In past editions of The Stockout, I’ve discussed how CPG supply chains might change in response to not only a greater focus on health, but also a redefinition of what a product needs to be considered healthy — which now includes limits to sugars and salt, as well as fat, and also providing some positive nutritional value. That new definition is critical because it will determine how products can be advertised, whether they can be sold in schools, and what consumers will buy — healthy and premium foods are one of the few CPG segments showing meaningful volume growth.
DouxMatok’s Incredo Sugar aims to reduce sugar content without compromising taste
On last week’s episode of The Stockout show, I had the opportunity to dig into that area of interest further with Kelly Thompson, SVP head of North America for food tech company DouxMatok. DouxMatok is one of the startups that aim to help CPG companies (and also food service companies, bakers and chocolatiers) reduce sugar in their products without compromising on taste or texture.
Incredo Sugar, DouxMatok’s patented product, improves the efficiency of sugar delivery to sweet taste receptors. As a result, 30%-50% less sugar is needed to have taste parity with original formulas. The lower sugar content also allows more space in the product for healthy ingredients, such as fiber. Currently, many food products use sugar as a bulking ingredient due to its low cost and contribution to taste.
As they are rolled out, low-sugar products using Incredo Sugar are likely to be 10%-15% more expensive than original formulas, according to Thompson. That doesn’t sound out of line to me, and it’s clear that consumers have demonstrated a willingness to pay a premium for healthier products. I can envision a scenario where more packaged food products will have more clean-label SKU alternatives alongside their original formulas.
Thompson is clear that the company is not “anti-sugar,” but instead, aims to help consumers utilize sugar in reasonable portions. To help get products to market, the company has established partnerships with existing sugar refiners, such as Lantic Sugars, Canada’s largest sugar refiner, which already have distribution networks in place — making the company’s logistics relatively straightforward.
View the full episode here.
Consumer headwinds challenge e-commerce volume
Subscription boxes and other forms of e-commerce that have grown in recent years are now showing retrenchment. FreightWaves’ JP Hampstead asks whether inflation is crushing e-commerce volume — it seems clear that it is as consumers shift their dollars to essentials.
Winsight Grocery Business highlights pressure on grocery consumers in three articles that stood out to me — there appears to be a shift from having groceries delivered (down 9% y/y) to curbside pickup (up 5% y/y), which is hitting the right mix of price and convenience. Two articles that are more concerning are Grocery eats up more ‘buy now, pay later’ online purchases and Study: SNAP customers weigh heavily in grocery purchases. The latter makes the rollback of enhanced COVID SNAP benefits seem all the more impactful.
On last week’s The Stockout show, Western regional parcel carrier General Logistics Systems said that subscription box volume, and other e-commerce, has been a mixed bag — the carrier is still seeing growth from the larger companies but is seeing volume declines from the smaller sellers.
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