According to data from the Brightfield Group’s evergi platform, sales of plant-based yogurt fell 9% in the second quarter of this year compared to Q2 2021 – mirroring a similar drop across other plant-based categories, including creamers, which fell 25%, cheese, which dropped 8% and ice cream, which dipped 3%.
The decline can be attributed in part to macro-trends that are shifting shopping habits across the grocery segment, such as ongoing inflation or the natural ups and downs associated with diet trends. But, some of the shortcoming falls squarely on the shoulders of plant-based yogurt makers, who in many ways have failed to meet consumers’ ever-rising bar for taste, nutrition and experience, claimed Brightfield Group.
All hope is not lost though. In this episode of FoodNavigator-USA’s Soup-To-Nuts podcast, Bethany Gomez, the managing director and co-founder of the Brightfield Group takes a closer look data from Brightfield’s integrated research platform evergi to uncover why sales of plant-based yogurt are falling and shares strategies for addressing these forces.
She also reveals where the category is growing, who is buying plant-based yogurt and how this compares to who is targeted in marketing and what other values-based messaging could hep lift the category. Two players in the space – established organic plant-based creamery Forager Project and newcomer Culina Yogurt – also share how they are driving growth and where they see the most potential.
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Where are we now?
When evaluating the potential for plant-based yogurt – or plant-based anything – Gomez underscores it is important to remember that the segment is not monolithic: what is happening in plant-based meat can be very different from what is happening in plant-based dairy. And what is happening within plant-based dairy, be it cheese, yogurt or creamer, may not represent individual players’ or brands’ experiences because what attracts consumers to each segment and each product varies.
“Plant-based has become a very broad category … with several different dynamics underneath” and a consumer base that goes beyond vegan and vegetarian – especially for non-dairy products, Gomez said.
She explained that while there is some overlap in customers between plant-based meat and dairy, plant-based dairy also appeals to consumers who can’t consume dairy because they are intolerant or have an allergy or because they are looking to reduce their consumption of calories, saturated fat and other health benefits – although the health halo around all plant-based is starting to tarnish, Gomez said.
'The percentage of Americans who consume plant-based … yogurt has decreased from 5.4% in Q3 of 2021 to 4.4% in q2 of 2022'
Despite plant-based dairy’s broad appeal, Gomez says it has suffered the same downward sales trend as meat – although data suggests that unlike its protein-focused counterpart, non-dairy may be stabilizing and could see a return to more significant growth in the near future – if stakeholders play their cards right.
“The percentage of Americans who consume plant-based … yogurt has decreased from 5.4% in Q3 of 2021 to 4.4% in q2 of 2022,” but “it is holding stable the last couple of quarters. We’re not seeing it continue to decline,” and research suggests that ‘trendy enthusiasts’ – or consumers who are eager to try new food – continue to engage with the space, Gomez said.
But for plant-based yogurt to build on this stabilization and push out into the mainstream, stakeholders need to understand why they fell and address those factors before sales and consumer engagement grow more significantly.
The ability to reach new consumers is going to 'make or break the category and to be able to expand past this niche 4% adoption'
According to Gomez, the biggest challenges holding back plant-based yogurt are price, evolving health perceptions, and lack of consumer education and awareness.
“The environment that we are in right now is certainly one with a very price sensitive” consumer base that increasingly is revaluating purchases to ensure they are getting the most value for their investment, Gomez said.
This evaluation includes weighing health benefits and nutrient density against price – an area where plant-based yogurt is not as strong with many products offering less protein, and sometimes no probiotics and longer ingredient decks, including fillers and gums that turn off some shoppers compared to its dairy counterpart, she said.
This challenge is compounded by a lack of consumer education and awareness about plant-based yogurt, Gomez said, noting that many consumers who buy plant-based milks likely would be interested in plant-based yogurt but they simply don’t know about them.
“In this economic environment, it’s very difficult, it’s going to require a lot of marketing efforts to really drive that awareness, drive that education level,” said Gomez, noting that cash-strapped consumers are less likely to take a chance on unfamiliar products and risk not liking them.
But she added that the ability to reach new consumers is going to “make or break the category and to be able to expand past this niche 4% adoption.”
Culina Yogurt founder exemplifies untapped consumer base
Category new-comer Culina Yogurt is tackling many of these challenges with its coconut-based Greek-like yogurt, which was created by the self-proclaimed foodie Erin Asaad, who exemplifies the potentially overlooked and untapped consumer base that Gomez mentioned in that health issues – not moral qualms – forced her to give up dairy.
But, as Assad explains, she didn’t want to give up the taste, mouthfeel and health benefits of Greek yogurt, which was a staple ingredient in much of her cooking.
Unsatisfied with the existing non-dairy yogurts, Assad began playing with ingredients and processes in her kitchen – eventually discovering that “a very long fermentation time” of 18 or more hours was the key to creating a deep flavor reminiscent of dairy yogurt with the same probiotic benefits.
She also opted for a coconut base that she described as a blank slate, allowing the yogurt to be used as an ingredient in other dishes from salad dressing to baked goods to pasta and rice dishes.
Appealing to environmental concerns could boost sales
Even though plant-based yogurt faces many challenges, Gomez notes the category is resonating with sustainably-minded consumers who view plant-based yogurt as more environmentally friendly.
For the plant-based creamery Forager Project sustainability and creating products that are better for people and the environment is a core component of its business, product formulation and marketing. But, company founder and CEO Stephen Williamson cautions these values cannot come at the expense of taste, texture and experience.
“Our goal at Forager was to create a product that was good for people and good for the planet, and I think there’s a lot more we can do on both of those fronts,” he said.
Almonds don't cream the way that soaked cashews do
This ethos is what led Williamson to land on cashews and eschew other popular options, such as almond, as the base for Forager Project’s yogurts and other dairy alternatives.
“We started first with almonds and I had two problems with almonds one I think they are huge users of water in a water tight world or watertight region they're grown in. So I thought there would be problems with that. And to almonds don't cream” the way that soaked cashews do, he explained.
But it takes more than soaked cashews to make a plant-based yogurt, and while Williamson said he understands consumers’ desire for products made from a short list of ingredients with which they are familiar and can find in their kitchen, manufacturers must balance consumers demand for taste and a familiar and enjoyable eating experience.
“Every ingredient you put in, you should ask the question, why is it here? What are you getting from it,” and “I always go back to if you don’t win on taste, you’re not going to win,” he said.
This has led him to use a slightly longer ingredient list than dairy yogurt because he needs to recreate the mouthfeel and other properties that come naturally to casein in cow’s milk.
Ultimately, he said, the goal is to make a product that is so delicious that even the pickiest eaters will enjoy it. Project Forager is taking on this challenge with a new product designed for the pickiest eaters among us – children. The company debuted this fall a line of flavored cashewmilk yogurt pouches that Williamson said are a hit with at least one 2.5-year-old who he described as a core taste tester who loves the product.
Is a shakeout on the horizon?
As more brands like Forager Project and Culina innovate within the plant-based yogurt category, Gomez predicts the product selection and quality will appeal to more mainstream consumers – something she says is already happening. And as that occurs, she predicts there could be a shake out in the category with larger CPG companies buying smaller successful brands and helping them scale.
This transition could give the category a leg up because larger players will have broader scale and distribution that can help bring down unit prices, and they have larger marketing budgets to educate more consumers.
While this will help the category overall grow, she acknowledged some smaller, more premium brands likely won’t be able to compete as consumers reach more affordable items from brands and players with which they are more familiar.