MARKET COMMENTARY

Tasting Good Business

From Swedish Fish Oreos to Starbucks’ pumpkin spice sensation, flavour is key to unlocking sales.

02.16.2021 - Fiduciary Trust Canada

Why has the Coca-Cola recipe been a deep dark secret for over 130 years? Why have there been over 60 variations of the Oreo cookie filling in the last eight years, including Swedish Fish, Green Tea and Blueberry Pie?[1]

The answer is flavour. Whether sparking a nostalgic moment or satisfying a craving for new and exotic tastes, flavour helps drive sales. Creating new food flavours can trigger success or disaster depending on consumer reaction. Think about 1985 when, in the midst of the Cola wars, Coca-Cola replaced their original formula with New Coke. The changed taste caused such a negative uproar that Coca-Cola Classic (the original) was reintroduced less than three months later.

Now, consider Starbucks’ Spiced Pumpkin latte. The seasonal elixir was introduced in 2003 and, as of 2019, is estimated to have generated over $2 billion in revenues.[2] Starbucks’ creation struck a big chord, sparking a craze that has spread throughout the restaurant industry and infiltrated product lineups with pumpkin spice added to everything from Cheerios to Bailey’s liqueur.

Since 1851, when scientific innovation and some luck created the first artificial flavoured candy, the food flavours industry has been growing.[3] Reports and Data’s 2019 analysis expects the global Food Flavors market to reach $19.72 billion (USD) by 2026, with a compound annual growth rate of 5%.[4]

As with many other industries, the path to growth increasingly includes the use of big data and artificial intelligence as integral tools in the race against time and competitors in the quest for new tastes. For instance, last fall Firemenich, SA, introduced the “world’s first AI-Created Flavour.”[5] The privately-owned Swiss firm teamed with Microsoft to develop a grilled beef taste, using natural ingredients, and designed for plant-based meats.

Alternatively, digital platform firms like Foodpairing are focused on chefs, foodies and large producers. Their ingredient and flavour data and algorithms generate insights on pairing flavours to update old recipes and create new ones for chefs and mixologists. On a broader scale, the Belgium/New York firm offer clients “consumer flavour intelligence” meant to help with decisions such as new product launches.[6]

Whether sparking a nostalgic moment or satisfying a craving for new and exotic tastes, flavour helps drive sales.

This year, it seems flavour trends are to reflect the mix of emotions people are experiencing these days, like the need for comfort, the yearning for exotic travel and ways to stay healthy. So, do not be surprised to see flavours like s’mores, cotton candy, rose, black lime, elderberry and turmeric in everything from drinks to baked goods and anything in between. It will be up to you to give the thumbs up or down on the new flavours for 2021.

 

 

  1. Maria Yagoda and Madison Roberts, “We Tasted (and Graded) Every Crazy Oreo Flavor,” People, August 9, 2018, www.people.com.
  2. Jael Goldfine, “A brief history of Starbucks’ Pumpkin Spice Latte,” The Business of Business, September 14, 2020, www.businessofbusiness.com/articles/history-starbucks.
  3. “A Brief History of Making and Faking Flavor,” Eater, www.eater.com/sponsored/9443515/a-brief-history-of-making-and-faking-flavor.
  4. “Food Flavors Market To Reach USD 19.72 Billion By 2026,” Reports and Data, October 10, 2019, www.globenewswire.com.
  5. “Firmenich announces the world’s first AI-created flavor,” F&D Technology, October 2, 2020, www.foodanddrinktechnology.com/news/35294.
  6. “Foodpairing,” The Foodpairing Company, www.foodpairing.com.

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