In an article on Food Business News, the author delves into how more and more manufacturers are turning to juices from fruits and vegetables as “alternatives” to artificial flavors, colors and sweeteners:
“With the new labeling requirements, using added sugars could have a negative impact on product labels,” said Jeannie Swedberg, director of business development, Tree Top Inc., Selah, Wash. “Juice ingredients may assist by adding natural sweetness and nutritional value, often without the added sugars. They can also provide natural color to candies, frozen novelties, fruit snacks, jams, jellies, sauces and, of course, beverages.
This article details many of the brands and manufacturers following this strategy I encourage you to read it. Of course, I do have to laugh at the irony of this — having spent a large portion of my career working in the alternative health and natural products space, it is rather funny that manufacturers are turning to nature to help with their products after decades of spending billions of dollars to develop every type of artificial flavor, color and sugar under the sun. I’m not going to get into the debate of the health claims around things such as sucralose and aspartame — but what stories such as these demonstrate is the power of the movement we call Clean Living and why it is emerging as such a powerful investment theme. Whether its because consumers are becoming more aware of ingredients in their food as a result of new labeling laws, or they are simply becoming more educated on the dangers of what some call “frankenfood”, the reality is that consumers are voting with their wallets and those votes are more and more being cast in the “natural food” aisles at the grocery store or at restaurants that tout things such as farm-to-table menus, organic ingredients or simply the elimination of artificial colors, flavors and sweeteners.
Clean Living is an interesting investment theme from an investment perspective. We’ve written a lot about Chipotle (CMG) and their movement in this space as they employ their “Food With Integrity” ingredients approach to keep their menu free of any artificial ingredients, hormones and GMO’s. That’s a trend that others have followed, including Panera Bread and even McDonald’s (MCD) as of late has been strides to follow. But what’s most apparent with the theme is the amount of M&A activity around business models that are riding the Clean Living theme: SodaStream taken out by Pepsi; Zoe’s Kitchen; J.M. Smucker acquired Sahale Snacks; Peet’s Coffee added Mighty Leaf Tea Company to their holdings; Mondelez International added allergen-free brand Enjoy Life Foods. The list goes on and on.