The plant based food market is awaiting explosive growth. If the investments made in the plant based food market is anything to go by, this industry saw 5 times more growth in 2021 than in any single year! Furthermore, more than 50% of global food and beverage brand owners are likely to invest their new product development and R&D budgets in plant-based products. Several global retailers are already en-route to incorporate their commitment towards the plant based food market. For instance, Tesco committed to increasing sales of meat alternatives by 300%, while Amazon Foods promised to widen its plant-based food sales in the years to come.
Future Market Insights sat down with CXO’s and Business Leaders from the plant based food industry across the leading plant based brands, large plant based food ingredient providers, alternative protein suppliers, and other prominent players in the plant based ecosystem to discuss the reasons behind this expected growth, the lucrative markets to go after and future growth prospects. This is an interview transcript of Alison Rabschnuk, Business Development Director at Kerry
https://www.youtube.com/watch?v=RzJIZJZPv9I
How has the plant based food market evolved in the past few years from your perspective?
The plant based food market is really evolving from an initial focus that was just on taste and indulgence. Now the focus is shifting to the original reason why consumers eat plant-based food, which is health. We are going to see more focus on nutrition, and less on processed ingredients. Until now a lot of the focus on plant based food market has been on macronutrients. The probable underappreciated area is micronutrients. As consumers start to replace more of their meals with plant-based meat, they are going to probably start focusing on some of those micronutrients.
There will be renewed focus on ‘clean labels’ essentially ingredients tag with very recognizable names. It’s a real fine balance to actually create these plant based food market products that check all of these boxes. The bar is set high for plant based foods. Consumers are expecting them to be healthy, have very short and recognizable ingredient tags, and be on par from a price perspective with the animal products they are replacing and they better taste as good!
Another way the plant based food market is evolving is in new product formats. Beyond the usual burgers, we are now seeing more of chicken formats like nuggets, tenders, strips, chunks, grounds. We are going to see more plant based egg companies come onto the landscape as well. We have been talking a lot about plant based meat market but the same is happening in the plant based dairy market, so it will go beyond the plethora of plant based meat. It is early days in the plant based food market, and there are endless ways it can evolve. I mean really again if you think of all of the many kinds of formats that animal products come in, there is an opportunity for plant-based companies to replicate those using plant ingredients. Same thing from a species perspective, there has been a lot of focus on beef, there has been a lot of focus on chicken and I think there will be more focus on pork. We are going to see more plant based egg companies come onto the landscape as well. Options are out there, and thats really exciting, you can find plant based milk that is made from everything- from peas, cashews, oats, soys and really so many incredible combinations. Now a huge range of creamers with coffee, plant based whipped cream, heavy cream, cream cheese, cottage cheese, dips, dressing sauces are being seen. So the whole category is really exploding from those initial product formats that were very recognizable to consumers.
We at Kerry use consumer insights to help us understand what innovation is needed to tap into consumers and from that perspective there are several areas of innovations we are focusing on
- Clean label notion - How do we actually help manufacturers with ingredients that are recognizable and clean label for the plant based food market. We are trying to replace ingredients such as methyl cellulose, or titanium dioxide which more natural variants
- Maintaining texture: There is a huge focus on creating ingredients that can mimic the succulence, texture and taste of animal products
- Innovations in the protein: Focus on R&D is on the proteins themselves, mostly on the way they are manufactured and in the way they perform under high temperatures. At Kerry, we are using various forms of extrusions, for example high moisture extrusion to arrive at that
- Sodium reduction: As more consumers really start focusing on the back of the pack nutrition, they are going to want to see lower sodium levels in these foods. And that's something for which we already have solutions and we are committed to solve them for the betterment of the plant based food market
Can plant based foods mimic animal products, an important competing factor in plant based food market?
I think for the plant based foods market and the products that really have the highest velocity and the greatest sales are the ones that are mimicking animal meat. That's not to say that there's not a place for products that are more traditional vegetarian products that actually may have black beans and corn in them. The market is really big enough to have a wide variety of products for consumers. But I think we are focusing on the products that are really appealing to the meat reducers. These are the consumers who do not want to sacrifice their meat eating experience and taste experience; rather they are looking for something that is healthier and more sustainable. It is not an easy task to balance the texture, taste and healthy profile. This is why Kerry has a lot of R&D, scientists and culinary chefs who work with our customers to help grain all of those ingredients and technologies together to do just that.
What has been the journey and growth strategy of Kerry in the Plant Based Food Market?
Our company's vision is to reach global population with sustainable nutrition, under which we have four priority areas and one of them is plant based food market. Although it is a major consumer trend but also it is a sustainable way to feed the global population. Kerry started as a dairy cooperative; so we understand the fundamentals of what makes dairy products perform like they do. We are also in the meat industry for almost 50 years and this allows us to translate our ingredients into plant based versions. We have a portfolio of technologies today under what we call the Radicle™ portfolio that range from base proteins, flavors, coatings and most important, food protection.
We have established sales in North America and Western Europe but the highest growth areas we forecast in Eastern Europe and Asia Pacific. Also, the consumption patterns are different and so are the ingredients. An ingredient that we may be able to use in North America may not be in use in Europe due to different regulations. So for manufacturers, it is really important to work with companies that have that level of understanding in the plant based food market.
What would you say about Kerry’s top markets?
Consumer demand for our plant based food markets is from all over the world. Kerry is a global company, working over 150 different regions of the world, so we keep tabs on the plant based meat market. We already have teams working with customers on plant based product development in most areas where we do business. North America and Western Europe have the most established sales. But the highest buyers were seen in North America, Eastern Europe and Asia Pacific. What is really essential for product manufacturers, is working with companies that understand, for example, the regulatory landscape of those companies. So an ingredient that we may be able to use in North America, we may not be able to use in Europe. So it's really important to work with companies that have that level of understanding. Also another important thing is the manufacturing point where all these ingredients are actually made, what is their sustainability story of where all the ingredients are coming from to make the final product.
Do you believe the plant based food market can achieve commercialization and scale?
From the Plant Based Food Market, specifically milk has already achieved mass commercialization and that product category has got 40% household penetration and already captured 15% share of the market. It took few decades to get to that point. Also from the Plant Based Food Market, the Plant based meat market is now on its way to mass commercialization, although it's really early days because it still makes up less than 2% of all the meat sales. The economies of scale will help bring prices down and achieve more mass market penetration. Some manufacturers are solely focused just on the price and they are rethinking the manufacturing process by replacing the traditional methods of extrusion with inventive measures that can lower the manufacturing cost.
What challenges the Plant Based Food Market is faced with?
One of the biggest challenges in the plant based food market is actually in finding contract manufacturers. Many of the companies, not just the start-ups but some of the large brands don't necessarily want to own the equipment/facility that is needed to produce all of the different kinds of products they may be producing. So they turn to contract manufacturers and there are not very many options and the existing are operating at full scale. This is a big gap the plant based food market is faced with when it comes to operations.
What is the growth outlook for Plant Based Food Market for next 5 years?
This plant based food market is really just getting started from the perspective of product development, product format and Kerry is well poised to seize that opportunity because we already have such a broad portfolio of solutions to make help products that taste really good, are healthy and sustainable. COVID-19 has brought in unique opportunities wherein because of meat shortages, consumers were turning towards alternative proteins. This has helped the plant based food market greatly.
Today, more and more food service companies are focused on offering plant based food options and that is a good signal because these are one of the first places where consumers often try alternative products.
The future will eventually start to include some of the technologies that are included in all proteins, beside just plant based food. More and more companies can be seen in the precision fermentation space who are making ingredients to help solve some of the challenges such as succulence and authenticity for the growth of plant-based food market. Cultivated meat is in its early days and it will be interesting to watch how this industry can potentially work with some of the plant based companies to sell hybrid products that are a mix of both of these technologies.
