PLANT-BASED EATING TAKES ROOT Focus on Beverages
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1 PLANT-BASED EATING TAKES ROOT Focus on Beverages The Evolving Plant-based Lifestyle Plant-based eating is moving into the mainstream. No longer a fringe dietary habit, a convergence of trends is feeding interest in green eating and steadily fortifying growth within the category. Foremost among those trends is health & wellness. Americans across generations are seeking out and eating more plant-based food and beverages in an effort to promote their overall wellness, along with that of their families and the planet. People equate plant-based eating with physical health benefits, such as heart health, immunity and bone health. Yet equally as important if not more are the daily lifestyle benefits they perceive from a plant-based diet gaining energy, supporting healthy digestion, avoiding toxins. While increased plant-based eating may be a monumental shift in American dietary habits, it s not signaling the elimination of all animal-based products in the diet. Most consumers are simply reducing the animal-based products they eat to make room for more plant-based ones. Interestingly though, consumer research reveals a permanent change to an increase in plant-based foods is more likely among those reducing but not eliminating animal products in their diets. This is borne out with the rise of flexitarian consumers sometime vegetarian, sometime meat eaters. While flexitarians bridge the two dietary patterns, it s important to keep in mind they differ from vegetarians and vegans in their unwillingness to sacrifice taste when eating plant-based food and beverages.
2 Younger generations (20 and 30 somethings) are the most interested in plant-based eating and are also increasing their use of plant-based food, beverages and ingredients. Yet at the same time, all age groups are participating in the evolution to more plant-based eating. And people who find plant-based eating important will pay at least five percent more for it, but interest falls off at an extra 10 percent or more. Measuring the market HealthFocus International in conjunction with DuPont Nutrition & Health conducted an online study of more than 1,000 consumers 18- to 65-years-old to better understand the plant-based food market. The sample included only people avoiding or reducing meat or other animal-based products and/or those increasing plant-based food, beverages and ingredients. The following plant-based consumer insights are from the research. Plant-forward more than a fad Shifting consumption patterns show more than half of Americans (52%) report increasing their plant intake. Among those increasing plant intake, 41 percent are also reducing animal protein consumption. The remaining 11 percent report no change in animal protein consumption. Meanwhile 18 percent of people are either avoiding or reducing animal proteins without increasing plant intake and 29 percent are static neither reducing animal nor increasing plant intake. 52% U.S. CONSUMERS are increasing plant intake 1 How consumers integrate plants into their diets 41% 11% 29% 18% Increase Plant / Reduce Animal Increase Plant / No Change in Animal No Change in Plant / No Change in Animal No Change in Plant / Avoid Animal Only 18% totally avoiding or reducing animal proteins without increasing plant intake. 1 Trend or fad? What indicates this plant-based eating pattern is a true shift rather than a mere flirtation with a passing fad is that nearly 60 percent of consumers know or hope their increase in plant-based eating is a permanent dietary change. Drilling down even further, researchers found those reducing or avoiding animal products in their diets were more likely to claim their plant-based dietary change was permanent. 6 IN 10 know or hope increasing plant protein is a permanent dietary change. 1 31% 26% 28% 14% Permanent Hoping it s permanent Trying it May not last 2
3 Primary plant-based drivers Plant-based eating is associated with more than simply nutrition and satiety. People link plant-based eating to a broader list of benefits that are both personal and societal. The three main drivers are daily living, health and social benefits. daily living benefits health-related benefits socially-driven benefits Healthier product Avoid toxic chemicals Energy Digestion Clean eating/safer Heart health Prevents illness Builds strong bones Live longer Skin health Sustainable ingredients Lifestyle preference Environment Animal welfare Family/peer influence 1 Daily living benefits comprise better digestion, a healthier product, avoiding toxic chemicals, gaining energy and safer/clean eating. These individual daily living benefits flow into the personal health ones both are part of the larger health and wellness trend in which people are more proactive about their well-being. As a result, they select food and beverages which they perceive to be good for themselves. The health benefits linked to plant-based foods are heart and skin health, illness prevention, longevity and building strong bones. The social benefits encompass sustainable ingredients, lifestyle preference, animal welfare, environmental impacts and family/peer influence. These reflect the Millennial desire to know more about where and how food is grown, made and taken to market. Nutrition-motivated consumers What motivates American consumers to buy healthy products? Through proprietary research conducted by HealthFocus International, DuPont found nutrition-motivated consumers are most interested in plant-based eating. The study revealed shopping behaviors of health and wellness consumers vary by their motivations. This led to dividing consumers into six distinct groups: Health Helpers, Health Wise, Weight Strugglers, Taste Driven, Good Life and Just Food. Among the first three groups, nutrition is primary and within the latter three, nutrition is secondary. HEALTH WISE While all three of the nutrition-motivated groups are interested in increasing their plant-based food intake, Health Wise consumers stand out as the most interested (74%) and also the most likely to have experienced a positive health impact from eating plant-based foods (39%). Health Wise consumers are active planners, nutritional savants who are the most assertive about their health. For them, nothing is more important than eating the right foods for long, active, energy-filled lives; therefore, nutrition is always more important than price. Health Wise consumers also lead in selecting dairy alternative beverages (42%) and snacks with added plant-based healthy ingredients (37%). 74% 42% 37% of U.S. Health Wise consumers are increasing plant-based food intake. 1 of U.S. Health Wise consumers choose dairy alternative beverages. 1 of U.S. Health Wise consumers choose snacks with added plant-based healthy ingredients. 1 HEALTH HELPERS Health Helpers are also strongly interested in upping their plant-based eating (65%). This older consumer cohort (50-years-old plus) is afflicted by health problems and chooses specific foods to help manage them. Since they eat a carefully cultivated diet, it s not surprising Health Helpers are most willing among all the consumer segments to pay 10 percent more for plant-based food and beverages. 3
4 Top plant-based products Alternative dairy beverages, such as soy and almond milk, are the most popular plant-based product across all U.S. consumer segments, with 28 percent usually or always choosing it. Health Wise and Health Helpers were nearly twice as likely to choose alternative dairy beverages than the groups for whom nutrition is secondary when making food choices. Among all segments, 24 percent of consumers choose snacks with added plant-based healthy ingredients and 23 percent choose plant-based snacks instead of traditional sweet cookies and confectionery. Similarly, 25 percent choose foods with added plant-based healthy ingredients. 28% 9% non-dairy based beverages meat substitutes 1 24% snacks with added plant-based ingredients Plant protein beverage claims growing From 2013 to 2017, U.S. beverage launches with plant-based and plant protein claims experienced double-digit growth. According to Innova Market Insights, the five-year period showed 32 percent CAGR. In 2013 less than a hundred launches were noted and by 2017 there were 250. During the same period, Innova data shows a 19 percent CAGR increase in the number of companies launching beverages with plant-based and plant protein claims. Within the same time window, a closer look shows small companies at the forefront of innovation in this category, although larger companies are increasing activity. U.S. Beverage Launches with Plant-Based and Plant Protein Claims % cagr
5 Most common plant-based beverage proteins Soy was the top protein source in new U.S. plant-based beverage product launches between 2013 to 2017, according to Innova. The next most popular plant-based protein was pea with 31 percent, followed by rice at 27 percent and all others at 9 percent. 2 33% 9% 27% 31% Soy Protein Pea Protein Rice Protein Other Protein Fermented beverage interest up Increasing interest in non-alcoholic, fermented plant-based beverages think juices and non-dairy yogurt drinks is reflected in new product growth in the category 63 percent CAGR from Jan to Sept. 2018, per Innova. The top three positioning claims within this emerging segment are probiotics (91%), digestive health (90%) and vegan (70%). Other notable package claims include convenience, gluten free, organic, kosher and GMO-free Fermented Non-Dairy Beverage Launches Launches U.S., U.S., Canada, Canada, Mexico 3 Mexico* 63% 91% cagr 90% 70% Sept Top Positioning Claims for Fermented Non-Dairy Beverages - probiotics digestive/ - gut health - vegan 5
6 Beverage ingredient opportunities DuPont Nutrition & Health offers an extensive array of ingredient solutions for plant-based beverages along with decades of application knowledge in this segment. Plant-based proteins When selecting a plant protein ingredient, multiple factors are essential beyond the plant source. Taste, nutrition, cost and sustainability are also all important considerations. DuPont Nutrition & Health brings decades of market leadership, capabilities and expertise to help beverage manufacturers navigate the plant-based protein landscape. Our global leadership in plant proteins, complementary ingredient portfolio and in-depth formulation, sensory and nutrition expertise give us the unique tools and capability to help formulate better-tasting products. Texturants/Stabilizers The broad DuPont Danisco range of hydrocolloids is supported by strong expertise in optimizing the texture, taste and appearance of specific beverage applications. Functionality, cost, availability, label acceptance, process tolerance, ingredient interactions and more are considerations when selecting an appropriate hydrocolloid that will perform over the shelf life of your beverage. DuPont experts can help navigate these considerations and guide you to the optimal texurant for your products. VEGE cultures Danisco VEGE Cultures are designed specifically for use in a variety of plant-based fermented products. Using our knowledge of the plant bases used by the food industry, we selected the best microorganism strains for optimizing the fermentation profile and taste of each plant source. The culture taste profiles range from a fresh, clean and mild flavor to a more acidic profile and are suitable with varied textures. Our cultures are composed of different species including the highly-documented probiotics Lactobacillus acidophilus NCFM and Bifidobacterium lactis HN019. The result is healthy plant-based fermented products all non-allergenic and adhering to all required certifications. SOURCES: 1 HealthFocus, International. Plant-Based Eating: USA DuPont Segments, August Innova Market Insights, July Innova Market Insights, October 2018 About DuPont Nutrition & Health DuPont Nutrition & Health combines in-depth knowledge of food and nutrition with current research and expert science to deliver unmatched value to the food, beverage, pharmaceutical and dietary supplement industries. We are innovative solvers, drawing on deep consumer insights and a broad product portfolio to help our customers turn challenges into high-value business opportunities. The information contained herein is based on data known to DuPont or its affiliates at the time of preparation of the information and believed by them to be reliable. This is business-to-business information intended for food, beverage and supplement producers and is not intended for the final consumer of a finished food, beverage or supplement product. The information is provided as is and its use is at the recipient s sole discretion and risk. It is the recipient s sole responsibility to determine the suitability and legality of its proposed use of DuPont products for its specific purposes. Information and statements herein shall not be construed as licenses to practice, or recommendations to infringe, any patents or other intellectual property rights of DuPont or others. DUPONT HEREBY EXPRESSLY DISCLAIMS (I) ANY AND ALL LIABILITY IN CONNECTION WITH SUCH INFORMATION, INCLUDING, BUT NOT LIMITED TO, ANY LIABILITY RELATING TO THE ACCURACY, COMPLETENESS, OR USEFULNESS OF SUCH INFORMATION, AND (II) ANY AND ALL REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO SUCH INFORMATION, OR ANY PART THEREOF, INCLUDING ALL REPRESENTATIONS AND WARRANTIES OF TITLE, NONINFRINGEMENT OF COPYRIGHT OR PATENT RIGHTS OF OTHERS, MERCHANTABILITY, FITNESS OR SUITABILITY FOR ANY PURPOSE, AND WARRANTIES ARISING BY LAW, STATUTE, USAGE OF TRADE OR COURSE OF DEALING. Copyright 2018 DuPont or its affiliates. All Rights Reserved. The DuPont Oval Logo, DuPont, Danisco and all products denoted with or are registered trademarks or trademarks of E.I. du Pont de Nemours and Company or its affiliated companies. PB 88-1 US DuPont Nutrition & Health
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