Rising Meatless Protein Investment by Food Industry Indicating Accelerating Plant-Based Demand
USA News Group – A new report from Bloomberg Intelligence is predicting that the global market for plant-based foods could see a fivefold growth by 2030. As the demand for plant-based dairy and meat alternatives continues to climb, the food industry is also seeing rising investment in new products and production methods, coming from a variety of ingredient and CPG manufacturers, including newly-public Nepra Foods, as well as established food industry giants such as Bunge Limited, Conagra Brands, Inc., Sprouts Farmers Market, Inc., and Archer-Daniels-Midland Company.
David Wood, CEO of Nepra Foods, just released an open letter upon public trading of his company praising the “favorable tailwinds” in the industry, which helped lead to his company’s recent successful IPO.
In Wood’s opening statement, he labeled Nepra as “much more than just another meat analog producer”, having since its formation in 2016 established a growing business-to-business portfolio providing proprietary specialized ingredients to food producers across North America.
The company’s existing business has already grown at over 100% year-over-year and is targeting to do US$6-8M in revenues this year.
What differentiates Nepra Foods from many of its peers is its hemp-based protein products, backed by a proprietary ingredient called THPTM (Textured Hemp Protein)—all of which are Non-Soy, Non-GMO, Allergen-Free and Gluten-Free.
Their multicategory offerings include, plant-based foods that include frozen meals, plant-based dairy, salty snacks, and meat alternatives that are high in protein and fiber, lower in carbohydrates, and are truly nutritious.
Wood emphasizes his company’s strategic targeting of addressing the challenge of food allergies. In the letter, he cites the WHO’s estimates of between 1-3% of adults globally have some food allergy, highlighting how that number increases to 4-6% for children.
“Producing high-quality and nutritious allergen-free food can be challenging and requires specialized technical creativity,” writes Wood. “The team at Nepra has the experience and skill to take those challenges head-on.”
Nepra’s team is quite familiar with food allergies, given that Wood, and Chief Innovation Officer & Director Chadwick White, were both involved with the success of Udi’s Gluten Free Foods, which was sold to what is now Conagra Brands, Inc. in 2012 for US$125 million.
“Focusing on plant-based foods high in protein and fiber, lower in carbohydrates, and truly nutritious – everything Nepra does is plant-based, allergen-free, and gluten-free,” writes Wood. “In addition, the Company develops and produces proprietary ingredients that are sold to other food producers and used in our own consumer products… We look for long-term trends in the market that will create lasting growth opportunities – such as reducing waste and production issues surrounding the gluten-free baking industry. Thus, the work we do at Nepra pushes the whole industry forward.”
There are many calls for the food industry to adjust to new demands for plant-based protein.
According to Credit Suisse, Bunge Limited is one such food producer that requires more certainty in terms of a plant-based strategy.
“Bunge said it is developing its investment plans for plant-based protein based on what its customers are asking them to do rather than through a major acquisition,” Credit Suisse noted in an August report. “This includes a minority investment in Merit Functional Foods in Canada, a soy protein company in China, and the acquisition of a shutdown food ingredient plant in the US with potential for retrofitting.”
Bunge CEO Gregory A. Heckmantold participants at a September presentation at the Barclays Global Consumer Staples Conference that structural change is emerging around plant-based proteins.
“We’re already enjoying that growth the last few years with our specialty lipids business as we provide a lot of the products that give the mouthfeel and the bite and the taste in those plant protein-based products that people love,” said Heckman. “And now we’re working with our customers backwards and to be a supplier of the plant protein. And that’s something you’ll see us develop over the next couple of years. That won’t be an overnight flip the switch, but we’re excited about that demand that is in place, and our customers are asking us to get involved. We’ve been a commodity supplier there before, and now it’s time to be a value-added supplier.”
Conagra Brands, Inc., owners of the Gardein brand, have been happy with the 33.5% increase in retail sales for its plant-based meat products, which the company says is fueled by “growth that is coming from meat eaters in this space.”
“Meat eaters represent 95% of the total population and represent almost 80% of buyers of the plant-based meat alternative category, and their growth rates in terms of both new buyers and dollar spend is also outpacing that of vegan and vegetarian counterparts,” said Ashley Lind, senior director, consumer insights, predictive science at Conagra Brands in an interview with FoodNavigator-USA. “We expect to see plant-based opportunities to grow in foodservice as the overall industry rebounds, and we’re seeing Gardein gain share in the space.”
Grocery retailers Sprouts Farmers Market, Inc. has been ramping up its plant-based protein offerings in 2021, recently adding OmniFoods plant-based pork-style proteins in August, and Hungry Planet’s plant-based meats in September.
“Hungry Planet is delighted to partner with Sprouts to make our game-changing plant-based meats available to food fanatics across the country,” said Todd Boyman, CEO and co-founder of Hungry Planet. “By delivering superior meats with industry-leading taste, health, and variety, we are providing customers authentically great food, and are developing a very loyal following. Our national launch into Sprouts increases points of distribution to serve shoppers hungry for more.”
Back in July, Archer-Daniels-Midland Company announced an expansion to its plant-based business, through the acquisition of Sojaprotein, a leading European provider of non-GMO soy ingredients—which had more than $100 million in sales in 2020, with offerings in the meat alternative, confectionery, protein bar, pharmaceutical, pet food, and animal feed segments.
“Thirty years ago, ADM invented the soy vegetable burger, giving rise to the plant-based protein segment,” said Leticia Gonçalves, president of Global Foods at ADM. “Today, alternative proteins represent one of our core growth platforms, and as this $10 billion global industry grows to $30 billion over the next decade, we are investing to expand our unparalleled capabilities.”