Plant Based

PLANTING THE PRIVATE LABEL SEED

EXPERTS SHARE HOW PLANT-BASED SUPPLIERS CAN GET INTO PRIVATE LABEL

By Dan Ochwat

At the Plant Based World Expo in New York, held in-person last December, plant-based food and beverage suppliers lined up the aisles cooking meat-alternative dishes from chicken parm sandwiches to specialty pizzas.

The trade show was buzzing, as the category is truly booming. Bloomberg Intelligence data, for example, said plant-based meat and dairy alternatives could reach 5% and 10% of their respective global market shares in the next decade, while the global plant-based alternative-meat market may grow to $28 billion by 2025.

Bloomberg also reported that this could translate into a $74 billion opportunity by 2030 if sales growth and penetration levels mimic those of plant-based milks to reach 5% of the total meat and fish market. Plant-based meat accounted for just 0.3% of total meat sales in 2020, but growth is accelerating and plant-based meat retail sales could reach $118 billion in 2030, per the report.

However, when visiting the Plant Based World Expo, where Store Brands moderated a panel on building private label, it was evident that many of the plant-based suppliers haven’t quite transitioned into building out a private label program. Here are tips from three leaders:

JOAN KAVANAUGH VP, national buying, ALDI U.S.

QWhat can you share about

the ALDI private label plant-based offerings?

The plant-based category is such an exciting one and we have been blown away by the response to these newer products, particularly our vegetarian and vegan line Earth Grown.

Earth Grown started as an ALDI Find back in 2018 and received such a positive response from our customers that less than eight months later we expanded the line and made it a part of our everyday selection. Earth Grown has quickly become one of our most popular brands and one that we see a lot of excitement about on social media when new items arrive on-shelf. We are constantly introducing new seasonal flavors and options through ALDI Finds, and we also offer plant-based milk alternatives from our Friendly Farms line.

QWhat are you looking for from supplier part-

nerships in the plant-based space?

This is such a rapidly growing category with new innovations in the pipeline every day. We’re always look-

WHAT’S DRIVING THE PLANTBASED BOOM?

Consumer interest has never been higher in two important segments of the food industry—store brands and plant-based options.

Store brand market share is approaching 18% of total dollar sales accounting for almost $200 billion in revenue across all major retail channels. That is an alltime record high, according to the Private Label Manufacturers Association.

Private label entries are no longer “me too” versions of national brands, but sales generators in their own right. Proprietary products build store loyalty and offer a competitive edge versus the store across the street.

At the same time, consumers are on a quest for healthier and sustainable food

CANDY SALES WERE 10.2% IN 2021. CHOCOLATE DOMINATES WITH 60% OF SALES. GLOBAL SALES OF PLANT-BASED FOOD ALTERNATIVES ARE ON A TRAJECTORY TO SURPASS THE $162 BILLION MARKET BY 2030.

options. Global sales of plant-based food alternatives are on a trajectory to surpass $162 billion by 2030, predicts a Bloomberg Intelligence Report. That’s up from $29.4 billion in 2020. There are currently almost 10 million people who consider themselves vegan—and that number is on the rise. Additionally, there are many people seeking out plant-based products for health and environmental reasons.

Consumers have shown they are willing to seek out retailers with plant-based options. Until now, there have been few options in one of the fastest-growing categories in the food industry today— confections.

Fueled by the pandemic and sustained as the world returns to a somewhat “new normal,” the category (chocolate, non-chocolate, gum and mint) posted sales increases of 10.2% for the 52-weeks ended December 26, 2021 versus the year before according to IRI data. Chocolate commands almost 60% of sales totaling $16.7 billion.

Krüger Delivers Tasty Breakthrough

in Plant-Based Chocolates Krüger Group, a proven leader with more than 50 years of experience in store brands, has always put sustainability and healthy options at the forefront of its products. That is especially true in chocolates, a hallmark of the company.

“We are seeing a huge demand for our better for you candy products,” said Connor Kramer, Krüger national accounts manager. To meet demand the company fitted one of its factories in Poland to gear up for production of plant-based chocolates including the popular tablet form.

While there are pleasing options in dark chocolate on the market, milk chocolate has proved more problematic.

Until now.

Krüger met the challenge of creating tasty and vegan milk chocolate by replacing dairy with oat milk. “We’re proud of our new recipe and we want the world to know more about it and satisfy demand for this growing plant-based category,” Kramer said.

The company’s menu of confectionery options match, exceed and fill in gaps that exist in national brand assortments. Since there is no leading national brand chocolate leader in the plant-based segment, the opportunity exists for a store brand to fill the gap.

Store brand options not only fill a market need but can build store loyalty and boost category profit margins. In fact, research from Moonshot Collaborative revealed three-quarters of consumers who prefer plant-based foods are willing to pay a premium for plant-based alternatives.

Kruger can collaborate with retailers to offer store brands that are vegan, fair trade, non-GMO, Rain Forest Alliance Certified and RSPO Certified Sustainable Palm Oil.

MORE THAN 9.7 MILLION AMERICANS COUNT THEMSELVES AS VEGAN.

ing for supplier partners that we can collaborate closely with to help track consumer trends and quickly bring new plant-based products to market. For example, in recent years, one of the main trends we’ve noticed is customers embracing the idea of being “flexitarian,” and wanting to limit their consumption of animal-based products but not eliminate them entirely. We’ve taken this insight into consideration as we continue to evolve our offerings.

That being said, the biggest tip I have for suppliers is to really have a pulse on the consumer, what they’re looking for and what they’re interested in. Retailers want to look at their suppliers as trusted partners who can help bring shoppers the products they want most.

Really have a pulse on the consumer, what they’re looking for and what they’re interested in. Retailers want to look at their suppliers as trusted partners who can help bring shoppers the products they want most.

Joan Kavanaugh, ALDI

JUAN DE PAOLI, VP of Our Brands, Kroger

QWhat’s new with Kroger’s

private label plant-based offerings?

We are developing our Simple Truth plant-based products to taste so good that even non-vegan customers will enjoy them. When we are developing and tasting new plant-based foods, we are adamant that they must be delicious and appealing to vegans and flexitarians alike. Last year alone, we added more than 30 new plant-based products under the Simple Truth brand and expanded into our Deli/Bakery department.

Some of the plant-based Simple Truth items are featured in our 2022 Food Trends report, including our plantbased baking mixes and cheesecake. We’ve found that there is a mindset shift in the purchasing of plant-based foods. Customers look to them for indulgence, comfort and nostalgia, while still lowering their carbon footprint. Uncovering this consumer sentiment allows us to think outside the box and deliver an array of plant-based options to delight all of our cravings.

QWhat are you looking for from supplier

partnerships?

Future growth in plant-based categories will largely come from flexitarians, not vegans. This means plant-based foods need to be as good or better than their animal-based counterparts, in taste, nutrition and functionality.

NICOLE ATCHISON CEO, PURIS Holdings

QWhat can you share about

PURIS and its private label plant-based offerings?

Retailers and consumers are just scratching the surface of plant-based. We’re still very early in the plant-based movement despite how much the category is discussed. Our world consists of developing innovative plant-based products for literally every aisle of the store. Our assortment includes plant-based meat, dairy, RTDs, milks, yogurts, snacks, cereals, eggs and more. PURIS has the capabilities to utilize off-the-shelf formulas that can get customers into the marketplace quickly. We also have the ability to co-create unique offerings designed for the private brands’ customer base.

QHow does PURIS work with retailers to develop

plant-based products for private label?

PURIS is uniquely suited to help our customers develop and grow their private brand offerings due to our deep knowledge and expertise in plant-based foods. Every day PURIS is developing plant-based products that taste amazing, are nutritious, have a clean label and are affordable. Private brands are a great entry point for customers to try plant-based products and PURIS understands how quickly the plant-based space is growing.

We’re constantly innovating and bringing new and ontrend products to the marketplace. By closely collaborating with our customers, we work to understand their plant-based needs and the purchasing behaviors of their customers. Ultimately, PURIS’s goal is to help the customer navigate through the journey of plant-based products and create an exceptional consumer experience.