Add Flavor and Value

Diving into food ingredients can help c-stores create great products—and better margins.

May 10, 2023

ALEXANDRIA, Va.—NACS Magazine spoke with Peter Losee, vice president, marketing, Bluegrass Ingredients on trends in the foodservice industry and why it’s important to innovate in this category.

For someone who isn’t familiar with your industry, can you explain the basics of what Bluegrass Ingredients does?

Bluegrass Ingredients is a food ingredient manufacturer. We predominantly produce and supply dry ingredients to food manufacturers to assist their innovation, development, productivity and quality. We also manufacture a selection of unique and custom concentrated dairy flavor ingredients for specific customer requests and food applications.

Specifically, Bluegrass Ingredients manufactures dry dairy, fruit, fat and concentrated dairy flavors for food manufacturers. Our ingredients are used in consumer-ready foods and play a vital role in controlling cost, improving desirability and meeting consumer expectations based on shifting food trends. Our ingredients are used in foods like snacks, baked goods, ready meals, sauces and gravies, dressings, desserts, beverages and condiments, among other categories.

Bluegrass Ingredients also offers our customers a battery of services to assist their operations, improve sales and support growth. We conduct consumer trend research and provide culinary development support and ingredient customization to meet specific needs. As an example, a customer may identify a market opportunity selling a ready-to-eat or heat-and-serve macaroni and cheese. We can assist from concept to final sales, including taste, texture, color, flavor, package, price and promotion insights.

We hear from customers all the time that they value our services and insights as much as they do our manufactured ingredients. Whether working directly with a retailer’s commissary or collaborating with a third-party manufacturer, Bluegrass Ingredients is structured to support all increments of the food products value chain.

What kinds of flavors or combinations are emerging?

We are highly focused on consumer trends research. We monitor trends related to consumer demographics, nutrition, color, texture, labeling, packaging, purchase channels, consumer values and economics as well as emerging food technologies like precision fermentation and plant-based trends. These insights are vital to our partnerships with customers in developing and producing foods that don’t just taste great but are also aligned with business priorities and market trends.

Specifically related to flavor, we are currently developing and promoting a variety of what we call “fusion solutions.” Citrus and heat is a trend we’ve been watching since early 2022. Combining our lime powder with nacho seasoning or cheese powders provides food manufacturers the ability to produce desirable foodservice and retail items.

We recently completed a primary research study with our partner INNOVA on dairy-blend flavor preferences. Cheese and cream, butter and cheese, cheese and yogurt and sour cream and cheese combinations are trending in snacks and other consumer-ready foods. (For more information on trending dairy-blend flavor insights, c-store foodservice leaders can contact Bluegrass Ingredients for a presentation.)

Additionally, we are currently highly focused on food texture. As any chef or home cook can tell you, texture and the amount and type of fat in a food item impacts flavor.

Finally, we offer what we describe as “nuance customization.” One common request we get is to “add more cheese flavor.” Nuance customization allows us to use every flavor and technique at our disposal to take ingredients and end products to the next level.

Regarding flavors, why is it so important to innovate within this space?

Over the past decade, consumer expectations and demands related to food have changed dramatically. Not so long ago, consumers were mostly focused on what’s in the food. That’s evolved toward a greater focus on what consumers can get out of the food. This mindset shift is critical for retailers and manufacturers.

Consumer trends in food are like fashion, rapidly changing. We call this “fast food.” Many retailers and food manufacturers lack the resources to remain current. That’s where Bluegrass Ingredients’ Agile Ingredient Innovation® services provide retailers and food manufacturers significant value as a trusted partner.

As Baby Boomers age, Gen Z and Gen Alpha are beginning to dramatically influence food trends. According to research by The Center for Food Integrity, Gen Z will be the predominant buying cohort by 2030. The challenge is that food manufacturers and retailers are just catching up to this realization. We recently conducted primary research validating which channels Gen Z is using and what type of foods Gen Z is buying. Addressing this growing cohorts’ expectations is critical for success now and in the future.

Innovation can also help with supply chain issues and optimization. Can you explain that and give an example?

Currently, and somewhat unexpectedly, food retailers and manufacturers find themselves needing to react quickly to supply chain challenges and inflation. Additionally, as the economy tightened in recent years, mergers, acquisitions and policy modifications disrupted established supply chains.

Bluegrass Ingredients products and services served as a vital lifeline to our customers through these disruptions. Some examples of how we provided our customers with support are cost-optimization projects, low minimum-order quantities, reduced inventory requirements, reduced controlled-environment storage, rapid product-matching efforts and on-time-in-full supply.

An example is the potential to eliminate the price volatility and supply challenges of natural cheese. Natural cheese price volatility was extreme post-pandemic. Additionally, as truck driver shortages persisted, frequent delivery of refrigerated cheese became a challenge.

In response, we rapidly designed and implemented finished goods solutions with our customers. Most of our dairy ingredients do not require controlled-environment storage, further reducing operating costs for manufacturers.