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Good Karma CEO eyes $600m opportunity in plant-based yogurt category

By Elaine Watson+

13-Dec-2016
Last updated on 13-Dec-2016 at 02:33 GMT2016-12-13T02:33:20Z

Good Karma dairy-free yogurts are available in blueberry, strawberry, vanilla, plain and raspberry flavors
Good Karma dairy-free yogurts are available in blueberry, strawberry, vanilla, plain and raspberry flavors

In the natural channel, says Good Karma CEO Doug Radi, plant-based options account for 25% of dollar sales of fluid ‘milk,’ but just 8% of yogurt sales. In the conventional channel, meanwhile, the figures are 8% and 1% respectively. “So if you close the opportunity gap [if plant-based yogurt can get to 25%],” he contends, “We’re talking about a $600m opportunity.”

He added: ““The plant-based yogurt category is still pretty small, but it’s set to top $78m in 2016 according to SPINS data and it’s growing 50% year-on-year, so I think every retailer we talk to is aware of the opportunity in this space.

"However, it’s still an emerging category, so some retailers still stock just one or two brands, and it’s not really a ‘set’ or a destination area... yet."

Soy-free, nut-free, dairy-free

But are plant-based yogurts on the market as appealing as the nut-, pea-, hemp-, and coconut-based beverages now carving out such a significant portion of what used to be the dairy case?

It comes down to personal taste, but there is definitely room for more players in this space as consumers pile into the category hoping to ride the ‘plant-based’ wave, said Radi, who was speaking to FoodNavigator-USA as Good Karma’s new flax-based yogurts hit selected Kroger stores ahead of a wider national roll-out with multiple retailers in 2017.

“I think a lot of consumers are still not happy with the taste and texture of some of the products. They also want more allergen-friendly options without nuts and legumes, and we’re dairy-, and nut-, and soy-free.”

Are plant-based milks and yogurts as nutritious as dairy?

And what about nutrition? Are plant-based yogurts – which typically contain water, gums, starches, sugar and relatively low levels of oilseeds, nuts, plant protein isolates or coconut - as nutritious as traditional dairy products, which arguably have a cleaner label and are inherently rich in protein, calcium and other micronutrients?

Doug Radi: "We’re a 20-year old company with a four year old brand.”

Some are definitely more nutritious/appealing than others, said Radi, but focusing exclusively on the Nutrition Facts panel or the length of the ingredients list is kind of missing the point, given that consumers are reducing or avoiding dairy for lots of reasons – some because they just want to and try something new, perhaps in addition to dairy, others because they have a milk protein allergy or lactose intolerance, some because they are vegan, and some because they are concerned about the environmental impact of dairy farming.

That said, Good Karma yogurts - which combine water, cold pressed flaxseed oil, cane sugar, fruit, pea protein isolate, starches, emulsifiers, gums, flavors, vitamins, live cultures and the mold inhibitor cultured dextrose – can hold their own in the nutritional stakes, even though the ingredients list happens to be longer than that of most dairy yogurts, he said.

Each 6oz pot (MSRP $1.69-$1.99) contains 100-130 calories, 5-6g protein and 7-18g of sugar, depending on the flavor. So while that’s less protein than Greek yogurt, it’s a comparable amount of sugar and calories, and you’re also getting 800mg of the short chain omega-3 fatty acid ALA from flaxseed oil, he noted.

And while much of the scientific literature focuses on the longer chain, marine-sourced omega-3 fatty acids EPA and DHA, epidemiological data also points to the cardiovascular benefits of ALA, he said, citing a 2014 study published in the journal Advances in Nutrition, although more randomized controlled clinical trials are needed to confirm this.

A creamy and delicious taste profile

Getting the messaging right is nevertheless key in this space, said Radi, who acknowledged that ‘dairy-free yogurt made with flax-milk,’ with ‘5g plant protein’ and ‘800mg omega-3’ per serving is clearly a more appealing description than, say, ‘Oilseed, starch and gum dessert with added sugar.’

As for sustainability, it’s an important part of the piece, but it doesn’t sell food products on its own, says Radi, who held senior roles at Frito-Lay, Horizon Organic, Whitewave Foods and Rudi’s before joining Good Karma Foods in December 2014, and says the priority is building a fun and engaging brand with great-tasting products that blow the competition out of the water.

Flax seeds contain the shorter chain omega-3 fatty acid ALA (alpha-linolenic acid)

Saving the planet is all very well, he observed, but if your product tastes grim, you’re wasting your time. "Our yogurts have a creamy and delicious taste profile. Flaxseeds have all these omega-3s, but they are also very neutral tasting, and surprisingly delicious. Not everyone likes the taste of soy, almond or coconuts.”

A 20-year-old company with a four-year-old brand

Founded around 20 years ago by Loren Wallis, Good Karma began as a private label formulator for plant-based products and only relatively recently shifted its focus to focus on its own branded products, said Radi, who is based in Boulder, CO: “We’re a 20-year old company with a four year old brand.”

The brand, which is now in around 6,000 stores from Target and Safeway to Sprouts and Whole Foods, includes flax milk, drinkable probiotic yogurts as well as the new spoonable yogurts, with several other new products in the pipeline, said Radi.

We’re making great-tasting plant-based products, we’re not making dairy ‘alternatives,’ which suggests that you have to make a trade off.”

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