Specialty food makers face critical supply chain, pricing, and labor issues in 2022, but they also face never-ending hurdles around communicating the benefits of their products to consumers. Whether those challenges involve explaining the health benefits of the products they offer or their sustainable sourcing and packaging, makers need to make sure they are getting the message across.
SFA News Daily asked three specialty food makers about the biggest issues they are facing in the new year. Following is what they said:
Adit Agrawal, president and CEO, AlcoEats
In 2021, the supply chain has been a major issue for anyone, and we are going to see some issues for at least the next two years.
Another issue will be with consumer spending habits. With inflation going up drastically, I think consumers will start buying fewer specialty food items in 2022, so I think there will be some downward pressure on demand. With inflation rising, our costs are going up, but to retain consumer demand and keep our customers with us, and make sure that they are cared for, we are eating up all those cost increases instead of forwarding them on to the customers. We will continue that in 2022.
The food crop is highly dependent on weather, but I can see prices taking a hit. We sell cashews, for example, and a lot of the supply for cashews is imported. Anything that is significantly imported to America will take a big hit.
Another major issue is that we see a big impact on small businesses. Big food suppliers have economies of scale in place, so it’s easier for them to navigate the supply chain challenges compared to smaller business, or companies that are very niche or that are in the specialty food business. It’s going to be very tricky for companies to maintain premium quality, and specifically for AlcoEats, maintaining the gourmet taste and ingredients at the level that we need is going to be a major challenge.
Hopefully we can navigate the scope of these challenges in a meaningful way, and of course we need all the help we can get from the customers. It’s been cool to see how customers have shown their support for small business.
Louise Cheadle, co-founder and tea taster, teapigs
We hope that consumer demand for transparency around governance and sustainability is not just a trend but a full-fledged shopping habit, so we’d say the biggest challenge would be educating consumers about how to choose a sustainable tea brand.
Many tea companies are working to eliminate plastic from their products and prove their environmental credentials. However, teapigs is ahead of the game and has been addressing this for some time. Teapigs’ range of tea temples are available in plant-based packaging. We were the first tea company in the world to receive the Plastic Free trust mark by A Plastic Planet, and we’re really proud! We invested in the Soilon bags (made from corn starch) for our tea temples to hold the tea, and NatureFlex bags to keep the tea fresh inside the pack (it’s made from wood pulp but looks like plastic). The pack cartons are made from Forest Stewardship Council-certified paperboard, and vegetable ink is used for printing.
It can be tricky, but when choosing a sustainable tea brand we’d recommend the following pointers for retail buyers:
• Check that your teabags don’t contain any plastic or use plastic to seal.
• Check the packaging is recyclable, biodegradable, or compostable.
• Ask your supplier where they source their tea.
• Ask your supplier if they give back to the communities that bring them their tea.
• Make sure your supplier is transparent about their sustainability status and goals.
Allison Ellsworth, co-founder and chief brand officer, Poppi
As the number-one modern soda brand, we have a clear vision: Shake up the soda scene for good. By influencing previous sugary soda drinkers to swap their soda for that same delicious flavor, but better ingredients and benefits, we strive to encroach on the market share from Big Soda.
Poppi is building both a retail footprint with Target, Whole Foods, Kroger, etc., and growing an online direct-to-consumer business via Amazon.com. While DTC is forecasted to be 30 percent of our total revenue in 2022, it requires significant investment in search, programmatic display, and other media vehicles that educate consumers on Poppi’s gut-healthy functional benefits and usage occasions. Our challenge next year will be to continue balancing spend and staffing against this critical DTC growth engine, while also expanding brick-and-mortar with our internal field sales team, broker partners, distributors, and merchandising alliances.
Related: UFCW Urges Retailers to Protect Workers From Omicron Variant; Food Retailers Discuss Supply Chain With President Biden.