Gerard Klein Essink04.01.05
European interest in soy-based products is rising, driven by a higher level of consumer awareness of the potential health benefits, together with a wider availability of such products. Unprecedented growth figures in various European markets have recently surfaced and there are plenty of growth opportunities for existing and new players to grab a share of the consumer's stomach in the coming years.
Why are soyfoods getting more popular? What are the drivers? Which new products have successfully been introduced? What can we expect for the future? These are important questions to consider when discussing the market dynamics for soy.
Soy-based foods are consumed by both young and older consumers, but for different reasons. Young people are making soy a regular part of their diet (via meat-free products and non-dairy drinks and desserts) for a wide variety of reasons, such as general and specific health issues, lifestyle or simply to take good care of their family. Older consumers tend to choose one or a smaller number of soy products for a specific health benefit and are less likely to make a large or complete change of diet, if not forced by doctors advice. Younger people buying soy products generally have a middle to higher education and a middle to high income. Further, the category tends to be led by women, who wish to take good care of themselves and/or their families.
Heart disease is a leading cause of death in the European Union (EU). High blood cholesterol is a risk factor for heart disease and many Europeans are very much aware of this relationship. Diets high in cholesterol and saturated fat have been linked to an increased incidence in coronary heart disease (CHD). The awareness of the health benefits of soy in relation to CHD may become more and more known to the general public. Health ingredients that have already made a firm connection with consumers are phytosterols, which are currently used in many new foods, such asthe Pro-Activ product range from Unilever. In fact, a major health insurance company in The Netherlands recently announced that its customers are eligible to receive a refund on their policy if they buy a certain amount of Pro-Activ products per year.
To date the usage of a soy-related health claim is only possible in the U.K. In 2002, following U.S. approval, the Joint Health Claims Initiative (JHCI) approved a functional claim, which states, "The inclusion of at least 25 grams of soy protein per day, as part of a diet low in saturated fat, can help reduce blood cholesterol" or "The inclusion of at least 25 grams of soy protein per day, as part of a healthy diet, can help reduce blood cholesterol."
The approval of this claim was used to further build the market. In 2003, Alpro, the European market leader in soy-based drinks and desserts, launched a €12 million marketing campaign targeting two million consumers via various sampling programs at railway stations, in conjunction with new product introductions. The total market for dairy-free products in the U.K. grew over 20% in part as a result of Alpro's activities in 2003. It can be expected that additional positive health claims related to soy will boost market growth in the coming years in other European markets as well. In fact, hints toward the health benefits of soy (e.g. the presence of isoflavones in soy drinks) are already used more and more by dairy-free manufacturers.
Major drivers of the demand for meat-free products in past years have been consumer concerns over the safety of meat and animal husbandry. Consumers have begun to lose faith in the control over the food chain by the food providers and have moved to alternatives like chicken, cheese, eggs and meat alternatives. During this crisis, new consumers entered the soy category and tried meat-free and tofu products. They found these products to be tasty and indeed appropriate alternatives to meat.
Some consumers also turned into vegetarians, some moved back to meat consumption patterns and a large group "accepted" meat-free and tofu products as a viable alternative in the interest of cutting down meat consumption.
The traditional group of consumers for soy-based foods are true vegetarians and vegans. Various sources in different European countries estimated this group to be 4-5% of the population, or approximately 15 million people in the European countries (see Figure 1).
Groups by far larger are the sometimes referred to "meat avoiders" and "meat reducers." Meat avoiders do not reject meat consumption, but avoid meat frequently and are also called "occasional or part-time" vegetarians. This group can be as large as 150 million people. The number of meat-free meals they consume is generally between three and four per week. Meat reducers may consume one to two meals a week that do not contain meat. The latter group is certainly the largest group of the population and a potential consumer segment, which can further drive the market.
Interestingly, large multinational food manufacturers, such as Nestlé, Unilever, Kellogg's and Mars, are increasingly catering to meat avoiders and vegetarian consumers. "Vegetarian" or "plant-based" is becoming a seal of approval, which is sometimes used in conjunction with specially developed logos, so that consumers can easily recognize a meat-free product. Furthermore, 10% of more than 1200 different ready meals introduced in Europe in 2004 carried the claim "suitable for vegetarian," "vegetarian" or "purely plant-based."
Lactose intolerance, as well as other dairy and food allergies, which affect millions of people in the EU, is an important driver in relation to soy-based drinks and desserts consumption. In the U.K., for instance, proven intolerance to cow's milk is estimated to affect approximately 3-5% of infants, with allergy to cow's milk protein estimated at about 1%. But many people misguidedly believe that they suffer from a food allergy. In fact, estimates indicate that up to 30% of children (or their parents) and adults perceive that they suffer from food intolerances and allergies (i.e. up to 17.5 million of the U.K. population, which is comparable to the other European countries).
In the past, consumers have been reluctant to try and/or adopt soy-based foods because of the taste and aftertaste of the products. Innovation linked to taste and texture development, as well as to a wider product offering, has been crucial for soy market development and staying power. More choices mean more consumption in most of the European countries. The range of soy-based foods as meat alternatives is still fairly limited when compared to the extensive range of meat offerings for regular and festive meals. For soy drinks and desserts this is no different when compared to the dairy sector.
Soy is used in Europe as the basic ingredient for making dairy-free and meat-free products. A substantial part of the market growth in Europe to date, and certainly in the years ahead, may come from foods, which contain soy and are linked to certain health benefits. Large dairy-based companies are now trying to participate in the soyfoods segment in various ways with milk and fruit drinks. Likewise, fruit drinks manufacturers see soy as one of the new functional ingredients that can be used to develop wellness drinks, which offer consumers new health benefits. These new generation wellness drinks would go beyond the concept of vitamin and mineral enrichment. Dairy giant Danone has on the other hand successfully introduced various dairy products containing soy in Spain in the past two years. Logically, other European countries will follow. The chilled Bio Soja yogurt is the star performer in the Bio range from Danone.
It is expected that more innovations are likely to hit the shelves in Europe in the coming years. These will include new dairy drinks with soy, fruit and soy drinks, meat-free products based on soy and ready meals with soy-based ingredients. The 2003 market for soyfoods in Europe was sized at €1.5 billion, growing over 20% in 2003.
Soy-based drinks and desserts make up approximately 25% of the total category, whereas meat-free products, including tofu, make up the remaining 75%. Soy-based drinks and desserts are currently going through a magnificant growth period in the various European markets. More distribution in combination with brand management and many promotional and PR activities have prompted consumers to buy into the category. Soyfoods are increasingly being offered through the chilled sections in supermarkets, where they are positioned alongside their counterparts, meat and dairy. Sales in the chilled sector have grown more rapidly than in the ambient dairy-free or frozen meat-free category sectors.
The U.K. market for soy-based milks, yogurts and desserts is the largest in Europe with over a 30% share of the market. This vibrant market grew more than 20% in 2003 and is expected to continue growing at the same pace in the coming years. The German and Spanish markets are the fastest growing markets with figures well over 40%.
The demand for meat-free products has become more steady. In the aftermath of the European 2001 BSE and 2002 Foot & Mouth crises, the market grew only 3% in 2003.
Based on figures currently available from Prosoy Research & Strategy, the soy sector has seen over 15% growth and there are no signs of a slowdown for the next several years. In Spain, for example, 20 new dairy-free products and fruit and soy drinks were introduced in 2004. Per capita consumption of fruit juices in Spain is amongst the lowest in Europe, which can be another sign of the huge potential for fruit and soy drinks in the rest of Europe. The combination of fruit and soy has also been a major area for product innovation in Germany, the largest European fruit juice market.
New potential growth areas for soy proteins are applications such as bars and bread. Soy flour is already used extensively in bread in many European countries for functional reasons rather than health and nutrition. The introduction of soy bread by Allied Bakeries in the U.K. in 2004 may fuel new developments in this area. Bars based on soy have not yet been a major success in the major supermarkets in Europe., so there is plenty of room for growth.NW
About the author: Gerard Klein Essink is director for Prosoy Research & Strategy, which is based in Bilthoven, The Netherlands. He can be reached at 31-30-2252060; E-mail: info@prosoy.org; Website: www.prosoy.org. Figures provided in this article were largely derived from the Prosoy research report "Soyfoods: The European Market 2004," "The European Market for Soy-based Drinks & Desserts 2004" and "The European Market for Meat-free 2004."
Why are soyfoods getting more popular? What are the drivers? Which new products have successfully been introduced? What can we expect for the future? These are important questions to consider when discussing the market dynamics for soy.
Typical Soyfoods Consumers
Soy-based foods are consumed by both young and older consumers, but for different reasons. Young people are making soy a regular part of their diet (via meat-free products and non-dairy drinks and desserts) for a wide variety of reasons, such as general and specific health issues, lifestyle or simply to take good care of their family. Older consumers tend to choose one or a smaller number of soy products for a specific health benefit and are less likely to make a large or complete change of diet, if not forced by doctors advice. Younger people buying soy products generally have a middle to higher education and a middle to high income. Further, the category tends to be led by women, who wish to take good care of themselves and/or their families.
The Soy & Cholesterol Connection
Heart disease is a leading cause of death in the European Union (EU). High blood cholesterol is a risk factor for heart disease and many Europeans are very much aware of this relationship. Diets high in cholesterol and saturated fat have been linked to an increased incidence in coronary heart disease (CHD). The awareness of the health benefits of soy in relation to CHD may become more and more known to the general public. Health ingredients that have already made a firm connection with consumers are phytosterols, which are currently used in many new foods, such asthe Pro-Activ product range from Unilever. In fact, a major health insurance company in The Netherlands recently announced that its customers are eligible to receive a refund on their policy if they buy a certain amount of Pro-Activ products per year.
To date the usage of a soy-related health claim is only possible in the U.K. In 2002, following U.S. approval, the Joint Health Claims Initiative (JHCI) approved a functional claim, which states, "The inclusion of at least 25 grams of soy protein per day, as part of a diet low in saturated fat, can help reduce blood cholesterol" or "The inclusion of at least 25 grams of soy protein per day, as part of a healthy diet, can help reduce blood cholesterol."
The approval of this claim was used to further build the market. In 2003, Alpro, the European market leader in soy-based drinks and desserts, launched a €12 million marketing campaign targeting two million consumers via various sampling programs at railway stations, in conjunction with new product introductions. The total market for dairy-free products in the U.K. grew over 20% in part as a result of Alpro's activities in 2003. It can be expected that additional positive health claims related to soy will boost market growth in the coming years in other European markets as well. In fact, hints toward the health benefits of soy (e.g. the presence of isoflavones in soy drinks) are already used more and more by dairy-free manufacturers.
Meat Scares Boost Market Growth
Major drivers of the demand for meat-free products in past years have been consumer concerns over the safety of meat and animal husbandry. Consumers have begun to lose faith in the control over the food chain by the food providers and have moved to alternatives like chicken, cheese, eggs and meat alternatives. During this crisis, new consumers entered the soy category and tried meat-free and tofu products. They found these products to be tasty and indeed appropriate alternatives to meat.
Some consumers also turned into vegetarians, some moved back to meat consumption patterns and a large group "accepted" meat-free and tofu products as a viable alternative in the interest of cutting down meat consumption.
Vegetarians
The traditional group of consumers for soy-based foods are true vegetarians and vegans. Various sources in different European countries estimated this group to be 4-5% of the population, or approximately 15 million people in the European countries (see Figure 1).
Groups by far larger are the sometimes referred to "meat avoiders" and "meat reducers." Meat avoiders do not reject meat consumption, but avoid meat frequently and are also called "occasional or part-time" vegetarians. This group can be as large as 150 million people. The number of meat-free meals they consume is generally between three and four per week. Meat reducers may consume one to two meals a week that do not contain meat. The latter group is certainly the largest group of the population and a potential consumer segment, which can further drive the market.
Interestingly, large multinational food manufacturers, such as Nestlé, Unilever, Kellogg's and Mars, are increasingly catering to meat avoiders and vegetarian consumers. "Vegetarian" or "plant-based" is becoming a seal of approval, which is sometimes used in conjunction with specially developed logos, so that consumers can easily recognize a meat-free product. Furthermore, 10% of more than 1200 different ready meals introduced in Europe in 2004 carried the claim "suitable for vegetarian," "vegetarian" or "purely plant-based."
Food Intolerances & Allergies
Lactose intolerance, as well as other dairy and food allergies, which affect millions of people in the EU, is an important driver in relation to soy-based drinks and desserts consumption. In the U.K., for instance, proven intolerance to cow's milk is estimated to affect approximately 3-5% of infants, with allergy to cow's milk protein estimated at about 1%. But many people misguidedly believe that they suffer from a food allergy. In fact, estimates indicate that up to 30% of children (or their parents) and adults perceive that they suffer from food intolerances and allergies (i.e. up to 17.5 million of the U.K. population, which is comparable to the other European countries).
Better Quality Offerings
In the past, consumers have been reluctant to try and/or adopt soy-based foods because of the taste and aftertaste of the products. Innovation linked to taste and texture development, as well as to a wider product offering, has been crucial for soy market development and staying power. More choices mean more consumption in most of the European countries. The range of soy-based foods as meat alternatives is still fairly limited when compared to the extensive range of meat offerings for regular and festive meals. For soy drinks and desserts this is no different when compared to the dairy sector.
From Niche Foods to Mainstream Foods with Functional Benefits
Soy is used in Europe as the basic ingredient for making dairy-free and meat-free products. A substantial part of the market growth in Europe to date, and certainly in the years ahead, may come from foods, which contain soy and are linked to certain health benefits. Large dairy-based companies are now trying to participate in the soyfoods segment in various ways with milk and fruit drinks. Likewise, fruit drinks manufacturers see soy as one of the new functional ingredients that can be used to develop wellness drinks, which offer consumers new health benefits. These new generation wellness drinks would go beyond the concept of vitamin and mineral enrichment. Dairy giant Danone has on the other hand successfully introduced various dairy products containing soy in Spain in the past two years. Logically, other European countries will follow. The chilled Bio Soja yogurt is the star performer in the Bio range from Danone.
Soy Outlook
It is expected that more innovations are likely to hit the shelves in Europe in the coming years. These will include new dairy drinks with soy, fruit and soy drinks, meat-free products based on soy and ready meals with soy-based ingredients. The 2003 market for soyfoods in Europe was sized at €1.5 billion, growing over 20% in 2003.
Soy-based drinks and desserts make up approximately 25% of the total category, whereas meat-free products, including tofu, make up the remaining 75%. Soy-based drinks and desserts are currently going through a magnificant growth period in the various European markets. More distribution in combination with brand management and many promotional and PR activities have prompted consumers to buy into the category. Soyfoods are increasingly being offered through the chilled sections in supermarkets, where they are positioned alongside their counterparts, meat and dairy. Sales in the chilled sector have grown more rapidly than in the ambient dairy-free or frozen meat-free category sectors.
The U.K. market for soy-based milks, yogurts and desserts is the largest in Europe with over a 30% share of the market. This vibrant market grew more than 20% in 2003 and is expected to continue growing at the same pace in the coming years. The German and Spanish markets are the fastest growing markets with figures well over 40%.
The demand for meat-free products has become more steady. In the aftermath of the European 2001 BSE and 2002 Foot & Mouth crises, the market grew only 3% in 2003.
Based on figures currently available from Prosoy Research & Strategy, the soy sector has seen over 15% growth and there are no signs of a slowdown for the next several years. In Spain, for example, 20 new dairy-free products and fruit and soy drinks were introduced in 2004. Per capita consumption of fruit juices in Spain is amongst the lowest in Europe, which can be another sign of the huge potential for fruit and soy drinks in the rest of Europe. The combination of fruit and soy has also been a major area for product innovation in Germany, the largest European fruit juice market.
New potential growth areas for soy proteins are applications such as bars and bread. Soy flour is already used extensively in bread in many European countries for functional reasons rather than health and nutrition. The introduction of soy bread by Allied Bakeries in the U.K. in 2004 may fuel new developments in this area. Bars based on soy have not yet been a major success in the major supermarkets in Europe., so there is plenty of room for growth.NW
About the author: Gerard Klein Essink is director for Prosoy Research & Strategy, which is based in Bilthoven, The Netherlands. He can be reached at 31-30-2252060; E-mail: info@prosoy.org; Website: www.prosoy.org. Figures provided in this article were largely derived from the Prosoy research report "Soyfoods: The European Market 2004," "The European Market for Soy-based Drinks & Desserts 2004" and "The European Market for Meat-free 2004."
