Household penetration of plant-based beverages has doubled in five years to more than 30%, says WhiteWave Foods
Speaking to analysts on the firm’s fourth quarter earnings call, CEO Gregg Engles chairman & CEO said the plant-based beverages category was delivering “robust” growth in the “mid-teens” in Q4, driven by almond milk, which grew 30% YoY, but that there were still huge opportunities to increase awareness.
“We believe that the development of plant-based foods and beverages is still in the early stages and that many opportunities exist to expand the category to appeal to a broader set of consumers… I think the entire refrigerated set in five years is going to look very different than what it was today on many different categories.”
Cashew beverages provide more milk like creaminess and taste but with lower calories and fat
Blaine McPeak, President, North America, added: “If you go back five years, we've effectively doubled the level of household penetration from the mid-teens to the 30% territory, which is remarkable.
“We continue to introduce products that consumers find more and more palatable against the milk frame of reference and have lots of other attributes that consumers like and so as we increase the number of offerings here, we increase I think the potential audience.”
One good example was WhiteWave’s recent launch of cashew beverages, which provide “more milk like creaminess and taste but with lower calories and fat”, said Engles.
“We're also expanding our commitment to plant-based foods with the re-launch of our Silk dairy-free yogurts. We have significantly upgraded both the formulation and packaging… and for the first time are producing them ourselves at our newly commissioned [facility in] Pennsylvania.”
We're in the very early stages of building distribution in China
WhiteWave – which has a significant presence in plant-based foods in Europe via the Alpro and Provamel brands – also entered the Chinese market in December with almond and walnut-based beverages under the Silk brand in single serve and multi-pack formats, he said.
“We're in the very early stages of building distribution in China and have been receiving positive initial feedback from customers and consumers.”
Acquisition opportunities: Expect us to be aggressive…
Asked about acquisition opportunities at WhiteWave – which was spun off from Dean Foods in 2012, acquired organic produce giant Earthbound Farms in late 2013, and bought fellow plant-based foods specialist So Delicious in late 2014 - he said:
“You should expect us to aggressively look to build our businesses but also to be disciplined about creating long-term strategic value.”
He added: “The good news is that because of the attractiveness of the space in which we live, there is, in fact a lot of dynamism in the food business with respect to companies starting businesses and building businesses in this arena that then become available for sale when they move past the highly entrepreneurial phase.”
2014 results: We continue to diversify the Earthbound brand beyond packaged salads
Denver, Colorado-based WhiteWave Foods - which also makes products under the Horizon Organic, TruMoo, Land O Lakes brands – posted a 45% rise in adjusted operating profit to $304m on revenues up 35% to $3.4bn in 2014.
Organic growth (excluding the acquisitions of Earthbound and So Delicious), was 12%, said Engles, who noted that the “Europe foods and beverages business continues to grow at an exceptional pace.”
Asked about plans for Earthbound Farms, he said: “We continue to diversify the brand beyond packaged salads with a rapidly growing line of frozen fruits, vegetables and smoothie mixes. Our innovation plans for 2015 include frozen fruit and vegetable blends and new varieties of salad kits for consumers seeking convenient, healthy eating options."
We've proved that the Horizon brand can travel beyond the dairy case
Meanwhile, recent moves to extend the Horizon brand into mac & cheese and snacks had proved that the brand could stretch beyond dairy, he said:
“We're pleased with the results … We achieved our targeted levels of distribution and validated our hypothesis that the iconic Horizon brand can travel beyond the dairy case. Additional innovations are planned for this year.”