Driving innovation with plant-forward solutions

Defining the global trend

Innovation is at the forefront of today's business strategies, especially in the food industry. One significant consumer trend is the shift towards more sustainable, cleaner, healthier food solutions, with plant-based products offering a meaningful solution. As defined by Harvard Medical School, plant-based or plant-forward eating patterns focus on foods primarily from plants. This includes not only fruits and vegetables but also nuts, seeds, oils, whole grains, legumes, and beans. It doesn't mean that people following a plant-based diet are vegetarian or vegan and never eat meat or dairy. Rather, people are proportionately choosing more of their foods from plant sources. During the pandemic, the food industry underwent significant changes, and the emerging plant-based alternatives industry faced numerous challenges. However, the focus on sustainability, value for money, and healthier and cleaner solutions has driven a growing interest in plant-based options, a key innovation area identified by Daymon as the Plant Forward Solutions Innovation Pillar.

private-label-article-1

Plant-forward solutions are influencing all FMCG-related industries, from food service to grocery products. The food service sector, a key player in shaping the future of food innovation, is increasingly promoting plant-based alternatives. According to the GEA Chef Survey on New Food from 2022, approximately 33% of chefs worldwide now regularly feature plant-based options on their menus, reflecting a significant shift in culinary trends. The increasing demand for plant-based foods in the food service industry has also affected the fast-food sector. Fast-food chains are now offering plant-based options on their menus.

For instance, in 2023, Nando’s Singapore partnered with Indonesia’s Green Rebel Foods to introduce its first plant-based PERI-PERI chicken alternative, creating a dedicated plant-based section on their menu.

At the FMCG level, major national brands are investing in plant-based solutions and are introducing plant-based alternatives to their main products. For example, Hershey now sells an oat-based, extra-creamy peanut butter cup, and The Laughing Cow offers a plant-based version of its popular product.

Retailers are not staying left behind and are increasingly entering the plant-based market, driven by the influence of flexitarians. However, affordability is crucial for these consumers, as they expect these alternatives to be less expensive than meat. For example, 58% of German consumers who eat red meat or poultry and, have consumed meat substitutes in the last six months say they would only purchase meat substitute products that are cheaper than meat-containing equivalents (Mintel). Retailers are developing plant-based Private Brand solutions across categories to offer their consumers the solutions they need.

Over the past few years, European and North American retailers have been investing in plant-based options for their Private Brands, starting with meat and dairy alternatives. More recently, they have been expanding into new categories such as cooking ingredients, meal solutions, and even snacking, exploring more indulgent, taste, and texture-driven products. Tesco's introduction of the "Root & Soul" plant-led side and salad range is a clear example of this expansion. Other notable examples include Aldi USA's Specially Selected Plant-Based Burger Buns and Holland & Barrett UK's limited-edition plant-based Christmas pudding. These products demonstrate the potential of plant-based food options to go beyond just being alternatives to animal-based food, exploring even premium positioning.

Retailers are expanding beyond products and are exploring Point-of-Sales opportunities. For instance, the German retailer REWE recently launched its first completely plant-based supermarket in Berlin in early 2024. The store offers over 2,700 vegan products, including items from REWE Private Brands EWE Bio + vegan, REWE Bio, REWE Beste Wahl, and Vivess. The range includes meat and dairy alternatives, cooking and baking ingredients, confectionery, snacks, and even an ice cream machine for customers to try soft plant-based ice cream.

plant-based-plme

Another opportunity is to help consumers bridge the say-do gap by supporting them to shift away from animal products. In spring 2024, Jumbo Netherlands decided to halt all promotional activities related to fresh beef, pork, and chicken to encourage consumers to purchase more fresh vegetable-based proteins.

REGIONAL HIGHLIGHT

In the Middle East, health concerns, particularly related to high blood pressure and cholesterol, are significant, as stated by the WHO. Plant-based diets can reduce the risk of heart disease and diabetes, making them an attractive option for health-conscious consumers. Younger generations in the region are driving the evolution of Middle east diets by choosing low-meat diets or becoming flexitarian.

This evolution of diets has an impact on product offerings and requires the industry to adapt. In 2023, UAE-based food manufacturer IFFCO opened the region's first plant-based meat factory at Dubai Industrial City, producing meat-free koftas, shish tawook, and chicken burgers. Another example of this plant-based dynamic is Kerry, active in the Middle East for over 20 years that opened a new 21,500-square-foot facility in Saudi Arabia in June 2023 to support its plant-based food supply. Similarly, Change Foods, a US-Australian food tech startup, is planning a 1.2-million-litre manufacturing plant in Abu Dhabi, set to be operational by late 2025.

On the product side, the offering is also evolving to include more and more plant-based products. Pure playing brands like Alpro are gaining space on shelves or Hellman’s Vegan mayo, which is now available in the UAE market. This demonstrates the growing importance of plant-based solutions for the region, and the need for Private Brand to explore the Plant-Forward Innovation Pillar across categories.

KEY HIGHLIGHTS

As Private Brands evolve into consumer-centric brands, it becomes crucial for retailers to understand and address consumers' changing needs, among which plant-forward solutions represent one of the pillars driving Private Brands’ innovation. The plant-based market is rapidly expanding, and consumers are increasingly seeking healthier and more sustainable options.

If affordability is key for consumers, moving away from highly processed food is also a key consideration when developing formulations, keeping in mind the potential impact of highly processed food on health. Another important factor to consider is the product experience, with taste and texture enabling retailers to explore more indulgent solutions.

By understanding these dynamics and leveraging technological advances, companies can continue to drive growth and meet the changing demands of today's consumers.

About Daymon

With 50 years of experience building successful private brand programs around the world, Daymon is the only solution provider that influences all aspects of private brand development, from strategy to execution to consumer engagement. Daymon’s unique approach helps retailers and brands set themselves apart through a full suite of best-in-class private brand development services, including: strategy, analytics and insights, product development, supplier development and management, account management, and design and packaging management. Daymon drives brand innovation, differentiation and results.

For more insights and recommendations for driving your brand, contact idc@daymon.com.