When it comes to today's trends in food and drink, it doesn't get hotter than plant-based.
Manufacturers of all types, ranging from startups to veterans, are working to use plants to make substitutes for dairy products, meat and eggs. Any grocery store in the United States today is likely to carry a variety of vegan products mimicking staples that traditionally come from animals.
The plant-based segment is growing rapidly. According to statistics commissioned from SPINS and reported by The Good Food Institute and the Plant Based Foods Association, it had a market value of $7 billion in 2020. Retail sales in the segment rose 27% in 2020, while dollar sales grew by at least 25% in every U.S. Census region. Major growth came from plant-based meat, which saw a jump of 45% in a year, while plant-based milk now represents 15% of the dairy category.
While today's products can be enjoyed by those who can't eat food from animals because of dietary restrictions, many manufacturers say the true target consumer is the person who does. Creating substitute products that meat, dairy and egg eaters would actually want to eat is the focus of this segment today.
As the coronavirus pandemic has gripped the nation, sales of plant-based products have skyrocketed. Consumers have reached for items with brighter health halos, and have found themselves more interested in food that can promise sustainability and abundance. According to Nielsen, sales of fresh plant-based meat alternatives have nearly doubled every month during the pandemic. In March 2020, grocery stores sold 231% more fresh plant-based food than a year prior. IRI data analyzed by The Good Food Institute saw an even larger increase, with plant-based meat sales 454% higher than the previous year during the week of March 21.
This report looks at the growth of the plant-based foods category. We examine:
The growth of the plant-based sector in 2020.
Plant-based chicken's popularity moving forward.
Impossible Foods' push to get Generation Z interested in plant-based eating.
How PepsiCo is moving into the plant-based space.
Lightlife's campaign to make all of its plant-based products clean label.
If dairy providers will enter the plant-based cheese segment, which is full of startups.
4 reasons plant-based milk will continue to grow after the pandemic.
Why plant-based business pioneers say the sector is just getting started.
Whether the coronavirus pandemic is accelerating the growth of plant-based meat.
We hope you enjoy this look at the growth of plant-based foods.
Plant-based meat had $1.4 billion in sales, growing 45% overall compared to 2019 and making up 2.7% of all U.S. retail packaged meat sales. Refrigerated plant-based meat sales saw the highest growth percentage, up 75% in 2020.
Considering that plant-based food sales have been on an upward trajectory for the last several years, coming in at $5 billion in sales in 2019, the segment's sales growth was certainly expected. But growth in 2020 took a steep upward turn, with sales figures climbing more than twice as fast as the 11% growth the segment saw in both 2019 and 2018.
The biggest winner in terms of sales gains was plant-based meat. While traditional meat also saw large sales growth in 2020, plant-based meat doubled that. It's becoming much more of a force in the meat section, with 18% of all households purchasing it — up from 14% in 2019, SPINS found. Plant-based meat has a high repeat rate, with 63% of consumers purchasing it multiple times.
SPINS attributes this high growth of plant-based meat to many retailers starting to shelve it differently. Last summer, Kroger and the PBFA found that plant-based meat sells about 23% better when it's placed next to traditional meat.
Plant-based meat companies also worked hard in the past year to come close to price parity with animal meat, which many in the industry have said is an important step to make consumers want to buy it. Before the Butcher's Mainstream line, which debuted last fall, costs about $5.50 per pound — similar to the price of lean ground beef. Beyond Meat sold a value pack of patties last summer that was very close to the price of beef. And Impossible Foods recently cut its retail prices 20%, putting it in striking range of beef.
Plant-based milk, which is the largest category in the segment, also saw great sales growth in 2020. SPINS found a 20% increase in dollar sales in this segment — four times as much as the 5% growth rate posted in 2019. Nearly four in 10 U.S. households purchased plant-based milk, which now makes up 15% of the total category and is worth $2.5 billion. While almond milk is still the segment leader, making up about two-thirds of all dollar sales, oat milk is now second, with sales more than tripling last year.
While plant-based milk is not a new segment, analysts have said its growth has been helped along by the pandemic as well as innovation. The health halo of plant-based milk has bolstered sales. And when consumers were looking to stock their pantries, shelf-stable plant-based milks were both available and appealing for their storage ability. And trendy new innovations in plant-based milk — ranging from Oatly's mega-popularity to the prototype for Impossible Milk to artificial intelligence-designed NotMilk that hit U.S. shelves last year — keep consumers interested.
Other plant-based dairy and related products also saw large sales increases, and are collectively worth about $2 billion, according to SPINS. The fastest growth was in plant-based eggs, which saw a 168% increase — nearly 10 times the rate of conventional eggs. Since the beginning of 2020, category leader Eat Just has expanded quite a lot, launching frozen folded Just Egg and frozen sous vide bites, and reducing the cost of its pourable Just Egg substitute by nearly 50%.
Plant-based yogurt and cheese also saw huge growth in 2020, SPINS found. Plant-based yogurt sales were up 20% — nearly seven times the growth rate of conventional yogurt — and plant-based cheese grew 42% — about twice as fast as dairy cheese.
Although the COVID-19 pandemic made a big impact on the retail food landscape, the 2020 growth rates for plant-based items may not be anomalies. Big companies including Nestlé, Danone and Unilever are all planning for plant-based to become a larger part of their sales. Investment firm UBS predicted in 2019 that plant-based food would be an $85 billion industry by 2030, and these 2020 sales figures show how that forecast might come true. With $2.1 billion in investment dollars last year to plant-based companies, there is also a large financial pipeline both for innovation and expansion.
Article top image credit: Permission granted by Beyond Meat
Why chicken is taking over plant-based meat
With Beyond Meat and Impossible Foods entering the space and new options filling freezer cases, the potential for the poultry analog suddenly seems limitless.
By: Megan Poinski• Published July 20, 2021
The chicken sandwich wars were last year's news. In 2021, the poultry battle royale is over plant-based chicken.
Beyond Meat had been working on improving its chicken product for years, Chief Innovation Officer Dariush Ajami said in an interview. The company first introduced plant-based chicken strips in grocery stores in 2012, but quietly discontinued them in 2019 and concentrated on its ground meat and sausages.
After nearly a decade of R&D, Beyond Meat is making another run at chicken tenders. The strips, which use fava bean protein as their base, have consistently ranked on par with actual chicken by consumers, Ajami said. There was a lot of work behind the scenes to bring the chicken up to Beyond Meat's current standards, he noted, with about 200 scientists developing the product.
"They have access to advanced technology in our innovation center," Ajami said. "They use imaging — scanning electron microscopy, confocal laser microscopy — to look at the microstructure of texturized plant protein, ... compare it to the muscle tissue of chicken, and try to match that texture. The same goes for flavor." He went on to describe high-tech electronic "noses" and "mouths" that can compare the smell, composition, texture, chew and mouthfeel of the plant-based chicken products.
Impossible Foods declined to answer Food Dive's questions about its planned chicken launch. Company President Dennis Woodside didn't share R&D details behind its chicken product for the Bloomberg story, but said the company has been working on chicken "for some time.” Impossible's chicken nugget base is made of soy with sunflower oil to give it juiciness, and has none of its signature plant-based heme — a copy of the molecule that imparts a signature meat-like taste.
Beyond Meat and Impossible Foods are two of the latest entrants to a category that has been showing enormous growth in recent years — and is sure to continue to climb. According to statistics from market analysis provider SPINS, plant-based chicken is growing at a rate of 18%. This is lower than the average for the whole plant-based meat category, but more than four times higher than chicken from animals, which has grown at a rate of 4%.
In the first half of 2021, there were several high-profile plant-based chicken launches, as well as huge funding rounds for startups and plans for international manufacturersto expand to the U.S. This makes sense when looking at the numbers. Jeff Crumpton, a SPINS retail business consultant, said chicken analogs are the second most consumed plant-based meat product category today, after beef-like burgers.
With chicken making up 45% of meat consumed, plant-based options are an exciting alternative to consumers, said Emma Ignaszewski, corporate engagement project manager for The Good Food Institute, a nonprofit that promotes alternative proteins. The large dollar and volume opportunities make it an exciting space for manufacturers.
“Having a tasty, affordable plant-based chicken option has the potential to deeply transform our food system,” she said.
Consumers chicken out
Poultry — especially chicken — has slowly taken over as U.S. consumers' preferred meat product.
Fifty years ago, the average consumer ate more than twice as much beef compared to chicken — or 83.9 pounds of the red meat compared to 40.1 pounds of the poultry, according to USDA stats cited by the National Chicken Council. In 2020, the average American ate 97.6 pounds of chicken.Chicken consumption is rapidly expanding worldwide, leading the projected worldwide meat market growth through 2030, according to data from the Organization for Economic Cooperation and Development and the Food and Agriculture Organization of the United Nations.
Through the years, chicken edged out beef and pork because it started being considered a healthier meat, and mass production drove consumer prices down while keeping a high rate of availability. Crumpton said this type of understanding has influenced consumer choices. During the pandemic, some consumers started to consider plant-based meat as an even healthier alternative.
“We see that continue to kind of migrate from something like a chicken, turkey sausage into a plant-based chicken sausage,” he said.
All types of plant-based meat saw sales increase in the last year
Sales figures from all retail channels from SPINS
The plant-based chicken product that had seen the most growth recently is the nugget, according to SPINS statistics. Between mid-May 2020 and mid-May 2021, nugget sales were up 48.4%, though there were more sales across the board for all plant-based and analog chicken products.
Sam Terris, co-founder and chief operating officer of plant-based chicken company Simulate, said that chicken nuggets are ubiquitous in the United States — a big part of the reason his company decided to start with that product.
“It's very low barrier to entry,” Terris said. “I think you can kind of convince anyone to eat a plant-based chicken nugget. … It doesn't take a huge leap of faith to try something a little bit different, whereas if you're trying to simulate filet mignon, people have these kind of extremely high expectations.”
The Good Food Institute's Ignaszewski said plant-based meat as a whole seems to be doing a good job of attracting omnivores.
“Chicken is clearly just a huge part of the American diet, and a huge opportunity for these companies to provide sustainable, healthy alternatives.”
Head of policy and communications, Plant-Based Foods Association
“There's definitely a perception gap where the products are actually outperforming consumer expectations in a lot of ways,” she said. "Having those high-fidelity products that match the taste, texture and appearance of animal-based meat, companies are really making advances in that mimicry. And plant-based chicken products that do compete with animal-based products on taste and texture will continue to drive the category growth."
Michael Robbins, who is in charge of policy and communications for the Plant-Based Foods Association, said there is definitely room on shelves for products other than plant-based burgers.
“It does make sense that as the plant-based beef market continues to have success that companies are going to look for other areas as well to grow,” Robbins said. “Chicken is clearly just a huge part of the American diet, and a huge opportunity for these companies to provide sustainable, healthy alternatives.”
New ideas bring new opportunity
Plant-based chicken is a diverse category.
At an average grocery store, consumers can find nuggets, tenders, patties, non-breaded strips and prepared products containing plant-based chicken shreds or chunks as an ingredient. Some of these products are in kid-friendly shapes, like nuggets that look like cartoon characters. Some have a striated texture that is more like cuts of meat. Some are made of pea protein, while others are mainly soy or fava bean.
PBFA's Robbins said this is a good thing for the segment. It shows that there is diversity in offerings, formulations — and potential consumers. Different plant proteins have varied taste and nutritional profiles.
There is also no one major technological advancement that is central to the growth of plant-based chicken. Extrusion — which uses heat and motion to change the shape of proteins — is an important technique. Some companies are working with more specialized high-moisture extrusion processes to enhance juiciness, taste and mouthfeel.
Ignaszewski said the breaded format of most of the plant-based chicken productslends itself to inherently being closer to traditional chicken. With breading, consumers have an expectation of texture and cooking process, one that is not quite as complicated to replicate as a browning and “bleeding” plant-based burger. Breading on plant-based chicken also gives manufacturers more of a chance to experiment with different taste and texture enhancements.
But, Ignaszewski wouldn’t characterize plant-based burgers as being more difficult to make than plant-based chicken. She said the two items have “different challenges,” though after plant-based companies have shown they can replicate the all-American hamburger, everything that follows — including chicken — has an easier time of winning consumer acceptance.
SPINS' Crumpton said the last years have seen a diverse array of plant-based chicken launches. Many focus on natural and specialty profiles, with trendier global flavors and a cleaner ingredients deck than previous products. The newest generation highlight a short ingredients list and careful sourcing, including organic and non-GMO ingredients. Considering the diverse array of plant-based chicken consumers, as well as the differences in the products that they make,Crumpton thinks there is space in the larger market for all of these subcategories.
While consumers are embracing plant-based eating for a number of reasons — wanting to eat healthier, interest in sustainability, desire to try something new — the segment as a whole is getting better at delivering what they expect from meat, said Sara Wheeler, general manager of Nestlé's plant-based Sweet Earth brand. The food giant saw this kind of opportunity to develop its Sweet Earth Mindful Chik'n line: a refrigerated, ready-to-eat product that isn't breaded.
“The sort of the top of the funnel, if you will, has become much broader and bigger,” Wheeler said. “More people[are] saying, 'OK, I'm comfortable coming into this space. It doesn't seem like there's any sort of scariness that there may have been several years ago when the products didn't taste as good.' "
Seizing market opportunity
As the plant-based chicken market gets more crowded, companies are working to differentiate themselves.
Some are making price parity with conventional chicken their priority, said The Good Food Institute's Ignaszewski. Others are playing up the environmental and social benefits of plant-based chicken. According to a life-cycle assessment her group commissioned on alternative proteins, which included plant-based chicken, it produces 86% less greenhouse gas, uses 96% less water, and takes up 97% less land when compared to traditional chicken.
Nestlé's Wheeler said that Mindful Chik'n, first introduced by the Sweet Earth brand in 2019, sets itself apart. Because it is more of a cooked chicken pieces product, it has more versatility than breaded chicken nuggets or tenders, she said. Responding to consumer feedback, Nestlé made Mindful Chik’n ready to eat out of the package, meaning no cooking is required. The plant-based chicken chunks can be added to a salad, sandwich or burrito.
Sales of many plant-based chicken products — especially nuggets — are increasing
Figures comparing two years of sales from SPINS
Nestlé also added different international flavor profiles, with its Mindful Chik'n Chipotle Chik’n Strips and Shredded Seasoned Chik’n and Shredded Korean Style BBQ offerings. The main driver behind product design for Mindful Chik’n is getting it to fit into flexitarians’ lifestyles.
“We look at chicken, and we look at the way that consumers are really using chicken in their kitchen,” Wheeler said. “That's the first thing that drives us in terms of helping understand where we should take it, and what's really driving the way that we're focusing our energies as we create these particular products.”
Mindful Chik’n is also becoming ubiquitous in grocery stores nationwide, which Wheeler said is important to its success. If consumers can easily find it and it is presented to them like chicken, they are more likely to buy it and use it as intended. Wheeler said that repeat purchase rates for Mindful Chik’n have been high.
Daring Foods, a relative newcomer to the food space, has a similar ethos behind its products. Co-founder and CEO Ross Mackay said in an email that the company wanted to create both a healthy and tasty plant-based chicken. The brand, which came to the United States last year, currently has four SKUs — Original, Original Breaded, Lemon & Herb and Cajun — and is designed to be a versatile product that could be eaten several times a week because of its wide variety of potential uses.
"The variety of flavors fit into endless recipes and are perfect for any meal of the day," Mackay wrote.
This brand, which counts recording artist Drake and and former Burger King chair Brian Swette among its investors, also differentiates itself with its short ingredient list. Its Original version — which is plant-based chicken chunks without breading or seasoning — is made with water, soy protein concentrate, sunflower oil, natural flavoring and spices such as paprika, pepper, ginger, nutmeg, mace, cardamom and salt. The company has prioritized a short ingredients list with items that are recognizable to consumers from the beginning, Mackay wrote. It is important to "create the cleanest plant-based meat option on the market, while still delivering on the taste and texture."
Daring closed a $40 million funding round in May. The company plans to use the funds for retail and foodservice expansions, as well as adding to its team. Mackay wrote that the brand is sold in more than 1,100 retail stores, as well as through the company's website.
“I think you can kind of convince anyone to eat a plant-based chicken nugget. … It doesn't take a huge leap of faith to try something a little bit different, whereas if you're trying to simulate filet mignon, people have these kind of extremely high expectations.”
Co-founder and COO, Simulate
Kellogg's MorningStar Farms is a veteran in the plant-based space, but continues to refine its product. It has had a line of plant-based chicken nugget products for years. But as the parent of the newer Incogmeato brand, it has leveraged technology to upgrade its offer with a line of Chik'n Tenders.
Sara Young, general manager of MorningStar Farms, said the new Incogmeato products fill a need for more realistic plant-based chicken. She said the more chicken-like tender is a product of high moisture extrusion, which experts say can more realistically recreate the fibrous texture and bite of meat.The entire process is proprietary, Young said, but the company uses non-GMO texturized soy as well as flavors, batter and breading to make Incogmeato Chik'n Tenders tear like a strip of actual chicken, with a similar look and mouthfeel.
“When you look at the flexitarian consumer and bringing more consumers into plant based, what we found is that we needed a broader range of products to delight their occasions, or different needs,” said Young. “And really, that 'tear experience' — in addition to looking and cooking and tasting just like the real thing — is really important. So we've been working on this for well over 18 months.”
Simulate, a relative newcomer that launched in 2019, takes the technology principle of iterative development — constantly changing small things and getting feedback in order to come to the best formula more quickly — and applies it to food. Simulate currently makes only chicken analogs: Nuggs nuggets and Discs patties.
The pandemic has been good to Simulate, which is now valued at more than $250 million, according to Bloomberg. The company started as a DTC operation in 2019, then slowly rolled out to retail stores and ghost kitchens during the pandemic. Nuggs are now in more than 5,000 retail stores, with another 10,000 planned by the end of 2021.
In June, Simulate closed a $50 million investment round, led by Reddit founder Alexis Ohanian's Seven Seven Six venture firm, and featuring a second investment from McCain Foods, which manufactures the plant-based startup's products. Terris said Simulate will use those funds to double down on its technology and expand, likely quadrupling the size of its tech team. The company is looking for potential acquisitions, and using the funds to expand outside of the United States.
Terris said Simulate's success is a result of the tech team’s close attention to detail to improve the product. Clever marketing, no matter how targeted, can only get so far, he said.
“You just don't have legs to stand on unless the quality of the product is really high,” Terris said.
Looking at a food product through the lens of iterative development has helped Simulate make dramatic improvements, Terris said. He described the product of a year ago as “not good.” It used unpopular ingredients including MSG and the whitening chemical titanium dioxide. It was mushy and salty, and didn’t have the right taste and consistency.
The granular feedback on the iterative development cycle has helped quite a lot, he said. However, the firmness and the juiciness are key.
“Every person has their own subjective tastes and whatnot, but ultimately, if you can get a springy texture, and you can make your product taste like chicken, in terms of a grilled chicken flavor, people are pretty happy,” Terris said.
An enzyme blend the company uses does a lot to bring about the springy texture that consumers expect from chicken, Terris said. He also credited Simulate's switch from using pea protein to soy protein to product improvement. This swap happened in summer 2020, as the main change in “Version 2.0” of Nuggs.
“Very much the ethos of the company is that if the consumer doesn't like something, great. We're an open book,” Terris said. “Tell us about it. We can make a change. I think that's a pretty special and unique opportunity for consumers.”
Alternative chicken's future
SPINS' Crumpton said there are currently two barriers to plant-based chicken’s wider adoption.
One is consumers not liking the taste and flavor profile of the analogs, though he said many companies have been working hard to make their chicken offerings taste more authentic.
“More people [are] saying, 'OK, I'm comfortable coming into this space. It doesn't seem like there's any sort of scariness that there may have been several years ago when the products didn't taste as good.' "
General manager, Nestlé's Sweet Earth
The other, he said, is companies that aren’t improving on the nutritional profile of the plant-based version of chicken. In general, chicken nuggets tend to be packed with less-than-desirable filler ingredients. Some plant-based options, while being able to claim a better environmental profile than traditional chicken, may find themselves just as unhealthy.
“Coming out of this, we will continue to see a type of innovation and formulation to be able to eliminate that kind of barrier, that you really can't tell the difference, one to the other,” Crumpton said.
GFI's Ignaszewski said technology will do more to advance this segment to the point where it's commanding much more shelf space and a larger share of consumer spending in the meat department. Since plant-based meat is made out of ingredients, she said, there can be much more versatility in terms of health and function than conventional meat.
Robbins predicts there will be a lot of development and growth still to come in the plant-based chicken category. While the market is small right now, exponential growth is a given. As it becomes more of a sizeable product segment, there still will be product innovation. After all, he said, the plant-based milk category isn’t growing much in terms of size any longer. It’s already a mature category, making up about 15% of the milk segment. But new products are constantly coming to shelves and improvements are always being made — including products with higher protein or using unique blends.
“As long as there is room in the marketplace, you'll continue to see new products coming to market, a refinement of the various products that are out there,” Robbins said. “I think what's great about this industry is it's not static."
Several plant-based chicken makers said their ultimate goal is for less animal-based chicken on store shelves and restaurant menus. They aren't focused on what other plant-based companies are doing. Instead, they want to make the best products for consumers, period.
When Simulate's Terris thinks of the future for plant-based meat, he recalls a more-than-century-old news article about how “Edison’s gas light substitute” — better known now as an incandescent light bulb — was catching on. Calling this then-novel product by the name of what it was replacing quickly became obsolete. To modern ears, it even sounds a bit preposterous. Terris thinks the entire meat section will go that way in the future.
“We make true animal-based meats obsolete, and the only things that are in there are simulations,” Terris said. “We might still refer to it as ‘meat’ because that's a term that we're used to, but I certainly hope that in five years, we see fewer animal-based products globally.”
Article top image credit: Courtesy of Daring Foods
Answer growing demand for variety in plant-based meat formats with insights from Ingredion
As the North American plant-protein market continues to expand, consumers are sending a clear message to food manufacturers: It's time for more variety in plant-based meats, with 47% of U.S. consumers asking for just that.1
Manufacturers have responded with a variety of new plant-based burger options — and increased launches of new and different meat alternative formats, including breakfast meat alternatives (up 44%), sausage products (up 58%) and seafood formats (up 48%).2
New formats, new challenges
With every new plant-based meat format, formulators face a host of unique challenges to meet consumer expectations for flavor, mouthfeel, juiciness and texture — while also delivering maximum nutritional appeal, visual presentation and cooking experience.
To shed light on the key issues for meat alternative formats, we asked Ingredion food scientists to top-line the key challenges and considerations for formats, including plant-based burgers and formed products, plant-based chicken products, seafood alternatives, and emulsified plant-based meat alternatives.
We quickly learned that for every consumer demand, there are both formulation and manufacturing challenges which Ingredion experts address holistically, drawing on their extensive formulation expertise and plant-based ingredient portfolio to create next-generation consumer favorites.
Formed products: Striking the perfect balance of bite and binding
For formed products like burgers and meatballs, Ingredion's Ying Bian, Business Scientist – Batter & Breading Global Applications,points to the importance of selecting a textured protein that provides proper structure, protein and bite/chew, and marrying it with the right binding solution to hold the product together and prevent sticking during processing. "For example, we've created a pea-based structured vegetable protein which helps to provide a good chewy texture, and paired it with an optimized blend of starches and gums to help bind the product together and keep it moist while giving a fatty mouthfeel," Bian says.Fat release and sizzle, she explains, is another factor to formulate into formed products to provide the cooking experience consumers expect. Bian's team also solves for cold temperature stability, important for both refrigerated and frozen product lines.
Plant-based chicken: Mimicking texture, delivering moisture and succulence
Bringing plant-based chicken products more of the sensory qualities of real chicken is the key challenge here. Again, Bian reports success with choosing pulse proteins as the base. "Ingredion's pea-based structured vegetable protein allows us to create a variety of chicken-type products such as vegan chicken nuggets as well as ground chicken." Moisture and succulence are two key challenges in delivering an authentic chicken-like eating experience, and Bian says that's exactly where her team is focusing. "We are working on the next generation of chicken products that will rely on high-moisture extrusion to provide the fibrousness of a whole chicken breast," she says.
Plant-based seafood: From snappy and chewy to flaky and tender
On the plant-based seafood front, consumers want either a firm bite and texture or a flaky, tender texture, depending on the type of seafood.
At Ingredion, experts are working on a plant-based shrimp alternative that delivers realistic snappy and chewy texture at both refrigerated and hot serving temperatures, making it ideal for cold shrimp salad as well as breaded and fried shrimp.David Shaya, Technologist – Meat, Meat Alternatives, Batter & Breading Global Applications, points to "Ingredion's proprietary blends of starches, gums and proteins that are functional over a wide temperature range, allowing for use in a variety of hot and cold applications," as key building blocks to their emerging solutions. Shaya also notes that pairing plant-based seafood with batter and breading coatings is an increasingly popular approach to optimize the eating experience.
Alternative hot dogs and deli meats: Bringing a unique bite and springiness
A list of growing meat alternative formats wouldn't be complete without emulsified offerings such as alternative hot dogs and deli meats. According to Ingredion's Zach Reed, Senior Associate, Meat Scientist – Batter & Breading and Meat Global Applications, emulsified meats such as hot dogs have a unique bite with a significant level of springiness which can be challenging to reproduce in a vegan plant-based product. The answer? "Ingredion has created a blend of proteins, starches and gums along with egg white proteins to produce a plant-based frankfurter that has similar eating qualities to that of a real meat product," says Reed.
Learn more from Ingredion
Armed with the latest consumer insights, dedicated plant-based protein technical expertise and a growing portfolio of sustainably sourced plant-based ingredients, Ingredion is helping manufacturers develop the innovative meat alternatives — and new formats — consumers are looking for. For more information, visit Ingredion.com or call 1-800-713-0208.
Mintel Reports US, Plant-based Proteins, 2020
Article top image credit: Yuri Arcurs via Getty Images
How Impossible Foods is getting Gen Z interested in plant-based meat
With its products in public school cafeterias and a teen-focused website that connects animal agriculture to global warming, the company aims to feed and educate the next generation.
By: Megan Poinski• Published June 21, 2021
Impossible Foods founder and CEO Pat Brown has been talking about how to get his company's products in front of children and teach them about what they are as far back as 2014.
Brown, who was a well-respected scientist when he started the plant-based food company in 2011, began his career as a pediatrician. Through Impossible Foods, he wanted to combine his passion for using science to create food free from animal agriculture with teaching children how to connect what's on their plates to what's happening in the environment. He's been talking about this desire with Impossible Foods Vice President of Communications Jessica Appelgren for years.
"It's profound, you know, the impact you can have on the planet — one person," Appelgren said. "This is something in each child's immediate control, right? They can't control energy systems, but they really can control how what they eat impacts the climate — and then the effects they might have on their peers around that, and the effect they might have on their parents and their grandparents."
In 2021, Impossible Foods has taken steps to engage with young people and let them know more about the ecological impacts of eating products derived from animals. For Earth Day, the company put out an online guide, "The Birds and the Trees," that advises teens about how to talk to their parents about traditional meat's impact on climate change. Weeks later, Impossible Foods released a report about kids' familiarity with global warming and what they can do to stop its negative effects.
And in May, Impossible Burger received a Child Nutrition Label from the Department of Agriculture.In June, the company's Impossible Sausage also received the label.This means these products have gone through a rigorous process to codify their nutritional value in a way that makes it easier for a public school district to use them in menu planning for cafeteria breakfast and lunch.
Even though the CN label essentially opens up another market for Impossible Foods, Appelgren said this new push has nothing to do with making more money for the company. There isn't as much of a financial benefit from moving into school cafeterias as there would be for other sectors, she said. It also isn't intended as a marketing campaign.
"I think it's more about the mission of the company, and finding a way to educate and involve younger people in that mission earlier," she said.
Appelgren said it drove the push to get Impossible Foods into schools as well. The company has always been encouraged by some school programs where students or local operations grow the food that is served in the cafeteria, she said. However, those programs do require a big programmatic shift — creating garden space and changing curricula for food growing and harvesting, shifting menus to work with the school's own produce, and potentially altering the way the cafeteria stores, displays and sells its offerings.
Bringing plant-based meat into the school cafeteria is an easier way for the school and students to become more eco-friendly, Appelgren said. No large procedural changes are necessary. The plant-based meat can easily be substituted for the animal-derived version they already serve.
"This is something in each child's immediate control, right? They can't control energy systems, but they really can control how what they eat impacts the climate — and then the effects they might have on their peers around that, and the effect they might have on their parents and their grandparents."
Vice president of communications, Impossible Foods
A study released in 2020 from sustainability nonprofit the Forum for the Future talks about how important it is for public schools to increase and enhance their plant-based options. The National School Lunch Program served more than 4.8 billion lunches in 2019, the last full year that school was not disrupted by the pandemic. According to statistics cited in that report, this program has a reach of 100,000 schools and institutions nationwide, and can potentially serve 30 million students a year. Some barriers to school cafeterias adopting more plant-based options cited by the report include an overall lack of adaptable choices, as well as differences in school administration culture and education about why changes should be made.
This kind of research, coupled with Impossible Foods' current manufacturing capacity, make this the right time for Impossible Burgers and Sausage to be available to schools, Appelgren said. Impossible's manufacturing partnership with OSI Group, as well as its own factories, put the company in position to supply any demand that might come out of K-12 schools, she said.
Impossible Foods has been hearing from school districts interested in serving its products for a while, Appelgren said. The company developed pilot programs for four districts — Palo Alto Unified in Palo Alto, California; Aberdeen in Aberdeen, Washington; Deer Creek Public in Edmond, Oklahoma; and Union Public in Tulsa, Oklahoma — as it continued to pursue the CN label. Appelgren said Impossible has been hands off with the districts about how they will use and promote the plant-based meat option. She was clear: The company does not want to use this as a marketing opportunity.
"The intention is to make our product available everywhere meat is served, and a lot of meat is served in our school lunch program nationally," Appelgren said. "Let's make this available, and just as in foodservice and retail, if people want it, they will purchase it."
For school lunches, Impossible is doing as much as it can to bring the price of its plant-based meat to parity with traditional ground beef, similar to its efforts in foodservice and at retail, Appelgren said. While it may not be exactly the same right now, she said, "the gulf is not too great." School districts that offer Impossible definitely need to be motivated to have it, she said, but it will not be so cost-prohibitive that they couldn't afford it.
Impossible Foods' sustainability factor compared to the animal meat industry appears to be a motivator so far. In the press release about the CN label, Michael Morris, senior manager of culinary offer implementation at Sodexo, said adding Impossible Burgers to the cafeteria foodservice operator's menus will help the company meet its goal of reducing carbon emissions by a third by 2025.
“The Impossible Burger is a product we think teenagers are going to get excited about," Morris said in the release. "We are interested in how the popularity of this low-carbon food can help effectively lower a whole district’s carbon footprint, while also getting students more engaged in thinking about their connection to the planet.”
In an email, Appelgren said the approval of Impossible Sausage's CN label was especially exciting because it can get the plant-based meat offerings in the cafeteria for school breakfasts. In 2019, there were more than 2.4 billion breakfasts served at K-12 schools.
"We are excited to play a small part in kick-starting the school day in a nourishing and sustainable way," she said in the email.
Impossible Foods is not going to push school districts to be overzealous with branding on their cafeteria offerings, Appelgren said, though it will try to get them to promote that the dishes use plant-based meat, since that is an important consideration for dietary needs. The company will be putting together resources for districts to use, including recipes and case studies, Appelgren said. Impossible Foods wants to navigate the line between being a helpful and informative resource and marketing, she said.
"I think it really is going to be up to the individual districts and principals and superintendents to make choices that work for their population but definitely won't be initiated by us," she said. "I think we'll be able to provide materials and they can use [them] as desired."
Appelgren said schools that serve Impossible might also be able to make plant-based meat accessible to children who would not otherwise be able to afford it. According to preliminary USDA statistics, 76.9% of all school lunches served in 2020 were to lower-income students who qualified for free and reduced-price meals.
How to talk to parents about climate change
Offering plant-based options at school is just one part of Impossible's youth outreach. The company also wants kids to appreciate why they are the better alternative. For Earth Day in 2021, Impossible Foods put together a colorful online report called "The Birds and the Trees" with chapters that are tongue-in-cheek references to the kinds of awkwardly titled lessons adolescents get about human sexuality. This report deals with a topic that is literally hotter: climate change.
"The idea really was how can we provide a resource for teens that care about climate change to actually talk to their parents about it with an informed perspective — with the data to share, with answers for typical arguments, and so forth," Appelgren said. "It's a conversation guide."
The report looks at climate change's ties to animal agriculture, pulling together charts, satellite imagery and statistics. The data is attention-grabbing and easy to read through, but links to additional information — including TED Talks, scientific journal articles and video explanations — allow users to learn more. Only a few parts close to the end include language promoting Impossible Burger as a ground beef alternative.
"I volunteered to share everything I've learned and our team has learned along the way with any company that cares to invite us in for a talk. [We] definitely want to collaborate on this topic."
Vice president of communications, Impossible Foods
Again, Appelgren said the report is not intended as a marketing tool. Other plant-based companies told Impossible they were glad it was sharing kid-friendly sustainability information, and were interested in working together to create similar reports and messaging, she said.
"Definitely, this is a space of collaboration first," she said. "I volunteered to share everything I've learned and our team has learned along the way with any company that cares to invite us in for a talk."
Impossible Foods' research has shown that educating young people about the link between eating meat and climate change is likely to be effective in getting Gen Z to change their diets.In 2019, Impossible Foods' Kids in the Kitchen report summarized attitudes of 1,000 U.S. consumers ranging from baby boomers to Gen Z about plant-based meat. In May, the company released its Kids Rule report, which talked to 1,200 young people ages 5 to 18 about their knowledge of climate change and how it is impacted by animal agriculture.
Both of these reports point to basic top-line findings: Younger consumers are more likely to eat plant-based food andeat less meat in order to save the environment. In the 2019 report, more than half of Gen Zers and about half of millennials said they ate plant-based meat at least once a month. Millennials with children of their own were more likely to eat plant-based meat more often, and more millennial parents than their Gen X and baby boomer counterparts have tried to teach their children about sustainability and how food choices affect the environment.
The report published last month found that almost eight in 10 kids were at least familiar with climate change, and 87% said it was important to do something to stop or reduce it. Kids were optimistic about their potential contributions to help stop global warming, with 73% saying they could make at least some difference through their personal choices.
But many weren't aware that animal agriculture contributed to global warming, the report showed. More than four out of five said cutting down trees, transportation, producing energy and trash had a role in climate change, but just 54% said the same about raising cows for meat and dairy. After those kids read a statement about the impact animal agriculture has on climate change, 78% said it was important to do something to reduce using cows for food.
Survey participants also read a statement describing the Impossible Burger that touted many of the company's key marketing points about taste, appearance, sustainability and nutritional value. The largest percentage — 29% — said they were most interested in its sustainability aspects.
This research, Appelgren said, was foundational to the CN label and the educational website.
"We had assumptions that there wasn't a lot of awareness or understanding about animal ag's role in climate change, ... but we definitely wanted to test that," she said
These conclusions have been corroborated by independent research, including a survey done last year by Mattson and cited by the Plant-Based Foods Association in which 100% of Gen Zers cited concern for the environment as a reason they eat plant-based food.
'It's Gen Zs who are actually leading here'
While today's young people are extremely savvy to marketing efforts by big brands, experts in messaging to children think they will be receptive to Impossible's message.
Rob Lough, co-founder and chief brand officer at kid-targeted digital media firm KidsKnowBest, said that young people are already steeped in information on sustainability and climate change. His firm conducts monthly in-person or video chats with about 200 kids ranging in age from 5 to 18. Lough said they let the kids talk about what is interesting to them and ask no leading questions. About 15% of all of those children, he said, tend to talk about sustainability-related topics.
"What we've learned, especially with Gen Z, is they are on a mission to reform and change outdated norms, and really try and pave the way for a better, more positive future: one that can preserve society and communities, but also the planet."
Global director, Wunderman Thompson Intelligence
"Kids as young as five are talking about it now — talking about plastic, saving the planet, recycling at home," Lough said. "I'm guessing you wouldn't have been seeing this fit even 10 years ago. These probably wouldn't have been topics [of conversation]."
Emma Chiu, global director for international insight and trends firm Wunderman Thompson Intelligence, said Gen Z is both savvy about climate change and willing to make changes to benefit the environment. In a 2021 survey of 3,000 people in the U.S., U.K. and China, 71% of Gen Zers said they would be willing to eat more alternative proteins in order to help the environment.
"It's Gen Zs who are actually leading here, not millennials, even though millennials are closely in second place," Chiu said.
While there's no data to support the idea that kids will seek out foods also served at their school cafeteria, the fact that Impossible Foods is on the menu will send a message both to kids and parents, Lough said. If it's branded — the cafeteria tags the meal as "Impossible sloppy Joes," for example — the product name would get into the students' lexicon. And if the student knows even from a basic standpoint that they are eating something that is not meat, it is the type of thing they will talk about with their parents, he said. Regardless, in school, the brand name and widespread demonstration of the product will get Impossible a lot of eyeballs, he said.
Parents are much more likely to be impacted by branding, Lough said. They would see Impossible's name on cafeteria menus. If the children like their school lunches, this may convince the parents to try the plant-based product at home — especially since kids tend to avoid eating vegetables.
"I don't think there's any downside on that as long as there's an option on the menu and you see the veggie burgers are Impossible," Lough said. "I think it's a stroke of genius, to be honest."
Chiu noted that since many young people support plant-based eating, if their school decides to serve Impossible Burgers, they may see it as a "badge of honor." Kids and teens are more likely to take pride in the fact that their school is doing something to preserve the environment, she said.
While today's youth can spot an advertisement miles away, Chiu said they spend money. If they can see that a company is upholding values that are similar to theirs, they are more likely to support it.
"What we've learned, especially with Gen Z, is they are on a mission to reform and change outdated norms, and really try and pave the way for a better, more positive future: one that can preserve society and communities, but also the planet," Chiu said. "And if messaging or education is there to further ground this belief, that will be definitely beneficial for them, because they're not only learning for themselves, but they want to educate their peers, they want to educate their family, their friends."
Article top image credit: Courtesy of Impossible Foods
PepsiCo is making 'a much bigger play' for sales in the burgeoning plant-based market
The CPG giant has made several acquisitions and introduced new products in an effort to scale quickly and build what it hopes will become household names in the category.
By: Christopher Doering• Published May 19, 2021
PepsiCo is accelerating the development of plant-based foods it hopes could one day rival sales generated by some of its popular chip, tea and soda brands.
The CPG's snack portfolio, which includes everything from Doritos and Sun Chips to Sabra hummus and Quaker oatmeal, has long depended on plant ingredients such as corn, chickpeas and oats. But PepsiCo is moving aggressively to expand its offerings to prioritize the use of plants that provide functionality attributes and have a more environmentally friendly footprint.
“Our core brands utilize agricultural commodities, but this is more than that. This is also positive nutrition on top of that," said René Lammers, PepsiCo's chief science officer. "Ultimately, we want to make this a much bigger play for us.”
During PepsiCo's February earnings call, CEO Ramon Laguarta singled out plant-based snacking as a category the company is using to generate future growth. PepsiCo posted sales of $70.37 billion in 2020, an increase of 5% from the prior year. Organic revenue is forecast to increase in the mid-single digits in 2021, in line with its long-term outlook.
Giving consumers more choice
To fuel its long-term growth in plants, PepsiCo has entered into a series of acquisitions, new product introductions and extensions to existing brands.
The company's juice and smoothie brand Naked Juice introduced in January a product that blends pea and soy protein. The drink builds on Naked's other plant-based protein beverages that include a combination of fruits and a few that mix together whey and soy.
Anup Shah, vice president and chief marketing officer of the juice portfolio at PepsiCo Beverages North America, which includes Naked Juice, Tropicana and KeVita, said his segment is "dabbling" in plant-based options. While he said the juice portfolio doesn't plan to shift entirely to alternative proteins, Shah expects future product launches to give shoppers more choices.
"We know consumers are asking for more plant-based options and so we're trying to deliver on that consumer need," he said.
"Our core brands utilize agricultural commodities, but this is more than that. This is also positive nutrition on top of that. Ultimately, we want to make this a much bigger play for us."
Chief science officer, PepsiCo
And Evolve, a maker of plant-based bars, shakes and powders that uses pea protein, was overhauled in March with new packaging, advertising and flavor profiles to raise brand awareness. PepsiCo purchased Evolve as part of a $465 million deal with Hormel Foods in 2019 that also added Muscle Milk to its portfolio.
PepsiCo's new plant-based brands may look "relatively modest in scale," Lammers said, noting new product launches can often be capital intensive. "But our intent, of course, is to scale these as fast as we can when we hit a consumer win. Just doing small, quick-cycle ideas for the sake of it is not the business we’re in."
'Kind of the wild west out there'
The food and beverage giant's investment in plant-based products is happening as consumers embrace the segment's environmental and health halo.
A 2018 study from DuPont Nutrition & Health found 52% of people who eat more plant-based food said it makes them feel healthier. That perception has only increased since the emergence of COVID-19. According to Nielsen data, sales of snacks promoted as part of a plant-based diet rose 10.5% during the 52 weeks ending Jan. 16, 2021. Plant-based beverage sales increased 13.5% during the same period.
John Boylan, a senior equity analyst with Edward Jones, said PepsiCo’s expansion into plants comes at a time when other major players in the space, like Conagra Brands, Kellogg, Hormel Foods and General Mills, are growing their own presence in the fast-growing category.
Boylan said with the latest surge of consumer interest in plant-based foods in its infancy, he’s keeping a close watch on PepsiCo to glean more information on its long-term strategy compared to that of its competitors. While the company’s success is far from certain, PepsiCo’s dominance in snacking will at least cause retailers to listen about the new items it plans to introduce.
"The one thing to keep in mind is this is still kind of the wild west out there with a lot of innovation and a lot of opportunities for a number of players involved, but it’s going to take time to unfold," he said.
Investment firm UBS predicted in 2019 that plant-based food would be an $85 billion industry by 2030.
Overcoming obstacles with plants
As companies incorporate more plant-based ingredients, there are a series of hurdles they need to overcome. Lammers said before PepsiCo can incorporate a pea, rice or other alternative protein into a new or existing product, it must closely study the ingredient. Scientists not only review the "nutritional credentials" it brings, but also determine how and where it's grown, the impact on the environment when it comes to inputs like water and, of course, its impact on taste, he said.
The snack and beverage maker also needs to ensure it can procure enough of the ingredient, determine how it will be processed and manufactured and whether new equipment will be needed to do it.
"There are always a couple of overarching challenges you face when you switch significantly an ingredient," he said. "We need to think completely end to end when when you switch some of these ingredients."
PepsiCo's snack portfolio has a diverse mix of well-known brands like Cheetos, Rold Gold pretzels and Lay's potato chips. Lammers said despite decades of expertise in snacks, where it has developed deep insight into flavors, seasoning and packaging, PepsiCo knows that other companies are more familiar with how to work with plant-based ingredients and their characteristics, including how to texturize and process them.
It's a big reason why PepsiCo entered into the joint venture with Beyond Meat.
“We don’t always have the capabilities in-house," he said. "I have to be open and honest and say 'Okay, this is a new territory for us.' "
Lammers said PepsiCo is planning further plant-based product offerings this year, though he declined to go into detail. While the category is an important part of the company's growth, it hasn't outlined specific revenue targets.
“We just clearly have an intent to go where the consumer is going," Lammers said, "and knowing PepsiCo, we will succeed and will build brands in the plant-based space that hopefully in a few years will become household names."
After a year of reformulating, all 19 products under the Greenleaf Foods banner have ingredient lists that are recognizable to consumers, which the company considers a necessity for plant-based food.
By: Megan Poinski• Published May 5, 2021
Lightlife made a splash last year with the relaunch of its cleaner label burger and its challenge to Beyond Meat and Impossible Foods to also adopt more widely recognized ingredients in their burgers. But it wasn't the end of the company's reformulation effort.
Since the late August burger relaunch, Lightlife has been quietly reformulating all of its products to make them cleaner label and completely vegan. As of now, the company's entire portfolio — 19 different products — has been reformulated to take out ingredients that consumers may find off-putting or that came from animals. All of its items are also certified kosher and Non-GMO Project verified. Gone are ingredients including carrageenan, eggs and maltodextrin, which have been replaced by ingredients including potato starch, citrus fiber and sugar.
Dan Curtin, president of Lightlife owner Greenleaf Foods, said this is part of the company's commitment to its customers. A survey of more than 11,500 consumers conducted by Boston Consulting Group last year for Lightlife showed that they wanted to be able to better understand the ingredients deck in plant-based products. The survey inspired the burger revamp, as well as the changes announced today.
"We believe this is a huge step," Curtin said. "It's a firm statement of the commitment that we made of going to cleaner ingredients."
While Lightlife had long planned the complete portfolio revamp, Curtin said it took a bit longer than expected. It couldn't just make simple ingredient replacements, and some of them — especially carrageenan, which is a popular emulsifier — were trickier to remove than others. The company also had to maintain product integrity. While the ingredient deck is important, so is taste and quality, Curtin said.
"I think some of those things that we removed are big, big pieces to remove. Consumers, I think, are going to continue to pay more and more attention to these ingredients. People may not even know what these what these ingredients are, so we tell people to do your homework, check it out and we're here to support you."
President, Greenleaf Foods
The latest revamp is going to be promoted largely online and through social and influencer channels, Curtin said. There are no plans to target others in the plant-based meat space for their ingredients this time around, though Curtin said that promotion plan paid off. He believes that consumers appreciated that Lightlife explained what it had done and what made it unique. There were a few detractors, he said — people who believe that all plant-based meat companies should be working together to advance the common goal of less traditional meat consumption. Curtin said he engaged with them, and that the clean label effort is what helps set Lightlife apart.
He thinks continuing the clean label effort will only make consumers respect Lightlife more.
"The proof is in the pudding," Curtin said. "...I think some of those things that we removed are big, big pieces to remove. Consumers, I think, are going to continue to pay more and more attention to these ingredients. People may not even know what these what these ingredients are, so we tell people to do your homework, check it out and
we're here to support you."
Lightlife has been paying a lot of attention to its products and consumer needs, and it is showing, Curtin said, noting that its brand awareness has tripled in the past three years. To him, this demonstrates that consumers are trying plant-based options and liking them enough to keep coming back. As the plant-based category gets more crowded, having clean labels is one way that Lightlife can stand out, he said. The brand is positioning itself as a guilt-free plant-based option that consumers can understand and know exactly what they are eating.
Lightlife, whose parent company Greenleaf Foods is owned by Canadian meat producer Maple Leaf Foods, is not against meat, Curtin said. The brand wants to give consumers options — a position strengthened through having cleaner labels, he said.
"[We are] partners with them in this — reducing our ingredients, reducing the things that are in there that are not as healthy for you. I think that's sending the right message," Curtin said. "Consumers want great-tasting products that are good for you, and finding that balance, I think, is the perfect lane Lightlife goes in."
Greenleaf Foods — through both its Lightlife and Field Roast Grains Meat brands — is working to develop more options for vegan and flexitarian consumers alike, Curtin said. Under the Field Roast banner, the company recently launched pepperoni and a stadium-style hot dog made of pea protein.
Vegan consumers, who helped make Lightlife a force when it started as a tempeh company in 1979 and many who do not want meat-like products, are still important to the brand.With a new $100 million tempeh plant in Indianapolis, Curtin said there is a lot of opportunity to expand the fermented soy product, which he believes could be "the next kombucha" thanks to its health profile and buzz.
"We see massive opportunities for the future, for sure," he said.
Article top image credit: Permission granted by Greenleaf Foods
Plant-based cheese is full of startups. Will dairy providers get into the segment?
New players and brands are bringing growth and innovation to the sector, while most traditional companies are hanging back. Are they missing opportunity, or is it not worth their effort?
By: Megan Poinksi• Published March 16, 2021
Even though many of his peers have been slow to enter the segment, Bill Graham said there's good reason why Bel Group is making a big bet on plant-based cheese.
Bel Group, started in France in 1865, is known for its distinctive snacking cheeses, including The Laughing Cow wedges, wax-coated Babybel rounds and Boursin spreads. In March 2020, the company took a majority stake in French plant-based company All in Foods, which makes vegan cheese alternatives in Europe. In October of that year, Bel pledged to create one plant-based variety of each of its signature brands and launched its first offering: Boursin Dairy-Free Cheese Spread Alternative Garlic & Herbs. In January 2021, it launched Laughing Cow Blends wedges, which mix the company's signature dairy-based cheese with chickpea, lentil or red bean proteins.
Graham, the CEO of the company's U.S. division Bel Brands USA, said the reason for such a big strategic turn in strategy is simple.
"We at Bel see this as a massive opportunity," Graham said. "...We believe that this category has the potential to reach over $1 billion by the end of 2025, give or take. And we also believe that we are uniquely positioned to bring value and address some of the unmet needs in the category from a consumer perspective. We believe we're in a good position to help our customers build out this category. It's not a trend that we're following, per se. It really is an intentional part of our business model and our strategy."
There certainly is a lot of opportunity in plant-based cheese. According to SPINS statistics, plant-based currently represents about 3% of the $34.3 billion cheese space. It's been an area ripe for new players, as several startups launch new brands. In the past couple of years, Violife, Parmela Creamery, Good Planet, Loca Food and Vevan have joined longtime segment leaders including Daiya, Follow Your Heart, Field Roast, Kite Hill and Miyoko's Creamery. And well-known plant-based companies have gotten into the segment, including Tofurky with its new Moocho line, Danone with So Delicious and plant-based yogurt maker Forager Project.
But while the space is white hot, there's something in common with almost all of the players. None of them — except Bel Group — have traditional dairy cheese as one of their primary products. There are many possible reasons for this. The processes are similar, but creating a tasty plant-based cheese that will have the correct mouthfeel and melt is difficult. And, demand for dairy-based cheese is still increasing. In 2020, dairy cheese sales in natural and multi-outlet groceries rose 21.2%, and increased 24.5% in regional grocery stores, according to SPINS.
Matt Gibson, co-founder and CEO of New Culture Foods, said this continued sales growth makes cheese an anomaly in the dairy space, since other products are not growing market share. Gibson's company, which is based in California, grows dairy proteins through fermentation to make cheese that is completely authentic, but not animal-based.
"We at Bel see this as a massive opportunity. ... It's not a trend that we're following, per se. It really is an intentional part of our business model and our strategy."
CEO, Bel Brands USA
Many traditional cheese companies have at least taken a look at the plant-based segment and decided it wasn't worth their trouble, Gibson said.
"The current way that plant-based cheese has been made doesn't give the functional properties as needed for them to keep their customers happy, essentially," Gibson said. "They say, 'Hey look, we're not going to put any more resources into this product. It's not good enough.' "
Gibson — whose company's purpose is making these alternatives "good enough" — and others feel that plant-based cheese's big day is still coming. Several say that their products can compete with dairy cheese now and will get even better. And as more consumers adopt flexitarian eating patterns — trying more plant-based options but still eating traditional meat, dairy and eggs — having high-quality plant-based choices in cheese will pay off, they say.
"Consumers will choose," said Domenic Borrelli, president of plant-based food and beverages and premium dairy for Danone North America. "How they feel and what they want to consume and incorporate into their diet is completely up to them. Our job is to give them the choice and provide a great breadth of offerings in plant-based to enable that choice to be easy as possible."
Is plant-based cheese all that bad?
Plant-based cheese has long had a reputation of being inferior to its dairy counterparts — not looking, tasting, smelling, feeling or melting properly. Consumer research done by Numerator found that 22% of potential plant-based cheese consumers think the products won't taste good, Borrelli said.
But shortages during the coronavirus pandemic caused by consumer hoarding and production issues actually helped change that belief, said Jeff Crumpton, a retail reporting manager at SPINS. Some consumers were looking for a particular cheese and ended up buying the plant-based equivalent because it was the only thing available. Many found they liked it, and became much more likely to buy it again, he said.
This is a testament to the work that plant-based cheese companies have done over the years to improve their products, Crumpton said.
"That also makes it incumbent on plant-based dairy in general to continue to innovate, to make that barrier even less," he said. "[To make sure] that they're producing the types of products that customers would really have a hard time differentiating if they were doing something like a blind taste test."
Bel Brands is quite aware of this barrier — and it has an even bigger obstacle to cross, Graham said. The company is not creating something new but rather remaking well-known popular cheeses in plant-based and hybrid varieties.
"We have a really good pulse around what success looks like in terms of what the consumer is expecting ... because they tell us," Graham said. "On the other hand, given the trust that consumers have in our brand and what they expect in terms of the quality, the bar is very high. We have to work extra hard in just making sure that the plant-based offerings that we put out into the market deliver against that same expectation."
Bel's long history in the space lends it credibility and trust from consumers who might be leery of trying plant-based cheeses, he said. The company's seasoned manufacturing and R&D teams can also work through any issues to develop better quality products, he added.
Danone has deep experience in trying to bridge the taste gap between dairy and plant-based products. Borrelli said the biggest concern for any dairy alternative — be it plant-based milk, yogurt or ice cream — is that it tastes as good as what comes from cows. Danone works on improving the taste and physical qualities of its alternative products. For example, perfecting melt performance has been one of its priorities for So Delicious cheese.
Consumers are also looking for variety, which is one of the central tenets to Danone's business strategy.
"The one category that's been the toughest from a consumer standpoint has been dairy cheese. Consumers love their dairy cheese," Borrelli said. "And so we know that the opportunity was really to delight consumers with a great-tasting product that would deliver against the expectation consumers had."
Danone has done extensive consumer testing on So Delicious cheese and launched the line through a well-known and popular brand name, Borrelli said. It also has a partnership with cookbook author Ayesha Curry to show how So Delicious can be used in recipes that would ordinarily include conventional cheese. Curry's role is to encourage people who are curious about plant-based cheese to try it, according to a press release.
With so many plant-based cheese products on the market and players in the space, product quality has had to improve. Good Planet Foods founder and co-CEO David Israel said that companies already in the plant-based space aren't the ones having problems with the execution.
"A lot of the major cheese manufacturers — I'll say four of the largest — have sent us samples, trying to get us to work with them, and I am blown away by the lack of cheese-likeness of the samples they send to us," Israel said. "It's a learning curve that's different from what they've been doing for years and years and years."
While there has been tremendous progress, plant-based cheese is often missing some of the function, taste and texture of the dairy-based alternatives. Gibson started New Culture to solve these issues. What's missing, he said, is dairy proteins.
"For us to make a cheese that mainstream dairy consumers are going to transition over to seamlessly, we absolutely need dairy proteins in there," Gibson said.
"It [is] incumbent on plant-based dairy in general to continue to innovate, to make that barrier even less. [To make sure] that they're producing the types of products that customers would really have a hard time differentiating if they were doing something like a blind taste test."
Retail reporting manager, SPINS
New Culture creates dairy proteins from plant-based sources using microbial fermentation. After producing these proteins in a fermenter, the company then adds other plant-based ingredients — including sugars and other proteins — to basically make a milk that can go through the traditional cheesemaking process. Gibson calls New Culture's product, which is still undergoing R&D, "animal-free dairy cheese." He expects its first offer to be on the market in 2023.
As consumers become more conscious of the healthfulness and sustainability of food, many are turning to plant-based cheese. Buttheir choices at the grocery store are ultimately driven the most by taste and price — areas where plant-based cheese cannot always measure up. This is how fermented dairy providers, like New Culture, can eventually win the category — once they can achieve the scale to make a difference, Gibson said.
"They're the only ones that can compete on taste, and with a favorable trajectory, they can eventually compete on price as well," Gibson said.
All about opportunity
Israel, who founded snack brand Pop Gourmet, was looking for a new venture when he left that business in 2018. He had no real background in food science, but after some research learned that plant-based eating was the next big thing, and there was a lot of space for innovation and improvement in cheese.
Israel found a company in Greece that made cheese from plant-based ingredients. After tasting a sample, he discovered that the texture and melt was spot on, though the taste was pretty bland.He convinced the company, which he declined to name because of a business agreement, to work with him. They then developed a line of popular cheeses — varieties including American, mozzarella and cheddar — and did some deep research on the target consumer for plant-based cheese.
"I really built a brand around the whole package to connect with those consumers — the Gen X and Gen Zs and millennials," Israel said. "Everybody wanted products that were good for them and good for the planet, and so that's what we did. We came up with the most amazing, meltable, tasty cheeses in the category, period."
Good Planet, which launched in 2018, has done well in the market, often posting double-digit sales growth once products hit new stores, Israel said.
Israel said that many other startups getting into the plant-based cheese space have the same outlook as he did: This is a category with a lot of opportunity. The field seems wide open, and plant-based eating appeals to a majority of consumers — including not only traditional vegetarians, but also those who might eat the occasional plant-based burger, Israel said.
"We're not out to kill the dairy industry," he said. "Yes, we're out to do better for our environment and better for the consumers' health, but, you know, there's room for everybody."
SPINS analyst Crumpton said it is common for startups to flood a hot new category that has seen recent innovation. Companies are trying to make the product better, or think they have a new twist that will make their offerings stand out. But many of the plant-based cheese players are still very small. Only 10 brands had more than $1 million in sales in 2020, according to SPINS, and the category leaders are still the older standards: Daiya, Follow Your Heart and private label brands.
Many plant-based cheese brands and private label options saw strong sales growth in 2020
Sales and growth by brand during the last two years, with all private label options counted together.
Danone has long been on the path to transforming into a full-spectrum dairy and alternatives provider. In 2017, the company bought plant-based dairy leader WhiteWave Foods, and it has been working toward solidifying and expanding its presence in the category.
"We see tremendous opportunity for growth within plant-based cheese, and with the launch of So Delicious, we've got a product that we are delighted to bring to the market that we know will really change perceptions for consumers around how great a plant-based cheese alternative can be," said Borrelli.
Danone has been working on plant-based cheese for the last few years, as it focused on opportunities to drive impactful growth. A good tasting product with the right taste, texture and melt, Borrelli said, could pay dividends. In developing So Delicious cheese, Danone was presented with a unique opportunity.
"We're not out to kill the dairy industry. Yes, we're out to do better for our environment and better for the consumers' health, but, you know, there's room for everybody."
Founder and co-CEO, Good Planet Foods
"We were able to marry the knowledge and the learning and capability that we have in plant-based food and beverage with the knowledge and the understanding that we have in ... organic cheese, and really find a way to develop a product that delivers the right taste and texture," Borrelli said.
The Follow Your Heart acquisition also gives Danone more room to grow and expand in the plant-based cheese space. The 51-year-old company has a suite of plant-based segment-leading products, from its shredded and sliced cheese to its Vegenaise spread. Co-founder and CEO Bob Goldberg said two things sealed the deal to sell to Danone: It is the world's biggest B Corp and has ethics around transparency and sustainability that align with Follow Your Heart's mission.The fact that Danone has publicly committed to tripling its plant-based product sales by 2025 also factored in.
"That's a huge commitment. That's going to mean that a lot more plant-based product is available around the world for consumers," Goldberg said. "In my mind, every time somebody buys a plant-based item instead of an animal-based product ... that's progress."
The view from dairy providers
Tillamook, a 112-year-old brand that is made as part of the Tillamook County Creamery Association, has been a well-known player in the dairy cheese business for generations. It currently is not in the plant-based space, though Executive Vice President of Brand Joe Prewett said the company is open to considering any new innovation that is disrupting the market.
While the company has built its name and reputation on traditional dairy, Prewett said he doesn't have a negative viewpoint of plant-based. In some areas where Tillamook has products — including ice cream, yogurt and butter — plant-based provides "healthy competition," he said. But it also provides a diversity of options, which is a net positive for the dairy segment.
"I don't think in today's market there's a close replacement for the product experience and nutritional impact of Tillamook cheese," Prewett said."I wouldn't be surprised if a product like that is going to be developed in the future," he added.
The traditional dairy industry overall has not been supportive of plant-based products, and has worked to guard the identity of its products.
The American Cheese Society, which is a membership organization for producers, sellers and enthusiasts of artisan and specialty cheeses in the Americas, has taken a position that only dairy-based products should be called cheese. In 2019, the group filed comments with the FDA to ask it to enforce labeling rules to restrict the terms "milk" and "cheese" to dairy products — an action that the federal agency has not taken.
The dairy industry is also battling a consumer perception that plant-based products are healthier — a belief that is not always backed up by products' Nutrition Facts. Because of dairy products' higher protein content, traditional cheese naturally has a better nutritional profile. Plant-based cheese makers currently need to add nutrients, including protein. But according to 2018 research commissioned by the Wisconsin Cheese Makers Association and Dairy Farmers of Wisconsin, more than a third of consumers who examined plant-based cheese products believed they had protein — and 21% thought it was higher quality than dairy protein. A quarter of the consumers thought the plant-based cheese products were low in calories and fat and contained no additives, which is not always the case.
Prewett is not overly concerned with misconceptions such as these impacting Tillamook's sales. He believes the truth will be borne out in time, and notes that people are still buying conventional cheese. In fact, Tillamook's cheese sales have increased by double digits during the pandemic, leading the company's growth, he said.
Despite the growth of the plant-based cheese segment and the rush of companies getting into the space, Tillamook is not spending much time trying to figure out how to succeed there, Prewett said. While there is some pressure on every dairy company to cater to the growing plant-based segment, it doesn't exist as much for cheese, he said. People primarily eat cheese for the flavor and indulgence, and it's hard to make a successful plant-based alternative that delivers on these motivations.
"We do not have an adversarial posture on healthy products that people like, and I know that is a narrative in the market. But I just think we have to be progressive and take a modern view of what the consumer wants, and then create great products for them."
Executive vice president of brand, Tillamook County Creamery Association
Tillamook may consider going into the plant-based cheese segment in the future if it can come up with something that can surprise and delight consumers, he said.
"We do not have an adversarial posture on healthy products that people like, and I know that is a narrative in the market," he said. "But I just think we have to be progressive and take a modern view of what the consumer wants, and then create great products for them."
Although Bel Brands is making a strong push into plant-based cheese, Graham said its dairy cheese sector is still extremely important. The company invested in improving the packaging and flavor of its The Laughing Cow brand, which turned 100 this year, and saw solid double-digit growth in the past year. It is also improving functionality and ingredients in its cheeses, including trendy adds like probiotics, which also has helped sales.
Right now, about 85% of Bel Brands' portfolio is dairy-based and 15% is plant-based. The company, which also owns pouched fruit brand Go-Go Squeez, is working to make those offerings closer to 50-50, Graham said.
"[It] is not going to be balanced because we're losing households in dairy," Graham said. "Quite the contrary — we anticipate to continue to grow.But it's really going to be coming from the acceleration and gaining the households in the plant-based and the fruit segments."
The cheese case of the future
The plant-based cheese segment will continue to grow in coming years, industry players and analysts said, but how much growth and who will drive it is yet to be seen.
Tillamook's Prewett said in five years he thinks the cheese case will look very similar to the way it is today. There may be a few more plant-based options, but they will mostly be in specific segments of the cheese market — just like plant-based meat, which is mostly in ground and nugget form.
SPINS' Crumpton expects plant-based cheese manufacturers to expand into more artisanal and craft varieties. While there are some plant-based feta varieties on shelves, Crumpton wouldn't be surprised to see more complex and distinctive cheeses such as Asiago and Limburger.
He also sees plant-based cheese migrating past the dairy case. Better-for-you frozen pizzas and snacks are starting to pick up plant-based cheeses for their products, Crumpton said.
"While the plant-based cheese itself is lightning hot, compared to what's happening in the dairy space, we're seeing that now kind of permeate across the store. The proliferation of products that have those associations are taking advantage of that."
In the next five years, New Culture's Gibson said that his company is likely to undergo some big changes — including having products on the market and transforming dairy-alternative cheeses — but there may not be big developments in the near term.
"Keep in mind that dairy cheese is the only dairy product, at least in the U.S., that is increasing in market size and increasing in consumption," Gibson said. "It is going to take more time for this sort of revolution. ...In five years' time, plant-based cheese will do a pretty good job of capturing some meaningful portion of the market, while companies like New Culture ... scale to these massive volumes that are required to start really shifting the balance in favor of animal-free products."
New Culture may not just be in business for itself in five years. One of its biggest boosts so far came in 2019 when Kraft Heinz's VC arm Evolv Ventures led a $3.5 million seed round of funding for the company. Gibson couldn't say much about the partnership, but said the the two have been working closely together. The legacy Kraft Foods, which got its start as a cheese company in 1903, understands that the world is changing, Gibson said.
"Consumers will choose. How they feel and what they want to consume and incorporate into their diet is completely up to them. Our job is to give them the choice and provide a great breadth of offerings in plant-based to enable that choice to be easy as possible."
President of plant-based food and beverages and premium dairy, Danone North America
"It's just a good relationship with both sides acknowledging that they can provide a lot of help to one another," Gibson said.
In the near term, Crumpton expects more plant-based cheese offerings to be from major brands, but he predicted most would likely come through M&A.While plant-based cheese's current growth rates are likely to slow as the segment gets bigger, he said, it could reach 10% to 12% share of the segment by this time.
But, he said, it could be more depending on both developments in food science and sustainability concerns about the animal-based dairy sector.
"If the type of R&D that they do, [that] these kind of brands are bringing to market, continues to be innovative, then we're going to see that even more turbocharged," he said. "And I think it really has to do with supply on the animal side. If we see a huge dip [in supply] because of increased temperatures and global warming and everything else, that may also be a factor that would help expand plant-based even further."
Article top image credit: Courtesy of Bel Brands USA
4 reasons plant-based milk will keep growing after the pandemic
Dairy alternatives have gone from trendy to on fire since 2020, and analysts weigh in on what will keep the segment booming in the future.
By: Megan Poinski• Published Nov. 24, 2020
In 2019, plant-based dairy was a hot trend that showed solid growth and promise for the future.
Now, amid a pandemic, new innovation and an extremely popular newer entrant to the market, plant-based dairy is on fire. Since stay-at-home orders were issued in mid-March 2020, sales have skyrocketed. They spiked at 75.3% sales growth the week of March 15, 2020, and 58% total growth the week of March 22, 2020 according to statistics from SPINS.
Sales have modulated somewhat, but the growth rate has stayed quite high across the segment, SPINS statistics show.
And dairy alternatives are becoming more widespread. According to Mintel, four in 10 adults in the U.S. lives in a home where someone regularly uses them.
The reasons for plant-based dairy's pandemic success are varied, but analysts say that this trend is not going away any time soon.
"I think that the long-term trajectory for plant based is not a fad. It is much more kind of a change in diet," said Jeff Crumpton, a retail reporting manager at SPINS. "And I think it aligns to a lot of the diet tribes that we see, whether it's a plant-based diet or a vegan diet."
Crumpton said that it's highly likely plant-based milk will eventually make up the majority of the dairy category, but he could not guess how long it would take to get there. In 2020, according to statistics from the Plant Based Foods Association, plant-based alternatives made up 15% of the entire milk market. It had grown at a 20% clip in the year, four times faster than the segment's 5% growth 2019.
It's apparent that the growth rate and market size already looks much different for plant-based dairy. Here are some of the reasons analysts say the growth will continue.
A bright health halo
During the COVID-19 pandemic, millions of consumers have been taking their health into their own hands. They're looking to eat ingredients that boost their immunity and support overall health. And many consumers see plant-based food as a clear nutritional winner.
"It falls within this idea of food as medicine," Crumpton said. "From a demographic standpoint, I think you have one segment that they understand it, they've tried it and they see this as a potential solution."
Karen Formanski, a Mintel health and nutrition analyst, wrote in an email that 39% of consumers use plant-based milks because they think they are healthier than dairy milk.
While conventional milk has many positive nutritional aspects — including being rich in calcium and potassium and fortified with vitamin D — consumers often associate plant-based products with being better for them. In the annual IFIC Food and Health Survey released in May, more than four in 10 said that a product with a description of "plant-based" would likely be the most healthy one out of several options.
Research has found that plant-based milk is not always the healthier beverage, though manufacturers are working now to add functional ingredients and more protein to the mix, Formanski wrote. Califia Farms released a Protein Oat line in 2020 that adds pea protein and sunflower seeds to make a product that's comparable to the protein value of dairy milk, Formanski said.
Even without adding functional ingredients, new varieties of plant-based milk are also bolstering the segment's health halo. Oats are commonly marketed as being heart healthy, Formanski wrote, so consumers may automatically make the connection to oat milk also being good for the heart — even without any specific claims on the package.
Consumers who pick up plant-based milk tend to want those higher nutritional values. According to Mintel, 38% of those who live in plant-based milk consuming households look for high protein claims. Almost half of adults want to see plant-based milk options with more protein.
Supply creates more demand
When consumers first ran to the grocery store in March 2020 to stockpile food and goods for an uncertain amount of time at home, they looked for items that could last on shelves for the long haul.
Canned goods, dry pasta and freezer staples were cleared out, as were shelf-stable plant-based milks. While some plant-based milk products are in the refrigerated section of the store, more are available in center store. And, more importantly, many more plant-based milks are shelf stable than their dairy milk counterparts.
Even if these consumers hadn't tried plant-based milk before, Crumpton said, they were easily inclined to do so as they prepped their pantries.
"They understand plant based. They've heard it enough," Crumpton said. "They're home, and so they're cooking more. I think people get a bit more adventurous when they're not able to kind of get out as much. And so they're using food as a way to connect with their family. They're not going to restaurants in as great a frequency as they would pre-pandemic. All of those things aid the top-line growth that we're seeing for plant-based milks and dairy alternatives."
In a June 2020 report about the pandemic's impact on plant-based dairy alternatives, Mintel found the alternative beverages helped consumers bring variety to their meals at home. This also helps them become familiar with the different plant-based options on the market today. After the pandemic, the firm concluded in the report, consumers are likely to keep the same plant-based milks in their refrigerators and pantries for the health benefits and to continue with the routines they have started.
Plant-based milks are not necessarily catch-all substitutes for dairy milk, Crumpton said. Different milks have different taste profiles, mouthfeel and textures based on the crop they are made out of and the manufacturer.
"It may be that I use almond milkwith cooking in this certain way, but I'm going to use oat milk with my morning coffee," he said.
Oat milk's meteoric rise
While plant-based milk has had great sales growth during the pandemic, oat milk has been a superstar.
According to SPINS statistics, the grain-based beverage, which has only been widely consumed in the United States for a few years, is now the second most popular plant-based milk. The only plant-based dairy product that sells more is almond milk, which has been on top of the segment since 2013.
The growth statistics on oat milk defy conventional trends. Oat milk sales represented a total of $213.35 million in the 52 weeks before Sept. 6, 2020 — an increase of 350.8% from a year before for refrigerated varieties and 106.4% for shelf-stable products, according to SPINS statistics reported by Food Navigator. Between mid-March 2020 and the beginning of October that year, dollar sales of the beverage were up 212%, according to Nielsen.
Crumpton said much of the meteoric rise of oat milk can be attributed to its taste profile, which is richer than many of the other plant-based milks that are on the market. Function is also important. Oatly, a player in the space since the 1990s, first entered the U.S. market through upscale coffee shops, being a non-dairy option for several cherished drinks. Formanski said the coffee shop channel continues to be important for oat milk brands.
But, she said, it isn't the only one.
"Consumers state interest in trying oat milk not only as a beverage addition, but also as a stand-alone beverage, with cereal and as a cooking/baking ingredient," Formanski wrote.
Almonds, on the other hand, are a water-intensive crop. According to Mintel, one in five adults thinks almond milk production is bad for the environment. Formanski wrote this percentage is even higher for consumers between 18 and 44.
Although consumers love almond milk, Crumpton said sustainability issues may force them to reconsider their choices.
"What happens when climate change starts to affect the almond supply in California?" Crumpton asked. "You have brands that are always kind of dipping their toe to understand what sustainability feels like, because, again, that's really core to what a natural [products] consumer is looking for."
Concern about sustainability is only getting stronger during the pandemic, and is likely to continue to be one of the factors that drives consumers' future purchases. Almost half of consumers said this spring that the pandemic has made them more concerned about the environment, with 11% shifting their purchases to more sustainable options in the previous 12 months, according to a study from Kearney.
Always something new
While oat milk is the newest big thing in plant-based dairy, there is more to come.
In October 2020, plant-based burger titan Impossible Foods showed a prototype of its Impossible Milk at a virtual press conference. As Impossible is still in R&D mode, the company did not say what plant proteins the beverage was made from, but its creamy texture, ability to froth and smooth performance in a cup of hot coffee were showcased.
"Impossible Foods ... [has] done a really good job of communicating plant based [meat] to the broadest segment of the population," Crumpton said. "... I'm not surprised that they're working on milk, and the fact that they're working on a product that kind of behaves and tastes and feels and smellsvery similar to a dairy milk means they are going for the same types of customers."
Impossible isn't the only player that is set to shake up plant-based dairy. Beyond Meat might also be eyeing the space. The publicly traded plant-based meat powerhouse filed to trademark the Beyond Milk name in August, though the company has not previously said anything about getting into the dairy alternative space. According to the trademark application, it would cover "bases for making milk shakes; coffee or tea beverages with milk or milk substitutes."
Plant-based dairy is seen as an entry point for other companies using technology to shake up the segment. South American plant-based powerhouse NotCo, which recently raised $235 million, has been selling its NotMilk in U.S. grocery stores since early 2021. NotCo uses sophisticated algorithms to determine the protein composition to make plant-based substitutes that are like the real thing. NotMilk contains pea protein, as well as chicory root fiber, pineapple juice concentrate and cabbage juice concentrate. Maximiliano Silva Figueroa, NotCo’s country manager in Chile, told Latin American Business Stories in July that NotCo's business has grown five times since 2020.
There are still other nuts and grains that are being transformed into new plant-based milk alternatives. Pistachio, pecan, hemp and cashew milks are on the market, as well as new combinations of nuts, grains and proteins. Different flavors are being added to plant-based milks as well, providing a true diversity to what consumers are drinking. Crumpton said that no matter how innovative or how close to dairy milk new products like the one from Impossible Foods will be, it will not detract from the market share or creativity of some of the other options coming on line. Consumers seem to be excited about new options in plant-based milk, and continue to buy more of it.
"I think it gives a brand doing some R&D in that space a deep bench to kind of pull from, so they could have a portfolio that has a little bit of all of them [flavors and ingredients]," Crumpton said. "And consumers, they still get the richness of all of the different flavor profiles. We see that, from an innovation standpoint, the segment grows, as opposed to replacing another product."
Article top image credit: Califia Farms
Why plant-based business pioneers say the sector has just gotten started
Animal-free meat, dairy and cheese business was booming in 2020, but leaders said at a virtual conference that price parity, new tech developments and consumer shifts will drive it further.
By: Megan Poinksi• Published March 25, 2021
If the plant-based food movement is a baseball game, industry leaders say it's only the first inning.
Alan Hahn, CEO and co-founder of mushroom-based ingredient company MycoTechnology, said at a session at the virtual New Food Invest conference in March 2021 that while the plant-based sector is growing, there are still people who are asking why there should be plant-based alternatives and discovering what they are.
"I think we'll be in the fourth or fifth inning when that question flips," Hahn said. "When people say, well, wait a minute. If it costs less, if it's environmentally better, nutritionally better, tastes either at least at parity or better, then the question flips to, 'Why do we need to make that whole animal-based economy?'"
If the analogy is made to a baseball game, Hahn and the two other panelists from the conference session have been in the plant-based food business since the first day of the draft. He shared the virtual stage with Miyoko Schinner, founder and CEO of plant-based cheese company Miyoko's Creamery. She has been writing vegan cookbooks and making plant-based cheese since the 2000s. And Seth Goldman, the third panelist, is founder and calls himself chief change officer at plant-based snack brand Eat the Change. He's also the co-founder of plant-based restaurant chain PLNT Burger and chairman of the board for Beyond Meat.
Even though plant-based eating is taking off, with plant-based meat, milk and cheese all posting market increases during the pandemic, Goldman said that growth is slowed because of the incumbent animal-based food industry. They've spent years marketing meat as the best source of protein, especially for building muscle. Generations of that message makes it difficult for plant-based products to break through and be seen in the same way.
Part of what may get it there, Goldman said, is plant-based products reaching price parity with their animal-based equivalents. Companies are striving to get there, but the only plant-based burgers that are consistently close now are Before the Butcher's Mainstream frozen patties. Last summer, Beyond Meat sold a Cookout Classic 10-pack of burgers, which was also close to the cost of ground beef burgers. And Impossible Foods recently cut the price of its CPG product 20%, which puts it within striking range of beef.
"If you think about animal agriculture, they are getting government subsidies, which keeps their prices artificially low. This industry is not getting a handout from the government. We are not getting grants or subsidies that will lower our price. So we actually have to charge the true price. If you take away the animal. If you take away the subsidies for a glass of milk, you're going to pay something that the average American cannot afford."
Founder and CEO, Miyoko's Creamery
While Schinner said that scale has helped her reduce prices of her plant-based cheese, butter and spreads, plant-based food is still at a competitive disadvantage.
"If you think about animal agriculture, they are getting government subsidies, which keeps their prices artificially low," she said. "This industry is not getting a handout from the government. We are not getting grants or subsidies that will lower our price. So we actually have to charge the true price. If you take away the animal. If you take away the subsidies for a glass of milk, you're going to pay something that the average American cannot afford."
At Beyond Meat, Goldman said it is just a matter of time before the company can undercut the cost of meat. In fact, he said, last year they committed to do that for at least one product by 2025. Inputs at Beyond Meat are much less than the traditional meat industry — Goldman said they use 99% less water and 93% less land — so they will eventually get there.
Schinner pointed out that as precision fermentation technology improves, prices of alternatives will go way down. MycoTechnology transforms mushroom mycelium into a wide range of ingredients through fermentation, and Hahn said its biggest cost so far has been the inputs. But this is changing.
"We now have had two major breakthroughs and have developed a way to take food waste streams — so say fruits and vegetables that would have gone to waste — and upcycle those and use those as growth media, and we're able to reduce our inputs by cost by 90%," Hahn said. "So this is a big game changer."
But the entire plant-based food industry also could use a bit of a shift, panelists said. Currently, consumers have preconceived ideas about how to eat food from plants, like beans and vegetables, Schinner said. Food manufacturers look at plant proteins more or less like building blocks, taking them apart and recombining them in different ways, instead of working to improve the eating experience of the plant they come from, she said.
Hahn said the future of plant-based food should be moving away from meat and dairy analogs.
"I think we need to use plants to their best form: deliver the best nutritional profile without trying to copy what an animal protein or animal food looks like," Hahn said. "That's when we've really made it. When we stop doing analogs and going, 'Hey, this plant, fermented this way, produces this type of food and it's great for you. It tastes great, and it doesn't look like anything you've got from an animal.'"
Consumers also need to see that plant-based food is not inferior to what comes from animals, Goldman said. He works with celebrity chef Spike Mendelsohn on both PLNT Burger and Eat the Change, which launched a mushroom jerky product. Goldman said Mendelsohn sees working on these brands as a challenge similar to those on TV reality show "Top Chef," where there is a limited array of ingredients, but the end result is something that tastes good.
"That's when we've really made it. When we stop doing analogs and going, 'Hey, this plant, fermented this way, produces this type of food and it's great for you. It tastes great, and it doesn't look like anything you've got from an animal.'"
CEO and co-founder, MycoTechnology
"I don't think anyone is going to be sacrificing taste to make the shift," Goldman said. "In a sense, it's freeing."
Funding for plant-based food is at an all-time high — plant-based meat, dairy and egg companies received a record-setting $2.1 billion in investments in 2020, according to the Good Food Institute. Hahn said the sector is undercapitalized compared to tech — a sentiment that has been shared by food and ag tech investors. However, Hahn said a change among big Silicon Valley investors has brought more dollars to the food space. When he started trying to raise money eight years ago, he said investors were more interested in putting their money into something like software, which is developed once and sold millions of times over. Now, they are getting more interested in putting money to support technology to make food, which is constantly developed and manufactured.
And while not many plant-based brands have gone forward with an initial public offering to date — including through special purpose acquisition companies — Goldman said it's more likely to become the norm as the segment matures. After Beyond Meat had its IPO in 2019, it became one of the hottest stocks and propelled plant-based business into the limelight. Goldman said it was an important move for the company, both in terms of funding and independence. While Beyond Meat could have put itself up for sale, he said, they knew there was no company that would invest that much in plant-based meat.
"If we had sold, it would have been sort of folded into somebody's R&D department and marginalized," Goldman said. "When you can stand alone with that vision, you have a much better chance of driving the science and the consumer even further."
Article top image credit: Miyoko's
How coronavirus accelerated demand for plant-based food
By: Megan Poinski• Published June 8, 2020
As consumer interest in plant-based meat has picked up in recent years, it seems the pandemic might have accelerated it.
Just over half of consumers think the food industry should focus on meat-free options to address potential meat shortages from plant closures and processing slowdowns, according to a poll from Rethink Priorities in conjunction with the Humane Society of the United States, which was reported on by Bloomberg.
Half of respondents to the poll of 998 people said they don't think the meat industry cares about the health of its workers. Nearly two-thirds said they don't think the meat industry cares about the treatment of animals.
The poll was conducted at the end of May.
“Covid is shining a light for consumers to start evaluating their own choices and whether or not they want to continue to buy meat,” Josh Balk, vice president of farm animal protection for the Humane Society, told Bloomberg.
Sales of plant-based meat were already on an upward trajectory. According to SPINS data reported by the Good Food Institute and the Plant Based Food Association, sales of plant-based meat were up 18% in 2019, with the category worth more than $939 million. Refrigerated plant-based meat saw sales increase 63%, and plant-based meat now accounts for 2% of retail packaged meat sales.
Plant-based meat has been one of the steady winners at the grocery store since the beginning of the pandemic. In the 13 weeks ending May 30, sales of fresh meat alternatives are up 239.8% compared to last year, according to Nielsen statistics.
While it will take more time to see the true impact of the pandemic on sales and consumer interest in plant-based meat, if anything could more quickly shift public opinion, it could be this kind of outbreak. After all, coronavirus originated from animals — a point that has become a rallying cry for animal rights activists and plant-based meat companies alike.
Plant-based meat, however, doesn't have any of those issues. The factories where it is made are more high-tech and naturally socially distant facilities. Larger plant-based meat manufacturers including Beyond Meat and Impossible Foods have taken precautions against coronavirus outbreaks in their plants. They have not experienced the kind of issues that their conventional counterparts have seen.
Plant-based meat's health halo also could help increase its popularity. Even though scientists have said more research is needed to determine whether plant-based meat is healthier than what comes from animals, consumers in general feel like it's better for them. A 2018 study from DuPont Nutrition & Health found 52% of people who eat more plant-based food said it makes them feel healthier. And in a time where personal health is key, consumers want to do what they can to feel better.
Still, there are a couple of places where conventional meat triumphs over its plant-based counterparts. One is variety. While plant-based meat as a segment has grown tremendously in the last several years, products are still fairly limited. Consumers wanting burgers, sausages and even chicken nuggets have a choice between conventional and plant-based options. But those who are interested in steak can only eat something animal based, even though non-meat alternative companies are working on bringing new options to consumers soon.
Conventional meat also costs less than its plant-based counterparts, for the most part. Even with prices going up at the grocery store — conventional meat cost 15.6% more during the week ended May 30 than it did a year ago, according to Nielsen — plant-based meat has not yet been able to catch up.
Plant-based meat companies say price parity is a long-term goal they are working toward, but note sales are going up regardless of cost. Beyond Meat got close to price parity during the summer with its Cookout Classic value packs. Before the Butcher announced its new Mainstream line in October, which is priced comparably to ground beef. It is expected to start appearing on shelves and menus at the end of 2020.
With the economy in recession, and millions of Americans out of work, the question is whether consumers will be willing to pay a premium price for plant-based products. So far, the numbers may be on the plant-based companies' side. A study from Kearney showed 83% of consumers took sustainability into consideration when making purchases in April — a number that increased as the pandemic went on. If consumers are able to prioritize sustainability over price, plant-based meat may see even steeper gains.
Article top image credit: Courtesy of Impossible Foods
The growth of plant-based foods
The pandemic has driven consumers to reach for items with brighter health halos, with products like meat substitutes and plant-based milk becoming pantry favorites. As the plant-based movement grows momentum, manufacturers of all types are working to create alternatives for dairy products, meat and eggs.
included in this trendline
How Impossible Foods is getting Gen Z interested in plant-based meat
PepsiCo is making 'a much bigger play' for sales in the burgeoning plant-based market
Plant-based cheese is full of startups. Will dairy providers get into the segment?
Our Trendlines go deep on the biggest trends. These special reports, produced by our team of award-winning journalists, help business leaders understand how their industries are changing.
Davide SavenijeEditor-in-Chief at Industry Dive.