The Power of Plant-Based
Starburst, a Mars brand, is launching Plant-Based Original Gummies, a vegan version of their iconic candy. Made without gelatin or animal-based glaze, the new products are available in four of Starburst's classic flavors, including Strawberry, Cherry, Orange, and Lemon.
TCHO, the California-based chocolate company owned by Ezaki Glico (the Japanese makers of Pocky), has announced that they will be transitioning to a plant-based company. While many of their chocolates are already vegan, TCHO is removing all traces of dairy from some flavors as part of their commitment to sustainability. The new move is coinciding with a new, bolder branding as well.
Kraft is launching a vegan version of their iconic mac & cheese in Australia. The new product not only removes all sources of animal products from the formula but comes with instructions on how to prepare the pasta using alternative milk and fat. Currently the product is only available in Australia.
Subway is releasing a vegan bacon hot dog sub sandwich in the UK. Called 'Plants in Blanket' (P.I.B), the name is a play on 'Pigs in a Blanket' (the British bacon-wrapped sausage dish, not to be confused with the US crescent dough wrapped sausage dish). The Subway P.I.B will have a plant-based sausage on a Subway sandwich bun wrapped in vegan bacon. The P.I.B is only available for the holidays. Also, Subway is releasing a plant-based ‘chicken’ schnitzel sandwich in Singapore. The meatless sandwich (it does contain egg white) is made using Nestle’s foodservice brand Harvest Gourmet’s breaded cutlet.
Atlantic Sea Farms has launched new flavors of Kelp Cubes, a line of vegan, gluten-free, sugar-free cubes made with a blend of 100% fruit and Maine farmed kelp. The frozen superfood cubes are marketed as a boost for smoothies. New flavors include Cranberry, Wild Blueberry and Ginger.
Swedish brand Veg of Lund has launched a new plant-based milk made from potatoes. DUG is made through a patented process that blends potatoes and canola oil into an emulsion. The new beverage is said to be ‘deliciously creamy’ and extra foamy for coffee and lattes. The biggest benefit is its sustainability numbers—because of the notorious efficiency of the potato, DUG has a carbon footprint much lower than any alternative milk or real dairy. For example, DUG uses 56X less water to produce than almond milk.
So What? A recent study that found that 1/3 of US children ages 4-7 believe that many animal-based foods, like cheese, hot dogs, chicken nuggets, bacon, shrimp and hamburgers, are made from plants. The researchers hypothesized that one reason for this belief may be because parents and teachers spend all their time explaining to children what to eat, but very little time teaching them where their food comes from. While that seems like a credible guess, the researchers had another hypothesis. When they showed children pictures of animals, plants and objects (i.e., stones, sticks, chairs, etc.) and had them sort by edibility, they found that 2/3 of children put cows, pigs and chickens in the NOT OK to eat pile (along with dogs, cats, sticks and stones).
This simple study with children highlights the two general tensions that are propelling today’s plant-based market with all consumers. First, there is the opacity of modern food processing. While we may find it sad that children don’t know that hot dogs come from animals, we must also recognize that most consumers don’t know what’s in their food. In fact, I’d guess that the presence of animal products in Starburst candies is an unwelcome surprise to the general population. In this way, the plant-based movement is sometimes less a desire for ‘plants’ and more of a push for transparency and control. The relaunching of a product, or development of a new product line, as ‘plant-based’ indicates that effort and care has gone into examining its ingredients and purging it of ‘unnecessary’ additives. In many ways, ‘plant-based’ is the secular version of Kosher certification, a sign that extra attention and oversight has been given.
‘Plant-based’ also resolves the underlying cognitive dissonance many people have about eating animals and animal products. As the study with children shows, it takes enculturation to accept that certain animals are ok to eat, while others are off limits. It also highlights that animal eating, in any form, is tinged with moral implications. Even for those that believe that, as omnivores, humans evolved to eat meat, there is the realization that this belief is ‘complicated’, and its rules subject to change based on where you go and who you are with. ‘Plant-based,’ by comparison, is relatively free of moral complication—few people have cognitive dissonance over eating a carrot.
It’s the unquestioned virtuousness of plant-based that makes it so powerful today. Its lack of moral ambiguity makes it the perfect partner to pair with other virtuous actions like sustainability, wellness, or general health.
What does this mean for brands considering going plant-based? If you want to ‘clean up’ the perception of a processed item, ‘plant-based’ gives you a path. Also, the moral clarity of plants makes them perfect partner to combine with virtuous claims. However, if you are an animal meat-based company, these motivations for plant-based show potential areas to message. Animal-based products should lean into the ‘processed’ nature of many plant-based offerings, exposing the possibility that plant-based doesn’t necessarily mean ‘cleaner.’ Also, they should give consumers the ‘moral ammunition’ necessary to defend against the cognitive dissonance that eating animal is inherently wrong. By showing the surprisingly positive sustainability, nutrition and wellness aspect of meat, you might provide a consumer comfort in not moving to a plant-based alternative.
2022 Predictions
Amazingly, the year is already coming to a close. Another twelve months marked by the pandemic, of staggered (re)openings and (re)maskings, more supply chain woes, Zoom calls mixed with IRL meetings, and a newfound dread of the Greek alphabet.
What will next year bring? Most likely the end of the pandemic and a return to ‘normalcy.’ But what will that mean? Below, in no particular order, are my predictions for the coming year.
Major Alternative Investments
Recent loses by Beyond and Maple Leaf Foods has momentarily cooled the red-hot plant-based alternative market. However, a significant pivot away from animal-based dominance in the food industry feels almost inevitable at this point. Just in the last few weeks, meat giant JBS acquired the Spanish cultivated protein company BioTech Foods, General Mills incorporated Perfect Day proteins into their new Bold Cultr product, Starbucks started trialing animal-free milk (also made by Perfect Day), Beyond added two Tyson executives to their ranks, and fungi-based alternative company Meati hired former General Mills CCO Scott Tassani as their new president.
In the coming year I predict even bigger moves and investments within precision fermentation, cultivated and biomass startups. I think the Great Reshuffling will see a lot more CPG talent leave traditional CPG and head toward these new alternative technology companies. In fact, by the end of next year, I believe one (or more) CPG, foodservice or ingredient company will acquire or sign a joint venture with one of these startups: e.g., Nestle-Perfect Day, Danone-The Every Company, McDonald’s-UPSIDE. Whether to lock-up IP or to ensure a piece of the future, these types of investments are coming quickly.
Return of Value (but also more Premium)
As we roll into 2022, two data points are pointing toward leaner times. First, the latest Fed report shows that inflation is spiking faster than it has in 40 years. As the food and beverage industry struggles with supply chain and weather issues, more and more CPG companies are raising prices. Second, the record pandemic personal savings that consumers accumulated is rapidly dwindling—especially among lower income folks.
The last time we saw these metrics converge was in the 1970’s, when grocery and gas prices skyrocketed, causing President Nixon to place a 6 month pause on meat price increases and consumers to rush to buy chest freezers and clip coupons. This era saw the introduction of such budget-stretching products as Hamburger Helper, Cup Noodle, and Manwich.
I predict that we will see similar innovations in the year to come as consumers look for relief from high prices. While research shows that consumers will continue to buy their favorite food items up to a 40% price increase, that doesn’t mean they’ll buy as much or from your brand. Hard discounters, like Aldi and Lidl, are waiting in the wings to pounce on shoppers eager to fill their carts for less. I believe private label, in general, will win back the points they’ve lost in the pandemic, and then some, as shoppers look for deals. As prices climb and consumers pinch pennies, there is a real opportunity for brands to look for high volume wins. This doesn’t necessarily mean moving to rock bottom pricing, instead it could mean innovative pricing strategies to win competitive advantage.
On the flip side, I foresee many CPG companies continuing to sell off under-performing brands and acquire/expand into higher margin, premium categories like pet food and wellness. During every downturn, consumers are willing to pay premium for some items, especially those that give them the most joy (i.e., pets) and appear to do double duty (i.e., wellness items).
Into the Grocery Metaverse
The pandemic accelerated a trend that was slowly (some would say painfully) progressing: the modernization of traditional grocery. Microfulfillment stores are growing, ecommerce deals are booming, and retailers are experimenting with hybrid digital shopping methods (e.g., Walmart partnering with Meredith Corp to allow consumers to shop via recipe content, HEB livestreaming cooking classes on Facebook, and Albertson’s providing shoppable videos).
In their 2021 ‘Year in Groceries,’ Instacart reports that 44% of Americans have tried to cook a social media trending meal in the last year and 1 in 3 say that ‘social media has changed how they approach cooking at home.’ At the same time, appliances are integrating into the digital world. Weber bought connected oven June, and GE’s newest line of WiFi enabled ovens started to be automatically updated to cook the latest craze. Just this Thanksgiving, GE pushed a new ‘turkey mode’ to users, ensuring better tasting turkeys all around.
My prediction is that in the coming year, retailers and will take all the data they’ve been collecting during the pandemic (on and offline) and turn it into profit. This means more ‘hyperlocal’ strategies to meet underserved niches. This might mean radical changes in total store SKU assortment as data is used to drive store-specific attributes. For manufacturers, this could mean closer ties to specific retailers as data show potential profitability in offering exclusive deals for one retailer versus another. Also, with more data, it will mean more targeted cross-promotions by brands.
Lastly, I believe 2022 will be a year of grand experimentation in DTC subscriptions by CPG companies. Armed with data and full coffers, CPG companies will try their hand at meal kits, snack kits, personalized health/nutrition and more. Look for more moves like Kraft-Heinz’s recent 85% acquisition stake in German DTC meal kit/spice company Just Spices as well.
Automation (Silently) Ramps Up
When we think of automation in the food sector, we think of robot waiters and inventory-checking, aisle-rooming machines. However, real automation looks nothing like these consumer-facing sci-fi wannabes. Instead, true automation is quickly being integrated behind the scenes. Spurred by worker shortages and safety issues during the pandemic, companies have made major investments that we’ll be seeing feeling for decades.
Tyson has revealed a $1.3 billion capital investment in plant automation to ease worker shortages and speed throughput. Ultrafast grocery delivery is coming online in New York and Chicago thanks to behind-the-scenes last-mile automation. Kroger and Ocado have broken ground on a 200,000 sq.ft. automated fulfillment center in North Carolina, allowing thousands of online orders to be assembled in minutes. In foodservice, Buffalo Wild Wings is testing out a robotic wing fryer, Jamba Juice has robots making smoothies right now, and salad QSR SweetGreens recently bought the restaurant automation company Spyce.
In 2022, I predict major capital investment across the CPG and foodservice industry to increase line efficiency, protect against labor shortages and any future Black Swans (e.g., another pandemic). The result will be interesting partnerships (like Starbucks and Amazon joining together for an automated coffee shop) and even more interesting products that take advantage of automation.
Carbon, Carbon, Carbon
2022 will be the year where every retailer and brand will be talking about sustainability. From carbon neutral eggs from Kroger, Neutral brand milk at Whole Foods, 30% PCR High-density Polyethylene Milk Jugs, or McDonald’s opening their first net-zero restaurant, the industry is going all in on sustainability.
I predict quite a few brands will fumble—overreaching on their promises and straying too far off brand message in the hopes of resonating with their target consumers. However, what I think will work are the concepts of carbon capture and regenerative agriculture. Carbon capture because it puts a hard metric to a nebulous concept, something for consumers to use for comparison (no matter how iffy the numbers really are). Regenerative agriculture because it appeals to the promise of ‘healing,’ and at the same time, offers a chance for wonderful storytelling about renewal, second chances and hope. Something that is sadly lacking today and will be much needed in 2022.
Renewed Weight Management
Messages on weight and wellness were tamped down during the pandemic. But now that we are seeing the light of post-pandemic we are all wondering, what was the result of disrupted schedules, minimal socialization and new eating habits? Its complicated. According to epidemiological data from King’s College London (and their Zoe Covid Symptom Study) people did gain weight, but about the same number of people got really interested in losing weight and increasing their fitness. However, NHS data reveals that, for those that gained weight, they gained on average 5 lbs. more than people had three years previous.
What that means is that we now have newly engaged fitness enthusiasts as well as people that put on more weight than normal. Together, this makes me believe that we are in for a surge in weight management and fitness lifestyle products—everyone will be interested in improving themselves in 2022. Some new products will focus on known lifestyles like Keto—well real keto is fading fast, but lazy keto is growing (see Papa John’s new oven-baked Papa Bowls that contain just pizza toppings, or Whisps new breading and topping products that find new uses for their cheese crisps). However, I’m also intrigued by new messaging that is popping up that softly connects immunity with energy, digestion and weight, and products that use adaptogens (like mushrooms) to do the same (like So Good So You’s Immunity shots).
Until 2022!
Culture Matters will be on hiatus until the New Year. I’d like to thank everyone for reading in 2021. This newsletter has seen a massive surge in subscribers in the last year (~20K!), so thank you for passing it on.
See you in the New Year everyone!