Culture Matters
Can plant-based be saved? Plus, the climate change conversation you should be having
Saving Plant-Based from Itself
Bolthouse Farms, now owned by Butterfly Equity after being sold by Campbell’s in 2019, has created a new sub-brand called Wunderoots. The line of products currently focused on carrots made into rice, noodles and ‘carrot dogs.’ The latter are carrots that are shaped and seasoning to resemble and taste like hot dogs. The carrot dogs are available in Classic American Style, Chorizo Style and Sweet Italian Style.
Käserei Champignon, via Champignon NA, has launched Rougette Bon·fire Cheeses, grillable rounds of cheese that can be used to make vegetarian ‘burgers.’ In the tradition of paneer or halloumi, the semi-soft cheese is available as-is or marinated in olive oil and herbs. The cheese is all-natural and lactose-free.
BFY sauce brand Otamot (that’s tomato spelled backward) has launched a new line of pizza sauce. Available exclusively at Whole Foods, the new sauce contains, in addition to tomato, sweet potato, carrot, butternut squash, red pepper, red beets and sweet onion, plus fresh basil and extra virgin olive oil. The sauce is gluten free and contains only 3 grams of sugar.
UK brand Rootles has launched a line of chocolate covered, carrot-based biscuits. Made from 35% root vegetables (a mix of carrots and sweet potatoes), the resulting biscuits are lower in sugar and higher in fiber than comparative products. Each pack of three is 120 calories.
Freshly, recently acquired by Nestle, has launched a new line of plant-based meals called Purely Plant. The DTC meal service announced that the new line will include proprietary plant protein blends including its signature Rainbow Harvest Plant-Based Burger and Purely Plant Crumble. The products are made using a one-ingredient pea protein blended with vegetables, legumes, seeds, pulses, and whole grains. Meals can be heated and served in three minutes with no prep required.
So What? The plant-based trend has been on a tear for the last several years, however storm clouds may be on the horizon. Beyond Meat, while beating analysts’ estimates for revenue, announced a wider than expected loss for its second quarter, sending stocks tumbled 4%. Meanwhile, recent research from Mintel shows that the plant-based label may be losing some of its credibility. Just as the natural and organic labels lost some steam as they proliferated, the same may be happening to plant-based. Mintel points to consumers losing trust as ‘plant-based’ labels are plastered on increasingly processed products.
As an industry, we do this to ourselves. Not intentionally, of course, but when we see a trend catching fire, we are quick to generate products with similar labels to capture the excitement, then proceed to ride it to the end (Exhibit A: Pumpkin Spice and the new Pumpkin Spice Cup Noodle). The problem is that, unlike flavor trends, health and wellness offerings are ‘faith based.’ Trends like ‘organic,’ ‘plant-based’ and even ‘keto’ are predicated on certain spoken (and unspoken) beliefs that cannot be disturbed, or the whole trend may fall apart. These beliefs may be around the maximum grams of sugar, how its made or even where its sold. In other words, health and wellness trends are fragile.
As more and more plant-based products pop up that push the boundaries of healthfulness, we may see the faith in the category wane. However, all is not lost. Manufacturers, if they want to extend the plant-based trendline out into the profitable future, need to return to simpler roots. In other words, plant-based can’t stop being about the plants. Proclaiming plant-based, then loading up a product with plant-derived sugar alcohols, fibers and mysterious ingredients is not engendering trust.
The Climate Change Conversations That You Should Be Having
Right now, most CPG companies think about climate change as a marketing or CSR issue. Don’t get me wrong, most of these companies take it seriously and are committed to reducing their greenhouse gas emissions, their plastic usage and their role in deforestation. However, very few are thinking about climate change as a strategic issue, considering how a warming, chaotic world will tangibility affect their portfolio—and that is a missed opportunity.
We all know the big picture of climate change—painted in extremely dire terms with last week’s UN special report. However, how many of us have considered the knock-on effects of a 1 degree rise in temperature to our portfolio? Or the trickle down caused by environmental regulations to product distribution?
Let me put it another way, if I had told two years ago that a world-wide pandemic would cause people to buy more groceries, you would not be surprised; its straight-line logic from quarantining to eating at home. However, if I told you that a pandemic would make it difficult for companies to package products, you’d likely need some explanation (i.e., a spike in Amazon shopping and pizza delivery leading to cardboard shortages).
Its these less considered effects that always surprise us but might have been foreseeable with some planning. Lately, as I see fires and 100°F temps blanketing most of the world, I’ve starting thinking about the less considered ramifications of climate change. Here are just a few:
· Goodbye to Gas: The fossil fuel industry loves to use the phrase ‘clean burning’ when talking about natural gas and propane. However, according to the EPA and independent commissions, the burning of natural gas leads to 33% of all CO2 emission (much of that is from industry). For that reason, there is push to phase out natural gas for home heating and cooking. While many are fighting it, its likely we will see a future with more electric and induction ranges and fewer gas stoves and grills. The implication being, quite a few production plants rely on natural gas for heating and processing. Change over will not only be costly, but experimentation will be necessary to maintain quality. On the consumer side, gas ranges are in 35% of US homes. Induction stovetops appear to be the heir apparent—how will that change how consumers cook and your product formulations and instructions?
· Hotter summers, wetter winters: For most of the US and Canada, climate change will likely mean we will see triple digits in the summer and fewer snowflakes in the winter. While a few degrees doesn’t seem like much on paper, it could make the difference between consumers cooped up inside or comfortably traveling. Is there a ‘soup season’ if winter never comes? Is grilling season longer? Will air fryers (a device that many consumers buy specifically because it doesn’t heat the house like an oven can) become even more popular? Will appetites change (i.e., less food, lower carbohydrate foods, cooling foods, etc.) with a hotter climate? Will consumers be less interested in cooking in general?
· Rewriting the GMO narrative: Even the mildest predictions on climate change forecast a significant effect on crop growing patterns, water availability, and blights. For example, scientists believe that wheat might be especially susceptible to disease in a warmer world (e.g., wheat rust). Likewise, olive growing regions are having a difficult time maintaining the narrow range of weather conditions that the fruit enjoys, leading to a decrease in yields of olive oil. In fact, one study showed that 80% of the land suitable for olive production in the Middle East will disappear in the next 50 years. One solution might be GMOs. From drought resistant corn to disease resistant wheat, experimental GMO crops are showing promise in feeding a warmer world. The question is, can we have the GMO conversation with consumers again? If the food industry wants to have food to sell in the future, is it in our best interest to change the conversation from “GMOs make tastier tomatoes” to “GMO will save the planet from starvation?”
· More Dangerous, Less Nutritious Food: A freak freeze in Arizona’s fertile Yuma region in February of 2018 may have damaged romaine lettuce just enough to make it a perfect carrier for the Shiga-toxin producing E. coli O157:H7; in the end, 96 people were hospitalized and 5 people died. Scientists believe that climate change could radically increase the number of food borne illnesses in the future, prompting the need for an overhaul of the way we handle and process raw ingredients. In addition, a UN report shows how climate change can lower the nutrition of crops, reducing the protein and vitamin levels. How might this change consumers view on staple fruits, vegetables, grains and legumes? Is the industry ready for the huge food safety issues? How will they maintain trust? Will consumers move to supplementation to make up for less nutritious foods or will there emerge quality guidelines to verify the nutrition in products? Will companies need to fortify products to make up for deficiencies?
· The menu of the future is Midwestern wine, jellyfish and black truffles: While the news is full of reports of how climate change could devastate current crops, you hear less about what crops might prosper in a future world. Jellyfish, it turns out. Reports show that cephalopods (i.e., jellyfish, squid, octopus and cuttlefish) have been increasing in number since the 1950’s. Unlike other marine creatures, cephalopods are happy to adjust to warmer water. Similarly, black truffles, those rare, coveted fungi, might increase their growing region in the future. And, to go with those black truffles, wine. But not ordinary wine, but Michigan, Wisconsin or Minnesota-grown wine. Early research is showing that the upper Midwest is becoming an ideal grape growing region. Which tells us that soon, we may need to pivot production locations and crops as the climate changes. Could we start talking about that now? Instead of cricket protein, why not jellyfish protein?
A few of my clients now have ‘war rooms’ specifically set up to strategize contingencies for COVID-19 (and a few are already thinking of getting ahead of the next pandemic). My suggestion is that companies begin to incorporate climate change planning into their long-term plans. If you aren’t war gaming with climate change top of mind, you aren’t going to be ready for the future.
Multi-Purpose Launches
Johnsonville is launching a new line of Sausage Strips, fully cooked rashers of sausage that “…you use like bacon.” The pork-based product contains 9 grams of protein per serving and comes in four varieties: Original, Spicy, Maple and Chorizo.
DTC meat provider Rastelli’s has launched Round Hot Dogs, the classic sausage but in a circular form. A ridged surface makes them better for grilling.
So What? On their surface, both products serve to broaden the usage and appeal of a brand’s core products. By changing shapes, Johnsonville and Rastelli’s were likely looking to expand their dinner appeal. However, I’m intrigued by both these products for a few other reasons. First, there is the keto/low carb component. If you talk to low carb consumers long enough, you realize that variety is a huge issue. While having burgers, steak and bacon for every meal might sound great at first, by month 3 you are craving something different. Sausage that you can sprinkle and a hot dog that is easier to eat sans bun are more keto-friendly. Second, I appreciate that the alternative shapes open up the use of these products to occasions outside of the traditional. Most consumers probably see Italian sausage and hot dogs as dinnertime fare, but by changing the shape, now breakfast and snacks are in scope.
Finally, the Johnsonville product may be much more than a smart way to frame break sausage, it might be a way to get ahead of legislation. For those of you not close to the meat industry, California’s recent passage of Prop 12 has caused a wide-ranging tsunami across the pork (and chicken) business. Basically, Prop 12 requires all raw pork sold in California to be produced from pigs raised in much different environments than they are now (e.g., more square footage, more breeding stalls, etc.). The problem is that only 1% of current pig farms meet this CA standard. Plus, this isn’t just a California issue, as California raises a tiny fraction of the nation’s pigs. What that means is that come January 1st, 2022, getting raw bacon in California is going to be difficult. However, Johnsonville might have found two ways around the issue: (1) The law doesn’t apply to pre-cooked product; (2) It only applies to whole muscle and whole muscle cuts (so ground pork is fine; yeah, I don’t get it either). If Johnsonville did this strategically—I salute you!
Brands I’m Watching
Popular meal kit maker HelloFresh has quietly launched a DTC grocery service. HelloFresh Market allows consumers to use the HelloFresh platform to order add-ons to their meals include fresh produce, sides, desserts and pantry staples. Consumers can not only order these products as a quick grocery fill-in, but HelloFresh also offers ‘chef bundles’ where their in-house chefs recommend specific product combinations to make meals. So far, HelloFresh Market has partnered with a series of brands, such as Epicurean Butter, Pillsbury, Intelligentsia Coffee, Annie’s, and Vive Wellness Shots, with more on the way.
So What? COVID-19 gave meal kit providers a much-needed boost but, unless they start to offer new benefits, they will likely decline again as the world opens back up. That’s why the HelloFresh Market makes so much sense. In my experience with consumers, even the most active meal kit buyer quickly grows tired of the service. Once they’ve run through the menu, collected the recipe cards, and gathered their handful of favorites, they lose interest in the whole program. As a standalone service, once the habit is broken, its extremely difficult to garner a return, with past consumers assuming a ‘been there, done that’ attitude. However, providing groceries may keep consumers in the franchise longer. Now, even if they get tired of the kits, they may visit for staples. Then, when menus are refreshed, they are still engaged with the service. The problem, of course, will be in offering a selection and speed that rivals companies like Walmart or Amazon (Fresh or Whole Foods). Why split your groceries among several providers when just one will do? HelloFresh Market will need to offer unique benefits (more like chef bundles) to make this dual service work.
AB InBev, makers of Busch beer, have introduced Dog Brew, a pork bone broth for your four-legged friend. Made of vegetables, herbs, spices, water, and pork broth, Busch says that it “provide[s] your best buddy with a nutritious and tasty snack that helps to promote a healthy digestive system.” Available online through the company’s Beer Gear shop for $15/4-pack.
So What? Before we critically assess how ‘on brand’ this product is for Busch, it’s important to note that Dog Brew is sold via the company’s merchandise shop, next to the replica Clydesdale horse blankets, Bud Light Retro 90’s fanny packs, and Busch Beer Soap. Therefore, it likely falls in the company’s advertising and/or licensing budget rather than their product P&L. Instead, I found this product interesting because it represents potential insight for pet food companies. Not so much the product itself (pet broths are quite common), but the beer drinker + pet connection. The fact that Busch has a whole section on their website devoted to enhancing the connection beer drinkers have with their dogs is fascinating. For example, having a beer holder that comes with an inflated dog toy that looks like a bottle of beer (Barkweiser: The Good Boy of Beers). Perhaps it’s something about wanting to share good times with a friend (that can’t drink beer)? Does this mean there is a human desire to share joys that are off limits to dogs (chocolate, nuts, garlic, tomatoes, and grapes)—could a pet food company leverage this? It also is a good reminder that there are always non-compete industries your company could learn from.