Food for Thought: 10 Considerations For Food and Beverage Companies In 2018

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Wendel Rosen’s Food and Beverage Practice Group provides a full range of services to producers, manufacturers, distributors, suppliers, growers, retailers and investors, as well as to the broader consumer packaged goods industry. Heading into 2018, we believe that food and beverage companies should keep the following considerations in mind:

  1. Regulatory Oversight. It is still not clear what the Food and Drug Administration’s (FDA) focus will be with regard to its regulatory enforcement strategy under the Trump administration. While the FDA rolled back certain regulations to allow for greater time for industry compliance (ex. new Nutrition Facts Panel and restaurant nutritional disclosure regulations), the FDA will likely pay more attention to enforcing the Food Safety Modernization Act regulations. Therefore, a focus on your company’s compliance with food safety regulations is a must.
  2. Changing Consumer Preferences. Staying on top of shifting consumer preferences is essential for relevant food and beverage companies. Healthy snacking options and increasing convenience in both food packaging and delivery are gaining significant traction in 2018. The lack of time for meal preparation continues to drive an increase in convenient foods, but consumer awareness also demands that such foods be nutritious and delicious alternatives to the home-cooked meal. While every trend may not apply to your business, prudent food and beverage companies should prioritize analyzing available market data to ensure they  understand the driving preferences behind consumer purchasing decisions.
  3. Recalls. Recalls are time consuming and costly events. Since 2011, Class I and Class II recalls have steadily increased. Food and beverage companies should continually review their food safety programs to effectively educate and train employees, conduct internal audits, and improve their food safety/quality systems. In doing so, they will greatly reduce the risk of a voluntary market withdrawal or a mandated recall.
  4. Social Media. The genie is out of the bottle, and food and beverage companies must have a strategy to retain control of their brand image in our increasingly digital world. Food and beverage companies should proactively develop strategies to effectively communicate about their products and manage user engagement to maintain a positive consumer expression about their brands.
  5. Mergers and Acquisitions. Mergers and acquisitions will continue to serve as a growth strategy for companies looking to bring new, on trend products to the marketplace. Acquisitions of smaller companies who are leading market food and beverage trends can be done at a lower cost than spending the time and resources in experimenting with new products.
  6. E-commerce. With Amazon’s acquisition of Whole Foods, e-commerce will continue to grow in 2018 as busy consumers will likely show increasing interest in quicker and/or home delivery.  Consumers will continue to integrate ordering from their mobile devices into their monthly routine of in-store shopping.  Food and beverage companies should look to find ways to expand their direct-to-consumer sales and/or third-party e-commerce platforms to increase their sales and market position.
  7. Technology. Technological change will accelerate in our food systems from the way food is grown to the way it is purchased and delivered. At this year’s Fancy Food Show we saw how the supermarket of the future may look, as well as how technology can provide consumers with greater transparency and more complete information that they can use to inform their purchasing decisions. Food and beverage companies need to understand what such transparency could mean for their brands and how they can meaningfully communicate with consumers.
  8. Disruption. From plant-based foods challenging “traditional” food concepts in the meat and dairy categories to hydroponic farmers challenging what foods can be certified organic, disruption continues to intensify. It is no longer enough to consider “how” something is done, but also “why” it is done. Entrepreneurs are emerging who are looking to explore the beneficial intersection of food science and technology to advance the sustainability and health of our global food supply. Food and beverage companies clinging to the status quo, beware.
  9. Plant-based foods. The consumer diet is shifting to accommodate more plant-based foods. According to the market research firm Mintel, the preference for natural, simple and flexible diets will continue to drive an array of vegetarian, vegan and other plant-based food products.
  10. Have fun!  While food safety and food quality are serious concerns of any responsible food and beverage company, don’t take yourself too seriously. The food and beverage industry still affords you meaningful consumer engagement opportunities, access to innovative technologies, and the venue to introduce exciting products that will be on supermarket shelves and in consumer pantries. Throw in the industry trade shows, networking opportunities, and professional growth opportunities and you quickly realize that the industry is FUN. (So, get out there and start enjoying it – we’re right here when you need us.)

Published by Bill Acevedo

I am the Chair of Wendel Rosen LLP's Green Business Practice Group, and I am the Co-Chair of my firm's Food and Beverage Group. My practice focuses on manufacturing and food, dietary supplement and cosmetic companies. I provide outside general counsel services to my clients, which include: entity formation, business and legal advice on proposed business transactions, general contract negotiation and drafting, brand and licensing protection, corporate governance, capital raises, and M&A transactions. Additionally, I assist my clients with labeling, advertising, and FDA regulatory compliance matters. In addition to my corporate transactional practice, I handle all manner of business litigation, such as labeling/advertising claims, contractual disputes, trade secret matters, partnership disputes, product liability claims, director and officer liability, and unfair business practices claims.

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