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Kevin Ryan's: Culture Matters

Collateral Costco Damage
McCormick is introducing a new line to their spices and seasonings portfolio: Speedy Sides. Consisting of a recyclable tray+ lid and seasoning mix, Speedy Sides has consumers add fresh or frozen veggies and microwave until done. The product comes in three flavors: Herb Butter, Teriyaki and Three Cheese.

So What? Last week, I disparaged McCormick’s new Tasty product, but this week is a win for the spice company. While it seems like an extremely simple concept, don’t be fooled by appearances; innovation doesn’t have to be novel and tech-forward to be effective. This product removes several barriers that consistently hinders consumers in their nightly battle to put dinner on the table. The primary barrier overcome is just providing a tasty way to get a healthy side. Meat is the focus of the dinner in most households, but parents are always looking to add in a veggie that kids might consider eating.  The second thing it does is it allows for flexibility in the evening veg. While there are steamable trays and bags of frozen veggies on the market, they are ‘locked’ and don’t allow for movement in terms of personalized seasoning (e.g. add a little extra garlic powder or pepper flakes) or the addition of a seasonal vegetable. Providing a flexible system means its open to the whims and tastes of the family.
However, the biggest strength of this product is that it taps into, what I call, the Collateral Damage of Costco. While a favorite shopping destination of many consumers, Costco’s bulk-buying format has a distinct drawback: waste. Specifically, fruit and vegetable waste. Yes, the bag of broccoli, green beans or cauliflower is a great deal, but finding quick, convenient and tasty ways to stuff your family with all of those vegetables, before they go bad, is a constant race against the clock. In fact, it is my theory that it was Costco, not just our evolving fascination with wellness, that made smoothies popular. Consumers needed a way to quickly use up of those giant bags of spinach, bunches of bananas and gallons of almond milk that were expiring. What better way to tidy up the crisper than grinding (Costco even supplies the blender!) and drinking it. Now McCormick has you add tasty powder and microwave it.
Personally, I’m surprised more companies haven’t developed products that feed on the worry of waste that Costco causes. Consumers likely aren’t going to stop buying in bulk at Club stores, but they also don’t want to throw away food. What they lack are low effort solutions to their bulk problem.
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Deserting Dessert

It looks like Land o’ Lakes is working very hard at test marketing refrigerated dairy desserts at Walmart. They have not one, but two new products at several US locations. The first is Naughty & Rice, a decidedly more decadent play on their current KozyShack rice pudding.  Flavors include: Maple, Mocha, Cinnamon Roll, and Birthday Cake. Indulge Your Feelings (no website yet that I can find, just a trademark registration) is a French-style pot de crème. Flavors are named after a particular feeling: Passion (Salted Caramel), Feisty (Espresso), Calm (Vanilla) and Joy (Chocolate Truffle).
French dessert-maker Marie Morin also seems to be testing in Walmart’s dairy case.  They have introduced a range of potted cheesecakes (similar to those they launched previously at Costco and Walmart Canada) in the US. The current US line appears to be limited to Mango & Passion Fruit, Salted Caramel and Vanilla Bean.

So What? Here is a shocking statement: Americans eat differently than Europeans. While that might seem obvious to anyone that has spent any time in either region, it seems to be lost on US grocery retail chains. For years now, they have spent considerable effort trying to replicate the European ‘chilled desserts’ section of the dairy case in the US market (For those who haven’t been in a French, Spanish or UK supermarket recently, imagine row upon row of crème brûlée, pot de crème, flan, crème caramel, steamed pudding and other yummy, gooey treats, typically in glass jars or tubs.)
While I understand the allure of incremental sales and often premium price points for dairy companies and retailers, I think the fundamental go-to-market strategy has been misguided. Americans aren’t eating dessert anymore. In fact, only 12% of dinners in the US end with something sweet, and most of that number is driven by consumers 65+. Younger consumers, especially those with children, have all but abandoned cake, pie or pudding with their evening meal. Much of this has to do with the desire for simplicity, as adding additional courses to a meal just adds unwanted complexity. That’s why the baking section of the supermarket sees so little traffic, the effort of making brownies as a post-dinner treat (even boxed) is not in cards. But wait a minute, you might be saying, wouldn’t pre-made chilled desserts be a good solution to consumers that want to add dessert back to dinner but not the effort? Yes, but I don’t think it’s just an effort problem. I think it is also being driven by our evolving attitudes toward nutrient timing.
Originally based on muscle-building in sports nutrition (see metabolic window) and more broadly popularized by the intermittent fasting craze, you’ve likely heard variations of nutrient timing expressed simply as ‘don’t eat anything after 8.’ While its efficacy has been scientifically legitimized and criticized, the more important point is that it seems to resonate with consumers (i.e. eating sweets late at night and then going to bed feels intuitively wrong to a lot of people.) In fact, just a few days ago, the Wall Street Journal posted an article entitled ‘The Fasting Cure Is No Fad,’ discussing how time-restricted eating is poised to be the next mega-diet trend.  In the nutrient timing mindset, lunch or mid-day desserts is recommended. Influencers are saying that, if you really must have a sweet treat, do so around an hour after lunch so that “you'll have the opportunity to burn off the calories throughout the rest of the day."
To that end, all of these new dairy dessert offerings need to work harder to claim the post-lunch sweet occasion (a whitespace I think indulgent yogurt offerings--think Noosa-- are filling today). Copying and pasting classical European desserts into the US market seems like the wrong strategy. Instead, I think there is a whole new ‘undiscovered country’ of chilled sweets with a unique American style waiting to be developed (hint: I think Naughty & Rice’s yogurt packaging cues are moving in the right direction).   
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Little Spoon, makers of refrigerated, fresh baby food purees, has launched Little Spoon Boosters. These small sachets are nutrient supplements that parents can add to their children’s food to “supercharge mealtime.” Each packet contains organic spinach or fruit powders along with a combination of vitamins, minerals, fibers and probiotics. The line includes: Whiz Kid (with DHA), Sniffle Shield (Immunity), Poopie Power (Constipation Relief) and Gut Feeling (Overall gut health).
Edesia Nutrition, the nonprofit famous for producing the fortified peanut butter product Plumpy’Nut that has so successfully helped starving children around the world, has announced it will be producing a new line of commercially available snacks called MeWe.  These knead & squeeze shelf-stable pouches contain a mix of peanut butter and fruit puree. Their benefit is to introduce infants to peanuts at an early age and, according to early exposure hypothesis, reduce the number of peanut allergies. As you would expect from their background, 100% of profits help end malnutrition in children worldwide. Flavors include: Apple Cinnamon, Berry Coconut, and Banana Coconut.

So What? Imagine a world where, prior to the implantation of an embryo via IVF, a series of genetic tests are performed to screen fertilized embryos to choose the one that has the lowest chance of developing disease and the highest probability for superior intelligence. While it might sound like science fiction, a company with such potential exists now, in a small township in New Jersey. Genomic Prediction current does pre-implementation screening for 300+ single gene disorders (e.g. Cystic Fibrosis and Sickle Cell Anemia) as well as polygenic disease risks (e.g. Type 1 and Type 2 diabetes and breast cancer). They announced a few months ago that they have the ability to screen for intelligence potential—both ‘mental disability’ as well as high IQ--although they don’t current offer such a service. “I think people are going to demand that. If we don’t do it, some other company will,” says the firm’s co-founder Stephen Hsu.
Whether Genomic Prediction’s services intrigue you or turn your stomach, the truth is that they are just an extreme example of how technology is opening up bold new possibilities for parents. While people have always wanted what’s best for their children, in previous generations that’s meant focusing mainly on the ‘nurture’ side of the ‘nature v. nurture’ equation; putting them in the best daycare, hiring the best tutors, or supplying the best nutrition. Parents did their best with the hand nature dealt them. However, new products are being created that dabble on the ‘nature’ side, offering the possibility of tinkering with your child’s physical makeup (e.g. their gut microbiota, their brain chemistry or their allergen response). Will parents be interested? Absolutely.
Its still early days on all of this, but definitely a whitespace for new startups to jump in. However, the pioneers will have to clear a path in terms of education and communication. Not just for consumers, but also retailers.  As MeWe’s founder Navyn Salem told NOSH, many retailers don’t even know where to stock such functional solutions for children in the store, as most products for kids only tout that they are peanut free, not that they help prevent peanut allergies.
Imagine giving parents the power to forever change their child’s gut microbiota (which has been linked to brain health and weight) or permanently alter brain chemistry? I think these options (or at least the promise of these options) will be things parents and manufacturers will be grappling with very soon.
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Brands I'm Watching 
Pact Foods, a Tyson brand, has launched a line of refrigerated, functional health snack bites. The line of snacks consists of four varieties: Gut Instinct (cranberry kombucha with probiotics), Gut Ahead (turmeric ginger with prebiotics), Vibe On (matcha blueberry “energizing”) and Glow With It (cocoa/coconut with collagen). Each pouch contains 8 snack bites and, while sold and recommended to be stored refrigerated, the company says they can be kept at room temperature for up to a week.
Danone has launched Activia Probiotic Smoothies in the US market. The beverages mix live and active probiotic yogurts with vegetables, fruits and seeds. The products contain no added sugar and come in three varieties (no actual names, just bottle colors): Green (chia seeds, flax, hemp, pineapple, kiwi, cucumber ginger), Yellow (Flax, mango, carrot, peach and turmeric) and Red (Chia, strawberry, pomegranate, blueberry and beet).
So What? Will probiotics and prebiotics be the next protein or the next omega-3? I don’t mean in popularity; I mean in use. The protein craze partially originated in weight-lifting culture, where protein powder supplements were prevalent. However, as the trend has moved mainstream, getting protein via its inclusion in ‘real food’ has become the norm (e.g. protein fortified snacks). Omega-3 played out very differently. It started out in real food (‘eat more fish’), moved to supplement (e.g. krill oil) and never went back to food. While a lot of companies tried to make omega-3 in snacks and shakes happen, it just wasn’t in the cards. So which way will pro-and prebiotics go? In 3-5 years will most consumers look to capsules or to real food for these? (or will they care at all?) I have early thoughts, but for now I think its just important for all of us to keep our eyes and ears open.
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Kroger has launched Break N’ Break Biscuit Bites. The refrigerated product appears to be based on the familiar ‘place and bake’ cookie technology, where a sheet of dough is pre-scored and easy to portion out onto a cookie sheet and baked. Kroger offers these in two varieties:  Cheddar and Garlic Flavored and Cheddar and Jalapeno Flavored.  So What? Psychology has a term called ‘functional fixedness’ that refers to the cognitive bias that occurs when you stop seeing new possibilities in objects that are familiar to you. Children rarely have functional fixedness, they are able to see a stick as being a doll, a sword, a wand, or rocket ship. Adults, however, are often unable to see beyond their mature experience. A stick is just a stick and, if you work long enough in food, biscuit dough is just biscuit dough. I haven’t seen the above Kroger product, but I can tell you now with all my technical experience, it’s not biscuit dough. At least, it’s not the airy, yeasty, stretchy stuff that you’ve seen come out of a can. It’s likely similar to cookie dough, tacky and thick. That’s why this product is so brilliant. Bravo to Kroger for thinking outside the norm, and recognizing that consumers don’t have the same functional fixedness around doughs that food manufacturers do. To consumers, a biscuit is just a savory lump of buttery bread, no matter how you got there. When you break your own functional fixedness, innovation becomes easier. 
 
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Global Partners, a public company that generated $12B in revenue in 2018, has introduced a new concept: a fresh convenience store. Alltown Fresh are 3,000-5,000 sq.ft stores specializing in healthy food with an emphasis on organic, natural, vegan, vegetarian and gluten-free offerings. Global Partners currently owns, leases or supplies 1,600 gas stations and owns 296 convenience stores, and already has 2 Alltown Fresh stores open in Massachusetts, with six more to open before the end of the year. After that, the company plans on a quick national expansion. So What? The role of the convenience store is going to radically change in the next decade. Not only are consumer tastes veering toward fresher, less processed foods, but as gasoline-powered cars become hybrid cars, become electric cars, the purpose of the ‘gas station’ will need to evolve. I can see convenience stores becoming cool again, trendy places that blend pop-up store chic with feelgood products. If I were Alltown, I would try to attract small, up-and-coming food and beverage brands. Saying a product is ‘gas station food’ in the future, might just be a compliment.
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Innovation Doesn't Need to Be Difficult
Malachite can serve as guide, coach and inspiration in your company's journey toward a profitable pipeline. From consumer interaction, to whitepapers, ideations and prototyping, Malachite can help. Visit malachite-strategy.com  for more info or email kevin@malachite-strategy.com
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