Products containing soy protein should play on the ingredient's environmental credentials to accelerate growth in a market which has, in effect, reached maturity.
That's the verdict of sector specialist consultancy Soyatech, which has just published a report showing the US soyfoods sector broke through the $4 billion barrier in terms of retail sales for the first time in 2008, reaching a value of $4.17 billion. But despite this achievement, growth in the category was modest — just 1.8 per cent year on year.
This contrasts markedly with the strong progress made earlier in the decade and the late 1990s, when soyfoods enjoyed a period of boom. But this trend stuttered in 2004 and has failed to recover since after hitting what Joe Jordan, content director at Maine-based Soyatech, called 'the inevitable wall.' "Any specific food category can only grow so much," he said. "Nobody's going to eat tofu 24/7."
Soyatech's projections suggest only a small improvement in growth levels between now and 2012. But Jordan said the market would remain "solid" and argued that profitable opportunities existed for products that hit the right notes with consumers.
In particular, he said, there was an opportunity for soyfood suppliers to emphasise the fact soy protein was a greener option than protein from animal sources, including dairy. "It's a fairly mature market now so new players have to be well positioned," he said. "It would be wise in this market to plan for brand extensions that have sustainability benefits, as soy is a sustainable choice as a food source. When you look at the amount of feed that has to go into a dairy cow in order to get out the same amount of milk as you would get directly from the soybean, soy protein consumes far less in the way of inputs."
Despite Soyatech's forecast for growth rates to remain low in the next few years, one major player in the sector believes the outlook is more positive.
Charles Ross, regional marketing director at soy ingredients supplier Solae, agreed that recent growth levels had been "modest," but said he believed they would begin to accelerate and overtake growth levels in the food and drink market as a whole.
"Eighty-five per cent of consumers in the United Soybean Board's 2008 annual consumer survey recognised soy products as healthy for them," he said. "As global demand for protein increases, the role of soy protein as a high-quality complete protein solution will continue to increase, leading to new innovation."