Get In On Alternative Proteins

September 1, 2017 04:00 AM
 
The Impossible Burger from Impossible Foods

Protein continues to drive sales across food categories. Yet 60% of millennials believe meat is not required to meet their dietary protein needs, according to research from “The Power of Meat,” a 2017 study by market research firm 210 Analytics.

Some turn to seafood or eggs to fill the gap, but more young consumers are gobbling up products made from beans, lentils, nuts, seeds, quinoa and other plant-based proteins.

A Growing Selection. Millennial buyers are seeking variety and ease of preparation. They also have concerns about their health and food costs.

“Consumers are continuing to seek out alternatives, especially to meat and dairy products,” says Michele Simon, executive director of the Plant Based Foods Association.

Over the past few years, entrepreneurs have started a variety of companies to compete with animal-based products. In July 2016, Redwood City, Calif.,-based Impossible Foods introduced its Impossible Burger made of proteins from wheat, potatoes and soybeans. The burger is on menus at restaurants in states such as California, New York and Texas. Beyond Meat, based in El Segundo, Calif., has sold its Chicken-Free Strips, composed of soy and pea proteins, since 2012. The company’s plant is in Columbia, Mo., and it sells its products at Whole Foods, Wal-Mart and Target.

Disruption extends beyond meat-like products to include beverages. Los Angeles-based Califia Farms produces a popular dairy-free almond milk for distribution through supermarkets as well as online direct-to-consumer subscriptions.

Founded in 2010 as a partnership with a family of California growers, the company saw sales of its non-dairy beverages and creamers, coffees and juices grow 77% in 2016, says Greg Steltenpohl, Califia’s co-founder and CEO.

“The dairy case of tomorrow will be increasingly balanced between plant-based and animal-derived,” Steltenpohl says. “This doesn’t just apply to beverages, but also cultured products such as plant-based cheeses,
butters and yogurts, which will, we believe, be a significant part of this trend moving forward.”

Potential For Partnership. As the plant-based foods market continues to expand, it will create new end users for top operators’ commodities.

Yet there are some caveats. For example, many companies in the plant-based industry use crops that are organic or non-GMO, which can make sourcing ingredients domestically a challenge, Simon says. Low supply in the U.S. often forces companies to purchase commodities from Canada or even Europe. U.S. farmers who can collaborate with plant-based protein companies could add profit to their bottom line.

Many plant-based companies also view these new markets as a way to communicate with another important
constituency: consumers. “We view our brand as a link between farms and consumers,” says Steltenpohl of Califia Farms’ educational efforts. “Farmers who embrace the idea of transparency, and the infrastructure to support it, will be well-positioned to share the growth of our product categories.”

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