Alternative foods taking bite out of processed market

Two things happened in May that should be a huge wakeup call for big food companies. First, the respected medical journal Cell Metabolism published a study that showed a direct relationship between highly processed foods and obesity. Second, the alternative-hamburger company Beyond Meat — which makes the plant-based Beyond Burgers that have been flying off supermarket shelves — had its wildly successful IPO, raising almost $250 million.

The takeaway from these developments for makers of canned pasta, aerosol cheese and muffins in cellophane is this: Consumers are choosing to eat better. They are hungry for foods that deliver the magic combination of health, taste and convenience at a decent price.

Unfortunately, right now the main innovations are coming from upstart companies like Beyond Meat and Caulipower, which has revamped pizza with a cauliflower crust and made $45 million in sales after a $5 million infusion from investors. The processed foods that are being blamed for making us fat and unhealthy need a makeover as miraculous as the burgers. So do the companies that make them.

These firms have two compelling reasons to reinvent themselves and their product lines: public health and their future financial health. In the public health realm, it’s clear that processed food and its added sugar, fat and salt are becoming a liability. According to Natural Marketing Institute (NMI), in 2017, 67% of consumers stated that they wanted foods that were less processed, up 43% from 2006. This attitude was reinforced by the study published in Cell Metabolism, which showed that people who ate mostly processed foods took in 500 more calories a day and gained more weight than those who ate a largely unprocessed diet.

Back in January another venerable medical journal, The Lancet, blamed the food industry for a “global syndemic” of obesity, under-nutrition and climate change. Both reports are shots across the bow of the food industry. They add to a growing body of evidence linking food and health. They stoke the fires of outrage among nutrition activists and policymakers, and they strengthen the case for more oversight and regulation.

Both Beyond Meat and its rival Impossible Burgers — which are now available at Burger King via the Impossible Whopper — are so popular that the companies can’t keep up with demand. At supermarkets, people are buying more pre-cut vegetables.

Emerging companies like Beyond Meat are showing how innovation is meeting consumer demand for better-for-you products.

Processed foods must become the means by which to deliver today’s food mandate: healthier, tasty, convenient food. Companies must re-invent their product lines by upping their R&D spending and demonstrating the same capabilities as a nascent industry did a century ago. They just need the will to do it.