will the use of these companies. Why would you drive in traffic, pay P50 for parking, and deal with the hassle when you can order everything from an app or computer and have it all delivered to your doorstep, at a time that suits you?
Trend 6: Ready-made meals
With many people in the country lacking refrigeration facilities at home and the time to prepare food, quick and easy meals are in fashion. When before people would usually buy their meals at the traditional carinderia, there is now a shift towards convenience stores and their box meals. Over the past 12 months, we have seen all the convenience stores free up refrigerator space to make way for microwaveable meals. We have seen Starbucks develop its own line of dishes that can be easily heated up and consumed for lunch. This market will expand. Just wait and see how the fierce competition will drive the stores to outdo each other with their ready-to-heat meals.
Trend 7: New millennial-targeted hotels
The hotel market has been stagnant since 2007, but over the past few years we have started to see some movement. The opening of new casino hotels like Shangri-La at the Fort, Grand Hyatt Manila, and Raffles Makati is targeted to the five-star market. So what about the two-, three-, and four-star markets, which are actually the fastest growing sectors in the hotel industry?
Around the world, the big hotel groups are spending millions on research and development to create and launch new brands targeting the millennials. Canopy, Even, Hyatt Centric, MOXY, Citizen M, and 25 Hours have started to break ground.
The Philippines is well behind in this segment, but all of this is starting to change and will dramatically shift the hotel landscape over the next eight years. I’M Hotel opened in Poblacion earlier this year and we have the Lub d Hostel opening in Makati this December. Watch this space and be surprised by how these lower-star hotels steal some of the bigger players’ market share. Keep an eye on Cebu, Boracay, and Davao, as there are exciting prospects coming up.
It is going to be an exciting 2018 with many other trends that will surprise us. Remember, though, that trends come and go. One thing is certain: There will only be a handful that will survive this very challenging industry. Let these predicted trends guide and help the players in any way.
Originally published in F&B Report Vol. 14 No. 6
