“Clean Label” to Reignite Energy Drink Innovation

Newswise — Austin, TX — March 2015 — Consumer fear and mistrust is driving the demand for complete transparency in product development. The emerging trend of “Clean Label” is the industry’s response and is creating a large opportunity for growth.

Since the energy drink boom in 2011, which netted an astonishing number of new product introductions, the market has steadily dropped in both innovation and consumption. A recent gathering, hosted by botanical and functional ingredients leader Applied Food Sciences, Inc. (AFS), looked to address this trend, as well as provide a platform for discussing the marketing opportunities this presents.

AFS invited a select group of industry leaders to a closed-door “Innovation Retreat,” a day and a half of high-level discussions on consumer trends, legal regulations, and formulation in the area of energy beverages and supplements. Helping host the retreat were Mintel’s Lynn Dornblaser — Director of Innovation & Insight, Eric Pierce — Director of Strategy and Insights from New Hope Natural Media’s NEXT Accelerator group, and Justin Prochnow — Shareholder at Greenberg Traurig, LLP, and part of AFS' legal counsel.

(Presentations from the retreat are available for download at www.appliedfoods.com/innovation).

Retreat takeaways were both eye-opening and informative:

• The global energy drink market has suffered greater than a 50% decline in new product introductions since 2011 when the market reached its peak. A large part of this is attributed to the changing habits of consumers and their concerns around health and safety.
• The core consumer of energy drinks is millennials. 67% of males ages 18-34 purchase energy drinks and the same goes for 47% of females. This is important as the millennial shopper is known to be well-educated, with their concerns about health and safety affecting purchasing decisions. Nearly two in five of these consumers are drinking fewer energy drinks because they say “they are not good for my health”.

“Consumers today — especially millennials — are skeptical and do not trust companies,” says Lynn Dornblaser, Director of Innovation & Insight at Mintel. “In fact, our research indicates that half of consumers in the US don't trust what companies put on product labels. Thus, it is essential that companies find ways to overcome that distrust.”

AFS believes it can offer a solution, thanks to its ongoing research and development in a wide portfolio of naturally-sourced botanical ingredients. The company’s goal is to help create more clarity and transparency in the supply and manufacturing chain, so that consumers understand and trust that what they consume is safe and efficacious.

“Imagine reading the back of an energy drink and it says ‘Organic Caffeine Sourced from Unroasted Green Coffee Beans’,” explains Jackson Zapp, Innovation Expert at Applied Food Science. “Even the most skeptical consumer is familiar with ‘organic’ and it is easier, then, for them to draw a conclusions that they can trust what is in this product.”

To further this idea, Eric Pierce from New Hope’s NEXT Trend discussed how “Clean Label Products” are representing this notion of transparency. Clean label products are generally comprised of natural ingredients that are easy to understand, fewer in number, and most often they are ethically-sourced.

“A close examination of consumer needs reveals a mix of positive and negative forces creating demand for Clean Label,” says Pierce. “Consumers are willing to expend more effort and to pay more for products and brands which align with their values.”

For product innovators, the opportunities are vast, as Mintel confirms that consumers are willing to spend 31% more on foods that align with their values around clean, ethically-sourced, “natural” ingredients.

To learn more about AFS wide portfolio of functional ingredients, stop by booth #490 at Engredea, part of Natural Products Expo in Anaheim, CA, March 5-8th 2015. Find presentations from the retreat at www.appliedfoods.com/innovation.

Austin, Texas-based Applied Food Sciences, Inc. specializes in developing functional ingredients and technology for nutritional products. For more information, visit www.appliedfoods.com, email [email protected] or call 1-800-345-9666.