Dive Brief:
- The number of global food and beverage launches claim to be vegetarian shot up 60% between 2011 and 2015, according to data from Innova Market Insights.
- New products that claim to be vegan comprise 4.3% of debuts in 2015, up from 2.8% in 2014 and 1.5% in 2012 — a relatively small, but growing, segment.
- Plant-based meat alternatives and meat substitutes are driving much of this growth. About 38% of U.S. consumers said they eat meatless meals once a week or more.
Dive Insight:
The rise in products labeled "vegetarian" and "vegan" corresponds to the fast growth of plant-based products, particularly plant-based meat and dairy alternatives. Startups and investments made by venture capital firms, incubators, and major manufacturers' own internal venture units have focused on this area. This year, General Mills' 301 Inc. has invested in plant-based dairy producer Kite Hill and plant-based snacks maker Rhythm Superfoods.
The increased prevalence of these claims also parallels the changing perception consumers have of the word "diet." In the past, "diet" foods revolved around those claiming low calories and fat, giving rise to brands like Lean Cuisine and segments like diet soda.
Nowadays, consumers are more likely to use the term "diet" in reference to healthy eating regimens, such as vegetarian, flexitarian, or Paleo diets, and manufacturers are retooling their products and marketing.
The plant-based foods and beverages market received backing from a major global producer this week when Danone agreed to acquire WhiteWave Foods for $12.5 billion. WhiteWave is a major premium and organic dairy producer in the U.S., which complements Danone's current portfolio of brands, but it also offers a plant-based business that grew 29% in the latest reported quarter.
WhiteWave recently announced it had identified an additional $3 billion in revenue as the plant-based foods category continues to grow. This revenue growth, combined with an additional $300 million in operating profit from the deal by 2020, assimilates into Danone CEO Emmanuel Faber's plan to return Danone to "strong profitable and sustainable growth" by 2020.