Soaring Market for Soya Beverages in Europe

Large multinational companies have finally entered the soy market in Europe, further pushing the category mainstream.

By Gerard Klein-Essink
Director
Prosoy Research & Strategy
Bilthoven, The Netherlands

The European market for soy drinks and desserts experienced another year of double-digit growth in 2006. And the influx of new brands from large multinational companies such as Unilever, Danone and Coca-Cola, sporting their extensive marketing and promotion campaigns are good signs that soy is here to stay in the minds of Europeans consumers.

Innovation is the key to success in the fast-growing soy drinks (milk alternatives and beverages including soy) and desserts (yogurts and spoonable desserts like custards) market. While the category is still in its infancy, new products that gain consumer acceptance and the required turnover will foster even greater growth in the years ahead. It is important to keep in mind that amount of dairy-free offerings is by far smaller than more established dairy offerings.

In 2006, Prosoy Research & Strategy, Bilthoven, The Netherlands, recorded close to 90 new soy beverage and dessert introductions in eight European countries (Belgium, France, Germany, Italy, Netherlands, Spain, Sweden and the U.K.). According to Prosoy’s most recent report, “Soyfoods: The European Market 2007,” a majority of these launches included new products (90%), while the remaining 10% were a result of new packaging concepts. Most of the new launches were recorded in Spain, Germany and France (75% of the total). The number of new product entries in 2006 showed a 15% increase vs. 2005. Most of the new products were categorized as milk alternatives (45%), followed by nearly equal percentages of beverages (including juice), yoghurts and desserts. Health is certainly the motivation for the introduction of many of these products.

Achieving Mainstream Distribution

More and more European retailers want a piece of the soy drinks and desserts market. In 2006, the German-based discounter Aldi stocked up additional soy-based milk alternatives and rolled out their Plain, Vanilla and Chocolate flavored ambient choices to consumers in the Netherlands. Most discounters in Germany have followed the Aldi example, which has led to tremendous pressure on consumer prices—currently soy milk is being sold for as low as €0.89 per liter. The industry is of course not too happy about soymilk becoming a commodity price-wise, but it is a good point for the awareness of soy in consumers’ mindsets.

In Spain, France and the U.K., many retailers also offer a range of soy beverages and desserts. Auchan introduced a range of bio soy beverages with a convenient screw cap in France during the second half of 2006, while Carrefour launched a peach soy beverage in Spain.

In the U.K. soy beverages and desserts have become part of a larger category in some retail chains called “Free From.” Retailers are aware of a growing number of consumers looking for foods suiting their dietary needs with regard to an absence of allergens, such as lactose, wheat or other ingredients. Some of these consumers have an allergy (1.5% of the U.K. populations), but many think that they have a food intolerance for milk and other substances (4-5% of the population).

Increasing Communication about Soy’s Benefits

Consumers absorbed a lot of information on the health benefits of soy through television, magazines and other media in 2006.

Danone introduced its new Senjá brand in Spain early last year, comprised of a line of fruit-based soy-based desserts, which was followed by an intensive marketing and promotional campaign.

The Yoplait Company launched Yop Soja, a probiotic cultured yogurt-based soy drink without lactose. Yop Soja is marketed in the typical white plastic Yoplait bottle, which is used for all yogurt drinks.

Unilever invested a few million Euros in 2006 to market its Adez brand in the U.K., and it decided to add close to €16 million in 2007. The Adez line consists of three fruit and soy drinks, which are very much mainstream concepts. The brand will soon be launched in The Netherlands as well.

In Spain, at the end of 2006, Coca-Cola entered the soy market with a new Minute-Maid orange juice and soy concept called Sojaplus. It too spent a lot of money to back the launch of the new product. This new brand was part of a line of healthy juices containing drinks called Duofrutas, Antiox and Classics.

Also in 2006, Alpro started to campaign on television in The Netherlands, while Valsoia continued its television campaign for the Valsoia brand in Italy.

It seems large companies have come to the conclusion that consumers are ready to receive the positive news on the health benefits of soy. Such was not the case five years ago, when the possible genetic modification of soy was in the media spotlight. A lot of soy-based drinks and desserts are either marketed as bio or organic or based on non-GMO soy beans or soy isolate, so the chances that this issue can create a detrimental effect on purchases is much less of a threat now.

The ‘Feel Good’ Nature of Soy

Modern lifestyle packaging design is currently being used to position products, whereas marketing campaigns focusing on a “feel good” aspect attract new consumers looking for healthy alternatives in the diet. Reputable companies and brand names in combination with existing packaging concepts such as the new Minute Maid or Yop products clearly demonstrates to consumers that soy-based products are indeed healthy, representing an extension of an existing range of health products, rather than something completely new. These reference points will certainly contribute to the further growth of the soy-based products available in the chilled and ambient cabinets throughout Europe.

Important claims on the packaging of soy drinks and desserts include “no cholesterol,” “no lactose,” the “vegetable basis” and “a source of protein.” In some cases, additional claims such as “with menopausal benefits” are used.

The product claim “no cholesterol” in relation to dairy milk has recently gained a lot of attention in the press. Alpro pushed the envelope in this respect in The Netherlands at the end of 2006 by asking the question: “Do you want your milk with or without cholesterol?” in its media campaign. The Dutch Dairy board won the court case and made Alpro stop running this campaign because dairy milk does not contain a lot of cholesterol. However, Alpro did gain a lot in this particular court case, especially since the Dutch judge did not question the fact that Alpo is using the term “soy milk” to describe its product. Presently, Dutch law does not allow the term soy to be combined with milk. Milk is a term restricted to cows milk, goat, horse and rice milk.

Soy in the Wider Context

Developments in other food and non-food markets will have a positive effect on the perception of soy’s health benefits in the future. In the meat-free market in the Netherlands, for example the leading brand Albert Heijn refers to the raw materials source (soy and wheat) on the front side of the sleeve of its meat alternatives range. In the bars market many new products containing soy as part of a diet or weight management program (Enervit bars in Italy) or for optimal energy recovery and muscle building after sports (Friggs Body Check bars in Sweden) appeared on the shelves.

In the non-food sector, various products containing have started appearing on the market. In the skin and hair care areas specifically soy is supposed to provide hair strength (the ultimate example is “Sexyhair”) and protect against skin aging (i.e., Nivea’s range of soy-based personal care products).

In 2006, the competitive landscape witnessed major multinational companies entering the European market. In one way or another, the top food companies are now staking a claim in soy-based milk alternatives, beverages and desserts in Europe or elsewhere in the world. Unilever, Coca-Cola, Danone, PepsiCo, Nestlé, Alpro and the global leader in organic products Hain Celestial are all competing for a part of the soy stomach of the European consumer. The future for soy looks very promising and the battle amongst brands has only just begun.

About the author: Gerard Klein Essink is the director of Prosoy Research & Strategy, Bilthoven, The Netherlands. PROSOY will be launching the new “Soyfoods: The European Market 2007” report sometime this month. Other relevant activities to the soy industry include a 3-day Soya Beverages and Desserts Course (May 2007, The Netherlands), the 1st European Meat-free Conference (October 2007, Germany) and the 3rd European Conference on Soya Drinks & Desserts November 2007 (London). See Nutraceuticals World’s “Meetings Calendar” section for more details.