Voice on air – PAUL HART: Requirements for succeeding

Many companies today want to be part of the evolving market of vegetable proteins. But what does a start-up have to do to succeed in this sector? What are the biggest risks? What do consumers want? To answer these questions and much more we went back to Paul Hart, plant-based protein consultant at Elm Lea Partner’s Ltd, who has already enlightened us about the waving process towards different plant-based proteins.

 

Hi Paul, thank you very much for being here. Regarding plant-based foods, what trends are you seeing today? In your opinion, what are the main risks from a business to consumer perspective?

Right now, if you go to a supermarket and you’re looking at the shelves, what do you see? Well, the big action is plant-based ‘milks’, in terms of shelf space, with a very big consumer presentation. We can even see plant-based dairy cheese there, but certainly, plant-based ‘milk’ has the main role. Then we have plant-based meats. They are there, but they don’t have quite the same shelf space impact or range as the plant-based ‘milks’.

Concerning plant-based ‘milk’, there does need to be a good dairy milk alternative in the market, because dairy protein is an allergen, and some people are intolerant to lactose. For example, most Asian countries are in fact lactose intolerant. So, ultimately, at one level, the consumer offer or choice is driven by a health imperative. To be healthy, you have to have an alternative protein, exactly what we saw with gluten-free a decade ago!

Alternative Meat requires a consumer offer where no animal suffering is directly involved, it’s a moral choice based on personal ethics which includes vegetarian or vegan consumers, and also the broader market group of flexitarians.

The main risk for a start-up business is that despite all the enthusiastic claims you don’t make a lot of money: Oatly is now much bigger than it was – but still not in profit yet; the same applies to Beyond meat in the USA: lots of discussion and claims, but no profit. The issue with ‘me-too’ start-ups is it’s unlikely they will make money!  All the companies jumping on board are gonna struggle, because there is so much competition. If big brands are struggling, then the little fish are definitely gonna struggle.

The risk is if you have got a big idea, you want to go to the market, then may be you’re not going to make a lot of money, uless you have a really fresh USP (see below). There is no problem in accessing capital. The problem is the investors, they want a return on their investment: how deep are their pockets, and how long term is their payback horizon?

Also, there is the fact that a lot of countries in the world where lack sufficient protein. India is in a protein deficit. There is a need in the market to valorize plant proteins from waste where there is a natonwide deficit of protein.

 

From a consumer perspective, what do you think are the main features they search for in plant-based products?

Consumers want plant based products with taste and texture that matches conventional, that’s the key thing. Now, when you are a ‘guilty’ meat eater who wants to be a bit kinder to animals, a bit more concerned about the environment: then you might skip meat for ‘MeatFree Mondays’, you perhaps sign up for Veganuary, after the Christmas holiday excess. These are the Flexitarians in the population, at about 15%; whereas Vegan is much smaller relatively at just 1-2% – there are more recovering vegans than committed – since it’s not a complete diet without supplementation (B12).

So, to recap, one requirement for consumers to keep buying a product is great taste and texture. And there is a problem with that for producers. Just like gluten-free, for convenience, you have to have quite some food science, stabiliser, emulsifier, preservative understanding and so on. Lots and lots of ingredients. And that is the paradox with plant-based products.

In plant based meats, the difficulty is making something that has texture, taste, and with a clean, smart, ingredient declaration. At the moment, we have typically 20+ ingredients, many of them commodities, but some are costly functional specialties and flavors, it’s going to be very difficult to get a cost comparison with just one ingredient: ground beef.  One other problem is the macro-nutrient profile. If you’re gonna use cheap protein concentrate you end up with complex carbohydrates and fiber in your burger, which don’t feature in ground beef!

 

Let’s briefly talk about clean labels. In your opinion, what will be the main challenges for the firm in the plant-based industry? I recall, for example, when Lightlife brand compared the ingredients of its burger with Impossible foods and Beyond Meats products…

I’m going to give you an example of a plant-based company that is doing very well. It is Innocent (part of Coca-Cola). I have to express admiration for what they are doing with their plant-based ‘milk’. There are using just 3 ingredients Almonds (5.8%), spring water, and salt. Perfect. So, it is not overly complex, it hasn’t many long supply chains, it has familiar ‘kitchen’ ingredients, it meets and achieves Michael Polan’s ‘Rule of 5’. However, the macro-nutrient composition doesn’t match dairy milk and neither do micro-nutrients.

So, the ‘clean label’ challenge is, how do we take and improve 20 ingredients. I notice that the latest Beyond Burger formulation comes down to 18 ingredients. But Lightlife go further – down on 16, we will see this trend continue. It improves carbon footprint, it improves sustainability, it improves environmental concerns.

But this is history repeating itself: go back ten years, when gluten-free became a convenience product: ingredient declarations were very long with 25 – 35 ingredients. In fact, to match texture and taste it’s not unusual to have extremely large ingredient inventories. Which is the case when you do something that’s not conventional, like gluten-free bread, many of the products end up low in protein, and it’s not functional protein. It is the same story with plant-based meats: you can use average proteins, which don’t have good solubility or good functionality, but if you’re trying to do something great, then it may be difficult.

We will see the simplification of ingredient declarations, clean label, and a shift to clean and green processing. But we might also see more products like Innocent which don’t attempt the nutritional match but go for ingredient simplicity. I think that’s good. Nutritionally there’s lot to say, but in terms of product supply chain, derivation, and presentation, it is very good.

 

Do you think there are some “good advice” you can give to startups and firm which want to enter in the plant-based protein market?

Anybody who enters the plant based market has to have a vital spark for their USP (Unique Selling Proposition). What are they gonna do in a competitive, crowded market? They have to be interesting, or more interesting, or more different than something that’s been done before. Bearing in mind what I did say about the difficulties of being profitable.

What is going to have a real market traction?  There might be, as we say in the UK, ‘a gap in the market – but is there a market in the gap.’ With all the complexity around great texture formulation, the most searched for dietetic trend on google right now is the ketogenic diet.

Anyone serious about plant-based formulations has got to do keto amazingly well, because of the fiber and carb components with impure proteins. Anybody who is gonna do it well could be proposing a plant-based vegan keto or a plant-based keto option, for those who don’t want 100%  animals or dairy-based proteins.

But OK: without being quite so hip and trendy – just doing plant-based ‘milk’ really well with the same macro-nutrient profile as conventional dairy would be great. Dairy milk is ~3,3% protein. Do you know how much there is in Oatly? … 1%.

Or how about a high protein shake, like a Special K protein shake (USA), but without dairy proteins and all the sugar etc… So just supposing you made a plant-based liquid shake, which is full of good protein…  And need I say, in plant-based meats, you have to try a lot harder to simplify and achieve the macro-nutrient profile: that’s protein, fat and carbs – that would be a great place to be. Supposing you did a liquid product with 6% proteins – texturally it’s much easier – a really good restorative product for vegetarian or vegans after exercise. That will be an interesting market introduction.