McGuireWoods’ food and beverage and private equity groups, alongside
industry senior executives, recently shared insights on emerging foods and
restaurant acquisition management in the marketplace, at an
Oct. 29 event in the firm’s Dallas, Texas, office. Here are the top takeaways from those
- Flexitarians. Makers and distributers of innovative
plant-based products are not targeting long-time vegetarians or vegans, but
are going after a new group of consumers who want a plant-based option for
environmental or health reasons. Products in the plant-based category
targeting these consumers should have familiar flavors and textures.
Standards of Identity No Longer Fit. Standards of
identity requirements by the U.S. Department of Agriculture and the Food
and Drug Administration are outdated and no longer neatly apply to the
categories of plant-based products designed to replicate dairy and meat.
Updates are forthcoming from FDA, but until then, pay attention to state
FDA-Regulated Industry Is Different Than USDA-Regulated Industry.
Many players entering the plant-based market are accustomed to working with
USDA regulations and having USDA approve the labels. With plant-based
products, FDA has primary jurisdiction and does not approve labels prior to
market. It is important to understand the differences between FDA and USDA
product labeling requirements.
State Regulations for New Foods. Many states have
attempted to pass laws to limit the standards of identity associated with
beef, pork, chicken and dairy, to apply to animal-derived products only.
Until the law is settled, it is important to check where products are being
sold and the law in that jurisdiction to ensure appropriate labeling.
Presently, several companies are challenging the states that have passed
laws to stop enforcement.
Expect a Fight. State legislators and traditional
cattle ranchers are not abandoning their push to pass new laws limiting use
of the words “milk” and “meat,” amongst others. Expect more legislation in
this space and more challenges from the plant-based industry.
Traditional Players Are Innovating. Some of the largest
traditional meat players are innovating and making plant-based products
work for them and their market. Expect to see other large companies enter
the playing field.
Refreshing the Old Restaurant Model. Innovation is key
to keeping up with consumer tastes and preferences when it comes to food.
Know your customer and your market to stay ahead of consumer food
preferences. Standard offerings and menu options may not stand out and draw
the attention of customers in a sea of options.
Technology and Your Current Model. Choosing whether to
take on delivery apps and online orders can impact your business model in
terms of both physical space and price point. Does your restaurant have the
space to handle the surge of online orders? Would it make more sense to
have a dedicated outside kitchen handling the volume? Consider these
options before joining a service.
For questions or additional information, please contact one of the McGuireWoods or McGuireWoods Consulting professionals.