At Engelworks, we follow the developments in the health and wellness industry and identify the opportunities that arise as the result of these changes.
Today we look at the global diet analysis published by Lancet on April 3, 2019, and focus on a few opportunities that it opens up for the cereal industry.
The key conclusion of the 27 year global study (195 countries) is that poor diet accounts for more deaths than other risk factors such as smoking. Another critical finding is that in most cases the more important factor is not what we eat too much of, but rather what we don’t eat enough of. Apart from salt - we consume far too much of it.
More than half of all global diet-related deaths in 2017 within this global study were due to just three risk factors: too much salt, and not enough whole grains and fruit. That doesn't mean people in these countries ate no grains but rather that they ate processed grains, with little nutritional value and high in calories, salt and sugar.
Whole grains are an important source of dietary fibre. People who have high fibre diets have lower risk of death and chronic diseases such as stroke, cancer and type 2 diabetes compared with people with low fibre intake, according to a widely publicised study by Andrew Reynolds that was published in Lancet in January 2019.
Most people globally consume about 20 grams of dietary fibre per day. The research recommends 25-29 grams of fibre each day. Higher amounts are even more beneficial.
Let’s focus on cereals as one of the main sources of grains. Is the $9bn cereal industry is in trouble, when sales have declined by 17% over the last decade?
Many attribute this decline to millennials’ habits and attitudes:
According to Mintel, 40% of millennials do not eat cereal for breakfast because it takes too long to prepare and clean up, but there is a rising trend to consume it later in the day as a snack.
Another trend is a gradual move away from sugary and processed foods, again led by many millennials and Generation Z.
Where are the opportunities for the cereal industry to close this whole grain gap? Perhaps unlike in the case of some other nutrients, supplementary pills are not the best solution.
We see 3 opportunities for food companies:
Reformulations: more whole grain, less processed. This would make food more functional by increasing the nutrient component. The days of old school sugary cereals are numbered, so food majors have been investing in improving their recipes. There have been numerous additions of Whole Grain products to their ranges, and some products have already achieved the 100% whole grain mark.
An example of it is the Shredded range of cereals by Nestle. Nestle uses bold, bright green banner with the whole grain tick on cereal packs, which means that a cereal contains at least 8g of whole grain in each serving.
General Mills similarly has a range of 100% whole grain products, certified with the highest 100% Whole Grain Stamp by the US-based Whole Grains Council.
Shift to convenience formats for whole grain dense foods, such as bars that can be consumed on the go during the day. A good example is Nestle’s Lion Breakfast Cereal Bar.
Buying and scaling niche companies with strong modern brands and social following and good recipes.
There are many upstarts in the space. A good example of such a company is Minneapolis-based, VC funded Seven Sundays, which has mastered both a strong functional food formulation and convenient formats.
It produces Muesli Squares, which are convenient, gluten free breakfast bars. The company’s vision is to change the way people think about breakfast. Its products are made with a variety of unprocessed, nutrient-rich ingredients like multiple types of whole grains (100%), nuts, seeds & fruits.
At Engelworks we believe that in many cases food is the best medicine, and we are working with a number of companies in the functional foods, or nutraceutical, space. Please get in touch if you would like to find out more.