How are millennials eating? The demise of American cheese says it all
If you’re not American, you might think (quite reasonably) that ‘American cheese’ refers to any cheese that is made in America. You would be wrong. American cheese is a preservative-filled processed product: the little orange squares of ‘cheese’ that don’t really taste like cheese. Usually, you see them on burgers in fast food joints. Or (in liquid form) being poured liberally on nachos. It’s a staple of the American diet, with a century-long history. And millennials hate it.
Givaudan, a major player in the trend towards natural food ingredients, has seen its share price appreciate by 5% over the last 6 months
SOURCE: Yahoo Finance
American cheese has become the latest in a long line of casualties from yesteryear’s more questionable foodstuffs. Millennials are big fans of natural foods, organic farming, and the trend towards health and wellness. American cheese just doesn’t meet their high standards. The data is clear: U.S. sales of American cheese are predicted to fall by 1.6% this year, marking its fourth straight year of declines. Younger Americans would rather eat Quinoa, or avocado on toast.
American cheese is still cheese – it’s made from cheddar and contains milk – but the added chemistry set puts today’s picky eaters off. Alongside what you’d expect to find on the ingredients list, you’ll find sodium citrate, calcium phosphate, natamycin, modified food starch, and more. The trend extends beyond the U.S.: in neighbouring Canada, 71% of consumers have used natural products, and 77% of them would go natural again whenever they can.
Smart businesses have noticed this trend and are responding to it. Fast food joints have started putting emmenthal, gouda, and stilton on their burgers. Delivery services, like Just Eat and Grubhub, have ‘organic’ delivery lists which tout the health benefits of food that’s not synthesised in a lab. Flavour and scent giant Givaudan recently acquired Naturex to bulk up on its portfolio of natural ingredient offerings. And they’re wise to do so: consumers have made their preference very, very, clear. And it’s not American cheese.
Dominion holds Givaudan, Just Eat, Grubhub, and other companies exposed to the trend towards natural foods, in its Global Trends range of Funds.
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