Report: traditional stores down 25 percent by 2021 instore, 8/31/2017 by Andy Nelson

The number of traditional supermarkets will decline by 25 percent from 2016 to 2021, according to a new study.

At the other end of the spectrum, meanwhile, eCommerce sales are expected to increase by 25 percent each of those five years.

In 2021, about 19,132 traditional stores will be in operation, down from 25,380 in 2016, according to “2017 Future of Food Retailing,” a report by Long Grove, Illinois-based Inmar Willard Bishop Analytics.  

The biggest percentage increase in the grocery category will be seen in fresh format, which could jump 48%, from 1,547 to 2,290 stores, according to the report. Store counts also are expected to be up significantly for super warehouses (30 percent), dollar stores (25 percent) and limited assortment stores (21 percent).

The number of supercenters could jump 11%, from 4,106 to 4,560. Wholesale club stores could total 1,613, up 9.6 percent from 1,472 in 2016, according to the report.

While eCommerce sales are expected to grow at an annual rate of 25 percent, limited assortment is set to grow 8 percent, fresh format 4.8 percent, super warehouse 4.5 percent, supercenter 3.1 percent, dollar 3 percent and wholesale club 3 percent.

Traditional supermarket sales are expected to decline .3% annually through 2021.

Organic items appear in 82% of American households March 27, 2017 - by Jeff Gelski

WASHINGTON   — A Nielsen survey revealed organic items were found on the shelves of kitchen cupboards and in the refrigerators of 82.3% of American households in 2016, the Washington-based Organic Trade Association said March 23. The national average climbed 3.4% from 2015 to 2016.

North Dakota had the highest jump, increasing 14.2% from 2015 to 2016 to reach 85.6% of households. Following North Dakota in the ranking of biggest increases were Rhode Island, up 12.3% to 88.3%; Wyoming, up 10.8% to 90%; South Dakota, up 10% to 68.9%; and Wisconsin, up 9.1% to 77.6%.

The nationally representative Nielsen study involved 100,000 households in 48 states and did not include Alaska or Hawaii.

Laura Batcha, c.e.o. and executive director of the Organic Trade Association

“These new findings show how important organic has become to millions and millions of American families everywhere — to more than 80% of our nation’s 117 million households, more than 80% of Georgia’s 3.5 million households, more than 85% of North Dakota’s almost 300,000 households,” said Laura Batcha, chief executive officer and executive director of the Organic Trade Association. “The organic community is looking forward to working with the new leadership at U.S.D.A. We are eager to show how important adequate funding is to support a strong organic program and to help organic to continue to become a part of healthy diets of households throughout our nation, including Mr. Perdue’s home state and rural states from coast to coast.”

George E. (Sonny) Perdue, a former governor of Georgia, has been nominated to be the next secretary for the U.S. Department of Agriculture. The number of households in Georgia buying organic climbed 4% from 2015 to 2016, reaching 81.5%, according to the Nielsen survey.

“The industry relies on a few critical public institutions to support this burgeoning industry, including the (U.S.D.A.’s) National Organic Program for global oversight and uniform standards and research investment targeted to organic production,” Ms. Batcha said. “Organic is fueled by consumers, and it thrives when U.S.D.A. recognizes the importance of organic to rural economies and to rural households.”

Total organic food sales in 2015 were $39.7 billion, up 11% from 2014, according to the O.T.A.’s 2016 U.S. Organic Industry Survey. This spring the O.T.A. will release is 2017 survey, which will examine the U.S. organic market in 2016. 

The egg industry has an overproduction problem Dec. 13, 2016 - by Ron Sterk

KANSAS CITY — Large, Grade A eggs were featured at 49c a dozen by a major Midwest supermarket chain in early December. The average wholesale price for large eggs quoted by the U.S. Department of Agriculture as of Dec. 2 was 45½c a dozen in the Midwest, the lowest of the four regions reported. Neither price would cover the cost of packaging and transportation, one industry source said. It is evidence of the deep problem the egg industry is having getting production under control.

October production of 7,506 million table eggs was the highest for any month since February 2015, two months before laying hen numbers began declining sharply because of an outbreak of avian influenza last year, according to the latest U.S.D.A. Chickens and Eggs report. October 2016 egg production was up 11% from October 2015, when flocks were being replenished, and was up 1% from October 2014, prior to the A.I. outbreak.

The oversupply of eggs has been reflected in prices since April, when average Grade A large egg prices dipped below 60c a dozen and breaking stock (used by processors to derive liquid, frozen and dried whole egg, yolk and white) fell to near 30c a dozen, both the lowest values since October 2010. Since April average Grade A large egg prices have fluctuated between 37½c to 77½c a dozen. Graded egg prices briefly moved higher when grocers featured eggs at low prices, only to move lower once the features were over. Breaking stock egg prices kept falling since April and have been under 20c a dozen since late July, which is well below cost of production.

 

October production of 7,506 million table eggs was the highest for any month since February 2015.

Typically, when egg prices fall below cost of production, producers adjust flock sizes by putting some hens into forced molt or by culling older, less productive birds. And, processors historically have bought up low-priced eggs shifted from retail and built inventories for when prices move higher, in effect carrying the risk of oversupply. Neither appears to have happened to a significant degree this year.

One scenario suggested by industry sources is a number of egg producers added facilities and laying hens, to comply with new cage-free requirements that several major restaurant chains and food manufacturers said they would move to over the next several years. That production came on-line sooner than expected (or needed), and at least in some cases was not countered by a reduction in the number of hens housed in traditional “battery cages,” thus resulting in more eggs. Others have suggested the cost of rebuilding flocks after the A.I. outbreak discouraged culling of birds. And some indicated disposal options of culled hens may have been limited by the massive disposal during the A.I. catastrophe. Also, low feed prices have helped to reduce breakeven costs for egg producers.

Processors, meanwhile, have been reluctant to buy cheap eggs because they lack confidence that prices will move significantly higher and stay at those higher levels as long as egg production exceeds demand. Processors that are part of vertically integrated operations have taken on extra supply, but independent processors have tended not to build inventories just because eggs are cheap.

 

When egg prices fall below cost of production, producers adjust flock sizes by putting some hens into forced molt or by culling older, less productive birds.

The most significant issue appears to be on the demand side, especially from food manufacturers who use egg products. Many were forced to switch to egg and egg product replacers because of egg shortages and record high prices during the A.I. outbreak. Some of that business never came back to real eggs, while the supply of real eggs and egg products has fully recovered. Thus, egg production and supply has not adjusted to lower demand.

There may be some light at the end of the tunnel, although most industry sources expect it will be only temporary until producers get serious about reducing flock sizes. Egg prices turned modestly higher last week and typically see increased retail demand from Christmas baking in December. Further, producers also tend to move more birds into forced molt at the start of the year. Whether that will be enough to turn the tide of overproduction remains to be seen. 

Bimbo to acquire General Mills' Argentina bakery business April 20, 2016 - by Eric Schroeder

Medialunas croissants, Argentina

The portfolio includes several baked foods including Medialunas — the Argentinian version of croissants.

MEXICO CITY — Grupo Bimbo S.A.B. de C.V. has reached an agreement to acquire the Argentina bakery and food service business of Minneapolis-based General Mills, Inc. Financial terms of the transaction were not disclosed.

The transaction would include General Mills’ bakery and food service business and all associated facilities, equipment, land and inventory in Argentina, as well as employment contracts for the production and salaried staff. The business currently employs about 360.

“Through this acquisition … Grupo Bimbo will continue consolidating its presence in the South American market, complementing its supply in the category of frozen bread that the company is already manufacturing under the Bertrand brand,” Grupo Bimbo said. 

Grupo Bimbo started operations in Argentina in 1995 and is the leader of the bread industry in that country with five plants and a portfolio of products in the categories of bread, buns, tortillas and sweet rolls, among others.

General Mills has operated the bakery and food service business in Argentina since 2001, when it took over the business as part of its acquisition of Pillsbury from Diageo P.L.C. The portfolio includes bread, pastries, small baked foods and Medialunas — the Argentinian version of croissants.

La Saltena Argentina retail brand, General Mills

General Mills said it will continue to operate its retail food business in Argentina, including the La Salteña brand.

“We would like to thank members of the Argentina bakery and food service team, who have performed well despite challenging conditions,” said Sean Walker, president of General Mills Latin America. “Having assessed our performance in the current business environment, we have determined that we need to prioritize other growth opportunities within our Latin American portfolio.”

General Mills expects to complete the transaction by May 2.

The sell-off of the Argentina bakery and food service business continues a strategic decision by General Mills to tighten its portfolio in Latin America. The company late last month exited Venezuela, selling off its Venezuela business to Lengfeld Inc., a private, international investor with a presence in Venezuela. The business primarily manufactures and sells canned meats under the Underwood brand, but it also includes the Rico Jam and Frescarini pasta brands. General Mills employs about 611 people in Venezuela, all of whom will remain with the divested business.

Natural food stores edging out mass retailers in specialty food sales April 21, 2016 - by Rebekah Schouten

Specialty Food sales growth infographic
Sales in the specialty food industry hit a record high in 2015, raking in $120.5 billion from mainstream retailers, natural and specialty food stores.

NEW YORK — The big box now has a big competitor in the specialty food industry. While mainstream retailers account for the largest share of specialty food sales, natural and specialty food stores are growing at an almost equal rate, according to the Specialty Food Association’s (S.F.A.) “State of the Specialty Food Industry 2016” report.

Sales in the specialty food industry hit a record high in 2015, raking in $120.5 billion. The sales gain largely has been fueled by the growth of small businesses, the report said, and sales potential may be biggest in natural stores.

Produced in conjunction with Mintel International and SPINS/IRI, the S.F.A. report tracks U.S. sales of specialty foods through supermarkets, natural food stores and specialty food retailers.

Specialty food sales at retail jumped nearly 20% since 2013 to $94 billion, driven by product innovation and wider availability of specialty foods in the mass market. In the food service segment, specialty food sales increased 27% to $26.5 billion, the report said.

Cheese and cheese alternatives topped the list of top sellers in the category, growing 15% in the past two years. Frozen and refrigerated meat, poultry and seafood snatched the No. 2 spot with an increase of 23%, and chips, pretzels and snacks came in third with a 22% gain. Prepared meals and refrigerated entrees inched into the top 10 after the category’s sales skyrocketed 35% in two years. 

Unit sales of specialty foods grew 14% overall to 15.6 billion, led by growth of refrigerated ready-to-drink tea and coffee, which swelled a staggering 302%. Other categories that experienced notable sales growth were eggs, jerky and meat snacks, refrigerated pasta and water.

While 58 out of 61 specialty food categories enjoyed double-digit sales growth in 2015, 15 categories experienced a downturn. The biggest drops were in frozen juices and beverages, drink mixes and concentrates, and ready-to-eat cereals.

As the topic of G.M.O. labeling pushes further into the spotlight, many in the supply chain said they think non-G.M.O. will be a product claim of growing importance to consumers. In fact, 49% of manufacturers plan to introduce non-G.M.O. products in 2016, the report said. Local products continue to gain in popularity as well.

“American consumers continue to move toward specialty foods and away from mass,” said Ron Tanner, vice-president of philanthropy, government and industry relations for the S.F.A. “Consumers are looking for foods with fewer and cleaner ingredients, and products that are made by companies with values they care about. All of these define specialty food.” 

When iconic brands go organic 4/11/2016 - by Monica Watrous

Capri Sun Organic, Kraft-Heinz Co.
Capri Sun Organic contains more calories and more grams of sugar than its conventional counterpart.

KANSAS CITY — Is organic healthier? It depends on your definition of healthy. Consider the newly launched Capri Sun Organic juice beverage from The Kraft Heinz Co. The organic product contains more calories (70 calories versus 50 calories) and more grams of sugar (15 grams versus 13 grams) than its conventional counterpart, a fact health-minded consumers may not be willing to forgive, said Carl Jorgensen, director, Global Consumer Strategy-Wellness, Daymon Worldwide.

Carl Jorgensen, director, Global Consumer Strategy-Wellness, Daymon Worldwide
Carl Jorgensen, director, Global Consumer Strategy-Wellness, Daymon Worldwide

“Across the board, wellness-engaged consumers are looking to reduce sugar, not increase it,” Mr. Jorgensen said in an interview with Food Business News. “People are trying to reduce sugar, and the products that help them do that are going to succeed. But to reformulate and come out with a product that has more sugar, that’s just not going to win.”

Mr. Jorgensen cited as an example Cheerios Protein cereal introduced by General Mills, Inc. two years ago in response to consumers seeking more protein in their diets. Problem was, the protein-fortified varieties contained 16 and 17 grams of sugar, compared to the original Cheerios’ 1 gram.

“It had 17 times more sugar than regular Cheerios,” Mr. Jorgensen said. “That’s the definition of a swing and a miss in marketing.”

Cheerios Protein cereal, General Mills
Cheerios Protein cereal contained 16 and 17 grams of sugar compared to the original Cheerios’ 1 gram.

Research from the Hartman Group, Inc. shows more than a third of consumers (37% of participants in a survey of 1,728 U.S. adults) believe organic food is more nutritious than conventional food. The figure skews higher for parents of young children, 44% of whom view organic food as more nutritious.

Sales of organic food and beverage products in the United States continue to grow at a double-digit rate, reaching $39.1 billion in the United States in 2014, which marked the first year conventional grocery sold half of the organic products, according to the Organic Trade Association. 

“Organic is not only here to stay but is going to continue to steadily grow for a long time,” Mr. Jorgensen said. “In terms of consumer acceptance and trust in organic, it seems to be growing year by year. Everybody is going to want to try to get on the organic bandwagon in one form or another. And some of those attempts will be very successful, and some will be less successful.”

Organic Gatorade, PepsiCo
PepsiCo plans to launch organic Gatorade later this year.

A product he predicts will be less successful is organic Gatorade, which PepsiCo, Inc. recently revealed it planned to launch later this year. 

“For something like Gatorade, it’s never really had an appeal to customers who are looking for cleaner products and a healthier lifestyle,” Mr. Jorgensen said. “Why all of a sudden will that brand appeal to them?... In many cases, the solution is not to take a brand that has no equity at all with the healthier eating consumer and try to make it healthy.”

Take Coca-Cola Life, the Coca-Cola Co.’s first reduced-calorie soft drink sweetened with cane sugar and stevia leaf extract, containing 35% fewer calories than other leading colas. The product rolled out nationwide at the end of 2014 with lackluster results.

Coca-Cola Life soda, The Coca Cola Co.
Coca-Cola Life is sweetened with cane sugar and stevia leaf extract, containing 35% fewer calories than other leading colas.

“That was an attempt there to say, ‘Okay, we want to give you the classic Coke experience, but let’s reduce the sugar,’” Mr. Jorgensen said. “You would think that’s a compelling proposition, but consumers have not flocked to it. I think tinkering with iconic brands and cleaning them up, it’s almost as though brands have to do it, but will it give them that much more of a sales lift? That’s the big question. And it’s not clear that it will.”

Mr. Jorgensen commended the Kraft Heinz Co.’s approach to quietly reformulating its flagship macaroni and cheese product line this past year.

Kraft Macaroni and Cheese with no artificial flavors or colors, Kraft-Heinz Co.
Kraft Heinz quietly rolled out its newly formulate macaroni and cheese with no artificial preservatives, flavors or dyes.

“What Kraft did with their mac and cheese is they did not really let consumers know they had taken out artificial colors or flavors until it had been on the market for months,” Mr. Jorgensen said. “I think that was smart because what they were testing was whether they were delivering the same experience. Will people continue to enjoy it in the same way they have in the past, even though they had reformulated it? In that case, it appears to have been a success.

“You see Hershey getting rid of beet sugar, which is genetically modified, and moving toward cane sugar. They’re not making a big deal about that, but I think in the end consumers who care will appreciate it, and eventually Hershey may move to take credit for it. It’s not something you have to trumpet the second you do it or even announce it before you do it. I think brands are learning to use a more stealth approach in this.”

Going organic may not always be the solution to slumping sales. Companies must decide what’s appropriate for a given brand, Mr. Jorgensen said.

Hershey chocolate bars - Hershey switches to cane sugar from G.M.O. beet sugar
Hershey is in the process of removing genetically modified beet sugar from its chocolates and switching to cane sugar.

“I don’t think we should discount how much this will be accepted in the marketplace,” he added. “I think because it’s such new territory, brands really need to design new ways to market this and new ways to communicate it to their customers. 

“I think a quiet approach can be a very effective way of doing it.”

Finlandia introduces Finlandia Imported Butter, 3/23/2016 by Staff

Finlandia introduces Finlandia Imported Butter – now available at Costco locations in San Diego, CA and Phoenix, AZ. Crafted with pure, wholesome milk, rich and creamy, Finlandia Imported Butter brings butter from family-owned farms in Finland to the American table. Its butter is made with non-GMO ingredients according to European standards, and contains no artificial ingredients or added hormones.  

“We’re thrilled to introduce our new Finlandia Imported Butter here in the United States,” said Emma Aer, chief executive officer, Finlandia Cheese. “We’re also pleased that Finlandia Imported Butter is now available at Costco locations in San Diego and Phoenix.”

Finlandia Imported butter is made with milk from cows that are not treated with rBst. The milk is patiently churned at the perfect temperatures for a light creamy and delicious flavor. 

Finlandia Imported Butter is available in 7 oz. perfectly salted and unsalted varieties at select grocery stores and supermarkets nationwide, including major chain stores, such as Kings, Foodtown, Pathmark, ShopRite and more.

 

When big companies buy small brands 3/14/2016 - by Monica Watrous

Annie's organic products - cereal, yogurt, soup - General Mills
In the first year together, General Mills helped Annie’s launch into organic soups, organic yogurts and organic cereals.

Steve Young, a vice-president at General Mills, said his company’s goal with Annie’s, Epic and the other natural and organic brands in its portfolio, including Larabar, Food Should Taste Good and Cascadian Farms, is to “marry that spirit of the small with the power of the big.”

Steve Young, General Mills
Steve Young, a vice-president at General Mills

“We are very committed to (the idea that) Annie’s is going to retain the right to do what it wants to do with Annie’s, and Epic is going to retain the right to do what it wants to do with Epic,” Mr. Young said during the presentation. “I would love to get to a point where consumers and the industry are less worried about that because they trust big companies are going to do the right thing. And I believe we can.”

In an interview with Food Business News during Expo West, Mr. Young and Mr. Foraker shed more light on the keys to successfully growing a natural and organic business like Annie’s within a portfolio as prolific as General Mills’. By 2019, General Mills expects to reach $1 billion in net sales from natural and organic products, and to support that goal the company recently announced plans to more than double the organic acreage from which it sources ingredients.

“To me, that was one of the biggest impact opportunities that (General) Mills could help us bring,” Mr. Foraker said. “What matters to us as much as having a successful business is driving big impact, and one of the biggest ways to drive impact is to convert more land to organic and sustainable ways of farming. To me, that’s the mainstreaming of natural and organic and why big companies are so important to the mix because small companies are not going to be able to expand the supply chain in the way necessary to make organic be a mainstream, affordable option for the masses, and that’s our goal.”

For General Mills, the partnership with Annie’s has inspired a more entrepreneurial approach to product development, Mr. Young said.

“What we’ve really learned is the speed-to-market; when you are truly mission- and purpose-driven, it gives you a lens for every decision you make, and you can make them fast when that’s the case,” he said. “We move faster. In the past, we may have said, ‘Well, we’d better research this; we’d better test this.’ What we’re doing now is saying, ‘We know this is right. We’re going to go.’”

Critical to fostering growth in a brand like Annie’s or Epic is allowing its leaders to retain autonomy in decision-making, Mr. Young said.

“We don’t want to buy these businesses and kiss the old team that was running it goodbye,” Mr. Young said. “That’s not how we operate anymore. We want to grow with these people, so part of what we look for is a talented team, who are mission-driven and purpose-led in what they do, good business people, good partners.”

Epic provisions meat snacks, General Mills
Epic is operated under the Annie’s division at General Mills.

Epic is operated under the Annie’s division at General Mills, with Mr. Foraker helping to guide and grow the business.

“What are we doing with Epic?” Mr. Foraker said. “Katie and Taylor are running it. We’re leaving it in Austin... We’re solving the problems they have, like helping them improve quality, and getting behind the mission.  

“We’re just giving them what they need and getting out of the way.”

What was hot — and not — in 2015 12/14/2015 - by Monica Watrous

BOULDER, COLO. — Matcha, meal kits and misshapen produce made the list of food trends in 2015, said Kara Nielsen, culinary director and trendologist at Sterling-Rice Group. The Boulder-based firm compiles an annual forecast of food and beverage trends for the year ahead. In an interview with Food Business News, Ms. Nielsen reviewed how her year-ago predictions panned out. Spoiler alert: There were some hits — but a few misses, too.

Kara Nielsen, culinary director and trendologist at Sterling-Rice Group

“I think it’s essential to look at where we’ve been so we can understand underlying drivers and consumer values,” Ms. Nielsen said. “When you’re talking about innovating for new product development, creating new food service concepts and growth, you can’t grow if you’re not in line with where consumers are going, and you can’t really understand where consumers are going if you don’t know where they’ve been or what they’re rejecting or what they’re trading in for something better.”

Trends tend to evolve over time, but many of the drivers remain the same. Consumers still seek health, convenience and experience in what they eat.

“Continuing to look at history and the landscape of what was discarded and analyzing what was left behind and what is it about those products that aren’t meeting consumers’ needs anymore, it’s only then that you can get an understanding of what consumers want going forward,” Ms. Nielsen said.

Hot: Matcha

Boasting nutrients with less caffeine than green tea, antioxidant-rich matcha has bubbled up in convenient formats to meet demand for ready-to-drink beverages with functional benefits. The flavor also has emerged in new snacks and confectionery products.

Matcha was a hot ingredient in 2015.

“Looking back on the year when I think about the predictions we made, I was very satisfied to see that matcha really did make a big splash in the marketplace and in headlines,” Ms. Nielsen said. “In the absence of hardcore sales data, and thinking of things I have observed over the course of the year, I do know that matcha continued to be a theme and it points to me to consumers looking for energy support in a new way.”

Hot: Advanced Asian

Fare from the Far East has become a growing trend in fine dining, food trucks and everything in between. Ms. Nielsen’s year-ago prediction called for a “deeper exploration of funkier, fattier, hotter flavors” driven by the next generation of Asian cuisines, namely Northern Thai dishes, tangy Filipino foods and savory Japanese pancakes.

“Asia has stayed a big focus and passion for people,” Ms. Nielsen said. “I’m seeing more Korean flavors turn up on food service menus as a continued sign that these flavors are now moving up that trend spectrum from fine dining and independent dining into casual dining, and I think by next year we’ll start to see these flavors in more C.P.G. products.”

Not so much: Communal dining

Food halls, pop-up dining concepts and restaurant incubators were expected to gain traction this year, but meal delivery services proved more popular.

“I think consumers wanted to have their own hands-on experience,” Ms. Nielsen said. “I think they’ve been thrilled by what they’re seeing in the food halls and marketplace, and … it’s having a little more parity of creating restaurant-style meals or culinary flavors and trying to get those more often at home.” 

Hot: Less-than-pretty produce

Odd or misshapen fruits and vegetables are getting a second look, supported by concerns over waste and efforts to reduce hunger. What began as a grassroots movement in a French grocery store has more recently spread to North America, Ms. Nielsen said.

Odd or misshapen fruits and vegetables are getting a second look, supported by concerns over waste and efforts to reduce hunger.

“There’s a lot of activism around this on the local level,” Ms. Nielsen said. “This overarching trend of grappling with food waste is going to keep growing… Are there other ways retailers, produce manufacturers, grocery stores can help consumers not waste their food?”

Not so much: Hop-free beers

A countertrend to IPAs, beers without that hoppy bitterness were pegged as the next big thing in the bar scene. Consumers, however, showed more favor for sour brews. 

“We talked about hop-free suds, but we probably should have talked about sour beers,” Ms. Nielsen said. “What we ended up seeing was a real uptick in sour beers coming from the craft beer space…

“What I took away from the fact this trend didn’t pan out was that we’re still working our way into exploring these more adventurous tastes, and the good news is it gives manufacturers an opportunity to continue to play with our mass products and make them have bigger, bolder flavors or more potent flavors in a new way.

“I think it’s also a sign that consumers are really ready for less sugar and less salt and more of other ingredients that offer a rounder taste profile.”

Not so much: Local grains

While it was predicted small-scale heirloom wheat varieties would be all the rage in 2015, alternative grains such as amaranth, millet, barley and rye figured more prominently into American diets. Still, both trends point to “an expanded understanding of an ingredient that used to seem very basic,” Ms. Nielsen said.

“It used to be wheat, whatever wheat was. Now it’s a whole bunch of things. I think we’ll see more teff coming up…. I think we’ll see more of these heritage grains, ancient grains… 

“At the same time, we have an interest in non-wheat alternative grains, the nut-into-grain trend, with coconut flour and almond flour being used in baked goods to recreate the mouthfeel and texture of wheat but with so much more flavor.”

Bottom line?

“Both sides of that grain story are going to continue to grow in interesting ways that give consumers a broad alternative to generic wheat flour and grain as a part of our diet,” Ms. Nielsen said.

Food and beverage acquisition outlook 2016 12/9/2015 - by Monica Watrous

Strategic buyers are seeking better-for-you brands in particular. For example: Pinnacle Foods acquiring Boulder Brands.

CLEVELAND — Expect “continued strong” acquisition activity in the food and beverage industry in the coming year, said Glen Clarke, managing director and head of food and beverage investment banking at KeyBanc Capital Markets, Cleveland.

“Food companies are trading at all-time highs, so they’ve got plenty of capital leverage,” Mr. Clarke told Food Business News. “I continue to see the strategic buyers being active. There are still 150 to 200 food companies owned by the private equity community, and as we know, those companies are always for sale. We’re going to continue to see those companies feeding into the M.&A. market, driving the continued M.&A. activity.”

However, a significant increase in interest rates may dampen M.&A. activity, he said.

“As rates rise the cost of capital goes up, which prohibits companies from paying high multiples,” Mr. Clarke said. “So as rates go up, multiples will come down, which will mean fewer people will be interested in selling as multiples soften.”

Strategic buyers are seeking better-for-you brands in particular, Mr. Clarke noted. A recent example is Parsippany, N.J.-based Pinnacle Foods’ $975 million acquisition of Boulder Brands, which manufactures products under the Udi’s, Glutino, Evol and Smart Balance brands.

“That’s how they satisfy the equity analysts,” Mr. Clarke said. “They’re driven by that consumer trend of better-for-you, all-natural, healthier products, and a lot of them didn’t have that in their product offerings.”