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5 Food Trends Taking Over 2021

This list will cover the 5 most important food trends happening in 2021.

The $6.02 trillion U.S. food and beverage industry is due for a shakeup.

And it’s finally getting one: the food industry is investing in ecommerce, robotics and technology like never before.

So whether you’re in the food and beverage industry (or just cover the space), you should find some new niches, companies and categories to keep an eye on.

1. Food and Beverage Goes DTC

Food and beverage has always been one of the segments that was least impacted by ecommerce.

But in 2020, it’s the fastest-growing category in online retail.

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US online grocery sales are projected to hit $59.5 billion in 2023.

One reason is the COVID-19 pandemic.

To avoid the virus, many consumers ordered food online for the first time this year. In the US, this led to a 110% increase in daily online grocery sales in April alone.

But even before the pandemic, ecommerce food sales were growing quickly. Online grocery shopping more than doubled from 2015 to 2018.

The most exciting part of this movement is the DTC (direct-to-consumer) segment.

DTC brands cut out intermediary retailers. This lets them capture more profit margin (and/or offer lower prices) than traditional players.

And because they control the customer relationship, DTC companies can easily test new products and make adjustments on the fly.

Finally, DTC brands are free to push more lucrative purchasing patterns, like subscriptions.

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The DTC baby food brand Yumi offers a weekly subscription plan.

With all those benefits, it’s no surprise that the DTC model is popular with investors. 70% of CPG brands that receive VC funding have a DTC component.

Another common aspect of DTC food startups is a focus on underserved markets.

Strict diets are a perfect example.

For example: Laird Superfood.

This plant-based nutritional brand was started by champion surfer Laird Hamilton, and it’s landed $51M in funding since 2015.

Its focus? High-performance vegan athletes.

Magic Spoon is another example.

Launched in 2019, Magic Spoon is a high-protein, low-carb breakfast cereal for adults. It caters to the ketogenic diet crowd.

Its founders say business has been booming. And judging by search volume for the brand, they’re not lying:

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Search volume for “Magic Spoon” has more than tripled over the past two years.

Any given strict diet can be the perfect initial market for a DTC food business. Because it represents a clear, specific need. But one that’s too niche for the industry giants like Procter and Gamble to tackle.

Starting small is fine for a DTC startup. They’ll only have enough supply for a niche market anyway.

At first, that is.

Once they’ve established a strong foothold in the original niche market, DTC brands can expand into the mainstream.

At that point they become legitimate competitors -- making them prime acquisition targets. And for established CPG brands, acquiring DTC brands is now a large engine of growth.

2. More Robot Kitchen Assistants

Like the world of manufacturing, the food service space is starting to go all-in with robotics.

For example, Miso Robotics.

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Searches for “Miso Robotics” since 2017.

Miso Robotics makes “Flippy”, a cooking robot.

More specifically, an autonomous robotic arm for use in commercial kitchens.

As of right now, Flippy has 2 specialties: flipping hamburgers and working the fryer. (It can work an entire grill or bank of fryers by itself, including cleanup and tool switching.)

But because it’s AI-powered, Flippy is always learning and improving -- and bound to pick up new skills over time.

Flippy has already been installed in locations like the LA Dodgers Stadium, Arizona Diamondbacks Chase Field and two CaliBurger restaurants. And last week, it was announced that fast-food chain White Castle would be trying it out too.

But Miso Robotics isn’t stopping there.

In the future, the company also plans to target the growing market of “ghost kitchens”, like Travis Kalanick’s CloudKitchens.

3. Vertical Farming on The Rise

It’s estimated that by 2050, global water demand will increase by up to 30%.

At the same time, climate change is causing crop production losses and threatens even more in the future.

Luckily, thanks to AgTech, we’re now seeing the birth of a new era of sustainable food production.

Vertical farming is a major area within that space.

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Search interest in “vertical farming” over the past decade.

Vertical farms grow crops in massive, stacked shelf-like layers. Often inside of tall, specialized warehouses.

The warehouses are carefully controlled for humidity, temperature, and light exposure so that the plants within them are grown as efficiently as possible.

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Image source: YouTube.

Vertical farming combines advances in machine learning, robotics, biology and chemistry to offer large improvements over traditional farming.

Improvements such as:

  • Higher yields per square foot (up to 600 times higher, for wheat)
  • Up to 95% less water usage, thanks to advanced hydroponic or aeroponic systems
  • Less mold and E. coli risk, with fewer -- or no -- pesticides and herbicides
  • Year-round growth that doesn’t rely on seasons
  • Protection from environmental threats like cold snaps, flooding, monsoons, hurricanes and fires

And the technology is getting cheaper, too. So much so that vertical farming is now viewed as a potential sustainable answer to the food shortages in Africa.

Software is eating the world. But soon, it may also be feeding it.

With a projected compound average growth rate of 23.5% from last year through 2026, the vertical farming industry is ripe with opportunity.

Some companies involved in vertical farming include:

Plenty, a vertical farming startup that’s backed by Jeff Bezos and includes some ex-Tesla engineering talent.

AeroFarms, which runs the world’s largest vertical farm: a 70,000 square-foot facility that produces up to 2 million pounds of leafy greens per year. (They also recently announced plans to build an even larger vertical farm in Abu Dhabi for R&D purposes.)

Unfold, which was just launched this month with $30 million in funding from Bayer and Temasek, and which will focus on developing new produce varieties with biologies specifically suited for vertical farms.

Intelligent Growth Solutions, a UK-based manufacturer of fully automated tower growth systems and shorter “Growth Stations”.

Freight Farms and Grow Pod Solutions, which sell vertical growing environments built inside of shipping containers.

Agricool, which uses shipping containers for urban farming in Paris.

Pipp Horticulture, which manufactures moveable vertical grow racks with anti-microbial coating.

Controlled Environment Systems, which offers control systems, dehumidifying air handlers, insulated doors and more. (As well as solutions beyond agriculture, like cold storage and clean rooms.)

4. More Vegan Food Options

Worldwide sales of plant-based “meat” products are expected to grow from about $12 billion in 2019 to over $30 billion in 2026.

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Image source: Statista.

And the number of vegans in the U.S. increased from 1% of the population in 2014 to 6% in 2017.

While in the U.K., the number of vegans increased 62% from 2018 to 2019 -- with 23% of the population planning to be vegetarian, vegan or pescatarian by 2021.

Those numbers may be impressive.

But in fact, most of the interest in plant-based or vegan food is actually coming from meat-eaters. According to a study by The NPD Group, about 90% of plant-based food consumers aren’t vegetarian or vegan.

That explains how retail sales of plant-based foods grew 11.4% in the U.S. in 2019 (to $5 billion), compared to only 2.2% growth in the overall U.S. retail food market.

One big reason for this popularity boost is because people are looking to improve their health. (43% of consumers consider “plant-based” products healthier.) Another reason is climate change, an issue Millennials and Gen Z are much more concerned about than older generations.

Veganization is also being propelled by grassroots movements.

For example, Meatless Mondays and Veganuary: a global challenge to go vegan for the month of January. (This year, over 400,000 people signed up -- up from 250,000 in 2019.)

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Search volume for “Veganuary” spikes every January.

Some of the biggest brands in this space are Beyond Meat (with a $7.75B market cap as of this writing) and Impossible Foods (last valued around $4B earlier this year).

Those two brands of vegan meat have been served (at least in test markets) at KFC, Burger King, Carl’s Jr., Hardee’s and more.

But they have plenty of competitors -- big and small.

Like Nestle’s new “Vuna” vegan tuna (under the Garden Gourmet brand). As well as Field Roast and Yves.

Dairy alternatives are on the rise as well, with global sales expected to rise from $13.02 billion in 2018 to $35.8 billion in 2026.

Growing products in this category include:

Oat milk, including the Swedish startup Oatly which almost tripled its sales from $68 million in 2017 to $200 million in 2019.

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Searches for “oat milk” are climbing every year.

Almond Cow: a kitchen appliance that lets you make your own plant-based milk.

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Search volume for “Almond Cow”.

And vegan cheeses made by companies like tapioca-based Daiya, grain-based Field Roast, and almond-based Kite Hill (which has raised $75.5 million since being founded in 2010).

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Searches for “vegan cheese”.

Alternatives to more niche products are taking off too, like mushroom jerky, vegan protein powder, and vegan collagen.

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Searches for mushroom jerky have quintupled in 5 years.

Outside of food, sales of vegan and plant-based footwear, clothing and beauty products are also growing faster than their non-vegan rivals.

5. Connected Kitchens Go Mainstream

The worldwide smart kitchen appliances industry was worth $9.87 billion last year. And it’s expected to grow at a compound annual growth rate of 19.1% through 2027.

While WiFi or Bluetooth-enabled appliances were already growing before COVID-19, the pandemic has pushed interest higher. 54% of Americans say they’re cooking more now, and 51% of those say they’ll continue to do so even after the pandemic ends.

In the U.S. the three largest segments of connected kitchens are smart refrigerators, smart ovens, and smart cookware and cooktops. However, smart dishwashers are also projected to grow quickly.

There are also a number of other smart kitchen gadgets.

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U.S. market size of smart kitchen appliances by product type.

The main smart refrigerator brands are mostly the same as for traditional fridges: familiar names like LG, GE, Kenmore, Samsung, Whirlpool, Bosch, etc.

Most smart fridges have WiFi, and many can ping your phone if the door has been left open or the water filter needs replacing.

Some have touch screens for making notes and lists, ordering groceries, playing music and even looking inside via interior cameras.

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Search interest in smart refrigerators has been growing for years.

Many of the same major brands that offer smart refrigerators also offer smart ovens.

Smart ovens come in two main forms: full-size and countertop.

Full-size smart ovens usually come as part of a full range with a stovetop. They commonly include features like voice control, package barcode scanning for premade meals (to load cooking time and temperature), finer temperature control or multiple temperature zones, moisture sensors, and companion apps to let you control and monitor what they’re doing from anywhere.

Some smart ovens also integrate with recipe apps and adjust themselves based on what the recipe calls for.

Whirlpool and its subsidiary KitchenAid have models that work with Yummly, which it acquired in 2017. GE, LG, Bosch, Thermador, Siemens and others work with SideChef. While LG, Electrolux and GE integrate with Innit.

There are also smart countertop ovens. These are smaller: usually around 15 - 25 inches wide.

But they pack in multiple functions like convection baking, air frying, and sometimes steaming and microwaving. And they often cost much less: usually around $200 - $600.

Unlike the other appliances we’ve covered so far, non-traditional brands lead the smart countertop oven category.

Amazon makes one popular model with Alexa built in. Breville makes a whole range of smart countertop ovens. And Whirlpool owns the smart oven brand WLabs.

But many of the names in this space aren’t as well-known.

Like Tovala, which pairs a smart countertop oven with a weekly meal delivery service. Tovala has also partnered with LG to have the larger company’s smart ovens detect meals from its meal service. As well as with Beyond Meat, to include the vegan meat in some of Tovala’s meals.

Tovala has even partnered with rival food brands like Eggo, Bagel Bites, Amy’s and Trader Joe’s so that its ovens can easily cook those brands’ products based on their labels.

The Chicago-based startup has taken $38.6M in funding since it started in 2015, including a $20M Series B four months ago.

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Searches for Tovala over time.

Brava is a more expensive option, with models starting at $1,000+ (compared to Tovala’s $299).

Brava offers an optional paid membership program called Brava Plus, which includes guided recipes and a chef support line. The startup was acquired by Middleby last year for an undisclosed sum.

June sells a smart oven for $499 that includes a built-in camera meant to identify different ingredients in order to cook them automatically. The startup behind it was founded in San Francisco in 2013, and has taken $29.5M in funding since then.

Smart cooktops and smart cookware are also growing product categories with several interesting players.

Hestan Cue offers a Bluetooth-connected countertop burner, smart pan and companion app for guided cooking.

At each step of a given recipe, the burner adjusts the temperature as needed. While the pan communicates with the burner so it knows when and if to tweak the settings to keep the temperature right. (The Californian startup has also designed similar tech for GE’s Café brand.)

Samsung’s smart cooktops can pair with its hoods, turning the fan on automatically when the cooktop is in use.

BuzzFeed has partnered with Cuisinart to make the Tasty One Top, a smart induction burner that works with BuzzFeed’s Tasty app.

SmartyPans doesn’t sell a cooktop, but does sell smart pans. With the companion app, the pans can weigh ingredients and walk users through food prep. The startup has raised $1.3M since it was founded in 2015.

For smart dishwasher brands, many of the same big names are back again.

The most basic smart dishwasher function is showing your cycle status in an app, and letting you lock and unlock the controls from your phone.

But more interestingly, smart dishwashers from LG, GE, Whirlpool and Kenmore can automatically reorder detergent from Amazon when you run low.

Other smart kitchen companies and products include:

Drop, which makes a smart scale and a recipes app that’s focused on integrations. The Dublin-based startup has partnerships with Bosch, Electrolux, GE, Instant Pot, Kenwood and Thermomix. And it raised a $13.3M Series A earlier this year.

Instant Pot’s “Smart WiFi” model of the popular electric pressure cooker.

Meater, a smart wireless meat thermometer that originally launched on Kickstarter last year. The product is made by UK-based Apption Labs.

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Searches for the Meater smart thermometer have been increasing rapidly.

As well as smart grills, smart microwaves and smart coffee makers.

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Searches for “smart grill” over time.

Conclusion

That wraps up our list of trends impacting the food and beverage space right now.

As we discover new food trends, we’ll add them to this list.

So please check back regularly to see what we’ve discovered.

Last Updated: 
February 5, 2021
Josh Howarth
Co-founder of Exploding Topics.

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