Jul 9, 2018, 9:26 PM ETPanel

Global Food Industry Leaders Building a Healthier Future

Market Consolidation & Disruption: Major CPG companies face sales declines, prompting a pivot toward startups, acquisitions, and venture funds, with over $1 billion invested in food/ag startups in the last year.
High-Profile M&A: Amazon acquired Whole Foods for $13.1 billion, described by one CEO as a "thermonuclear bomb" against the grocery industry.
Nestlé's Portfolio Restructuring: Nestlé sold its confectionery unit to Ferrero for pragmatic reasons (aiming for a #1 or #2 market position) and strategic alignment with a "healthier future" mission.
Nestlé's Acquisitions: Proceeds from the confectionery sale funded acquisitions in high-growth, health-aligned sectors, including:
- Freshly: Direct-to-consumer fresh-prepared meals (growing >100% annually).
- Sweet Earth & Chameleon: Plant-based protein and cold brew coffee.
- Blue Bottle Coffee: Premium retail coffee.
- Atrium Innovations: Plant-based supplement company.
Mars Edge Launch: Mars created a new business entity, Mars Edge (launched 7 months prior to the panel), with a mission to invent affordable nutritional solutions to address global gaps where 4 billion people lack adequate nutrition.
Beyond Meat & Tyson Investment: Major meat producers Cargill and Tyson are investing in disruptors like Beyond Meat, Impossible Foods, and Memphis Meat.

Natural & Organic Growth: The natural and organic sector is growing 5% to 15% year-over-year, driven by improved product quality and taste, moving away from the "cardboard" perception of early products.
Generational Shifts: Gen Z consumers drive further demand than Millennials, consuming 57% more tofu and 550% more non-dairy milk; they prioritize plant-based options and price consciousness.
Plant-Based Expansion:
- Hain Celestial reports plant-based products are no longer a niche, with 5-6% of the population identifying as vegetarian or vegan, while meat consumption patterns shift toward reduced red meat.
- Nestlé plans to expand organic lines across major brands (Lean Cuisine, Stouffer's) and launch new plant-based lines (Lean Cuisine Origins).
Consumer Education: Consumers are highly educated regarding ingredients (GMOs, high fructose corn syrup, hydrogenated oils) and increasingly use smartphones to scan products for nutritional data.

Kroger's Goals: Kroger committed to "Zero Waste" and "Zero Hunger" by 2025.
- Food Waste: In the prior year, associates distributed over 300 million meals to food banks from unsold but high-quality food.
- App Innovation: Launched "Opt-Up," a free app helping customers track nutritional scores (e.g., sugar intake) and receive personalized healthier alternatives.
Mars' Progress: Mars is on track to deliver 1 billion healthy meals by 2021, having already delivered 600 million (as of the panel date).
- Focus Areas: Reformulating products for sodium, saturated fat, and sugar; promoting family dinner times; and developing affordable nutritional solutions for global populations.
Supply Chain Sustainability:
- Nestlé: Focusing on zero waste in factories, reducing water usage, and reconfiguring distribution networks to minimize mileage.
- Hain Celestial: Advocating for local sourcing to reduce carbon footprints (e.g., growing local produce in Upstate NY vs. trucking from California) and educating farmers on pesticide-free practices.
Agricultural Challenges: Discussions highlighted the environmental strain of animal production (e.g., chicken waste, manure lagoons) and the risk of soil failure (7-8 harvests away from failure in some regions).
Mars' Animal Welfare: Mars has committed to cage-free eggs, slower-growth broiler chickens, and increased use of antibiotic-free and hormone-free meat.

Employee Wellness Programs:
- Kroger: "Know Your Numbers" program requiring health assessments; resulted in a nearly 50% reduction in high blood pressure among enrolled associates.
- Nestlé: Global "Steps Challenge" app competition and "Know Your Numbers" health coaching for associates with overweight/obese BMI classifications.
Sugar Reduction: Major CPG companies are actively reformulating products to reduce sugar, sodium, and artificial ingredients, responding to a global obesity crisis.
Medical Integration: Panelists and Dr. Heber called for greater partnership between the food industry and medical professionals to treat nutrition as a primary driver of health, shifting from a disease-centric model to a preventative one.

Kroger (5-Year Vision): Aiming for a seamless, transparent, and customer-centric experience where transactions occur via physical stores, delivery, or pickup based entirely on consumer terms.
Hain Celestial (5-Year Vision): Expanding globally as a health and wellness leader; anticipating e-commerce to grow from 2% to 20% of food sales (representing $160 billion in the US) by 2023.
Nestlé (5-Year Vision): Continued portfolio evolution focused on enhancing quality of life and healthier futures through reformulation, innovation, and strategic acquisitions.
Mars Edge (5-Year Vision): To have invented, developed, or acquired the first targeted, affordable nutrition solutions to close global nutritional gaps and help consumers make healthier daily choices.
E-commerce Forecast: Panelists note that while 2017 was a year of disruption, 2018 represents a return of large players adapting to the new landscape, with a focus on scaling health and wellness solutions.