Scrutinizing Ultra-Processed Foods (UPFs) – Industry Insights

Scrutinizing Ultra-Processed Foods (UPFs) Industry Report Overview

UPF products have been developed with maximum profit and consumer enjoyment in mind. It forms part of the modern and highly complex food ecosystem, having gone from pioneering innovations to food villains. Awareness of UPFs is growing but there is no universally accepted definition. Brands must educate consumers about UPFs, dispelling misconceptions.

The typical UPF sectors such as savory snacks and confectionery have a varied outlook. Volume growth rates in food overall are sluggish up to 2027 indicating that food inflation remains sticky when compared with value growth. Wider macro issues such as climate change and geopolitics will take precedence in growth outcomes for the foreseeable.

The Scrutinizing Ultra-Processed Foods (UPFs) Industry Insights report is part of a series on key trends and issues that are currently affecting the consumer landscape in consumer goods, food service, and packaging. It explains what ultra-processed food is, how consumers are responding to this new categorization, and how brands can tackle this issue in formulation and marketing.

Global: Value ($ Million) and Volume (Million KG) Growth of Food Sectors, 2024-2027

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Scrutinizing UPFs – Consumer Mindsets

Four distinct mindsets can be considered regarding consumer attitudes to UPFs including weight warriors, flexitarians, wellness seekers, and risk-averse.

Flexitarians: Recognizing that rigid dietary rules are not always practical or effective, this segment embraces mostly natural, fresh foods while allowing indulgence and UPF products in moderation. This flexible approach to eating generally takes a long-term view that the balance between foods is most sustainable and may not necessarily bother to actively identify or avoid UPFs.

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Scrutinizing UPFs – Clean Label Demand

Consumers scrutinize ingredient lists to assess natural and clean label credentials. The level of attention is highest in emerging economies, but industrialized countries take trust and transparency for granted. Naturally healthy product attributes are the highest market value by-products tagged to such type of claim. In addition, clean-label products are in demand, so, innovations are finding ways to offer convenience, authenticity, healthiness, and more effective performance.

Two Brothers Organic Farms Pickle, India: This pickle in a haldi root lemon variant is handmade in small batches using lacto fermentation techniques. This is a traditional method that leaves the product to ferment for two to three weeks in natural lemon juice and unrefined sesame oil. As a result, the product can claim to be a source of probiotics and free from artificial additives found in more mass-produced pickle products. Using traditional production methods allows the product not only a clean label image but also a sense of authenticity.

Global: How Much Attention Do You Give to The Ingredients Used in The Food and Drinks You Consume? 2023

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Scrutinizing UPFs – Regulation

Regulation is instrumental in UPF development. The rising trend in diet-related diseases is pressuring governing bodies to more strictly regulate certain UPFs. Governments faced with heart disease and obesity epidemics are increasingly looking to regulate UPFs and associated categories of food deemed a threat to public health. Regulation is therefore one of the biggest catalysts for change in how brands address the issue of UPFs.

UPF tax, Colombia, 2023: In November 2023 the Colombian government imposed a tax on UPFs, which will be doubled by 2025. Colombia’s “Junk Food Law” is the first in Latin America that impose a tax on unhealthy foods, which is a more comprehensive approach than other countries’ regulations in the region.

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Scope

1) Consumers’ level of concern and association with UPFs varies from category to category. Not all UPFs are equally healthy/unhealthy so work needs to be done in educating the consumer and marketing different UPFs responsibly.

2) Demand for clean label, natural products can be seen as a rejection of UPFs; however, food technology innovations are now working to deliver high-tech formulations that are balanced with a natural health halo.

3) Regulation is increasingly restricting UPFs but the approach varies across markets.

Key Highlights

• Consumers’ level of concern and association with UPFs varies from category to category. Not all UPFs are equally healthy/unhealthy so work needs to be done in educating the consumer and marketing different UPFs responsibly.
• Demand for clean-label, natural products can be seen as a rejection of UPFs; however, food technology innovations are now working to deliver high-tech formulations that are balanced with a natural health halo.
• Regulation is increasingly restricting UPFs, but the approach varies across markets.

Reasons to Buy

• Understand the challenges and opportunities within the evolving Ultra Processed Food landscape.
• Gain insight into how competitors are responding to this trend.
• Access valuable strategic take-outs to help direct future decision-making and inform new product and service development.