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Welcome to the Community Call Podcast.
I am Melissa Travers, Director of Community here at BevNET & NOSH, here with my co-hosts Monica Watress and Mike Schneider.
If you're enjoying the show, please follow and review us on Apple Podcasts, or your listening platform of choice.
Monica, Mike, so great to see you.
And Monica, I got to see you in person last week, all the way from Kansas City to BevNET headquarters in Newton.
But you were here?
You've made coffee for me, Mike.
You know what?
We went to market basket.
In the rain.
In the rain, yeah.
We missed you.
You know, I saw that and on the one hand, I was happy for you, but on the other hand, I was really jealous.
How much did we talk about Melissa in the car ride?
The whole time.
The whole time.
I saw it and I wanted to be happy for you.
Monica was worried that you were going to be sad, and I was too.
Yeah.
I was like, Melissa gets to go.
I was really glad that you went.
What did you buy there, if anything?
Or was it more of like an observing mission?
Donuts.
And kombucha.
And I also got a commemorative tote bag.
She got the one with the photo of Market Basket on the front.
I thought maybe the Demoula's one because that one looks really vintage, it's super cool, and it's bigger.
But she went for the-
I say collect them all.
I thought about it, actually.
Next time I go back, I'll get another one.
Well, I am so glad that you got to visit the Mothership.
So how else was your visit?
Oh, it was great.
It's always really nice to spend time with BevNET crew and the NOSH team got together, and we're planning some big moves for the remainder of the year.
As much as I love Kansas City, and I'm grateful for the opportunity to work from home, I do really love having FaceTime with the team, and we had some really good meetings, and it was kind of sad to come back, actually.
We were all sad to see you go.
We definitely love having you in the office, and your energy is unmistakable.
It's really just super positive, great energy, and yeah, we did have some really good meetings while you were here.
Your energy is as bubbly as the sparkling water that comes out of our water tap in the break room.
What's that thing called again?
The quench machine?
The quench machine.
I put Monica several levels above that annoying thing.
Several, several, several.
It's worth it, but it's slow.
Speaking of which, I've got some.
Oh, yes.
I use the quench machine.
What's in the shaker bottle?
We've got some MizuLab here.
Have you tried MizuLab yet?
I have, but I haven't tried all the flavors.
Electrolyte stuff.
But I made MizuLab my favorite Asian yogurt drink and strawberry, which I just call strawberry yogurt.
I made it sparkling.
That is completely genius.
What are the other flavors?
They're all Asian inspired.
They are.
What are you holding?
This is yuzu and mango, which sounds amazing.
This one is lychee and mangosteen, which I don't remember what mangosteen tastes like because the lychee is really powerful in this, as it is, you know, anywhere you have lychee or lychee, however you prefer to say it.
And then, of course, Asian yogurt drink and strawberry!
Let's try this one, too.
Yeah, I want to try this one, too.
I think I tried the lychee and mangosteen and really liked it.
Monica, I also wanted to talk about your inaugural Sweetgreen visit.
I had the pleasure of eating lunch with you out on the deck on a beautiful day, and it was your first trip to Sweetgreen.
Tell us, what did you think?
Baby's first Sweetgreen.
It was really exciting.
I've always wanted to go to a Sweetgreen.
I live in the Midwest.
We don't have them.
Or maybe there's some in Chicago.
I don't know, but there's none in Kansas City.
And I've always wanted to try one.
And as luck would have it, there was one within a couple miles from the office.
So I ordered a lovely miso salmon bowl, and I've been dreaming about it ever since.
Is there a Kansas City version?
Is there like a fast casual salad place in Kansas City?
There is a really nice fast casual salad place.
It's an independent chain in the Kansas City area called The Mix with two Xs.
And it's fantastic.
So that is a nice alternative.
Monica is from Kansas City, Missouri, not Kansas City, Kansas.
So you also have to remember the meat.
The meat is king.
Kansas City, Kansas, the racing.
I like that there are two Xs, too.
I feel like that makes it a little racy.
Can you imagine if there were three?
That would be a whole different business altogether, perhaps.
Right?
Well, anyways, it was so nice to see you, and I'm glad I got to be there for your first week, Reign.
I wanted to welcome Kamal Jarrett of Hillside Harvest to our Slack community.
So great to see you in there, Kamal.
We think you're fantastic, and we're so happy to have you around in making your fantastic hot sauce and marinades.
I actually saw Kamal at a Naturally New England event.
I think it was at Expo West.
Kamal, great to have you here.
Hope all as well.
And Naturally New England is actually having a pitch slam on the 21st of May at the BevNET offices.
So if anybody out there is local, I think there are a few tickets left.
So we'd love to see you there.
If you're not and you fly in or you're just around, you can still come.
And you'll be a VIP to show us your plane ticket and we'll give you a crown.
If we're going to talk about hot sauces, I would love to talk about a hot sauce that Kartik of Deucerys sent to us.
He's such a wonderful guy.
Not only is he out there promoting his own brand, but also promoting the products of all of the folks around him.
So he sent a bottle of this hot sauce to all three of us.
Let me spell it for you.
I would love to hear how you think it should be pronounced D-J-A-B-L-O.
I think it sounds like Roblo.
Jablo?
Yeah, Roblo, Jablo.
Do you think that Jablo could get Roblo to endorse it?
That would be meta.
Can we try it?
Yeah.
You know, Roblo, if you're listening to the Community Call podcast, which you certainly must be.
Of course you are.
Yeah, of course he is.
We would love to have a call with you to see if you might, you know, not that we ask.
If we could just get you on the show and have you try it.
Yeah, yeah.
The internet might implode.
All right, should we try it?
Because if we want Roblo to try it, then certainly.
If we want Roblo to try Jablo.
Ooh, it's so thick.
Maybe Kartik can send some to Roblo.
You know what?
I bet he would.
I bet he knows Roblo.
Yeah, I bet he does.
He knows everyone.
Everybody loves Kartik.
If he doesn't, then Roblo is probably somewhere going, why haven't I met Kartik yet?
And why haven't I tried this hot sauce yet?
All right, here we go.
Ooh, yes.
Ooh, yeah, it's bright and very spicy.
You think it's very spicy?
You know, compared to some other ones, I feel like the heat hits you a little bit faster.
Like oftentimes, you get a hot sauce and it's not that hot.
This is nice.
It's nice.
It's got some heat.
I like this.
It has a little bit of like almost habanero flavor.
Are there habaneros in it?
There are Italian chili peppers, and there are jalapeno peppers, Asian teardrop chili peppers.
That's what you cry when you're eating the hot sauce is teardrops.
Ginger?
Of joy.
Oh, and also Jamaican round chili peppers, chia seeds, dried spirulina.
I don't see.
Oh, yes, I do see ginger.
It was hiding at the beginning.
So good.
Hiding at the beginning.
It is so tasty.
Kartik, thank you so much for sending us this.
And another thing on the Jabolo website I saw was a recipe for hangover salmon, which made me think about spicy things, how they're good for hangovers.
What's your favorite hangover food, Monica?
Oh, yes, definitely.
Yeah, that's perfect.
I just care what else.
I would say anything spicy is really nice.
I do love a little fermented, like a little sauerkraut or a little kimchi.
Like kimchi is perfect because it's spicy.
You can almost pretend you didn't just ruin yourself the night before.
Mike, you never get hangovers anymore, which is probably the smartest thing to do.
No, I still do.
I just don't know why.
It's probably from coming here every day.
In all seriousness, I am curious, what prompted you to really jump on to this sober, curious, sober wagon?
Well, for me, it was mostly because of the impact.
Maybe I didn't find too much of a difference between me when I'm drinking and when I'm not.
Yeah.
So, yeah, the next day was the primary reason.
Plus, I have a family history of just people who like their alcohol.
It's not that I do without it all the time.
It's just I've got to be moved to have a drink.
Do you remember the last time you were moved to have a drink?
I had one with Monica the last time, two times ago.
At the Chinese restaurant, I had...
Did you get one there?
I didn't think you did.
No, I didn't have one there.
No, you didn't.
I was going to, and then I decided not to because I was driving.
Yeah, but I looked at it.
That's the last time I looked.
No, I think I had a beer with my brother.
I don't remember.
I do enjoy a magic cactus from time to time, though.
Oh, yeah.
I had one last night.
Yeah.
Magic cactus.
Because I'm also trying to drink less alcohol, so I'm bringing in the THC drinks, and they've been really hitting the spot.
Well, delicious hot sauce, Jabolo, we are big, big fans.
And talking about things that are hot, we also need to talk about this episode of Community Call, where we talk to Kelli Howard, Senior Manager of Client Insights from Spins, about what's trending in the plant-based category, how protein is taking this category by storm, the ingredients that consumers are seeking out and moving away from, and how brands are interpreting clean label based on consumer demand.
If you want to join a live recording of Community Call, you can do that at bevnet.com/communitycall, and we hope you enjoy this episode.
On June 12th and 13th, in New York City, hear from Ora Bora, Haywell, Tip Top, Mom Water, Full Frame, Diagello Ventures, Spins and more, during the leading event for the beverage industry.
Learn more at bevnetlive.com.
Today on Community Call, we are thrilled to welcome Kelli Howard, Client Insights Manager of Spins.
She will be sharing the latest data and trends in the plant-based category.
We're all coming out of Expo West.
There is so much innovation and evolution in the plant-based category, from eggs to frozen treats to chocolate, dumplings, everything you can think of.
And we are thrilled to dive into the data and the trends to understand how this category is evolving.
Kelli, thank you so much for joining us today.
Thank you so much for having me.
I'm really excited to be here.
Such a pleasure.
Why don't we start off with an introduction?
Please tell us a little bit about yourself and what you do as a Client Insights Manager at Spins.
Sure.
At Spins, I always like to tell people I found my dream job.
But for those that don't know much about Spins, I just want to give a brief background about what we do as a company and how we partner with brands and retailers.
So Spins is a product and technology company headquartered in Chicago.
And really our mission is to bring emerging shopper values to the marketplace through our partnerships with retailers, with brands, and with our other investment partners to really help them through point of sale data and insight services understand how to win, how to fuel growth where the market is headed.
So as a client insights manager, I sit on our client growth solutions team and I get to work with amazing brands every day, big and small.
And we meet on a weekly basis.
We talk through their goals.
We talk through what they want to understand from the market and the data.
And then we go and we dive in and we look at the insights and we tell them our recommendations from an educated data-backed perspective with a deep focus on product quality and product intelligence.
So I lead the team of plant-based insights analysts at Spins.
And so we're working with leaders across the industry that are really focused on taking the plant-based space to the next level.
Great stuff.
I know that the resources that Spins provides are incredibly helpful to brands, whether they are in market or looking to launch an innovation.
So we're excited to dig into all of the information that you've prepared for us today.
Why don't we start off by defining the criteria that Spins uses to determine which brands and products qualify as plant-based.
You mentioned you're not talking about fruits and vegetables.
So please tell us how you decide what fits into the category.
Absolutely.
So like I mentioned, Spins has a very deep focus on product intelligence.
We have an amazing PI, what we refer to them as, product intelligence PI team, that goes through and analyzes all of the products that hit our database.
So we have three different ways to really define plant-based because there are so many different ways of looking at it.
The first is through diet attributes, and you can go into Spins and you can call plant-based diet.
And really what this is, is an analysis of the ingredient panel.
And our PI team says, would this fit a consumer with a plant-based diet, yes or no?
And if all of the ingredients included in that product are plant-based, then it's coded as plant-based diet.
The second way of looking at the product is positioning attributes.
So this is the one that I'll be focusing on and the way that I've pulled the data together for our conversation.
But this is any product that is plant-based positioned based on how it's overtly communicated on pack and media and as a brand identity to consumers.
And I like to focus on this one because at the end of the day, it really is all about consumer perception.
And so this is a unique way that Spins gets to that point.
And then lastly, we also have a certification attribute.
So this identifies any foods that are certified plant-based by the Plant-Based Foods Association.
So this is really the highest certification, but you'll have products on the shelf that will just say made with plant-based ingredients that aren't necessarily certified plant-based.
So there is a difference in how you look at those products on shelf.
You know, I wonder for the positioning attributes, which you mentioned is a key part of how you consider the category, that change is so frequently in brands are so constantly changing their positioning.
How do you keep on top of that?
It is a constant process.
Like I said, we have an entire team dedicated to analyzing all of the ingredients that are hitting our database.
So a lot of the brands we do partner with directly, and so we're able to get really straight from their mouth how they're positioning the product.
And so we work with them, we have a product hub, but really it's just the analysis of our PI team determining and analyzing those coding.
All right, so now we understand what criteria Spins uses to define plant-based.
Why don't we move along and start to understand how consumer preferences and standards have evolved, which as we mentioned, it's doing constantly and from where I sit pretty quickly.
Yeah, absolutely.
So I want to start by just talking about the growth and the evolution of the total plant-based category since 2020.
So if we think back to 2020, it was just under a billion dollars in sales for total plant-based across the store.
Moving to 2021, that annual sales volume grew to 6.9 billion.
So just saw explosive growth between 2020 and 2021.
This is really when the category was gaining traction, focused on early adoption, trial, and a lot of new entrants entered the market.
This was also fueled a lot by the COVID spikes that we've seen across all categories.
But as you can see, that large growth has been pretty much sustained since 2021.
So if you fast forward to 2024, where we are now, the market sits at about 7.3 billion in annual sales across the store.
The change that we've seen is that the category has started to decline a bit.
So after this explosive growth, now we're seeing a little bit of a tail start to level out.
And this is important to understand because we are reaching a period where consumer preferences are evolving.
So when first, when plant-based was first introduced, consumers were just excited to have an alternative, right?
Anyone who was vegan or wanted to eat less animal-based foods or wanted to eat more sustainably, finally, there were more and more options hitting shelves and more prevalent in the market.
So this is that introduction phase.
If you think about the product lifecycle, that's really the introduction phase, early 2019, early 2020.
Now we're seeing the market approach maturity, really.
We're seeing that sustained annual growth.
And what happens in this maturity phase of any product lifecycle is that plant-based becomes more of a staple, saturation in the market increases, and pricing becomes very competitive.
So inflation and pricing, and who is the core consumer as plant-based becomes a staple, very important things to focus on for brands in this phase.
But we are starting to see that decline, and I think it's very important to mention that plant-based is not dead.
It is just evolving.
I get that question all the time from brands.
Is this something we should move away from, our consumers abandoning plant-based altogether?
And my answer is no, it is not dead.
But what's really important to understand is, again, going back to the product life cycle, when a category starts to reach maturity, the future outlook is dependent upon product extension, innovation, and the ability to adapt the product quality to meet consumer preferences and needs that are changing.
And so I want to talk a little bit more with you, Melissa, about what those preferences are and how they've changed over time.
But I first wanted to just talk through that evolution of the plant-based market because it's really important to.
And there was a greater need for consumers and retailers, like a greater openness by retailers to take on new items and store.
And so we saw a flood of new entrants into the plant-based market, and more and more brands were starting to recognize this as a trend and want it to be a part of it.
And so those items were accepted on shelf, and then trial adoption happened, and now we're getting to a point of refinement, right?
So some items that were introduced back then are going to stick, some are not, and we're going to need to evolve the formulation.
So what consumers are saying, you can't try this, and this is what I want to be different.
So a little bit more education has happened since that point.
And you mentioned that positioning, of course, is a big part of how spins categorizes products as being plant based.
If a brand or a product changes their positioning and removes the plant based call out from their branding or their front of pack, does that show is a decline in sales and in the data?
So you're saying if, let's say, last year, they had plant based on pack, this year, they do not.
And it's taken off of that coding.
Does that show is a decline?
Exactly.
No, it does not.
So the coding is applied to any historical sales as well.
So that's the good news.
We are getting a true read of the sales trends over time.
If a product becomes plant based, then that will apply to the UPC.
If the UPC has not changed like the product code for all historical sales.
Thank you so much for explaining that.
I would love for us to move on to your next topic, which is what's driving performance.
So a few things are driving the performance of this plant based decline.
So the first is the shifting consumer preferences that I mentioned.
So consumers are starting to notice that they don't want their plant based foods to be processed.
If they're going to go into the store and they're looking for something healthier, they want it to actually be that.
They want ingredients that they recognize.
And they are also, this is an even further level up as consumer preferences evolve.
They're getting more challenging to please.
One more step up is that they want their food to be functional.
And so anything that's added to the food or anything that's an enhancement that can serve a specific function in their body to support, whether it be mental health or relaxation or any of those mood support agents, the functional food trend is very big right now.
So they want it to be free from artificial preservatives, free from unrecognizable ingredients, very clean label, but also include things that are good for them.
So are they getting the right amounts of protein?
Are they getting the right amounts of vitamins, minerals, and supplements?
So heightened consumer preferences is one reason that we're starting to see the decline, because not a lot of current products on the market today and plant-based meet that preference.
A second driver has been inflation.
But we're seeing that price increases have driven a shift in consumer behavior, and they're no longer able to spend as much as they used to, or buy as frequently as they used to in plant-based categories.
And then lastly, switching has impacted the decline in plant-based.
When you think about the core plant-based consumer, they're primarily flexitarian omnivore, and this means that they have more options across the store.
So if a product is not meeting their needs from a clean label perspective, or a product is not affordable to them, they have more options to switch to other alternatives that are not plant-based.
So that's another factor that we're seeing driving that performance.
You mentioned that inflation has certainly motivated consumers to change their purchasing habits.
Is it flexitarians who are choosing to maybe go back to a non-plant-based item because it's cheaper and it has fewer ingredients?
I guess my question is, what are consumers buying if they're not buying the plant-based version of the product that they want?
That's going to vary by category, but I'll use cheese as an example.
If a consumer, let's say they want to eat a plant-based meal one or two times a week, and so they want to make a pizza at home with their family, and they're buying plant-based cheese shreds.
Maybe they go into the store and they notice, you know what, I'm using dairy cheese shreds for my eggs, and it's going to be more economical for me when I look at the price difference to just buy that and not buy a plant-based in addition.
So that switching over because of price can happen between a plant-based and a dairy alternative.
Another example could be maybe someone's pescatarian, and one week they're buying plant-based burger patties, but the next week they see that they could buy half pound of shrimp for the same price.
And so they switch to shrimp, which is an animal-based product, not plant-based.
So that flexitarian switching is something that we're seeing drive the performance in plant-based.
So it's really important to understand that consumer.
And incrementally gain share of their household penetration.
And you have a couple of really interesting examples around what's driving performance and how brands and products are evolving.
The first one was plant-based milk.
The brand Calafia Farms has a really interesting product evolution that illustrates perfectly what you were just talking about.
Exactly.
So a brand that's doing this really well in market, they've very quickly been able to identify, hey, with some plant-based milk, consumers are saying, we're noticing that these milks have oils, they have emulsifiers, they have gums, they have added sugar, and why wouldn't I just stick with the dairy milk?
It's a flexitarian consumer, and they don't have lactose allergy.
So, Calafia has quickly noticed that, and they've evolved their product formulation to match that consumer preference.
And so, this is one that myself and a lot of my teammates are really excited about and excited to try.
But you can see the evolution in their first product.
There were a handful of ingredients, very long ingredient list, and it included margum, it included gel and gum, and frankly, it is sometimes a conflicting consumer need where they want the product to taste exactly like the familiar dairy alternatives.
And so, some of these fillers are necessary to achieve that.
However, you can see that the clean label is, the clean label preference is starting to supersede that need.
They don't want to sacrifice taste, but being healthy and nutritious and clean is superseding all other.
As Calafia evolved their product formulation, they recently came out with an oat milk and an almond milk that one is unsweetened.
And so, the only ingredients are water, organic almonds, and sea salt.
And they clearly call out on the pack, only three ingredients, shake well to enjoy, dairy free.
So, this is one brand that's doing that very well in market today.
It's so great.
I mean, they've decreased the number of ingredients by a huge percentage.
Originally, Elmhurst and maybe New Barn were two of the kind of leaders in clean label plant-based milk.
And it's so great to see other brands falling in line based on what consumers are asking for.
And then you also have a really great example around plant-based cheese versus dairy-based cheese.
Yeah, so one example of a cheese brand that is doing this very well, their brand name is Climax Superfoods, and I first saw them at Expo West last year, and they were sampling their blue cheese.
What's special about this brand is that they are laser-focused on methodology and innovation and how they formulate the product, and they compare themselves to the dairy method and all of the core elements that consumers care about.
So first, taste, second, texture, third, nutrition, fourth, cost to consumer, and five, sustainability.
If there are five things to focus on with plant-based foods, those are the five that consumers care most about.
So when they compare their product to the dairy method, it's on par in terms of taste.
It's very hard to tell the difference of their blue cheese versus the dairy blue cheese.
When it's compared in terms of texture, same thing.
Nutrition, it's better because they're claiming to add superfoods to the ingredient, like I was saying, with that functionality of food, they're hitting that on the head.
And there are no fillers or mulsifiers, gums, in this product either.
And cost to consumer, they're able to do this for a relatively low cost, on parity with dairy alternatives in the blue cheese format.
And it's earth-friendly, so identifying and utilizing the most sustainable plant-based sources for their product.
So this is something that's very hard to achieve, and I think why you don't see a ton of it happening yet.
But it is going to be the future and what determines the success of the plant-based category going forward.
So this is a brand that I've tried to track them in spins.
I don't see them yet, but I expect to see more and more brands strive for this type of product formulation and methodology.
I remember trying this brand last year at Expo.
I also tried the Blue Cheese, and I was amazed at what they were able to accomplish in the plant-based sector.
It was truly amazing.
Everyone was coming up to me saying, go to the Climax booth.
You have to try it.
So that was that type of buzz that brands are trying to achieve at Expo.
Well, certainly in addition to the health benefits that come with following a plant-based diet, the sustainability advantages are at the top of so many people's minds.
How do sustainability concerns contribute to consumer preferences?
Sustainability, again, talking about Expo West was the most talked about topic.
This is something that is gaining importance with consumers year over year, especially the younger consumer.
And we know the plant-based consumer tends to be with younger households.
So something that's very important to this consumer segment.
There are a couple ways that brands are really succeeding and increasing the sustainability of their products.
So one that I see happening is upcycling.
A great example of upcycling is Diana's Bananas.
What upcycling is, is taking ingredients that would otherwise be wasted through the production process and reusing them for something else to be consumed by consumers.
So Diana's Bananas takes bananas that, for whatever reason, are going to be disposed of, but still totally safe and okay for consumption.
They hold them in super delicious chocolate, freeze them, and they're sold as a frozen dessert.
So upcycling is one that is increasing sustainability.
A second is regenerative agriculture, and this is a practice that has a really big focus on making sure that farming practices are sustainable, not depleting the soil, conserving water, making sure that nutrients are packed into the foods through the soil and the farming practice.
Regenerative agriculture, we're seeing in plant-based for all the plants that are used, but also in dairy for the plants that are fed to the animals.
So that's another one where we're seeing brands lean in that sustainability is harder to do that.
And in some cases, it's more expensive, but we are seeing consumers are willing to pay more.
Diana's bananas are absolutely delicious, and I know that frozen is one of the bright spots in the evolution of the plant-based categories.
But before we end on an optimistic note, how are the plant-based categories and products performing compared to non-plant-based counterparts?
I know certainly by the information that you shared right at the beginning of the call, we can see that there has been a recent decline.
Yeah, absolutely.
So because of that consumer base that I mentioned, because we know a lot of the plant-based consumers are buying both animal and plant-based, it is really important to look at how the non-plant-based counterpart category is performing in comparison to plant-based.
So when I think about some of the staple categories, so meat, poultry, and seafood, milk, creams and creamers, cheese, yogurt, in most cases, plant-based is declining while the non-plant-based counterpart is growing.
So this is something that is very important to keep an eye on and understand.
The one bright spot that I see in these staple categories, creams and creamers for plant-based is growing 7.2%.
So we've seen a lot of innovation in this space, and this is one where it's really easy to incorporate into your day, swapping maybe an oat creamer or a pea protein creamer or a dairy creamer, in your coffee, in your matcha, anything like that.
So it's lagging slightly behind the non-plant-based creams and creamers.
So dairy and oat creamers are growing 12% as well, but plant-based creams and creamers are still seeing growth 7%.
The other thing to consider is that these categories are staples within most consumer households.
Meat poultry, seafood, milk, cream creamer, cheese, yogurt.
And so if they're buying those on a regular basis, pricing is something that they're very focused on.
And so that's why minding your price gap to the non-plant-based alternative is very important as well.
And calling out the performance drivers that you mentioned before, which are price, taste, texture, and clean label, if we continue to see innovation in these categories, the stable categories that you're talking about now, there's reason to hope that perhaps we could see an upswing in sales as brands and products evolve along with the category.
Is that right?
Absolutely.
Yes, I love that optimism, and it's absolutely true.
Going back to that product-length cycle comparison, it's typical to see a slight decline after it reaches maturation, but the dependency of success in the future is that innovation.
If we continue to see products come to shelves with clean labels, taste, texture, and cost, we can expect to see these categories start to rebound.
Excellent.
Well, let's move right into the good news.
Which products and categories and brands are bringing us into an upswing?
Yeah, so there are some bright spots within plant-based.
And when you look at the categories where plant-based products are showing growth, some of the fastest growing are refrigerated entrees, snacks, and sides.
A brand called Plant Spire recently launched a green-inspired sweet chili tofu scramble.
Meal preparation sidekick.
And that is doing really well driving the plant-based growth for that category.
Also important to note that that's green-inspired, because another trend we're seeing within plant-based is this increase in international flavors and really diversifying the flavor profiles that are available to consumers, and that's driving a lot of growth.
The second fastest growing category of 140% for plant-based is bread and baked goods.
So a brand called Veggies Made Great is selling a vegetable-based muffin.
Obviously, it includes some of those other ingredients that are important for baking, but adding that nutrition from the vegetables and positioning it as plant-based also plays to that functionality aspect that I mentioned previously.
Salt-stable salsas and dips, this is another one where plant-based foods are still succeeding.
Primal Kitchen has a spicy queso plant-based dip, and this is one that I have tried and I love.
It tastes very similar to dairy queso.
And queso is something that sometimes you want to drink, so I can get a plant-based version that I can still go for you about.
That's amazing.
Also, refrigerated cookie and pastry doughs.
This is one where plant-based products are starting to take off.
That category is up 16% versus year ago for plant-based products.
Two brands that are doing well here are Sweet Lawrence, which is a refrigerated edible cookie dough, but you can also bake the cookie dough.
So multi-use, multi-function, but positioned as plant-based, it's vegan.
And then also Dough Cookie Dough.
It's spelled D-E-U-X.
This is positioned as a functional cookie dough, but it has a lot of added superfoods and nutritional benefits.
So it says right on the pack.
This is not a low calorie food, but it is a high nutrition food.
So it's a dessert that you feel like you're getting, A, all the benefits of plant-based, and you're getting added benefits from the functional ingredients in the product.
And then lastly, a category where plant-based is still seeing success is protein supplements and meal replacements, up 7.8% versus year ago, and Truvani and Only What You Need are two protein supplement brands that are really driving this growth.
And which ingredients are consumers looking to consume in plant-based products, and which are they looking to avoid?
In the Calafia example that you gave us, I mean, I certainly noticed there are no gums in the final product that only has the three ingredients, no oils.
What does the breakdown there look like?
Yeah, so when we look at the data for the different ingredient types that are included in plant-based food, it is very clear that when you think about total plant-based, down 4.4%, there are a lot of ingredients that we know, anecdotally, consumers are looking to avoid, but when you look at the data, it really supports that.
So first is artificial sweeteners, emulsifiers and gums, preservatives and artificial colors.
And so high fructose cornstarch, for example, within the plant-based base, items with that ingredient are down 21% versus year ago.
So far outpacing the decline of total plant-based.
Aulose, another sweetener, down 15%.
Carrageenan and emulsifier, down 15%.
Artificial preservatives, down 14%.
Gums, down 9%.
So those are some of the ingredients that they're looking to avoid.
Some ingredients that they're looking for, or some attributes that they're looking for.
A is vital clean, and that is a unique attribute that spins codes for.
Really, that's no artificial preservatives.
So that really covers what we just talked about.
They are also looking for labeled non-GMO, labeled gluten-free, labeled organic.
More so, the plant-based consumer is looking for this more so than the non-plant-based consumer.
Vital clean, that's a great way to label clean label.
I didn't realize that that's the sort of descriptor that spins uses, so that's super interesting.
I also thought it was really interesting that in the list of ingredients that consumers are looking to avoid, I mean, certainly you would expect that they're looking to avoid high fructose corn syrup, artificial flavors, and colors.
I was a little bit surprised to see that they're looking to avoid allulose, and then less or so, but still, you know, truthfully brown rice syrup.
Those two, I guess I didn't expect.
Absolutely.
And I know those traditionally have more of a better for UK low around them, but I think it just speaks to like the processing.
They want their ingredients to be non-processed.
And the plant-based consumer does tend to have higher standards than the non-plant-based consumer, and or what those ingredients are.
And that's not just not to say all consumers, right?
But we're just looking at the proportion of plant-based that shopped on versus not.
Well, certainly an ingredient that consumers are looking to consume more of is protein.
We've heard it from past folks in the community and community calls.
We saw a ton of it at Expo West.
Which protein types are succeeding in the plant-based category right now?
Absolutely.
So this is a great question to talk through, and I love looking at what the trends look like here because I'm very interested to see what's going to come through as the new protein source.
There's been a lot of information in the media around soy, right?
That's the main, one of the first plant-based ingredients, protein bases.
But we're seeing declines in that base down 12%.
We really are seeing, because the total category is down 4.4%, most of the protein sources are down as well.
But the protein sources that we're seeing outpace the total category, too, are pumpkin seed and chia.
So these are a little bit more recognizable, also, to consumers.
Pumpkin seed is up 50, almost 50% versus year ago, and chia is up almost 30% versus year ago.
When you peel back what brands are driving us, there are two primary brands that use these two protein sources that are succeeding in the market right now, and that is Truvani and Only What You Need.
So those two brands that we're seeing, some of the growth in protein supplements, are really bringing to light these new protein sources that consumers are responding well to.
Ava bean and hemp are also pacing ahead on the category while they're in decline.
These are two protein sources that are not declining as much as total plant-based.
But we are seeing declines from chickpea, rice protein, soy, and mung bean as well.
Again, I don't think I would have thought of pumpkin seed and chia immediately, so that's super fascinating.
But you mentioned that there are a couple of key brands that have a high percentage of the market that could be driving the growth there.
Is that right?
When you look at the plant-based market too, and some of these protein types are still emerging, and so you want to be careful to consider this a widespread trend, but it's important to see the early winners in these spaces.
And so pumpkin seed and chia are only what you need in Trevany, the two brands that are really trying.
Can you think of or talk about any of the new innovation in market that's in line with all of the trends that you've described?
Yeah, so I'm glad you bring up innovation because this is something else that I wanted to touch on.
As a bright spot in plant-based, we are still seeing, despite slowdowns in sales, we continue to see plant-based milk have a high rate of innovation and frozen meat alternatives generate news.
So when we think about the innovation rate, right, so the percentage of items that are new compared to total items in the category, for total food and beverage, that innovation rate is 8%.
On average, total food and bev, 8% of items are new.
Within refrigerated and plant-based milk, that percentage is almost 13%.
So we're still seeing a very high innovation rate there.
And so Califia is really my best example of a brand that is innovating in that space and just really reducing their ingredient panel.
But we're also seeing flavors come through there as well for seasonal and creams and creamers.
So like a pumpkin spice creamer from Chobani or things to match the holidays, things like that.
We're seeing a high rate of innovation.
And then within frozen plant-based meat alternatives, that innovation rate is 12%.
So again, higher than total food and bath.
So another bright spot, something good to hold on to for plant-based.
In terms of other brands that are innovating in market, the two that I really wanted to focus on today are Califia and Climax, because I think that they're two that are doing very, very well in terms of meeting that consumer standard with taste, texture, nutrition, cost, and sustainability.
Kelli Howard, Client Insights Manager at Spins.
Thank you so much for joining us today on Community Call.
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