CPG Week: Fancy Food and Buzz-Free Booze

[00:00:05] Monica Watrous: Welcome to the CPG Week podcast by BevNET and Nosh, your source for the latest food and beverage industry news. I'm Monica Watrous, Managing Editor of Nosh, here with my co-hosts Brad Avery and Lukas Southard. If you're enjoying the show, please subscribe on your listening platform of choice. On the podcast today, we are discussing dry January and the buzz around Booze Free. But first, the Winter Fancy Food Show was held earlier this week in Las Vegas, and our colleague Adrianne DeLuca and I were out there tasting the latest in Specialty Food. Have you guys been to that show?

[00:00:43] Brad Avery: Oh yeah, many times, including the Vegas location.

[00:00:47] Lukas Southard: Mm-hmm.

[00:00:48] Martín Caballero: Yeah, I haven't been to Vegas. I've done the New York summer show a couple times, but I've never Thankfully had to had to make the trip out to Vegas and and deal with that. I'm not I'm not a big Vegas guy I find Las Vegas to be a lonely city

[00:01:03] Lukas Southard: to say

[00:01:19] Monica Watrous: is in fact leaving Las Vegas. They announced a new event to replace the Winter Fancy Food Show that was held in Vegas the last two years. The new event is called Winter Fancy Fair with an asterisk at the end for some reason. And it is designed to be more interactive, maybe a little bit more approachable for earlier stage brands. A lot of the details of what the new event is going to look like are scarce at this point, but it will be happening in San Diego next year. and in San Francisco the following year, where it was held for many, many years before it went to Vegas.

[00:01:54] Martín Caballero: This sounds very kind of Newtopia Now vibes that everyone's following that lead, it looks like.

[00:02:02] Brad Avery: I was going to say deja vu, especially announcing it during the show. Because I remember the final expo East, it was kind of weird because they said it at the top of the show and then everyone had this kind of like, well, now what? Like it kind of cast a pallor over the show. How did they handle the announcement this time for Specialty Food doing it?

[00:02:24] Monica Watrous: Oh, how did people handle it? Or how did the SFA handle it?

[00:02:27] Brad Avery: How did SFA handle the announcement? Did it feel the same way like when New Hope kind of dropped that on everybody?

[00:02:32] Monica Watrous: Um, not exactly. So this was announced at a special gathering on the first night of the show. They had drinks and hors d'oeuvres being handed out and the CEO of SFA got on stage and said, Hey, we've got a big announcement. And then they played a video and the video said, we're out of here. And introducing the Winter Fancy fair.

[00:02:58] Martín Caballero: How was the reaction from the participant or attendees? Was there a sense of dread or surprise or, you know, what was, what was the reaction?

[00:03:09] Monica Watrous: People are really happy to go to San Diego and not be in Vegas. And then also to go to San Francisco. Yeah.

[00:03:16] Brad Avery: Validation for my feeling that Las Vegas is not a happy place to be.

[00:03:21] Lukas Southard: It's not.

[00:03:22] Brad Avery: I know some people are very much Vegas people and like going there. But, you know, it's like going there for nacks. is also a totally different experience than going there for fancy food and fancy food always doesn't quite feel like a Vegas show to me. The tone of the the brands that are there versus the city around them makes more sense when you got the the cigarettes and the gas pump companies alongside all the candy brands and the sodas.

[00:03:48] Martín Caballero: Yeah, or like car shows or something else. But like, it's a great place for conventions, just maybe not like specialty fancy food convention. Although there is a lot of really nice fancy food in Las Vegas. I mean, that's the one reason I like going is like, there's some really, really awesome restaurants.

[00:04:05] Monica Watrous: Well in Specialty Food Association is leaning into the fact that San Diego and San Francisco are big culinary destinations. So in addition to the events happening at the convention centers, they are going to have activations outside of the convention centers in different food focused areas of the cities. And I also know that they will be charging less for booth space. They're going to be offering some more affordable options like tabletops, again, very much like Newtopia Now did. So I think what's happening is the industry trade show landscape is changing. It's becoming more competitive. We're seeing all of these distributor shows that are taking away from the SFA and New Hope events, and they're having to scramble to evolve to keep pace. And so it'll be interesting to see what Winter Fancy Fair actually is. But again, I'm not sad about going to San Diego in January. I think that's going to be a really great time.

[00:05:09] Brad Avery: Yeah, I will be happy to go next year. This sounds great.

[00:05:13] Monica Watrous: You're going to have to fight me and Adrian.

[00:05:16] Brad Avery: How was the final Fancy Food Show then? What did you see on the floor?

[00:05:21] Monica Watrous: So you know I've been to this show for about 12 years now and it felt very quiet this year. There were not a lot of people walking around. It felt like a smaller show in terms of the number of exhibitors and I didn't see a lot of new new in terms of innovation. But the themes that stuck out to me and Adrian as we were walking through the show were a lot of Southeast Asian flavors in snacks as well as sauces. One of the more interesting products that I got to try was an Indian take on chili crisp. and it was called Bombay Chili Crunch. It featured savory curry leaves and garlic and some Indian chilies. I also got to sample some naan pretzels. Niramaya Foods, which is known for its Indian-inspired dips, is about to launch some pretzels made with naan, the Indian bread, the flatbread. And it had a really unique crunch. It also has some really tasty seasonings that are definitely found in a lot of Indian street Food Show that was a really exciting trend. Also, we saw several brands exhibiting products featuring konjac. Several brands had konjac jelly snacks, which are known to be high fiber and low calorie. Sometimes they're enhanced with collagen and vitamins. It's a popular Asian snack, and we're seeing it pop up more and more stateside. And I think my favorite part of the show was the section that featured a handful of brands working with an incubator in Hawaii. And there I sampled ube chocolate, a line of hot sauces made with Hawaiian fruits. I also tried a line of granola featuring Hawaiian grown fruits, including breadfruit and taro. which is not a fruit, it's a tuber, as well as papaya, and then some Hawaiian cacao. And there was another company there that was putting a Hawaiian twist on the freeze-dried candy trend that we've seen so much lately. So think Ube, Lychee, and Lilliqua. Lilliqua, Lilliqua. I don't even know how you say that, but that's a Hawaiian fruit that I saw in several applications in this section of the show. Another company there produces wild harvested Hawaiian venison bone broth, which utilizes an invasive species, the axis deer, which is known to spread noxious weeds and strips the land of native plants, so increasing risk for wildfires.

[00:08:07] Brad Avery: You don't see much venison in CPG.

[00:08:10] Monica Watrous: You don't. But I tried the bone broth. It was really tasty. And the company partners with local USDA inspected hunters and processors to source the bones to make this bone broth. And then there was another company that was making shrubs using upcycled fruit grown on Hawaii islands. So a really interesting assortment of brands. And I can't recall ever seeing a presence from Hawaii entrepreneurs at the Fancy Food Show before. So to me, that was a really exciting standout of the event.

[00:08:44] Brad Avery: I'm curious, do you notice any affirmation or innovation on a lot of these macro trends we're seeing, talking to brands about how they're innovating for say GLP-1 drugs or anything with like the seed oils? Did those types of trends come up in conversation?

[00:09:00] Monica Watrous: You know, not so much in conversations that I had, but certainly in call outs on the labels as well as booth signage. I saw several snack brands as well as a seasoning brand calling out in big letters, no seed oils. And as far as the GLP-1 trend, I've seen a lot of low calorie products that I believe are catering to dieters and whether they're on the GLP-1 drugs or not. So certainly there is a lot of development around these trends. And I saw multiple brands offering non-alcoholic takes on wines and spirits.

[00:09:42] Martín Caballero: I was going to ask about that.

[00:09:45] Monica Watrous: It was there.

[00:09:46] Martín Caballero: Well, it is dry January. Aren't we all just, you know, taking time off from our alcohol consumption?

[00:09:52] Monica Watrous: I am. And I was personally glad to see some options available for me.

[00:09:57] Martín Caballero: Well, I am as well, sort of, I would say. I'm having a damp January. He's damp Lucas. I'm damp Lucas, and I'm drinking a lot of non-alcoholic beer. Shout out to Groovy, who sent me their reformulated de-alkalized wines and their near beer. I'm a big fan of the Golden Era. It's my favorite so far. I'm also working my way through the... the backlog of hemp drinks that I've had sent to me over the last year. But I have promoted myself. Legally? Well, I mean, you know, it's technically... We just do crimes on this show. It's a gray area, guys. Lucas does crimes and we abet them. Yeah, we call him out. You're just not, you're not admitting to your crimes. That's the thing. I don't mind admitting to them. But, you know, I also have had a couple alcoholic drinks. I went to Treehouse Brewery with the family last weekend. I had one of their lovely beers and I also had a martini on a date night. So I'm not going full dry, I'm going damp as the Gen Zers are saying when it comes to January. But in saying all that, there is a lot of data that has started to come out around the adult non-alcoholic trend. So Nielsen IQ released some data recently clocking the adult non-alc or ANA category. Sales were nearly $1 billion in 2024, which is over 27% higher year over year than in 2023. And that doesn't even account for. now dry January 2025. So taking an even closer look at the category, RTD adult non-alcoholic sales were up 167%. So everyone's grabbing these non-alcoholic Palomas and gin and tonics and all these other different canned RTD non-alcoholic options that have basically flooded the market.

[00:11:47] Brad Avery: I'll tell you anecdotally, I'm seeing more and more people talking about mocktails or making mocktails. I was at a dinner party this weekend with some of my wife's coworkers, not beverage industry, not CPG industry related, and they were making mocktails because they were not drinking anymore. for, you know, various reasons. And so this is definitely something that outside of the industry, I'm hearing more and more from people. So it's one person's perspective, but definitely it's always validation when I see someone just sort of organically, you know, embracing the trend.

[00:12:24] Martín Caballero: For sure, for sure. I mean, according to IWSR data, the non-alcoholic spirits category, which is a lot of where these mocktails are being mixed up with, is the fastest growing segment in the broader spirits category. So it has a five-year compounded annual growth rate exceeding 60% through 2024. And so despite the success of non-alcoholic beer brands like Athletic Brewing or Best Day or the recently Spider-Man Biro brand, IWSR reports that segment's growth trajectory outpaces that of all other non-alcoholic alternatives, which is pretty interesting because usually when we talk about non-alcoholic alternatives or adult non-alcoholic category, we're talking about the athletic breweries of the world, but this trend is growing in multiple areas or sub-segments of the broader beverage alcohol atmosphere.

[00:13:24] Brad Avery: Yet I saw a press release from Target the other day that they're expanding their wellness offerings by over 2,000 new products across categories, not just food and drink, but they're bringing Bureau in and they're continuing to grow out that NA set that they partnered with Seche last year to expand. So we are seeing this more in mainstream retail and it's reaching consumers of all income brackets.

[00:13:49] Monica Watrous: You guys, I have a confession. I didn't know it was called Biro. I thought it was like Barrow, but now that you say it, and now that I like, Tom Holland is Spider-Man, is that what the deal is? Like Hero and Biro?

[00:14:02] Brad Avery: I thought it was like Zero, like Zero-Elk and Biro. I will say it wasn't instant. I had to think about it as I was reading the name, and it kind of hit me like that, but I don't know, maybe it's Hero.

[00:14:15] Martín Caballero: Honestly, I didn't really think about it until you just brought it up. I just assumed it was Biro, but it...

[00:14:19] Monica Watrous: It's B-E-R-O, right? Yeah, it could go either way.

[00:14:22] Martín Caballero: I think they need that extra E in there. We're going to have to get Tom Holland on to give us the correct pronunciation and then we'll all know.

[00:14:34] Monica Watrous: I tried a new to me adult non-alcoholic beverage this weekend that I really liked. It was from Recess' Zero Proof line of mocktails. I had several of their products before, but I hadn't had this one. It was Island Spritz, and it was made with guayusa and adaptogens, which kind of gives you that nice little unwindy feeling. That's what I look for in ANA drinks. I don't want it to taste like tequila. I want it to make me feel good. So this was a really nice one. I'm excited to see all the innovation that keeps popping up in this segment.

[00:15:09] Martín Caballero: And a lot of them are leaning into this functional aspect. So adding L-theanine or ashwagandha or these other ingredients that make you feel a little something while also still being an alternative to famous cocktails, whether it's the Palomas or the Margaritas or anything like that. This is all interesting because it comes at the same time that the Surgeon General just released a statement saying that alcohol consumption is one of the leading preventable causes of cancer and the Surgeon General Vivek Murthy also is asking for or calling for labels similar to what we see on cigarette packets, warning people about the risks of alcohol consumption being a cause of cancer. And this is something that the Surgeon General can't actually do. This needs to come from Congress to put these labels or to mandate that labels go on alcohol. But it's something that the beverage alcohol industry has been kind of fighting against for a while. But it also makes a lot of sense.

[00:16:19] Brad Avery: It feels like we knew this for a while, that alcohol and cancer are certainly linked, although I think leading cause is definitely the headline here.

[00:16:29] Monica Watrous: I mean, what doesn't cause cancer these days? Am I right?

[00:16:33] Martín Caballero: I guess this is interesting because there has been, over the decades now, there's been a kind of push and pull over whether moderate drinking had some health benefits. Some studies have said that it prevents heart attacks and strokes, but recently we've seen a lot more studies, and these are what Vivek Murthy, Surgeon General, was alluding to that moderate drinking is is not good for you no drinking is better for you and is a way to prevent cancer so nothing has been done in congress and we'll see how this plays out over the coming weeks and years but it is a something that the non-alk community and the non-alk industry is really kind of aligning around saying like hey look we're not just saying this the surgeon general is also saying that Moderate consumption of alcohol is not good for you either.

[00:17:28] Monica Watrous: What a buzz kill. Well, insiders can read more about trends around the adult non-alcohol category at BevNET. And here are some other notable bits of news from the week. Atlantic Seafarms adds funding and new CEO, Zico Rising closes Series B round, and Protein 2.0 seeks multi-hyphenate status with brand refresh. For these stories and more, become an insider at BevNET and Nosh. That wraps up this edition of CPG Week by BevNET and Nosh. Thank you to our audio engineer, Joshua Pratt, our director is Mike Schneider, and our designer is Aaron Willette. If you enjoyed the podcast, please subscribe on your listening platform of choice, and we will see you next time.