SUBSCRIBE

Breaking News on Food & Beverage Development - North AmericaEU edition | APAC edition

News > Markets

Read more breaking news

 

 
FoodNavigator-USA's Soup to Nuts Podcast

Soup-to-Nuts Podcast: What is driving the booming sales growth of plant-based products?

1 comment

By Elizabeth Crawford

03-Jun-2016
Last updated on 06-Jun-2016 at 14:24 GMT2016-06-06T14:24:37Z

Soup-to-Nuts Podcast: What is driving the booming sales growth of plant-based products?
Soup-to-Nuts Podcast: What is driving the booming sales growth of plant-based products?
Loading the player...

Sales of plant-based alternatives to animal products are booming, thanks in large part to improved sensory qualities, expanded availability and increased consumer access to information about their health and environmental impacts, according to category stakeholders who participated in FoodNavigator-USA’s inaugural Soup-to-Nuts Podcast.

Reflecting on SPINS data commissioned by the newly formed Plant Based Foods Association that shows sales of plant-based products grew 8.7% in the last two years to reach a whopping $3.5 billion, the trade association’s executive director Michele Simon attributed the growth mainly to two converging trends.

“One is the information that keeps coming all the time about the myriad benefits of transitioning to a plant-based diet, whether that is a desire for improving your own health and that of the environment or about animal cruelty issues. There’s so much information out there that consumers have access to that … they’re realizing the decisions they make every single day really do have an impact on the world around them,” Simon said.

The other “little explosion” that is driving sales of plant-based products is increased availability of higher quality and more variety of plant-based foods which is proving to consumers that they don’t have to sacrifice taste or satisfaction when they bypass animal products for plant-based options, she added.

At the same time that this “bottom-up” revolution of consumers interest is fueling growth in the category, there is a simultaneous “top-down” approach from innovative companies that are advancing food technology to further contribute to the segment’s tremendous growth, said Bruce Friedrich, executive director of The Good Food Institute and co-trustee of New Crop Capital, a $25 million VC fund that invests in plant-based and cultured products.

He explained, “One of the things that we’re very excited about at The Good Food Institute is the degree to which the really big picture and the people who are interested in technology at large are seeing the potential for food technology to address some of the world’s biggest problems,” such as how to slow climate change and how to feed 9 billion people by 2050, which “we certainly are not going to do with the extraordinarily antiquated and inefficient system of cycling crops through animals in order to eat animals.”

Access to information, new products attracts new consumers

Greg Steltenpohl, co-founder and CEO of the plant-based dairy alternative beverage company Califia Farms, agreed with Simon and Friedrich’s assessment, noting that “digital engagement tools and digital knowledge access is accelerating all of this new awareness around” the benefits and potential of plant-based foods.

As a result, he noted, there is “a great opportunity for brands” that can help consumers engage with and understand plant-based diets, and the flood of products entering the market.

One way Califia Farms is doing this as “a small company that is kind of the underdog” is by offering consumers fun, engaging packaging, flavors and a variety of products that meet multitude niche desires, Steltenpohl said. For example, Califia Farms doesn’t just offer large containers of non-dairy milk as an commodity-like alternative, it also offers plant-based coffee creamers and ready-to-drink dairy-alternative beverages, such as horchata and protein shakes.

Taste & health lead the way

Steltenpohl also agreed with Simon and Friedrich that plant-based product manufacturers must win on taste, especially if they want to make it in the baskets of shoppers who do not have ethical qualms with animal products.

He noted a survey of 2,500 consumers commissioned by Califia Farms found taste was the No. 1 driver for all people who have shifted to plant-based alternatives to dairy. Specifically, he said, 67% of people surveyed converted for taste.

Not far behind that at 65% was the perception that non-dairy alternatives are healthier than dairy options, he added.

Younger shoppers’ “passion” for animal welfare is a driver to watch

Significantly lower on the list of reasons why consumers buy plant-based alternatives to animal products currently are ethical concerns, but that could change in the near future, Steltenpohl said.

He noted that only 40% of shoppers currently select plant-based options because they are concerned about humane production and animal welfare, according to the survey commissioned by Califia Farms.

However, he said: “I would caveat that by saying that I think as the consumer trends younger, you get louder and more passionate concerns about the ethical aspects. And I believe, that passion together with a generational shift is going to drive those concerns higher as we move forward.”

This shift is one that larger food companies will need to pay attention to in the near future, he said, noting that while these consumers are still young and not yet driving the numbers, “their passion way out indexes any prior generation’s passion for these ethical concerns.”

Sustainability concerns increasingly will drive future growth

Building on this and prior observations about the power of technology to quickly spread information about the impact of animal-based products on the planet, Eugene Wang, founder of vegan seafood company Sophie’s Kitchen, believes sustainability concerns also will carry more weight in the future.

As an example, Wang cited a recent Facebook post from a “loyal fan” of Sophie’s Kitchen that featured a picture of a wild caught fish, which is widely believed to be the more sustainable seafood option, with statistics that showed how for each pound of wild fish caught, there is another five pounds of other species that are caught, killed and discarded.

“This once little-known secret is not unfamiliar to a lot of people now thanks the Internet, social media and smart phones,” he said.

To meet consumers’ growing demands related to sustainability, Sophie’s Kitchen carefully measures how much environmental impact it has, Wang said. For example, he added, “what’s going on in the ocean and the sea is really hard for anyone to measure, let’s be honest. So, what our approach is that we should probably use our land-based plants to make all these seafood alternatives.”

Cultivating flexitarians offers sales potential for the future

With an eye towards fueling future growth of plant-based alternatives, Wang encouraged manufacturers not to focus exclusively on vegetarians and vegans, but rather to appeal to flexitarians, which represent a larger and growing segment of the population.

He explained that in the US about 40% of the population is actively seeking plant-based foods versus their conventional animal-based counterparts, and that the majority of these are flexitarians, or people who eat vegetarian or plant-based food some or most of the time but “are not really full-time vegetarians.”

Taking a step back to look at the global picture, Wang added that about 60% of Germans are flexitarians, in addition to 5-10% of the population in China and Japan, and 40% of the people in Taiwan and India.

“If you add all these numbers up, you are close to 300 million [people] … who are what we call flexitarian and that’s close to the size of the US population,” he said, adding, “Right there, you’ve got a very beautiful business opportunity” that continues to grow.

1 comment (Comments are now closed)

Podcast mp3?

Is the podcast available via iTunes or any of the other main podcast players? Most of us listen while on the move, so need to be able to put them on our phone to listen to.

Report abuse

Posted by Cal
02 August 2016 | 12h182016-08-02T12:18:28Z

Related products

Soup-to-Nuts podcast: The return of consumers to home kitchens

Soup-to-Nuts podcast: The opportunities & challenges of consumers' return to home kitchens

Despite continued pressure from the on-the-go lifestyles that dominate today’s culture and have fueled...

Soup-To-Nuts Podcast: Key strategies for innovation from Kraft Heinz

Soup-To-Nuts Podcast: Key strategies for innovation & renovation from Kraft Heinz

A commonly held perception of the ongoing renaissance in the food and beverage industry...

Soup-To-Nuts Podcast: What does it take to win a pitch slam?

Soup-To-Nuts Podcast: What does it take to win a pitch slam?

For time-strapped entrepreneurs who are brave enough to take the stage, competing in pitch-slams...

Soup-To-Nuts Podcast: Can duck be a dark horse of animal proteins?

Soup-To-Nuts Podcast: Can duck become the dark horse of animal proteins?

When it comes to eating meat in the US, chicken, without a doubt, is...

Soup-To-Nuts Podcast: The business case for kosher certification

Soup-To-Nuts Podcast: The business case for kosher certification

Ethical claims on food and beverages sold in the US are almost as ubiquitous...

Soup-To-Nuts Podcast: Hemp is overcoming hurdles to become superfood

Soup-To-Nuts Podcast: How hemp is overcoming hurdles to become the next superfood star

Nutrition-packed, environmentally sustainable and already notoriously well-known – although partly for the wrong reasons...

Soup-To-Nuts Podcast: Seeds emerge as superfood powerhouse

Soup-To-Nuts Podcast: Nutrient-dense seeds emerge as superfood powerhouse

Nuts and seeds in the US are finally reaching superfood status, thanks in part...

Soup-To-Nuts podcast: 3 trends driving growth in bottled water

Soup-To-Nuts podcast: Three trends driving growth in the bottled water category

After years of steady growth in the high single-digits, consumption of water in the...

Soup-To-Nuts Podcast: grain-free vs ancient grain trends

Soup-To-Nuts Podcast: Gluten free movement spawns divergent grain-free vs ancient grain trends

As the tenacious gluten-free trend continues to grow and mature into a market behemoth...

Soup-To-Nuts Podcast: Agency enforcement and litigation targets

Soup-To-Nuts Podcast: FDA & FTC move forward with enforcement even with some regulations in limbo

New regulations and draft guidances may be on hold at many federal agencies until...

As soda sales fall, kombucha rises

As soda sales fall, kombucha rises

Tumbling soda sales have opened the door to the mainstream market for a variety...

Bonafide Provisions expands bone broth's appeal with Drinkable Veggies

Bonafide Provisions expands the reach and appeal of bone broth with Drinkable Veggies

As recently as two years ago, bone broth was virtually unheard of by the...

Defining dietary fiber at the 2017 IFT show

VIDEO: Should we define dietary fiber on the basis of what it is or what it does?

Which ingredients should be classified as dietary fibers and why? Elaine Watson caught up...

Sugar Reduction: What’s next? At IFT, companies weigh in

How will added sugar labeling change the market? At IFT, companies weigh in

The controversial requirement to list added sugar on the nutrition facts panel has divided...

Corbion's trans fat-free emulsifiers allow manufacturers to 're-engineer' cakes

Corbion's trans fat-free emulsifiers allow manufacturers to 're-engineer' cakes

"The conversion away from partially hydrogenated oils is really an opportunity to re-engineer cakes...

Cargill R&D VP talks ‘processed’ food, EverSweet, at IFT 2017

VIDEO: Cargill R&D VP talks ‘processed’ food: ‘All food is made of chemicals’

To many consumers, ‘processed food’ is just another term for ‘junk food.’ It’s hard...

Entomo Farms talks edible insects at IFT 2017

Entomo Farms: 'We’re one of the most recognized [edible insect] brands across the world now'

Canadian bug powder supplier Entomo Farms is still doing most of its business with...

Clean meat labeling and regulation in focus at IFT 2017

VIDEO: Will we need a new regulatory framework for clean (cultured) meat?

Producing ‘clean’ meat by culturing cells – instead of raising or slaughtering animals -...

IFT 2017 green banana flour in focus

VIDEO: ‘Green banana flour has the functionality of a starch and the label of a fruit…’

One product that generated quite a buzz at the IFT show this year was...

Retail competition heats up as consumers seek more ethnic products

Competition among retailers heats up as consumers seek more diverse, ethnic products

Consumer demand for products that are authentic and ethnic is not only prompting brand...

Key Industry Events

Promotional Features

Content Provided by Fonterra

Way forward with whey protein