According to Mintel and data provider SPINS, the $2.6bn US soy food and beverages market (in food and drug stores, mass merchandisers - excluding Walmart - and natural stores) has slumped 13.6 percent during 2008-10 and is predicted to decline a further 17 percent during 2010-12.
Blaming the decline on “competitive threats from products with fewer taste and cost barriers, higher prices, soy’ burnout’, and allergies”, Mintel senior analyst David Browne said things were only going to get worse in some segments of the market.
“As more consumers adopt products made with almond, hazelnut, oat, rice, and hemp milk into their diets, moving these into other dairy alternative segments like cheese and yogurt will be a natural progression. This will continue to reduce sales in the soy food and beverages market.”
Launch rate for products with isolated soy protein up 170 percent, 2007-2010
But soy ingredients giant Solae stressed that it was important to make a distinction between soy ingredients and general soyfoods like soy milk, soy sauce and tofu.
Michele Fite, vice president of global strategy and marketing, said: “According to Innova Market Insights data, the launch rate for products containing isolated soy protein in 2010 was up over 170% vs 2007 in the US. Similarly, we have seen strong growth, globally and domestically, in our soy ingredient sales to sectors such as sports nutrition, weight management and clinical nutrition, where the demand for high-quality protein is a driving force.
“As the economy has recovered and companies have refocused their energies toward strong growth opportunities in the weight management and sports nutrition markets, we have noticed an uptick in new projects first quarter this year compared to last year in the US.”
Sports nutrition and weight management
There was also a big opportunity for soy protein suppliers to cash in as awareness of protein’s benefits in managing hunger and promoting lean muscle mass rose, while blending proteins such as whey and casein with soy was also a growing trend in sports nutrition, she claimed.
“Innova Market Insights data for Sports & Energy products that contain isolated soy protein indicated that the launch rate in the US was up 200% in 2010 versus 2007. In the last few years, we have also seen more soy protein … being incorporated into weight management products for the satiety benefit it provides.”
As for the suggestion that consumers were becoming bored with soy, the recently-issued 2010 Dietary Guidelines for Americans specifically highlighted the benefits of soy protein and soy-based food, “the first time in its history”, she noted.
“Additionally, we believe consumers will become smarter about protein sources in the future and begin to distinguish between protein sources and their specific nutritional benefits. In that regard, soy protein holds an advantage over many other plant-based proteins, not only because of its superior protein quality but due to the large amount of nutrition research supporting its health benefits, specifically heart health.”
Growth opportunities: Plant-based proteins and the planet
Soy marketers could also play up the environmental issue, said Mintel’s Browne, who also highlighted significant variation between categories in the SPINS data, with big declines in soymilk, soy-desserts and babyfood in 2008-10 but strong growth in soy-based energy bars (up 20 percent), refrigerated meat-replacement (up 17 percent), refrigerated juices and functional drinks (up 48 percent) and frozen lunch and dinner entrées (up 26.8 percent) over the same period.
“This could include the messaging that soy is not only better for human health, but that it is also better for the environment compared with animal proteins.”
And this would become increasingly important as green issues moved up the agend, predicted ADM Marketing and Customer Development Manager Courtney Kingery: "With global population predicted to reach 9bn by 2050 and with the middle class expected to hit 3.2bn people worldwide by 2020, it’s clear that the world is going to need abundant supplies of nutritious food – especially protein sources. Soy protein will grow in importance as a complete source of protein for the growing world population."
Soy’s moisture-retention abilities also presented opportunities in the gluten-free market as bakery products made with rice flour tended to be dry, added Browne.
Bleak outlook for soymilk; competition from Quorn
But in other areas, soy was in trouble, he claimed: “There was a big rise in the use of soy protein on the back of the Atkins craze, but I think consumers have started to get soy burnout and they are looking at other things, particularly in the dairy alternatives/milk area, where you see much more interest in coconut milk and almond milk”.
There has also been a lot of negative publicity surrounding soy’s impact on hormones, while the GMO factor hasn’t helped, he said. “We’re seeing some companies actively promote the fact that they don’t use soy.” And where they do, they are stressing their non-GMO credentials, he added.
And while there had been growth in soy-based meat replacement products, there was strong competition from rivals such as Quorn, he noted.