By Michael Baxter, Fresh Business Thinking
It had been steadily growing but Covid-19 may be accelerating the wellbeing and holistic health food and drink sector, a development that may be given further impetus by Boris Johnson’s Better Health Campaign.
“The biggest consumers of our alcohol-free beer are people who do drink alcohol,” says Joelle Drummond co-founder of Drop Bear Beer Co.
And that seems to sum it all up. These days, it seems it is not so much that some people drink alcohol and others don’t, some people enjoy a vegetarian-only diet, and others eat meat, some opt for healthy foods whilst others are not interested, instead we get overlap.
“I enjoy a pint,” explained David Brown, founder of Nocktail, a company that sells non-alcoholic cocktails.
Maybe we see more of a pick and mix approach to healthy food and drink. At least that view seems preeminent amongst the people behind businesses in this space who took part in a recent Great British Entrepreneur Awards roundtable in partnership with haysmacintyre.
Of course, this is not new. Demand for sustainable food and drink, or if you prefer, health and wellbeing, was steadily growing. But maybe Boris Johnson’s initiative, the ‘Better Health Campaign', has built upon this Covid created impetus further still.
“Lockdown has meant people re-assess how they spend their time,” suggested Ellie Webb, from Caleño, which sells non-alcoholic tropical spirits.
Ellie expanded her point: “New habits have been formed.” She speculated that during the early stages of lockdown, some people did drink a little more alcohol but then realised it wasn’t sustainable. Now “people are drinking more, but not necessarily drinking more alcohol.”
Sustainable food and health and well-being entrepreneur, mentor and investor, John Stapleton, also founder of New Covent Garden Soup Co, reckons that you can divide the Covid crisis period into phases.
At first, there was panic buying, and shortages, coupled with a degree of comfort eating and drinking, then there was a move towards healthier food. “Home cooking became more popular."
“But at the moment, a wish for immunity is driving demand for health and well-being food.”
Then again, when you look at comparable markets pre-Covid, they also went through phases. As Joelle Drummond explained: “With vegan food it hockey-sticked.
“At first veganism was an alternative lifestyle thing, only for people who had opted for this choice. Then it went mainstream; we had vegan kebabs and vegan pepperoni pizzas. It is no longer a niche.”
Maybe Covid has accelerated this switch to non-alcoholic drinks. We have all engaged in a certain amount of life re-evaluation. And for some of us, being stuck at home was tough. But many of us began to worry about our health. If we get the virus, the symptoms are more likely to be severe if we are overweight or relatively unhealthy. So maybe finding drinks and food that combine health with taste, was a good compromise.
Not that it has been like that everywhere and for everyone.
Mr Lee’s Pure Noodles offers a healthy option for those who like instant noodles, not exactly a product type usually known as a health food. But the combination of health and taste comes at a price — Mr Lee’s products carry a premium price. “In Australia” observed Damien Lee, the eponymous founder of the company, “we noticed a trend towards cheaper brands.” He speculated that this was down to economic insecurity — fears about job stability encouraged people to watch their pennies or cents a little more closely.
Yet, in the UK, there was a surge in demand for the company’s product.
It is just that up until recently, if you wanted a non-alcoholic drink, choices were limited, especially for those who want their drink to be healthy.
“Until recently there weren’t many alternatives to alcoholic drinks,” suggested David Brown.
Then again, with alcoholic drinks, we have seen trends — the massive variety of fruit ciders for example or craft beers. “With alcohol-free beer, you need to reflect trends seen in the alcohol market,” said Joelle Drummond.
Ellie Webb agreed, “there are more alternatives to alcohol now,” she said.
The rise of online
Covid related lockdowns have also been accompanied by a rise in online shopping — or e-commerce.
For startups in this food and drink space, the growth in e-commerce has been a boon.
ACTIPH Water sells alkaline ionised water. Its founder, Jamie Douglas-Hamilton, told how online has created new opportunities for the company. “Before lockdown we were selling three to four pallets a month through Amazon, now it’s 50 to 60. Sales through Ocado are up eight-fold.”
Maybe more significantly even than that, online has opened up overseas markets. The company has begun selling its products into China via Alibaba, the US via Amazon and now into Dubai.
Demand for online has also been an exciting experience for Olivia Ferdi, co-founder of TRIP, which markets CBD drinks, drinks made from cannabidiol – the non-psychoactive compound found in hemp plants. Unlike THC (tetrahydrocannabinol), CBD will not give you a high.
For Olivia, it is not just the immediate sales benefit of online; it also the customer feedback that comes with it that is valuable.
Then again, during the height of Covid-lockdowns, “getting a delivery was the highlight of your day.”
Millennials and transparency
John Stapleton has a concern, however. He warns about “brands claiming to be healthy...there are a lot of spurious claims.”
On the other hand, he suggested “millennials are quite savvy.”
Damien Lee echoed those sentiments: “consumers are looking for transparency in the food chain,” he opined.
For Mr Lee’s Pure Noodles, this can mean highlighting the origin of the food. “In the US, especially, consumers want brands made in the US.”
But transparency can also be about education and a breakdown of ingredients and why they are important.
Mindfulness was becoming more popular before, Covid, maybe with mental health becoming a bigger issue during lockdown, it will become more popular still.
But David Brown applies the idea to sustainable food and drink; he calls it “mindful drinking.”
But in the post-Covid era, behaviours that emerged during lockdown may stick. That means increased online sales, with the opportunities that entails including more favourable margins, sales into territories previously out of reach and maybe more significant interaction with customers.
But maybe with fears of a virus never far away, health and well-being will become higher priorities,
Businesses in the sustainable food and drink business understand this; maybe investors need to be mindful of it too.
The webinar was chaired by Jon Dawson, haysmacintyre