For the world's largest food manufacturer known for its popular water, coffee, frozen meals and baking ingredients brands, the future of food is rooted in plants.
"I don't think plant based has been quite as big of a revenue driver in the U.S. as some of the other established categories we play in, but if I look toward the future and I look strategically at Nestlé's portfolio and where we want to grow, the plant-based space is vital," said Ryan Riddle, R&D specialist of vegetarian meal solutions at Nestlé USA. "It's one of most important spaces that Nestlé is really investing heavily in. I don't think that it's a short-term fad that we're trying to chase. We really believe that it's the future of food."
Nestlé's major foray in the U.S. in plant-based food came in 2017 when it purchased Sweet Earth. Since the acquisition, the brand has debuted more than 45 vegetarian and plant-based products, expanding into faux beef, chicken, sausage and deli meats, as well as bowls and burritos.
Nestlé has been rapidly expanding its plant-based operations into other parts of its business. It incorporated Sweet Earth Awesome Grounds, its plant-based ground beef option, into items that traditionally use the animal-based protein: DiGiorno Rising Crust Meatless Supreme and Stouffer’s Meatless Lasagna.
"It's one of most important spaces that Nestlé is really investing heavily in. I don't think that it's a short-term fad that we're trying to chase. We really believe that it's the future of food."
R&D specialist of vegetarian meal solutions, Nestlé USA
Nestlé also has rolled out a range of plant-based dairy alternative beverages, such as its Nesquik GoodNes chocolate oat milk and coffee creamers under the Natural Bliss and Starbucks lines. The offerings complement the same item on the shelf that has meat or dairy, giving consumers the choice of what type of product they want to incorporate into their diet, Riddle said.
"We're investing a lot in Sweet Earth in terms of the new products we're developing, but I think you're seeing across many of our brands that people want more plant-based options and they want to go meatless more often," he said. "I think potentially all of our brands have potential to go more plant-based as we adapt to what our consumers are asking for."
The Swiss food giant said during its second quarter that sales of vegetarian and plant-based food products grew by 40% behind strong growth of its Garden Gourmet offering in Europe and increased growth for Sweet Earth in the United States. Nestlé's success is reflective of the rapid increase in the popularity of plant-based foods around the world.
Growth of plant-based protein and meat alternatives is projected to increase from $4.6 billion in 2018 to $85 billion in 2030, according to investment firm UBS. In recent months, companies have launched a variety of products, from plant-based burgers to faux chicken nuggets, to get a bigger presence in the alternative protein space.
The alluring growth prospects have attracted several other big-name players such as Tyson Foods, Conagra Brands, Perdue Farms and Kellogg that have introduced new products or reformulated existing offerings to make them more like meat. Hot upstarts also have flooded the space, including Beyond Meat and Impossible Foods.
"If you look at the growth of the category, I think that's also a really compelling reason why companies like Nestlé want to be in that space," Riddle said.
While much of the expansion in plant-based foods has been in beef and chicken, other products like pork and turkey are likely to be added to the menu as shopper demand for faux meat items continues to grow. Riddle said cheese "is going to be the next big thing" because of how much of it people consume.
According to Nielsen data collected by the Good Food Institute, plant-based cheese sales were worth $133.2 million between August 2017 and August 2018 — up 41% from the year before. This growth rate was faster than that of plant-based meat, which the data found to be 23% during that same time. As more consumers embrace plant-based products, Nestlé is preparing to expand its reach by moving into new offerings.
"We're really trying to make to sure that when those flexitarians are looking for a substitute that they can choose something that really meets their needs," he said. "Keep an eye out for things like fish and other types of meat and animal-based products that we're trying to make."