Food Companies Continue to Spend on R&D as Plant-Based Food Movement Rages On
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NEW YORK, Dec. 23, 2020 /PRNewswire/ -- We've seen some exciting developments in the food and beverage industry over the last few years, particularly with regards to plant-based alternatives. Last year, the US plant-based food market hit $5 billion in sales, while sales of plant-based "meats" have grown by 31% in grocery stores alone over the past two years. As we head into 2021 and beyond, food companies are putting millions into the research and development of the food industry innovations of tomorrow. Companies like Else Nutrition (TSXV: BABY) (OTCQX: BABYF), Kraft Heinz Company (NASDAQ: KHC), Beyond Meat Inc. (NASDAQ: BYND), ConAgra Brands (NYSE: CAG), and Kellogg (NYSE: K) are investing in research and development teams to stay ahead of the curve, keep their offerings fresh and current, and possibly create the next big industry innovation.
Israel-based food and nutrition company Else Nutrition (TSXV:BABY) (OTCQX:BABYF) is focused on developing innovative, clean, and plant-based food and nutrition products for infants, toddlers, children, and adults. The company just completed a successful e-store and Amazon launch and is currently in the process of rolling out its products at over 380 US retail locations.
On December 15, Else announced the official opening of its new product research and development (R&D) division. The new team of nutrition scientists and engineers will leverage the company's robust intellectual property (IP) portfolio and new state-of-the-art lab to develop future portfolio products in the infant, toddler, children, and adult nutrition segments.
"This marks an exciting milestone in the next phase of our growth, expanding on our capabilities as pioneers in the plant-based nutrition space," said Else Nutrition co-founder and CEO Hamutal Yitzhak. "This innovation lab will serve as a springboard of new products and for years to come, and we're looking forward to continue delivering novel, clean label, plant-based consumers solutions globally."
Else Nutrition has strong IP protection with patents granted in 22 countries, including the US, Australia, India, Japan, and Eurasia, as well as an additional 44 patents pending.
Plant-Based Market Boom Projected to Continue After Pandemic
The plant-based food industry has experienced significant growth in 2020, but analysts don't see the market growth as a fad. In fact, the plant-based food and beverage market is projected to reach $32.29 billion by 2027 due to increasing incidences of lactose intolerance, the rising number of milk allergies, and innovative product launches.
Plant-based milks currently account for 14% of the entire milk category in the US, a 5% increase year-over-year, and could "eventually make up the majority of the dairy category." The plant-based meat category has also skyrocketed, with sales increasing by 18% over the last year, likely driven by the popularity of Beyond Meat Inc. (NASDAQ:BYND).
Beyond Meat entered the public market with a bang in May 2019 with one of the biggest IPOs in recent history and has continued to grow its product portfolio ever since. On November 16, the company announced two new versions of the Beyond Burger®, which are expected to launch nationwide in early 2021. Earlier this year, Beyond Meat launched its Beyond Breakfast Sausage Patties, Cookout Classic, Beyond Meatballs, and Beyond Breakfast Sausage Links.
The shift in consumer spending on plant-based alternatives has also led food industry giants to shift focus towards new product offerings. Although Kellogg (NYSE:K) has been involved in the vegan food space for a while through its MorningStar Farms brand, the company bolstered its meatless alternative offerings in 2020 to meet with changing consumer tastes. To stay up on the competition going into 2021, Kellogg is partnering with Unilever to suss out new talent at the Future Food-Tech Summit in March.
ConAgra Brands (NYSE:CAG) may take the cake for the most product launches into the market this year after revealing the launch of more than two dozen new products in July, half of which were plant-based. In September, ConAgra brand Gardein debuted the first-ever collection of plant-based meat alternative soups with five flavors, all of which contain 10-15 grams of protein.
Lagging behind in plant-based R&D initiatives is global food company Kraft Heinz Company (NASDAQ:KHC), which only spent 0.4% of revenues on R&D in 2019, well below the average 1.4% spent by its peers. After facing financial hardship in 2019 and coming under scrutiny, the company has vowed to put more money in R&D moving forward. In June, Kraft hired Miram Ueberall to lead international R&D, who says that innovation will be the key to improving company performance. Kraft could be looking to gain a slice of the plant-based dairy market after its cream cheese company Philadelphia revealed that it is considering launching a vegan soft cheese spread.
Else Nutrition is also looking to grow its stake in the dairy alternatives market with adult nutrition and toddler baby food products currently in development.
For more information on Else Nutrition, please visit this link.
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