It’s mid-January. Some of us have already fallen off the wagon, secretly stuffing our faces with leftover chocolate and guzzling down the remaining dregs of Baileys, all in the name of ‘waste not want not.’ Others, that have a modicum of restraint and willpower, will still be on the straight and narrow (for now).
Whichever camp you’re in, there’s no denying that ‘new year new me’ has an allure. Even if you disdain the radical cold-turkey approach and love to mock ‘veganuary’ or the dry January doers at your local drinking hole, the chances are, you too are still likely to make some commitment to change come the new year – and, as YouGov data shows, it’s most likely to relate to your health and fitness.
Getting fit is top of the list
Out of all resolutions, getting fit, losing weight, and improving diet feature in the top three for Brits, with 45% of women and 39% of men pledging to change their diet in 2023. Data also shows that for the fourth consecutive year, exercise and fitness tops the list for more than half of Britons making resolutions for 2023.
It’s not shocking then that even in 2023, with a deep-seated global recession taking a heavy toll on most markets, the healthy food market is still booming. Although there were occasions when it may have peaked – think 2015, chia seeds were as hot as bitcoin and Beyonce was wearing a ‘Kale’ jumper – the coronavirus pandemic swooped in just in time to silence the naysayers and trans-fat lovers and give supplements, sauerkraut, and soy milk their day in the sun again. In fact, the superfood powders market in the UK is expected to grow by over 250 million USD between 2021 and 2025, states Technavio.
But how much is the healthy food market in the UK worth now, and how will that be impacted by the cost of living crisis, supply chain issues and soaring inflation? Well, between 2016 and 2021 the organic health food market’s sales value grew by over 30% to above £3bn in the UK. In 2022, the global health and wellness food market was valued at $841bn, projected to increase to one trillion US dollars by 2026.
Health vs hedonism
It’s expected that parts of the health market, like organic foods, will take a knock during 2023 as people pull back their spending to make ends meet. But, overall, the trend for healthy on-the-go snacks, made popular in European countries like Germany and the Netherlands, is still on the rise in the UK. This has been reinforced by the current government’s bid to address the ‘obesity epidemic’ by adding calories to menus and banning junk food TV advertising before 9pm. It’s also true that people’s preferences have changed over the past decade, with more and more younger people opting for a plant-based diet and cutting back on their alcohol intake.
Yet, with fast food and ‘junk food’ snacking safely embedded in Western culture, how have health snack giants gone head to head with household names to transform the landscape? Well, if the story of Anthony Fletcher, former CEO of Graze and previously data-guru at Innocence, is anything to go by, then science, data, and a Silicon Valley mindset may be the equation for breaking food and bev.
Changing molecules, not habits
As we know all too well, knocking a bad habit out of touch is hard. The University College of London found that it can take between 18 days, all the way up to 254, which is as unhelpful as it is demoralising, depending which way you look at it. So, will adding calories to menus and taxing sugary foods help drive healthier consumption? Unfortunately, probably not.
When it comes to changing our diets, there’s perhaps more science involved than just pure willpower. These days we know more about cravings and their link to our gut microbiomes as well as the links between our belly and our brain. So instead of going against the immovable force of will, why not let science help us snack smarter, without making our taste buds miserable?
Urban Legend, the latest venture from Chemist grad Anthony Fletcher has put this theory to the test – and so far, it seems to be working. The brand is going toe-to-toe with the sweets and dessert industry. And while it may look like another Instagrammable donut pop-up, Fletcher can laud one major USP over competitors like Krispy Kreme, Crosstown and Donut Time. Its calories, or we should say, lack of them.
How did Urban Legend bring doughnuts to the healthy snack market?
The doughnut brand has already swept through the South with popups in train stations and concessions in Selfridges as well as a delivery service on Deliveroo. Their biggest claim? That their doughnuts are the same calories as a slice of buttered toast. Their mission was not to move into dried date bars or nut packets to replace indulgent snacks, as Fletcher had previously done at Graze, but to make indulgent snacks bend to science.
By donning some white coats and toying with the elements, his entrepreneurial team managed to successfully ‘set’ doughnuts with steam, instead of deep-frying them. Success was measured on whether the process could emulate the crispy fried taste we know and expect from the fairground snack – but with half the calories making them ‘responsibly indulgent’. You won’t find any attempt to make raw carrot or matcha the star of the show either, flavours like Bubblegum Burst, Banoffee Pie and Belgian Biccie promise to please the sweet-toothed.
Why good food is good for business
OakNorth’s Soho neighbours and one of our first business finance customers LEON were ahead of the curve when they decided to penetrate the fast-food market. The data behind this one is easy – the UK’s love of takeaways and fast food has moved well beyond a ‘chippy Friday’ treat with the market set to be worth over £20bn in 2022.
As people juggle long working hours and navigate sharing a small kitchen with 4 other flatmates in the UK capital, the fast-food industry, although responsible for increased levels of obesity in the UK, is clearly not without its perks. Much like Urban Legend, LEON asked why something we enjoy and makes our lives easier always must be a vice. If we’re a nation with ‘fast food syndrome’ then how can we make fast food healthier and better in the long-term. Leon’s plant-based options along with freshly cooked low sugar low salt meals have proved popular with fast-food lovers alike, opening 70 restaurants since their launch.
Crunching the data on the snack industry
2022 research shows that 86% of UK adults eat snacks at home. But, within the snack industry, there has been a huge surge in demand for affordable healthy convenient, on-the-go food options including high-protein, low-carb, high-fibre, and gluten and dairy free. In fact, 72% of of snackers said if healthier snacks were more affordable, they’d be more likely to choose them over unhealthier ones.
Deliciously Ella, a blog that turned into a highly successful business, founded by Ella Mills and her husband Matthew Mills was another success story born from personal experience. Looking to overhaul her diet and lifestyle to treat a debilitating illness, Ella took the public on her journey to becoming plant-based.
After the success of her online recipes, she released her first physical recipe book which instantly became a bestseller, but seeing a gap in the snack market, she knew that carrot sticks, and a thimble of hummus weren’t really going to entice snackers looking for sin-free choices. Seen as less convenient, less accessible, and less enjoyable than traditional options, the healthy snack offering back in 2016 was less crowded, so Ella’s pocket-sized portable work-friendly nibbles were a huge hit. Since then her snack line has gone from strength to strength with her range stocked in 6,000 UK retailers.
As their brand grew and their success soared, Ella and Matthew wanted to regain control and buyout private investors so they had full control of their future, they took out a business loan from OakNorth to make this happen.
The algorithm that makes healthy meals and reduces food waste
Last year OakNorth welcomed a seemingly unlikely member to its non-executive board – Founder and CEO of Gousto, Timo Boldt. Timo’s trailblazing business successfully married food with big data to give time-poor foodies the chance to fall in love with home cooking again. And despite the UK’s growing reliance on fast food and quick fixes, his approach to the food market was to enter it as a ‘data business that loves food’.
Like OakNorth founders, Rishi and Joel, Timo’s passion came from solving a personal frustration. He wanted to cook but with the pressures of a full-time job and finding fresh raw ingredients each evening, he was struggling to make it suit his modern working lifestyle. Now, in 2023, Gousto is set to employ over 700 people. Timo’s secret sauce? ‘Listening to what the data tells you – it’s telling the truth about consumer trends’. His data seems to be the recipe for success, with thousands of households discovering new recipes and cooking fresh meals with zero waste.
So, if you’re looking to crack the healthy food and bev market, the answer may be simpler than you think. The data tells a clear story – modern western life demands convenient on-the-go foods, and we want them to taste good without making us feel bad. Whether that’s by steam-setting doughnuts or delivering high-protein cacao balls, let statistics and science steer your path to success.
Looking for a financing partner to help you get there? Find out how expert business loans from OakNorth can accelerate your journey.
