2018 food and beverage manufacturing industry predictions
Processors are expected to adopt more technology in their plants as well as produce more natural products in the coming year.
MarketsandMarkets (MnM), a revenue impact research and advisory firm focused on high-growth niche markets, has released some of the top trends that are expected to affect the food and beverage industry in 2018.
Among the top trends, automation and robotics are expected to gain mass adoption in many food processing plants to help operational efficiencies and customer order fulfillment as well as to increase throughput and quality. The food robotics market is projected to witness a remarkable growth rate of 12 percent from 2017 to 2018.
To meet consumer demand, more food and beverage manufacturers will be using terms like “natural” and “functional” to launch their new products. The consumption of natural beverage products that can deliver nutritional and functional benefits is projected to grow at a rate of 10 percent, in terms of volume, from 2017 to 2018.
Other predictions are an increase in dairy alternatives due to a growth in consumption of products with ingredients such as soy, almond, coconut, oat, and hemp milk, acting as substitutes for regular milk products. The consumption of these dairy alternatives is projected to witness a growth rate of 10 percent from 2017 to 2018.
Additionally, food safety concerns are on the rise worldwide, due to more outbreaks of foodborne illnesses globally, the increasing global food trade and resultant enforcement of stringent food safety regulations and the development of advanced technologies for rapid testing. As a result, the food safety testing services market is projected to grow at a rate of 8.0 percent from 2017 to 2018.
In the Q&A below, Suraj Nagvenkar, senior research analyst at MarketsandMarkets, and Priyanka Goswami, food, beverage and agriculture research analyst at MarketsandMarkets.
FE: Technology, including automation and robotics, is predicted as gaining more traction in food processing. Why now? Are processors looking for operational efficiencies to improve throughput? What technology/equipment will be most likely to be adopted? Why?
Nagvenkar & Goswami: Factors such as increased demand for fresh and clean food ingredients, growing processed food industry, rising health consciousness among consumers, and increased instances of food contamination and accidents during processing through human contact calls for automation and robotics in the food processing industry.
Food processors are looking for flexibility—the ability to switch from one product, package or label to another—and real-time traceability in the food production line due to frequent changeovers in consumer preferences, which is leading to increased use of automation and robotics. It helps in optimizing resource management, improving yield, mitigating security risks, driving productivity and enhancing asset utilization in the production and brings cost-efficiency in the throughput.
Approximately 36 percent of the total investments in robotics are driven by the willingness to reduce labor cost in food processing. Food processing giants such as The Kraft Heinz Company and The Coca-Cola Company have recently invested to incorporate robotics and Artificial Intelligence in their manufacturing units to reduce operational costs.
The average selling price of robotics is expected to decrease in near future due to increased production of robots with multi-functionality by players such as ABB Group, Kawasaki Heavy Industries Ltd., Fanuc Corporation and Rockwell Automation, which makes them suitable for a variety of applications such as packaging, repackaging, processing, and palletizing in food and beverage processing.
In the food automation category, the demand for discrete controller systems and visualization systems such as SCADA (supervisory control and data acquisitions), PLC (programmable logic controller), HMI (human machine interface), MES (manufacturing execution system), and DCS (distributed control system) is expected to increase by approximately 7 percent during 2017-2023, as they help in increasing productivity and quality by streamlining various processes in the production plant.
Furthermore, COBOTS (collaborative robots) are also expected to experience high adoption in the robotics segment by food manufacturers owing to their easy adaptability and ability to work in coordination with human, reducing the risks of accidents at production plants. The market of cobots is expected to grow at a CAGR of 36.19 percent during 2017-2022.
FE: What will the launched natural/functional beverages in 2018 look like (less sugar, no artificial flavoring, etc.)? Will these companies be using new types of equipment to produce cleaner label beverages?
Nagvenkar & Goswami: Health consciousness among consumers and consumer demand for comprehensive labeling of products ingredients and nutritional values, together with regulatory restrictions on usage of artificial/synthetic additives in beverage products have driven the beverage manufacturers toward adoption of natural ingredients.
However, limitations such as low supply of natural ingredients and their associated higher cost vis-à-vis artificial ingredients have historically resulted in their lower adoption, but are a cause of concern among beverage manufacturers and ingredients suppliers in the modern world. The surging demand and shortfall in supply has resulted in growing R&D and industrial research for innovation in space of natural ingredients and development of new production sources.
Furthermore, given the consumer demand, beverage manufacturers are increasingly introducing new products in the market that are being marketed/positioned in-line with consumer focus. Hence, products are significantly highlighted with claims such as ‘sugar-free,’ ‘gluten-free,’ ‘allergen free,’ ‘natural flavors,’ ‘no preservatives,’ ‘100% natural,’ among others.
Though innovation in equipment/technology and packaging techniques has resulted in elimination of preservatives; ingredients play a greater role in production of cleaner label beverages.
FE: What new products will be introduced that are non-dairy? What segments in the dairy space are ripe for the non-dairy market?
Nagvenkar & Goswami: Introduction of dairy alternative/ plant based products is expected to take over the dairy industry. The increased vegan population and instances of lactose intolerance are the key factors expected to drive the market for plant-based milk products. Companies such as the Hain Celestial Group (US), Vitasoy International (Hong Kong), and Danone (France)—with recent acquisition of Silk and So Delicious of WhiteWave Foods—are continuously innovating and introducing new products in the non-dairy segment.
Dairy alternative yogurt (almond milk, soymilk, rice milk, coconut milk, and oat milk yogurt) is one of the new products which is expected to be introduced by the major dairy alternative manufacturers. Furthermore, barley, flax, hemp, pea, and quinoa milk are the major non-dairy trends and are expected to grow at a fast pace in the market.
The market of whey is expected to slow down owing to increased instances of milk allergies and lactose intolerance among people who can be captured by the dairy free products. Furthermore, the market of milk powder in the dairy ingredients space is also expected to experience slow growth and this can be present opportunities to the non-dairy/plant-based dairy alternative products. The use of non-dairy products in sports nutrition and nutraceuticals is projected to increase their demand.
FE: What types of food safety testing methods will likely be adopted? Will genetic testing gain more traction or is that still a few years out from being adopted by the F&B industry?
Nagvenkar & Goswami: Currently, chromatography and spectroscopy based testing methods, such as high-performance liquid chromatography (HPLC), liquid chromatography (LC), gas chromatography (GC), and mass spectrometry (MS), are disrupting the technology market in food testing industry. The use of these testing methods is gaining growing level of significance and adoption among food testing laboratories and government inspection agencies. This is attributable to their large-scale advantages over other food testing methods– PCR, ELISA, culture-based—such as greater sensitivity, higher accuracy, lower turnaround time, simplicity in operations due to automation, ability to detect multiple targets simultaneously and requirement of minimum labor for sample preparation, among other such factors.
In established testing methods, Real Time PCR and digital PCR are also experiencing surging demand in food testing owing to their simplicity in usage, accuracy of results, and more importantly lower cost of testing a food sample.
In the F&B industry, genetic testing is still in the phase of industrial research and is expected to be still a few years away from being significantly adopted in the industry.
FE: Anything else you’d like to comment on for 2018 food and beverage processing predictions?
Nagvenkar & Goswami: 2018 food & beverage processing trends can be classified into ingredients-based and technology-based. Based on ingredients, the demand for clean-label ingredients is expected to increase owing to consumer shift towards healthy and ethical eating. Consumers are looking for “No Artificial Preservative Added” products and are willing to know about how their food is procured, processed, and packaged. GMO transparency, Fair Trade certification, responsible production in terms of environment sustainability, and animal welfare standards are on the top of it. Also, todays’ consumers are more concerned about packaging of the products they are buying. Hence, compostable and bio-degradable packaging is on trend.
Emerging food processing technologies such as HPP (High Pressure Processing), pulsed electric fields, cold plasma, ultrasound, control systems and robotics are expected to experience growth in the food and beverage processing. Key F&B manufacturers are actively investing in technological advancements of their production processes. For instance, the fruit juice and smoothie manufacturer Fruitapeel (UK) invested USD $3.09 million in HPP technology, which helps the company to retain key nutrients of its products and maintain their quality.