Friday, April 24, 2020

Navigating the New Norm of Plant-Based, Non-Dairy Foods

Photo source: Plant Based Foods Association

It’s time to toss away most market research and sales trend data and start fresh, a sort of spring cleaning, a reboot. While some flavor preference data remains valid, along with interest in health and wellness, it’s a new marketplace. Make sure you stay relevant in order to participate.
With that said, there’s new retail sales data that supports some of the old data. 

COVID-19 shopping has shown us a number of things. For starters, the plant-based meat consumer and the plant-based dairy consumer are not necessarily the same person. This is something that the “old data” suggested, and new shopping habits support.

We have known that most plant-based meat consumers are flexitarian. Prior to COVID-19 they explored meat analogs out of curiosity, and if the product was liked and they bought into its sustainability messaging, they often repurchased. However, now during these trying times, most plant-based meat cases remain well stocked, while beef burgers and chicken breasts are flying out of the cooler. The flexitarian wants the real deal and most vegans are not interested in fake meat.

Blended meat and poultry products are a different story, as these contain real meat and are simply mixed with more plant-based ingredients. This might be plant proteins, legumes, grains or vegetables. Think chicken breast stuffed with cauliflower and quinoa, or beef and lentil burgers.

The plant-based dairy consumer, on the other hand, tends to be someone who is avoiding dairy. Maybe it’s a vegan or someone with digestive issues. While some flexitarians like mixing things up, the core user of non-dairy foods is the dairy avoider. This has been shown in various studies and still holds true.

Don’t believe me? According to IRI data, provided courtesy of the Midwest Dairy Association, for the week ending April 12, 2020, as compared to the same seven-day period in 2019: total store dollar sales are up 12.7% compared to a year ago (the prior week was +13.4%). Dairy aisle sales are up 32.1% (the prior week was 30.1%).

Fluid milk sales are up 15.5% (volume sales) and 20.6% (dollar sales). In the previous week, sales were up 13.7% (volume) and 19.8% (dollar). But there’s also growth in plant-based dairy products. Refrigerated alternative beverages are up 14.9% (volume) and 19.1% (dollar) compared to 16.9% (volume) and 19.1% (dollar) in the previous week.

While I don’t have data on other plant-based dairy categories, it is safe to assume that the beverage buyer continues to purchase other non-dairy products. Frozen and cultured were and will likely continue to be the most popular.

In early March, the Plants Based Foods Association released 2019 sales data. It’s important to recognize there was power in plant-based dairy last year and it will likely continue into the new norm.

U.S. retail sales of plant-based foods grew 11.4% in 2019, bringing the total plant-based market value to $5 billion. The total U.S. retail food market had grown just 2.2% in dollar sales during this same period. This data covers the total grocery marketplace and was commissioned from SPINS, a wellness-focused data technology company and leading retail analytics provider.

Sales of plant-based milk-type products grew 5%, comprising 14% of the entire fluid category. Emerging plant-based dairy categories grew faster. Plant-based yogurt was up 31% in 2019 and plant-based cheese grew 18%.

Here are some new plant-based products in the marketplace, many from dairy processing companies.

siggi’s, the pioneer of lower-sugar yogurt with simple ingredients, is now in plant-based cultured category. The product contains three times the protein and 40% less sugar than leading yogurt alternatives.

The launch of siggi’s plant-based recipe comes after two years of development and fills key gaps consumers have desired from similar non-dairy products. The recipe contains 10 grams of protein, 8 to 9 grams of sugar per 5.3-ounce cup, and is made with simple, recognizable ingredients. The product features a thick and creamy texture and comes in four flavors: Mixed Berries, Mango, Raspberry and Vanilla Cinnamon.

The siggi’s plant-based product line is made with a proprietary blend of coconut, macadamia and pea protein. True to siggi’s long-held commitment to lower sugar and simple ingredients, this innovation contains more protein than sugar in each cup.

“I am very excited to offer consumers a plant-based option of our popular products. Like our dairy products, our plant-based products are rich, creamy, lower in sugar, and higher in protein than what’s available on the market today. Nearly 15 years ago, we started a low-sugar, simple ingredient revolution with our signature skyr, and now continue to deliver on that commitment in plant-based as well,” says siggi’s Founder and Chairman Siggi Hilmarsson.

“We are really excited to enter the plant-based segment and offer a truly unique product that delivers on what consumers have asked for,” says Carlos Altschul, president and CEO. “We are proud to continue to enhance the yogurt aisle through innovation.”

Unilever is adding Non-Dairy Sea Salt Caramel Bars to its Magnum Ice Cream brand, joining Classic and Almond varieties. Certified vegan, master chocolatiers source cocoa beans from Rainforest Alliance Certified farms and pair them with a creamy vanilla base made with a blend of coconut oil and pea protein.

O’MY frozen dessert has grown from availability in less than 100 stores at the beginning of 2019 to 1,400 today. O’MY is thoughtfully produced, and includes both Non-GMO Project Verified and Fairtrade Certified ingredients, with 70% or more organic. Each pint carries the Certified Plant Based icon. All of the recipes are crafted to be free from major allergens, including wheat/gluten, dairy, peanuts, tree nuts, eggs and soy.

With the majority of people limiting their consumption of sugar to some degree, O’MY is moving beyond its allergy-friendly promise to now also contain less sugar while still being made with real ingredients. O’MY recently introduced two new flavors--I Love Chocolate and Cake Walk--with just 2 grams of sugar per serving. The brand is also growing its core line with Cake Batter.

Perry’s Ice Cream is growing its non-dairy Oats Cream brand with two new flavors: Cherry Fudge and Vanilla. The new flavors join the seven that entered the market about the same time last year. The original flavors are: Apple Strudel, Blueberry Pancake, Coconut Caramel, Oat Latte, Peanut Butter Coffee Cake, Peanut Butter & Cookies and Snickerdoodle. The vegan lineup is a good source of fiber (a nutrient of concern in the U.S. diet) and made with whole grains.

Danone North America is growing its yogurt alternative offerings. New Silk Almondmilk Yogurt Alternative Mix-ins comes in four varieties. They are: Apple Cinnamon, Coconut Chocolate Almond, Maple Chocolate Banana and Mixed Berry Chia Granola.

There’s also new So Delicious Coconutmilk Yogurt Alternative Pairings in four varieties. They are: Coco Almond Crunch, Key Lime Pie, Salted Caramel Cluster and Spiced Blueberry.

“For the past 100 years, we have always put the diverse interests of consumers first, and year after year, our innovations are leading the category--growing it and bringing consumers into the yogurt aisle--whether they are new or returning,” says Pedro Silveira, president-yogurt. “We’re incredibly proud to have started and ended the 2010s with breakthrough innovations and look forward to making the yogurt aisle a vibrant and exciting destination in the American supermarket as we enter a new decade.”

He said this at the end of 2019. Not only have we entered a new decade, it’s a new marketplace, a new consumer.

Earlier this week, Danone (global) reported that 1Q20 sales rose to $6.7 billion, up from $6.6 billion for the same period in 2019. This was attributed to consumers stockpiling in Europe and North America during March. Like most consumer packaged goods (CPG) companies Danone withdrew its full-year guidance due to the unpredictable economic impact of the coronavirus.

I will end with what I found to be a very helpful read in understanding the new norm: “Analysis Tips During Very Uncertain Times” from “CPG Data Tip Sheet: Transforming your syndicated data into business insight.” Link HERE.

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