Personalization is driving innovation across consumer markets
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Sensors, sustainability, and alternative ingredients will continue to push major players to extremes as they innovate to survive, Lux Research says
Recent key developments are shaping industry trends across consumer markets for 2020 and beyond. In a new report, Lux Research’s leading agrifood and health analysts collaborated to compile a list of the top developments across applications of digital technologies, resource availability, plant-based foods, and environmental conservation. Lux’s report, “Agrifood and Health: Key Developments in 2019 and Outlook for 2020,” points out personalization as the most pervasive factor driving innovation across agrifood and health industries. Driven by intense competition from smaller, more agile brands that can quickly innovate, the need for increased personalization is underpinning most innovation decisions across consumer markets.
While personalization has expanded opportunities across the healthcare space and is driving increased attention toward lifestyle-based interventions for managing chronic diseases, it poses problems for major food and agrichemical companies that have historically relied on mass consumption to drive top-line growth. “In 2020, look for more adoption of digital technologies in the food industry for new product development, end-to-end transparency, and food e-commerce applications,” said Lux Research Analyst Harini Venkataraman.
Bioinformatics – point-of-use (POU) sensing
Digital technologies like bioinformatics, point-of-use (POU) sensing, and ingredient informatics are making their mark on the agrifood space already. These recent innovations are transforming the products and services that drive consumer markets. “Bioinformatics is emerging as an opportunity for companies to reduce product development costs and target identification time. Increasing sensor ubiquity is shaping consumer health habits by empowering them to take more factors into account in decision-making,” said Sara Olson, Ph.D., Director of Research at Lux. “Cheaper, smaller, faster sensor options will continue to infiltrate consumer product markets beyond health tracking to include food safety and quality. This increasing sensor ubiquity will empower consumers to take even more factors into account in their purchasing decisions,” Olson explained. Combining algorithms and data, ingredient informatics is reinventing food formulation, driving down product development timelines and costs.
Additional key factors driving changes in agrifood and health innovation are resource affordability and scarcity concerns, especially regarding water. Research Associate Mia Lu said, “Nearly a quarter of humanity is already experiencing a shortage of water. The crisis will worsen with climate change and population growth, driving water prices further upward and posing increasing threats to individuals as well as agricultural and industrial value chains.” From foods to agrichemicals, companies are under pressure to diversify, pay more attention to conservation efforts, and form multisector collaborations to accelerate development of advanced water treatment options.
Developers expand their product portfolios
One major shift due to environmental concerns and technological innovation is seen in the push toward plant-based foods. While health and flavor trade-offs remain an issue for plant-based burgers, further innovations and massive marketing budgets are enabling these companies to compete; they may even take a meaningful market share from beef products. “The momentum behind plant-based foods will persist as developers expand their product portfolios,” said Research Associate Laura Krishfield. “We will see second-generation plant proteins achieve cost parity with soy as well as the first hybrid products – combining plant- and cell-based protein sources in individual products.”
Environmental conservation efforts and increased consumer demand for responsibly produced food have fueled innovation in biofertilizers, marking another key industry shift. Once isolated to leguminous crop varieties, biofertilizers have the potential to provide nitrogen fixation to broadacre crops like corn and wheat. Lux Research Senior Analyst Joshua Haslun said, “biofertilizers improve efficiency of nutrient use and contribute to agricultural sustainability, which will drive further innovation in the agriculture and agrifood industries.”