Retailers, CPGs Bet on Plant-Based Products

From Store Brands, July 27:

A network of investors focused on alternative meats took a close look at how 15 retailers and 10 food producers are muscling up dedicated teams around plant-based products, naming Tesco and Unilever as the top of the non-meats food chain.

The investor group FAIRR said two in five global food giants with combined annual revenues of $459 billion now have dedicated teams working to develop and sell plant-based alternatives to meat and dairy; the group is studying the 25 handpicked companies in its Sustainable Proteins Hub, an ongoing interactive tool for investors to see how the retailers and food producers are using protein diversification to drive growth.

FAIRR said the investors in the network praised Tesco and Unilever for showing a commitment to shift food portfolios to more sustainable protein sources, demonstrating board-level support for a climate-aligned protein transition and completing a climate “scenario analysis” on their commodity supply chains. Of all 15 retailers studied by the group, seven have plans to have alternative sources in their meat aisle.   

The manufacturers included in the study are: Unilever, Nestle, Kerry Group, Conagra, General Mills, Grupo Nutresa, Hershey, Kraft Heinz, Mondelez and Saputo. The retailers are: Tesco, M&S, Sainsbury’s, Groupe Casino, ICA Gruppen, Carrefour, Loblaw, Morrison’s, Woolworths, Ahold Delhaize, Kroger, Coles, Walmart, Amazon, Costco.

A retailer not on the list, Albertsons, announced during its first quarter earnings call that they would be expanding plant-based products, including its recent line of dairy-free ice cream. Meanwhile, Kroger has been open about its push into the plant-based meats category, recently testing that alternative meats sell better when positioned with meats in-store.

Jeremy Coller, founder of FAIRR and the chief investment officer at Coller Capital said that the COVID-19 landscape has made 2020 a watershed year for the sustainable protein market, attracting double the investment of last year in just six months.

“This engagement shows which food companies are putting in place the infrastructure and innovation to benefit from this seismic shift in the ways we shop and eat; and those that will lose out,” he said. “Investors are watching closely.” 

The report shows that more than $1.1 billion of venture investment has gone to the alternative proteins category in the first half of 2020, doubling last year’s $534 million.

Retailers leading with dedicated teams focused on the category, per the report, are Kroger, Coles, Marks & Spencer, Sainsbury’s and Tesco.