KANSAS CITY — The market for plant-based protein is advancing well beyond its previously defined space in beverages and sports nutrition. As consumers continue to express an interest in such ingredients, opportunities are opening in a variety of categories, including bakery, dairy alternatives and more.
Kara Nielsen, vice president of trends and marketing for CCD Innovation Inc., Emeryville, California, said plant-based proteins are bringing new consumers to the market for products featuring the nutrient.
“These people may be vegans, people with allergies or people who are looking for alternatives that are innovative and interesting,” she said. “They are taking the generic protein trend in a new direction.”
That new direction was prominently on display this past September during the Natural Products Expo East trade show that was held in Baltimore Sept. 13-16. By 2020, global sales of plant-based dairy and meat alternatives are forecast to reach $19.5 billion and $5 billion, respectively, said Michele Simon, executive director of the Plant Based Foods Association, San Francisco, during a presentation at the show.
“Big food companies are taking notice of the success of this industry,” she said, pointing to several acquisitions announced in the past year, including recent deals by Nestle and Dean Foods. This past September, Nestle SA, Vevey, Switzerland, acquired Sweet Earth, a manufacturer of plant-based foods, including frozen meals, burritos, breakfast sandwiches and burgers. Earlier in the year, the Dean Foods Co., Dallas, entered into a partnership with Good Karma Foods, a manufacturer of plant-based products made with flaxseed.
Driven by health, environmental and animal welfare concerns, more than a third of Americans buy plant-based meat alternatives, and just over a quarter of consumers said they ate less animal meat in the past year, Simon said.
Nielsen said consumers shifting from animal-based proteins to plant-based proteins may be an issue related to “higher order trends.”
“What is more important when choosing a product?” she asked. “For certain consumers, especially vegans, it is more important that it is vegan. That’s part of the reason why you are seeing vegan yogurts and other products like them.”
Nielsen added that a company like Impossible Foods, Redwood City, California, is also capitalizing on such higher-order trends. Impossible Foods manufactures a plant-based burger that has the taste and texture of a meat-based product.
“They (Impossible Foods) are offering meat eaters an alternative that is not made from meat,” Nielsen said. “Their issue is the environment; it’s all part of their story.”
The market for plant-based products and proteins has momentum. In the past year, plant-based meat and dairy alternatives in the United States grew 8.1 percent, topping $3.1 billion in sales, according to Nielsen data commissioned by the Plant Based Foods Association and the Good Food Institute. During the period, milk alternatives grew 3.1 percent, while sales of cow’s milk declined 5 percent.
Inside the dairy alternative market
Paige Ties, senior technical services manager for Cargill’s Texturizing Solutions business, sees beverages as a significant space for growth in plant-based proteins.
“It’s huge in milks,” she said. “We see a lot of traction in that space.”
The market for dairy and dairy alternative beverages will reach a projected $28 billion by 2021, according to Packaged Facts, the Rockville, Maryland-based market research company. Leading the charge will be plant-based dairy alternatives, which are forecast to represent 40 percent of the combined total of dairy and dairy alternative beverages — up 25 percent in 2016 when dairy alternative beverage alone accounted for $6 billion in retail sales.
This shift away from traditional dairy products stems from growing consumer perception that plant-based foods are healthier than animal-based foods, Packaged Facts said. Additionally, animal welfare concerns have motivated more consumers to opt for plant-based products over animal-based ones.
“Vegetarians and vegans together account for less than 15 percent of all consumers, and their numbers do not grow very rapidly, but a growing number of consumers identify themselves as ‘flexitarian’ or ‘lessitarian,’ meaning that they’ve cut back on their consumption of animal-based foods and beverages,” said David Sprinkle, research director for Packaged Facts. “It is this group that is most responsible for the significant and ongoing shift from dairy milk to plant-based milk.”
In the past few years, several nut- and legume-based milk alternatives have stepped onto the scene beyond the typical soy, rice, coconut and almond varieties. These new and novel non-dairy milks are expected to find a wider audience in 2018, Packaged Facts said. Several up and coming sources of plant protein in the dairy alternative market include pea, hemp and even quinoa.
Pea milk offers several advantages over other dairy alternatives, according to Packaged Facts, which could “make it a hit” with consumers. Pea milk brand Ripple Foods said one serving of its pea milk has 8 grams of protein, the same as cows’ milk, compared to about 1 gram of protein in coconut or almond milk. Ripple also contains half the sugar of cows’ milk — which plays well with the consumer trend of reducing sugars in their diets — plus it contains 50 percent more calcium, vitamin D and iron. Ripple’s pea milk line includes original, chocolate, unsweetened original, vanilla and unsweetened vanilla varieties. Ripple also offers a pea-based half and half product.
New non-dairy hemp milk is a segment with “potential for rapid growth,” Packaged Facts said, as consumers seek new varieties within the plant-based beverage segment. Currently, only 1 percent of the North American population has ever tried a food or beverage made with hemp, according to participants in the hemp production industry. Hemp is packed with omega-3 fatty acids, plant-based protein and 10 essential amino acids.
While quinoa has become a common ingredient in the food space, it has yet to significantly penetrate the beverage segment. However, it is about to, Packaged Facts said. Quinoa milk is high in protein, fiber, vitamins and 9 essential amino acids. It also contains minerals such as magnesium, iron, copper, manganese, zinc and phosphorus and has a low glycemic index.
Another plant-based variety Nielsen said to watch is oats. The Swedish company Oatly has reintroduced its product in the United States, and Nielsen sees possibilities.
“When it was first introduced in the US, Oatly never quite took hold,” she said. “Now they are coming in from the barista point of view; now they are making a real concerted effort to reenter the US market, and they are doing well in New York and out here in California.”
Don’t dismiss the mainstays
While new varieties of plant-based protein receive a significant amount of attention, the more traditional varieties should not be forgotten.
“Soy will always have a place in the market,” Ties said. “A key thing that comes up when talking about vegetable protein is price. It plays a critical role in the market. I don’t think we have fully identified a vegetable protein that can replace all of the benefits soy brings. Proteins like soy and whey have been around a long time and experienced a lot of growth and optimization.”
Price was an issue raised by Nielsen.
“Some of these plant-based items from smaller niche brands are premium priced and premium looking,” she said. “Plant-based yogurts, I would wager, are more expensive than a mainstream yogurt. Because we are in a strong economic place and because millennials and others are choosing for lifestyle reasons, consumers are in a place where they want to buy these products.”