Mr. Ivor Harrison, Director at IHA Consultant, and chair of a Track on New Products & Channels at the 9th Bridge2Food Protein Summit 2016, has summarised with his team of speaker the outcomes of a successful Summit on the trends, developments and challenges of new protein products and its channels.
Session – Protein foods retailing trends
- Sports & performance: Viktor Fekete, Head Strategic Sourcing & Purchasing, Scitec Nutrition (Hungary)
- Bakery & Baked goods: Mine Uran, President, Alver (Switzerland)
- Beverages & Sauces: Mathieu Gonçalves, Founder, Algama (France)
- Food Service & Ageing consumers: Diederik Bruins, CEO & Founder, Fortified Food Coatings (The Netherlands)
The panel discussed “what does it take to succeed today?” given the current regulatory environment, competitive landscape and costs involved.
For the established player it was clear that the marketplace has become increasingly challenging, not just from the number of new entrants but also the channels through which they operate. There was the perennial need for continual product innovation but more disturbingly the possible need to reassess the validity of current business models. e.commerce was a critical success factor for any company selling a broad A-Z range of products, less so for the narrow player. Furthermore, there was a need to widen markets or enter new ones with new brands.
For new players, the challenge was to target specific groups and use specific channels (from FMCG’s traditional retail and internet, but also cure, care, and ‘horeca’).
A second issue that is affecting success today is the fact that while awareness of protein is increasing, understanding of it and its role is very limited. Other than body builders, few know much. Perhaps ‘Millennials’ know something but others are confused and often ignorant. When it comes to communication, technical information sells to the ‘informed’, but just the word protein can work for others. However, although much discussion the topic of protein centres around its technical attributes, emotional engagement (above rational) is essential as people buy for emotional reasons.
There’s no doubt that to be successful requires relevance, so it was recognized that one needs to listen to consumers, and then offer products and services that meet genuine needs in the most convenient way possible – for purchase and consumption.
It was felt that there are a few new categories emerging – one being micro-algae with its sustainability and low cost per kg compared to animal sources of protein; another was ambient stable plant-based foods, as most today are fresh or frozen; and lastly in time 3D protein foods created in-home.
Session – Flexitarians and plant-based foods
- Flexitarians – Consumer & industry options: Henk Schouten, CEO & Owner, GoodBite (The Netherlands). Gerard Klein Essink of Bridge2Food, spoke on behalf of Henk, who unfortunately could not make it
- Oat & bean based meat-free: Reetta Kivelä, founder and CTO, Gold & Green Foods (Finland)
- Plant-protein pieces: Andreas Redl, Project Manager Innovation, Tereos (France)
The panel discussed the pressing question “How can we increase the consumption of plant-based protein to 50% by 2025?”.
Although it was recognized that plant-based protein is becoming top of mind is was less clear just why! Certainly millennials are showing greater concern for the environment, but it was felt there is generally a greater consciousness and conscientiousness. In addition, there have been technical improvements which have led to better tasting ‘vegetarian’ products. Nonetheless taste was considered to be the number one hurdle to overcome for there to be mass appeal. Overcoming technical issues may be a critical success factor but changing perceptions that ‘men eat meat’ and understanding that sufficient protein can come from plant-based sources required a real need for education. In simple terms the understanding is that there’s ‘meat and vegetables’ and each provide different nutrients – meat provides protein and vegetables fiber, vitamins and minerals. Government health advice does not make things clear either and needs to change for a groundswell to be created.
The panel felt that a clear message is everything. Simplicity matters such as “Monday’s minced meat alternative”. But this all requires a social movement that discusses the issues and benefits, and educates.
To achieve such rapid change could only come about if interested parties work together. The Dutch government has started an initiative – asking industry to answer the question (above) by the end of this year. So far, it seems there is a requirement for an Association of interested parties to drive increased household penetration. Today in the Netherlands household penetration of ‘vegetarian’ meals is about 30% but it is believed this needs to increase to c.70% for there to be any chance of reaching the goal. Specifically, industry have suggested that acceptance of these sources of protein from plant-based foods need investment in communication, in-store sampling, shelf space, promotions and a common name.
Session – Plant protein foods: the investors’ perspective
- Florian Loebermann, Munich Venture Partners (Germany)
- Liz Specht, Ph.D., The Good Food Institute (USA)
- Matthieu Vermersch, New Protein Capital (Singapore)
The panel was asked “What’s required to succeed tomorrow?”
It’s clear that investment in plant-based protein is ‘hot’ and the panel gave their view on why – there’s a growing global need as the world’s population is likely to rise to 9 billion by 2050 and we won’t be able to provide enough protein from animal sources to feed so many; the opportunity is therefore very significant, and we have a sense that we’re at a tipping point.
When it comes to money matters, the two venture capitalists indicated what investment criteria they assess potential targets by. There is definitely a wish for technical, protectable IP, ideally the product or service should be in market already or at least ready for market, it should be scaleable, and there needs to be a strong management team in place who will have skin in the game and sufficient equity to be motivated and to share in the upside. They were also looking for high or novel technology, sometimes called disruptive technology, and the absolute that the plan was stretch but feasible.
Interestingly the timescales required for payback or exit varied from 3 years up to 10 years. But where more time was accepted it was definitely not to hand-hold management
The VCs tend to share the investment risk with a consortium of funders with the lead VC taking a seat on the board.
The value chain was discussed and while one (Munich Venture Partners) were interested in all parts of the chain, the other VC (New Protein Capital) were focused on the mid-stream which lacked investment and was an area most inclined to disruptive technology, as opposed to upstream (crop engineering and smart farms) or downstream (food delivery) where it was felt there had been too much investment.
It was felt that being successful required a bridging the value chain, which entailed good communication, but an appreciation of the regulatory hurdles. Risk management was also high on the agenda as there was a desire to work only with investments which could bring super returns, as failures were part and parcel of managing a portfolio.
The panel were asked what the view wa son whether it was better to source funds directly from corporates or from VCs. The answer was swift – VCs offer faster and more flexible investment, while corporations might mix up or be conflicted by strategy and financial return.
Session – The next food trends
- 3D-Food printing: Melissa Snover, The Candy Factory (UK)
- Fresh Fitness Food: Emma Rose, Nutritionist, Fresh Fitness Food (UK)
3D printing – The Candy Factory
Melissa gave is a fascinating insight into the growth of The Katjes Magic Candy Factory and why it may be relevant to foods for the future. 3D printing was invented some 30 years ago, and the patents expired in 2012, which she was able to take advantage of. Initially 3D printing focused on industrial prototypes, then medical devices, but since 2012 the door is open to applications for the mass market – candy! Melissa feels candy (sweets) is a good place to start simply because it’s more acceptable to the mass market; consumers are not ready for real food from 3D – but in the years ahead they may be.
Today the printer has already been reduced from something the size of a smart car to one that is portable and can be used in home. It’s just 45cm3, weighs less than 30kg, and prints in under 5 minutes – which means the candy dries within 5 minutes which is revolutionary.
The technology is very difficult to use and therefore the barriers to entry are significant. Not only that, the custom patented plug-and-play software is what really changed the game. It allows consumers to choose imagery at the push of a button and print easily and simply without the need to know how the printer works. Today the printer will print an object to a maximum of 10cm high depending on the detail of the design.
The application to a wider variety of foods may be to combine food ingredients with the necessary nutritional profile that meets the individual’s requirement.
Personalised home delivery meal service – Fresh Fitness Foods
Emma gave us a clear roadmap of how a bespoke offering can bring substantial rewards, despite the complexity and challenge to manage it.
The company conducts an online ‘interview’ with customers to determine his or her needs and what kind of bespoke service will help to achieve results. This is then followed up with delivery of bespoke meals and soon after with 1-1 calls to the customer to check on results and how else FFF could help.
The customer receives products that are of the very highest quality, including all organic, grass-fed meat, and personalized high level of service – both of which have an impact of returns
Today the FFF has 400 customers – the question was raised whether the business is scaleable? We were assured that it is.
Interested in proteins?
Then take here a quick look at the new programme of the 10th Protein Summit 2017, 26-28 September 2017 (France). This great 5-in-1 Summit will bring together 400 leaders, 75 speakers and 60 exhibitors in the food, petfood and feed industry from retail, brands, ingredients, processing, research and universities. An ideal place to shape new networks and business. The 5 Summits are:
– Plant-based Foods Summit
– High Protein Foods Summit
– Protein Ingredients Summit
– Protein Processing Summit
– Protein 2030 Summit
Or download your brochure here.
Till 30 June new applications can be made for the Protein Awards for the best new category, new product, ingredient or disruptive innovation