Plant-Based Brands Struggle in a Crowded Market

Plant-based meat has transformed into a billion dollar industry over the past decade, and market space for new and emerging brands is growing increasingly limited. According to Nielsen data, annual plant-based sales rose 42 percent to $888 million from March 2016 to March 2019. And with major companies like Tyson Foods, Perdue, Nestlé, and Conagra now offering their own versions of the concept, competition is fiercer than ever.

As reported in June, Tyson Foods became the largest meat producer to join the plant-based segment with the launch of its meat alternative brand Raised & Rooted. The new brand offers blended meat burgers and chicken nuggets composed of pea protein. Tyson Foods had previously invested—and, two months prior to the launch of Raised & Rooted, divested—in plant-based producer Beyond Meat.

Seth Goldman, executive chairman for Beyond Meat, is not afraid of the large corporations infiltrating the plant-based market. He maintains that only quality, tasteful brands will last in the long-term. “At some point, not all those products are going to make it on the shelf. Not all of them are going to stay on the shelf.”

However, Goldman readily admits that he and other plant-based brands did not think the market would become so competitive so rapidly. “The acceleration in plant based is just taken everyone by surprise,” adds Goldman. “It's been far quicker and more aggressive and more robust than anyone expected it to be. We always believed it would go to this level. It's just surprising how quickly that has happened.”

Founded in 2009, Beyond Meat went public earlier this year. As a smaller, plant-focused company, the brand is able to quickly revamp products in response to customer feedback, current scientific understanding, and technological capabilities. Beyond Meat enjoys numerous lucrative partnerships with such restaurant and fast food chains as Dunkin’, Subway, and TGI Fridays. The company recently added plant-based sausage and chicken options to its menu.

Meanwhile, Nestlé will release the plant-based Awesome Burger to shelves this fall. Perdue has already seen success with its plant-based chicken nuggets, and Conagra is increasingly promoting and investing in its meat alternative brand Gardein.

And what lies next in terms of plant-based innovation? "Nothing is off the table,” says Goldman. “Anything that is a meat-based occasion is fair game."

Big Food is Fostering Innovation

Large corporations have been noticing how consumers have been favoring products made by independent startup food companies, since a good chunk of those provide craft, high-quality, niche, and, a lot of times, healthier products.

Needless to say, big food wants in. Especially, since this specialty food segment has a tremendous growth potential.

So, how is big food seeking innovation?

Companies like Campbell Soup, Chobani, Kellogg, Kraft Heinz, Nestlé, PepsiCo, and Tyson Foods are creating innovation centers and/or partnering with existing incubators to help niche brands grow and flourish.

PepsiCo

Pepsico’s new center for innovation is called “The Hive.”

According to Food Dive, “this incubator will be a separate entrepreneurial group outside of the core headquarters that will help nurture niche products already in the portfolio,” like for example Stubborn Soda.

As Foodable has reported in the past, PepsiCo also partnered with a Chicago-based, food and beverage incubator, The Hatchery, in order to look at other startup brands that have the potential of becoming a possible venture for the beverage giant.

Tyson Foods

Earlier this year, Tyson Foods announced that it will be working with two incubators—Plug and Play and 1871—linking the food giant to innovation hailing from Silicon Valley and Chicago.

That’s not the first time Tyson showed it’s commitment for innovation. In fact, the company launched a venture capital fund in late 2016 “to invest in companies developing breakthrough technologies, business models and products to sustainably feed the growing world population,” according to the company website.

Since then, Tyson has invested in brands like for example Beyond Meat, that promote sustainability and others that promote the internet of food, like FoodLogiq.

Tyson is spearheading innovation through its own brand, ¡Yappah!, which aims to fight food waste by utilizing “forgotten” ingredients like rescued vegetable puree and spent grain to make protein crisps, and investments in companies like Future Meat Technologies, an Israel-based “biotechnology company aiming to transform global meat production through distributive manufacturing of fat and muscle cells, increasing food safety and reducing ecological impact worldwide,” as stated in the company’s website.

Chobani

Chobani is another company looking to foster innovation through its Food Tech Residency. The company set out specific challenges in the food and agriculture value chain they would like to tackle (like food waste, food safety, water conservation, logistics, etc.) and invites like-minded, early-stage tech and agriculture startups to apply for funding.

Currently, the brand is hosting it’s fourth incubator class, since it launched the program in 2016, with companies developing products like tea, hummus and allergen-free baking ingredients. Alongside the food startups, two tech companies will be participating in Chobani’s inaugural Tech Residency Program—CinderBio and Skyven Technologies.

Watch the video above to learn more and stay tuned to other Industry Pulse episodes to keep up with all the innovation happening around your business! To learn about other consumer trends involving sustainability like plant-based meals, watch the video below:

Food Tech and Incubators Are All The Rage

Food Tech and Incubators Are All The Rage
  • Food technology is creating a space for more brands and restaurants to become innovative in how they meet consumer demand.

  • Being innovative means being able to understand your consumers’ needs and providing a unique solution.

Food technology has had one of the largest impacts on the foodservice industry since social media.

In this episode, Host Bill Bender unpacks with the panelists what exactly innovation in the foodservice industry means and how it can either improve or hamper the growth of the industry.

Is this a fad or a complete shift in the model of how food innovation will occur in the future? Take a listen for more insights on how technology is innovating how we meet consumers’ needs.


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This Food Supply Blockchain Between IBM, Nestlé and Walmart Aims To Improve Food Safety

This Food Supply Blockchain Between IBM, Nestlé and Walmart Aims To Improve Food Safety

Global food safety is a major concern in the world.

Retailers and food companies, like Nestlé and Walmart, have announced a blockchain collaboration with International Business Machines Corp. (IBM), one of the largest information technology companies in the world, to help address concerns and help “strengthen consumer confidence” in the foods purchased.

IBM is tasked with identifying the “most urgent areas” across the global supply chain that would benefit from the blockchain, as reported by “Forbes.” “Many of the critical issues impacting food safety such as contamination, food-borne illness, waste and the economic burden of recalls rest though on a lack of access to information and traceability.”

The blockchain will fill in the gap that currently exists since the supply chain is currently not being overseen and it is hard to trace problems to the actual source.

Data will help identify the source through this proposed blockchain.

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What You Can Learn From Nestlé Toll House Café by Chip Franchisee Incentives

What You Can Learn From Nestlé Toll House Café by Chip Franchisee Incentives

Finding the right investors for one's business can be an arduous task. Between meetings, presentations, and coming up with the best ways to market a concept– an operator can be left exhausted at the end of the day and sometimes to no avail.

One way to find investors to buy into your franchise is to start investing in your business yourself.

While there are many ways to help your business grow, like investing in your company culture, hiring the right kind of team, and improving the product quality of a business– when it comes to scaling, things can get tricky.

One effective way to get the attention of people with the big bucks is by creating attractive franchise incentives and limited-time offers that investors simply can’t resist.

A good example of this is currently being rolled out by Nestlé Toll House Café by Chip, which recently announced a “Buy 3 Get 2 deal,” along with 50 percent off franchise fee in 30 regional malls.

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