Webinar: The Future of Better-for-You | Insights and Expertise | Blue Diamond Global Ingredients

WEBINAR TRANSCRIPT

Laurie Colin: Hello, and thanks for joining us. I'm Laurie Colin.

Laura Gerhard: And I'm Laura Gerhard. Today we'll be exploring what's next in the better-for-you food and beverage category and how almonds and almond ingredients can help you surpass the market. Healthy eating is already more than a passing fad, but the recent global health crisis has increased the urgency with which consumers are shifting toward healthier food and beverage choices. Those consumers and their purchasing behavior are being driven by three major factors: a holistic approach to wellness, better-for-you. meets better for us, and increased label literacy. We'll start with that holistic approach. Consumers around the world are looking for foods that have preventative health benefits and disease fighting qualities.

Take a look at these statistics: 60% of global consumers say they use food as a remedy to treat or prevent some condition. A similar number are looking for foods and beverages that offer immune health benefits, and 30% say they grew more concerned about immune health in 2020.

But it's not just physical health people are concerned with. After a year of isolation and challenging news, 60% of American consumers say they're more worried about their mental health compared with a year ago. That concern has led to a 12% lift in sales for products with messaging includes self-care.

And while they're taking care of themselves, a growing concern for taking care of the planet has consumers seeking out more sustainable food options as well. 60% of all consumers say it's important that their food is sustainably produced, and nearly three quarters of Gen Z consumers are willing to pay more for those sustainable products.

That increased awareness of the environment is being matched by greater attention being paid to what's on the label. A majority of consumers are choosing to educate themselves on what's in their food and what health benefits those ingredients might offer.

And 58% say they're trying to choose foods and beverages with fewer synthetic or artificial sounding ingredients. These changes mean that it's no longer enough to make foods better-for-you reducing calories, sugar and fat. Food and beverage companies need to meet consumer demand by focusing on: functional ingredients that contribute healthful nutrients like protein and fiber,

ingredient combinations that can achieve holistic health benefits and keeping the ingredient list as short and recognizable as possible. Since consumers are paying more attention to what's on the back of the pack, here are just some of the opportunities we've identified for innovations that can make an impact as consumers look to improve immune health.

The focus often turns to the gut. In fact, 61% of consumers worldwide are interested in digestive health products. Whether or not they actually have a specific problem. 57% are taking a more natural approach to gut health by trying food and drinks with higher fiber content.

And as much as 39% of global consumers would pay a premium for a food or beverage that can claim gut health benefits. one perhaps surprising place consumers are looking for immune health. Kids snack food products, baby and toddler foods are in the top three product categories for growth in immune health claims.

That might be because more millennials are becoming parents and their very health conscious. In fact, 80% of millennials are expected to be parents within the next five years, and three quarters of millennial moms say they consider the nutritional profile of a product before buying it.

Many consumers are also interested in getting more protein into their diet without necessarily eating more meat. 60% of consumers say they want to eat more protein, and about a quarter say they're already eating more plant based protein than a year ago.

It's not just plant based burgers, either. one third of snack bars launched in 2019 featured high protein claims on their labels. Up from just 17% in 2015. Consumers are even looking for nutritional improvements in traditionally indulgent spaces like bakery, confectionery and desserts.

More than two thirds of consumers say they would pay more for high protein chocolate, and sales of gluten-free cookies grew 20% in 2020 alone. All of this discussion around healthier eating comes with one very important caveat it still needs to be enjoyable to eat.

Taste and texture are the most important purchase drivers of foods, no matter what their nutritional profile, and 86% of consumers say taste drives their purchase decisions. That's both a challenge and an opportunity. After all, many healthy foods and drinks taste great already.

45% of consumers almost half say the taste of alternative milk products is a reason they choose to buy them, and that continual repeat purchasing pattern is key. It takes eight purchases for someone to become a loyal customer. About half of buyers who make an initial trial purchase will make a repeat purchase, and only half of those buyers will buy a third time. Many consumers are also interested in getting more protein into their diet without necessarily eating more meat. Many better-for-you. Products on the market today have sacrificed taste and texture to meet nutritional targets, but they aren't meeting customer expectations.

For more on that and passing it over to Laurie, our Senior Technical Business Development Manager.

Laurie Colin: Thank you, Laura. There is a huge opportunity for brands to fill in the gap with products that aren't just better-for-you, but also taste great. The key is using ingredients that may support those health claims, while also helping to overcome common formulation challenges like removing off notes and plant based protein products, achieving desirable textures in better-for-you bakery, nutrition bars and non-dairy formulations. And keeping a simpler label by reducing the need for flavor masking agents. Almond ingredients, like those offered by Blue Diamond, work exceptionally well at addressing these needs. Almonds are all natural and gluten free, a great source of protein and fiber, and most importantly, they actually enhance taste and texture.

New product development teams can rely on almonds in a variety of forms to support better-for-you formulations. For example, almond protein powder can help provide a soft, chewy texture in products like nutrition bars and snacks, as well as emerging areas like bakery and confectionery.

And since it already tastes great, it reduces the need for masking agents, which helps keep the label simple and clean. In bakery and non-dairy products, almonds offer a variety of opportunities. Almond flour's fine granulation is ideal for even the most delicate of pastries.

Almond protein powder and almond butter both contribute to viscosity, and to a rich, dairy like creaminess in non-dairy frozen desserts and custards. And more traditional almond forms offer a value-added texture and taste as a topping or inclusion. Also important to note, Blue Diamond does not use chemical additives in processing our almonds.

All of our ingredients are produced by mechanical separation. When they appear in an ingredients list, consumers immediately recognize them and love them. In fact, 47% of global consumers are willing to pay more for a product containing almonds.

And that's great news for your new product formulations. Blue Diamond has spent more than 110 years growing almonds and the almond marketplace, and our growers and supply chain partners are ready to solve your taste and texture challenges with versatile almond ingredients.

The proprietary processes and equipment that allow us to maximize quality and consistency and an expert R&D team committed to helping you enhance taste, texture and labels. We are ready to deliver on our commitment to provide innovative solutions that will help bring better-for-you products into consumers' homes for a long time to come.

Laura Gerhard: Thank you for joining Laurie and me today. We hope you found these powerful insights and our applied almond expertise helpful.

Q&A

Loretta Kelly: Welcome back. Now we'll begin our Q&A portion. Please continue to submit questions in the chat box on the side of your screen. But first, let's introduce our panel and get a little bit of insight on how the better-for-you trend has impacted them personally and the foods and drinks they purchase.

First up, we have Laura Gerhard, our Vice President of the Global Ingredients Division. Laura, what is a better food product you've added to your diet during a post-COVID?

Laura Gerhard: I've tried to incorporate more almond flour in my baking at home, and so my kids and I have the Saturday morning tradition to make the blueberry muffins from our almond flour cookbook and they sure are tasty.

Loretta Kelly: Thanks, Laura. Next up, we have Laurie Colin, our Senior Technical Business Development Manager. Laurie, same question: What is a better-for-you product you added to your diet post or during COVID?

Laurie Colin: Well, since I have not been as active, one of my objectives has been to cut down on my carbohydrates and I have started baking keto gluten free bread. I use almond flour and our almond protein and really it's a very nutritious, low carbohydrate, high protein bread that I try and bake at least once a month.

Loretta Kelly: That sounds really good, Laurie. Next up, we have Emma Ignaszewski, Corporate Engagement Project Manager for the Good Food Institute. Hey, Emma. So what is the better-for-you product you've added to your diet during or post-COVID?

Emma Ignaszewski: Yeah. Real quick, I just wanted to give everybody a one sentence around on GFI at the Good Food Institute. We work with companies around the globe to accelerate the alternative protein market, including plant-based meat, eggs and dairy products, to really make sure that consumers have access to alternative proteins that taste the same or better, cost the same or less and are as healthy or healthier than conventional proteins. And the better-for-you product that I've added to my diet since COVID is plant-based cheese. There's no lactose sensitivity, there's no saturated animal fat, no growth hormones at all.

And it makes me feel better about making a homemade pizza on a Friday night.

Loretta Kelly: That's really good, I know how I feel about eating pizza every Friday night as well. You're always trying to find a healthier option. Next up, we actually have Carole Bingley, Technical Specialist from RSSL. Carole, do you want to tell us a little bit RSSL as well and also answer: what's the better-for-you product you've added to your diet during or post-COVID?

Carole Bingley: Yeah, thanks, Loretta. So, I work for Reading Scientific Services Limited or RSSL. We're based in the UK, but we're a contract research organization with a global client base, and we provide analytical and product development services to the food industry.

So, I work in the product development team and I'm working on a lot on plant based development actually and also working in fortified foods as well. So, I started taking vitamin D tablets at the at the start of the pandemic in the hope to boost vitamin D.

Being in the UK, we don't get that much sunshine. So, but also I've been trying to increase the variety of plant based ingredients that I have in my diet to try and make sure that I have a good mix of fruit, veg, nuts, grains, pulses and really just bringing that variety in.

Loretta Kelly: That's really exciting, Carole. I know I've added meatless Wednesdays to my house as well. I'm another question for you all. And I used to get maybe two perspectives. I'll stick with you, Carole. What is the impact of COVID on the better-for-you trend overall?

Carole Bingley: I think it's going to be huge. I mean, we saw plenty of information in the in the video, but I think it's really helped to focus people's attention on their diet and how important the food is in terms of their overall wellness and just taking control of that, that part of your life, because we've all had a year and a half of a lot of things being out of our control, but you can make a difference to your health and well-being by what you eat. So, I'm seeing a lot of innovation in this area.

We have clients that come to us to ask us to support with product development, and we're seeing a real upsurge in in products where people are looking to both take away the fat, the salt, the sugar in the products, but also bring in ingredients which can help to boost the profile and bring added benefits into its products.

Loretta Kelly: Thank you, Carole. Laura, how about you add to that, do you have any other things about the impact of COVID on the better-for-you trend?

Laura Gerhard: I think that it is very much about balancing work and family, as well as thinking about health and wellness holistically. So as families choose the foods that they're eating, I think COVID has also drove forward this concept of food, as medicine and really push them into the mainstream.

So, Americans are trying a lot of foods that help them boost immunity, prevent inflammation, helping to aid their digestive health, but also relieving stress and anxiety.

Loretta Kelly: That's so true, I know I've definitely added in a lot of foods that are trying to help my community. One of the things I've added is like turmeric and I don't call them golden lattes, but like, I have a hard time formulating them.

So, I guess, you know, the next question I have is maybe, Laurie. How about you tell us: How does Blue Diamond help food developers meet demands for better-for-you products, especially when it comes to formulation?

Laurie Colin: Sure. Well, our almond ingredients offer a number of nutritional benefits. Almonds are low in sugar and offer a source of complex carbohydrates, a source of protein and a source of fiber and healthy mono- and polyunsaturated fats. They are a source of vitamin E and also provide several essential minerals, including calcium, iron, potassium, phosphorus and magnesium.

So, in addition to nutritional benefits our almond ingredients offer numerous functional benefits. Our almond flour allows easily transition from traditional wheat flour in better-for-you bakery products such as pancakes, cookies and muffins, while still offering a smooth mouthfeel and a rich texture and flavor.

Our Blue Diamond Almond Protein Powder. Clean flavor will allow flavors to shine through without the need for flavor, maskers or flavor enhancers. This clean taste pair with water binding and gelling capacity will help achieve some of the desired qualities, such as that desire, texture in nutrition bars, better-for-you baked products and a wide range of plant-based refrigerated and frozen desserts, and that is just naming a few.

Loretta Kelly: Wow. Sounds like it's really complicated to formulate something. You know, Emma: I know you work with a lot of manufacturers at the Good Food Institute and I know every time I head to the grocery store these days, there's a new better-for-you product on the shelf.

So, you know, what are you seeing? What are the newest better-for-you claims that you've seen from the manufacturers?

Emma Ignaszewski: Yeah. So I think there's a lot out there. You know, we're particularly interested in the kinds of claims that companies are making in the plant-based space. We've seen product launches with plant based. There's a claim growing from about 300 per year in the total food and bev space in 2016 to more than 1,500 in 2020. So, plant-based claims have grown at a compounded annual growth rate of about 50% in the past four years, which I think is both incredibly fast. And at the same time, it's not too surprising we're all seeing the trends and the patterns flowing.

And then some of the specific better-for-you benefits that I think we're seeing the plant-based trend tap into and we're seeing consumers look for when they're selecting plant-based products are less saturated fat, more fiber, more complex carbohydrates.

They're interested in no trans fat, zero cholesterol. And we're also seeing consumers starting to weigh the fact that plant-based foods have zero antibiotics. And then in the seafood category as well, they have zero mercury, no heavy metals, no other contaminants.

So, I think any one of these benefits is something that could interest you're given a consumer that's looking for a better-for-you product.

Loretta Kelly: Thanks, Emma. I know when it comes to better-for-you products, you're always trying to find something with the right taste and texture. Right? So, this one questions for both Carole and Laurie: How do you guys work with clients to assist in the formulation of enhance better-for-you products when it comes to taste and texture?

How about you go first, Carole.

Carole Bingley: Now it can be a challenge, depending on the ingredients that you're trying to introduce into a product and the sort of levels that you're trying to achieve, and sometimes you will need to use masking flavors. I know that that's something that a lot of manufacturers are trying to avoid, but sometimes I'm thinking of ingredients like green tea has quite strong taste, which may be compatible with certain products, but less compatible in others. And maybe sometimes it's choosing the right flavor system to work with you or your particular ingredient. It may be that, for example, if you're trying to put something into a juice-based drink the softer, sort of strawberry raspberry type flavors may be more difficult, whereas the tropical flavors may have a stronger masking flavor. So sometimes it's it's really trying to design the product around the ingredient you're trying to introduce. But you know, a lot of the time we're looking at products and there's higher levels of sugar and salt than would be desirable because again, they are very effective at masking off tastes when you're trying to introduce ingredients. So, it's really trying to find novel ways to address those sorts of issues as well. So, it's a challenge and each product has to be kind of assessed individually and really sort of come up with the best solution for that particular product.

Loretta Kelly: Definitely understand that. Laurie: do you have a perspective on formulating when it comes to getting to the right taste and texture?

Laurie Colin: Certainly, we know that one of the top challenges that exist on the successful formulating of better-for-you products is delivering that taste in the texture and the nutritional benefits that consumers expect. Our main objective here at Blue Diamond is basically to help our customers overcome some of these challenges by having a comprehensive understanding of almond ingredients and the nutritional and functional benefits they provide in different food and beverage applications. We work with our customers R&D teams in defining their needs and establishing if in fact our almond ingredients can meet these requirements. For example: can our almond protein deliver the same or similar properties, including the taste and texture, for their better-for-you products that they're better-for-you products require? Or does our almond flour meet their requirements for their gluten free or keto bakery products? So based on this on these findings that we have obtained from these discussions, we make recommendations and provide technical support, which may include assisting with formulations and hopefully help our customers R&D teams accelerate their new product development cycle.

Loretta Kelly: Thanks, Laurie. Appreciate that. And, Emma, this is questions for you: I think you've been working with a lot of manufacturers, of course, and you've seen a lot of different trends over the years when it comes to who you've been engaging with.

Do you see a shift in generational concerns when it comes to new trends around immune health?

Emma Ignaszewski: Sure. So, thinking about generations, if we track the rise of plant based as a better-for-you trend by generation, first of all, we see that this trend is picking up with every single generation from Gen Z to Baby Boomers.

And we can see within each generation for every one consumer that's purchasing less plant based protein than they did a year ago, there are actually three consumers who are eating more plant based protein so than they did a year ago. And we see health as a real driving factor, in particular for baby boomers.

While millennials are looking for more restaurants that serve plant-based meat option and they're looking for convenience, and this trend also particularly with millennials, goes beyond vegans and vegetarians. We're seeing that 34% of meat-eating millennials are also eating four or more plant based dinners each week.

And then an interesting sort of intersection here is we're seeing parents twice as likely to be eating more plant-based protein today compared to a year ago. And as you know, millennials are becoming – more parents are millennials these days ‚ we're seeing parents feeding plant based proteins to their kids. There's an entire generation of children who are also being raised on these better-for-you plant based products.

Loretta Kelly: I know this is quite interesting. I know my niece is excited by plant based – I'm going to call it chicken nuggets, but it's not chicken. But plant-based nuggets, which is interesting because I remember, you know, actually growing up and loving McDonald's chicken nuggets.

And that was that was the thing. And now it's always like, I want my plant based nuggets. So, it's very interesting. The perspective has completely changed. And what's – what children want, you know: I think another good question that's come up here is and it may be good for everybody to answer this question:

There has been a lot of made better-for-you type claims that have come out. And then there is these traditional better-for-you type claims. I think a good example is that, you know, back in the day you had spring water, and that was a wonderful claim to have on your bottled water.

But now it's, you know, alkaline spring water. And so, you have these claims that keep expanding and growing. But really, there's only so much room left on the label. You know: What should take priority here? Carole: you have any thoughts?

Carole Bingley: I think it's really important to work with your consumer on this side and really understand who your consumer is because there is a temptation to say all the great things that you possibly can about your product. But if they're not meaningful to your consumer, then you run the risk of actually confusing them and alienating them.

So, I really think it's carrying out that that consumer insight piece and really working with them to understand what claims resonate and which ones actually, they don't really understand or they just think are kind of, you know, some products you think that's a given.

We don't need to know that I expect already of the – that has to be the baseline for the product. So, I think it's really kind of making that connection with the the consumer.

Loretta Kelly: Okay, cool. Laura: do you have any thoughts?

Laura Gerhard: I would have to absolutely agree. I think it really just comes down to understanding your customer and your consumer and what resonates with them as they're purchasing your product.

Loretta Kelly: How about you, Emma?

Emma Ignaszewski: Yeah, I'd love to add on to this one, because I think that, you know, shifting claims and how you make the claim matters a lot and, in many cases, emphasizing the health benefits of a product can be more important than focusing on what the product doesn't contain.

So, for example, in the plant-based space, GFI commissioned a study from Mine Lab that looked at driving plant based food purchasing. And one of the main findings was that was that purchase intent is positively influenced by terms like plant protein, plant based, plant powered.

And meanwhile, terms like meatless or meat free or vegan or vegetarian are much weaker motivators of purchase intent. So, when thinking about how to prioritize different claims, like many of which would apply to a given product or category, it can be really important to focus on the positive benefits.

Loretta Kelly: Laurie, do you want to round out the discussion?

Laurie Colin: Certainly, yes, I agree with everything that's been said about really understanding your consumer. We know that a majority of consumers are choosing to educate themselves on what's in their food. We basically live in the age where information is at our fingertips and consumers have the ability to confirm the value of an ingredient and/or a claim via a simple, Google search. One of the most important aspects when making claims is understanding the target audience or your consumer and the type of benefit or claim they are looking for in their food and beverage options.

Choosing the best ingredient that can provide such claims while at the same time keeping the ingredient list as short and recognizable as possible. Since we also know that consumers are paying quite a bit of attention to what's in on the ingredient list.

Loretta Kelly: OK, final question. This'll go to you, Laura: How do you balance demands from health-conscious consumers while producing indulgent food and beverage products that actually taste good?

Laura Gerhard: So health or indulgence, I think consumers definitely want both. I think one thing is certain that while there's been more interest and better-for-you products and it continues to rise, that taste texture is really important that overall eating experience, it has to taste good.

That is still going to be at the top of the list when consumers are thinking about making a repeat purchase. So, it's important to keep those things at the forefront as you're formulating and choosing those ingredients that go into your product.

Loretta Kelly: Thanks, Laura. Well, we're just about time is up for us right now. Thanks for joining us today. We had a really good discussion. If you'd like to continue the conversation, you can go to our website, bdingredients.com, select the contact us form and one of our sales directors will be in touch with you.

In the meantime, you can join us on our podcast, Grown in California. We'll be discussing more better-for-you trends as it relates to the plant-based foods evolution. Laurie and Emma will also be on that podcast. We hope you enjoyed this webisode, and we look forward to seeing you again soon.

Thanks.