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With soy plateauing, which plant protein source will step up?
All hail soy, king of the plant protein market-but for how long? While soy commands the number-two spot in protein overall, behind animal protein (two-thirds of the market), it is heading towards maturity. Other plant alternatives are now eyeing the ladder, and marketers are finding more consumers willing to cross over. Nutritional Outlook interviewed Frost & Sullivan's Christopher Shanahan, global program manager, food and agriculture, about how protein’s ingredient value chain-especially plant protein-is changing.
Shanahan will lead the upcoming educational session “Trends in the Protein Ingredients Market” at the upcoming Ingredient Marketplace trade show in April.
Soy Still Dominates
First off, give soy credit where credit is due. No ingredient climbs to the top of its market without skillful navigation. Soy marketers have done an excellent job of taking soy to the top of the charts. “Soy is huge. Everyone eats soy now. Anytime we go to a Thai restaurant, there’s always going to be soy. Ten or 15 years ago, soy was probably the biggest superfood there was to date at the time,” Shanahan says.
Soy is an extremely versatile protein. It can be concentrated into a protein isolate, made into tofu, or serve as a base, emulsifier, or egg or dairy replacer. It is, in fact, “a wonder bean in many ways,” he adds.
But consumer concerns over soy allergies (allergies specific to soy but not necessarily to other legumes) have left the door open. And market saturation of soy-based products, especially in the soymilk market, have consumers considering other potentially exciting alternatives, as evidenced by growing sales of almond, coconut, and rice milk.
“Soy is under threat in multiple categories, whether it’s the dairy-free milk category or in the protein space where we see significant rise in plant-based proteins-potato, canola, pea, rice, even wheat gluten, which is somewhat similar and being looked at again as a potential substitute,” Shanahan says. “Really any legume besides soy is either being commercialized or in R&D right now as a potential disruptor.”
Which Are the Most Promising Disruptors?
Pea protein, whose sales Shanahan loosely estimates have grown a minimum of 20% year over year, looks like the most promising right now. (Shanahan will unveil more precise market estimates during his Ingredient Marketplace presentation.) Pea protein activity is especially high in snack food and cereal, he adds.
“I think pea has made a pretty significant mark on the market,” he says. “Pea proteins have a lot of benefits in the plant space. They’re equal to or surpass the protein content of soy. In many cases, they address the palatability issues and allergy issues that soy has."
Still, next to soy, the pea protein market “is still very small,” Shanahan says.
Microalgae protein is also promising, first in animal feed and more slowly in human nutrition. “Algae has been around for a while already,” Shanahan says. “The thing with algae is that there are a lot of players, a lot of small players producing multiple types of algae meals. If the number of players continues to enter the market at the rates that they’re entering, that will do wonders in terms of making algal protein price competitive, especially on the aquaculture and the animal feed side.”
Most emerging algal protein suppliers are focusing for now on the animal feed space, especially considering the cost of producing standardized, food-grade algal protein for human nutrition, which only a few suppliers today provide.
Globally, there is demand and supply for algal protein. “There is a lot of algae out there," he says. "There’s a lot in APEC (the Asia-Pacific Economic Cooperation). There’s a lot all over the world, and there are a lot more participants entering this space."
Where Opportunities Lie
Is soy going away any time soon? No, Shanahan says. “Is it still the second most important feedstock for proteins in the protein ingredient space? Yes. I don’t think that will change over the next 5–10 years.”
But there is potential for other protein sources if those sources can compete on price-which is not the case today. Algal protein might command ten times the price per kilo that soy protein does today, he says. Potato, rice, and canola are also not yet competitive.
That’s what makes pea protein so attractive, Shanahan adds. “There are a lot of peas grown already in the world, so it would be pretty quick to increase capacity and availability, and make it price competitive.” Those prices are likely to drop as Roquette (Lestrem, France) and other pea protein players grow capacity.
It remains to be seen whether any of those protein sources will one day rise as high as soy has, but it's looking optimistic. Today, Shanahan says, “a lot of the plant protein growth is due to alternative protein ingredients, whether it’s rice or pea or wheat glutens or the multitude of other ingredients coming into the space.”
What will it take to change consumers’ minds to try something other than animal or soy? Some skillful marketing, as well as patience, Shanahan says. “There’s a lot of potential there for being more disruptive. But it will be driven by the decisionmaking of the food manufacturers who want to use these proteins.”
Beyond sports nutrition, opportunities may be highest in food and beverage products that are positioned towards women’s health, whether for weight management, simply enhanced health and wellness, or “maybe the yoga folks or people who are buying Greek yogurts.”
Geographically, Europe may be the brightest spot for high-protein products, as shoppers there represent “probably the highest in proportion of users relative to the total grocery shoppers in terms of willingness to adopt functional foods and high-fortified products,” Shanahan says. And although Asian shoppers have better embraced functional foods and beverages in general, “protein tends to be one that’s actually not as important relative to where protein ranks in the United States.” So there’s still work to be done.
Crossover, if it happens, will happen gradually, he adds. “Consumer awareness is key in terms of trying to determine which ingredient will come out on top after soy. Consumers are already used to soy. It took them a long time to get used to soy, and now the switch from soy to alternatives may be a little bit faster, but it still takes some time for reformulation, repackaging, relabeling. Those are the constraints.”
For now, many protein ingredient sources lack an “effective communication message” convincing consumers why they should switch over, he says. “It’s going to take a big consumer education campaign to really offset the gains of soy and milk.”
“I think there are opportunities to increase protein’s market share," Shanahan adds. "It’s really a matter of the suppliers and the brand owners communicating the benefits of protein that drive the sales. It’s just a matter of finding manufacturers willing to do that."
As is often the case, suppliers will need to rely on manufacturers to lead the charge by formulating these alternative sources in products consumers actually want. “If the protein folks were to look at soy as a case study and say, ‘Well, we need to not just make protein powders; we need to offer maybe a meat alternative product and a milk product and a cheese product. We’ve got to put more effort in terms of delivery of these ingredients beyond protein powder or a protein bar. We have to put more work into making these attractive food products that people can easily consume and that’s recognizable to what they’ve always eaten, whether it’s bread or something similar.’ I know you can only do so much as an ingredient supplier, so they’re going to have to rely on partnerships with brand owners willing to invest a lot of time and R&D to get those new ingredients formulated in new products, but it will be worth the investment if it can get pulled off.”
Which brings us back to pea protein. Pea protein is the perfect example, he says-one that demonstrates how natural forces (a.k.a., modern shopper preferences like clean label, non-GMO, natural, and organic) will entice consumers to alternative plant protein sources. “We’re already seeing evidence of pea making inroads in that direction,” he says. “I think pea protein is a testament of effective communication to consumers on the benefits-using green packaging, leveraging the organic/natural claim, talking about the vegetarian claim. I think that’s really a key driver.”
Sidebar: Animal Protein Still the Leader
With all this talk of plant protein, don’t discount the clear winner in the protein category: animal protein. Shanahan said that while threats from plant protein to animal protein’s market share seemed higher a few years ago, animal protein suppliers today may be friendlier to plant proteins, even looking to partner up. “There’s been increasing tendency for partnerships for the dairy industry-even possibly considering partnerships with these vegetarian-based alternatives and creating value-added combinations,” he says.
And while the animal and plant proteins are slightly different in terms of digestibility, flavor, and “effectiveness,” Shanahan says, animal protein marketers are finding value in using plant proteins as line extensions or creating animal/plant protein ingredient mixes-“kind of a new protein, a super protein mix, that’s primarily dairy-based but with enhanced plant-based for long-term digestibility and benefits,” he says. “Increasingly, the dairy guys are seeing this as a possible product line extension or partnership opportunity. Maybe they’ll cannibalize some of their sales, but they won’t 100% lose them as a consequence.”
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