The plant-based foods movement continues to gather momentum as consumers explore and embrace new ways of eating. Already a more than $3 billion market segment, the plant-based food category’s rate of growth has attracted a lot of interest from retailers and suppliers ranging from startups to major CPG companies. Representing the interests of those operating in the space is the fledgling Plant Based Foods Association. Created in early 2016, the PBFA is led by Executive Director Michele Simon. She spoke with Retail Leader about PFBA’s mission, new dynamics in the food industry and the definition of milk.
Retail Leader: Why did the plant-based industry need an association?
Michele Simon: I’ve spent my entire career learning about the importance of having a political voice and how important policy is in the food industry sector. At the time that I founded the Plant Based Foods Association, there wasn’t really anyone representing this particular industry sector. Yet every other sector of the food industry, whether it’s the soda industry or the sugar industry, had a political voice. And plant-based foods has become a much bigger part of the food industry. So it was kind of a combination of having a personal interest in and eating these types of foods combined with my experience and the importance of policymaking that made me realize there was an opportunity here and a real need for this sector to have a collective voice.
RL: Can you elaborate on your experience with policymaking and the role that plays in the food industry?
MS: I have done some lobbying in California at the state level and I have also been involved in some federal issues. And then throughout my career I’ve really been an advocate for healthy eating and shining a light on how important food policy is to what’s called our “food environment” and public health. So, you know, the food choices that we are faced with every day and how they are very much impacted by our agricultural policies, our nutrition policies and of course our economic system. I’ve done a lot of work understanding that and some of the negative ways that the “dark side” of the food industry has really undermined public health. And so learning about that definitely made me realize that the growing healthy food industry sector needed to be heard as well. And there is already some of that going on in the form of the natural and organic industry and we’ve seen some of the fruits of that labor. It’s a natural time for the plant-based foods sector to be represented. Every animal group, meat group has a lobbying arm. Our members are busy making alternatives to those foods.
RL: Speaking of meat alternatives, sales of these products are growing rapidly and creating new marketplace dynamics. What’s your outlook for plant-based foods overall?
MS: It is a really exciting time. We did an analysis with Nielsen that shows the plant-based foods industry grew 20 percent since last year with sales that topped $3.3 billion. I was actually surprised to see growth was that high. It’s a sign that the industry has arrived.
RL: What do you mean by “arrived?”
MS: There are people who might have thought that veganism or plant-based diets were just a trend. But that has now been proven wrong because of the growth figures now climbing over several years. And I think what it really points to is the incredible explosion of new innovative offerings on the market. It’s no longer just a niche market. Now we’re seeing just many more types of products that are helping entire categories grow. It’s a wonderful situation of a “rising tide lifts all boats.”
RL: Where do you see plant-based food sales headed? Can last year’s 20 percent growth rate be maintained over the next five or 10 years?
MS: Well obviously some of the sales growth is driven by newness. When you have a relatively new category that people are just getting into then there’s going to be more growth. If you take a category like plant-based milk, last year we only saw 3 percent growth in that category. And that is a mature category. But this year the growth in plant-based milk is 9 percent. So even that category, which obviously has been around a while, is showing above-average growth. Because again there are new entrants to the market and there’s more innovation from the companies that have been around a while to kind of keep up with the competition. So I think the answer is we’re going to continue to see a lot of growth because of the innovation and because we’re just getting started. As long as we have this magical combination of consumer interest in healthier foods and these companies that are making great tasting innovative products we will continue to see growth.
RL: What does the composition of your membership look like today?
MS: We have three types of member companies. There are the startups that are really just excited, you know. They’re going to make it because they know what they’re doing and they’re well capitalized and you know they’re already in the market. Then we have the established brands that have really helped put plant-based foods on the retail shelf. Those are members like Tofurky, for example. They are plant-based companies that have been around the world and are now growing along with the rest of the market because of the mainstreaming of their products. The third type of member is the bigger players that see this plant-based trend and want to be part of it. They realize they have to keep up with that shifting consumer interest and people wanting to eat better. That would be a company such as Campbell Soup Company.
RL: So where do you hope to grow. Do you have a membership number in mind?
MS: We’ve grown our membership from 22 companies in 2016 to 115 now. Part of our challenge is that while we are established as the industry voice we still represent a number of smaller companies that pay lower dues. So while we have a few companies that are at the top tier of our membership we still represent a number of smaller companies that are important at their present size. Our three biggest member companies are Campbell Soup, Morningstar Farms, which is the brand under Kellogg, and Blue Diamond Growers. We want to have a good diverse representation, which I think we do have and we want to keep that going. We like the smaller companies. We have a great number of medium sized companies as well. There are a few companies that we would like to have join us so we would like to find ways to reach out to them and show them what we have to offer. I think mostly what we want to do is help ensure the continued success of the sector. We are well positioned to grow along with the industry and bring on new companies because we’ve done a really good job of positioning PBFA as the voice of this growing sector. We are fortunate to have a handful of foundations and individual donors that are passionate about our mission and have been donating money to us. We just need more resources to match the likes of the milk lobby and now increasingly the meat lobby.
RL: Speaking of milk, there are some issues with what can be called milk. Talk about the biggest issues your members are facing and how PBFA is representing their interests.
MS: A lot of our members get help from us on the policy front. Labeling is obviously our number one issue right now because some members are trying to figure out how to label a plant-based product. This is a challenge for the industry as a whole. Our members know that we are representing them in the policy arena with these labeling challenges, particularly now with milk.
RL: How do you even define what milk is, and what meat is, and how do you make your labeling case to the FDA?
MS: On the milk issue, we formed a Standards Committee on how to define milk. We drafted various versions of standards and then came up with a document that creates a minimum standard for composition of milk, and what is required to be in a product labeled milk. And then we came up with labeling conventions, which are voluntary recommendations to the industry on how to go about labeling their products. And then we’re going to turn the meat category and you know that may pose new challenges. So I’ll let you know how it goes in a year. The most important thing here that we don’t need an act of Congress, we don’t need the FDA to dictate how these products are labeled. Obviously there are some basic rules of the road that our members are already following. Words can’t be misleading. The nutrition facts must be right. The disagreement is around the use of certain terms that the animal food industry thinks that they own when in fact they don’t.
RL: What happens when you have members disagreeing on these issues?
MS: We work it out. We had this year long process of a committee and we went to all of the major players in the milk category that were not on the committee and that’s why it took a year. No not everyone agrees, but the good news is we came to agreement. I think we came up with a pretty good solution. Nobody thought that we shouldn’t be able to call the plant-based products “milk.” And some of the bigger companies that maybe take a more conservative approach were actually the most vociferous in defending the use of the term. People are very passionate about this stuff. And sometimes people in the milk industry think they have a corner on their passion for dairy and I get why they’re passionate about their industry sector. Maybe their parents owned a dairy farm for 30 years or whatever. I get it. It’s great they have that passion and they’re defending their turf. That doesn’t negate the passion that our members have for making a product that bears resemblance to milk and just happens to be made from soy, almonds, cashews or whatever. Consumers aren’t buying these products in droves because they think that they’re buying cow’s milk. They’re buying them because they taste good and they like it on their cereal or in their smoothie and they provide some other benefit they aren’t getting from cow’s milk.
RL: So how do you reconcile your activist mission on behalf of plant-based foods with the practices and missions of the large, traditional CPG firms?
MS: Well clearly we haven’t exactly scared them away. I mean for a company like Campbell Soup to join, we’re doing something right. We’re not a bunch of radical vegans here. Our whole philosophy is to be open to companies like Campbell Soup that want to join to grow that particular sector of their food portfolio. We’re not telling them to stop selling chicken soup. We’re just saying, “Okay we can help you sell more pea protein milk.” And we have the same philosophy with consumers. We want to help the everyday consumer that’s just looking to cut back on meat or looking for an alternative because their child allergic to dairy or whatever the reason is. We know that the growth is coming from the mainstream consumer that is cutting back. Because we have a philosophy that we are welcoming to all, I think that is why we’re able to attract the likes of Campbell Soup. Of course, those are the conversations we had when they were considering joining. There’s room for everyone in this movement. And yes it is a movement, and our member companies may be motivated by different reasons. We have companies that are full-on vegan and partner with animal welfare groups. And then we have other companies that just want to sell more veggie patties. They are not necessarily promoting a cause per se but they understand the marketplace opportunity.
RL: What are your key policy initiatives for next year?
MS: We are busy defending members’ ability to use words like “milk” in the proper context and clearly communicating to consumers what these products are. And on the retail side, we’re starting to conduct outreach with two major retailers and our plan by the end of this calendar year is to have one shopper marketing campaign in partnership with a major retailer in roughly 100 stores as a pilot project. We’ve developed our own marketing materials that we’re offering for free to retailers who want to partner with us. So we’re paying for the marketing, the messaging and the POS advertising campaign — everything that would go along with a shopper marketing campaign. Parallel to that we’re developing relationships with other retailers to see what role we can play in helping to educate them about the category. We’ve gotten very good feedback from retailers so far. They don’t want to be left behind when it comes to this growing consumer trend. RL