Natural Foods Merchandiser

Everybody's Gettin' On The Soy Train

Remember rice milk? While still popular, it was once the de rigueur milk alternative. Then, in 1996, a new soymilk called Silk exploded onto the market and the soyfoods revolution took hold.

Now a $3.65 billion market—and projected to reach $6 billion by 2005, according to Soyfoods: The U.S. Market 2003, published by market research and consulting firms Soyatech Inc. and SPINS—soyfoods have captured the attention of mainstream consumers. Research conducted by the United Soybean Board in 2002 showed that 74 percent of Americans perceive soy-based foods as healthy, and 31 percent seek out soyfoods specifically for the health benefits they confer. Nearly half (42 percent) say they eat soyfoods at least once a month. What's stopping the other 58 percent? Primarily, the perception that soyfood doesn't taste good.

It's an objection that's easily overcome in today's marketplace, says Peter Golbitz, president of Bar Harbor, Maine-based Soyatech. "These products taste good. They are far improved from the ones that were in the marketplace just five years earlier."

They are more abundant, too. In 2002, there were 3,400 SKUs of soy-based foods in the mainstream market, Golbitz says. Products like soy "chicken wings" now grace the shelves of naturals and conventional stores alike. Sharing shelf space, along with the more familiar smoothies and veggie burgers, are cookie, muffin and pancake mixes; pasta; heat-and-eat ethnic entrées; tortilla chips; salad dressing; and frozen desserts, all with soy as their primary ingredient.

Even unprocessed soybeans, or edamame, once thought to be too "risky" to introduce to mainstream consumers, have become essentially the Japanese-food answer to chips and salsa—grab a table at any self-respecting Japanese restaurant, and you'll see diners noshing on the salted veggies while waiting for their entrées.

"The No. 1 way, globally, to consume edamame is at a bar, with beer," says Tina Nelson, president of the SoyFoods Association. Wearing her other hat as director of sales and marketing for consumer products at Sunrich Food Group, Nelson is optimistic about edamame. Her Hope, Minn., company is releasing a line of frozen edamame in November. But the focus won't be on the beans as bar food, but as family food.

"Kids love it," Nelson says. "It's a food they can play with. Stick 'em on the floor with a bowl of edamame and they're entertained for awhile."

Whether it's edamame or jalapeño tofu pâté, the astounding growth of the soyfoods market—as much as 30 percent in 1999, and now growing at a respectable rate of 13 percent, according to SPINS/Soyatech data—can be traced to a handful of factors.

"Between 1996 and '99 one of the main drivers of growth was the introduction of Silk," says Golbitz. Other drivers, he says, included the rapid growth of the meat alternative category and heightened consumer interest due to positive news on soy and health. Still, Silk is widely seen as a pioneer in the soyfoods industry. "For three straight years that product grew more than 100 percent a year." Now, says Golbitz, soymilk accounts for 90 percent of the nondairy beverage category.

Riding The Wave
Steve Demos, president of White Wave, the Boulder, Colo., company that manufactures Silk, believes the success of Silk was, at least at first, a matter of savvy marketing—"the product showing up with the right package and the right flavor"—and market timing. Demos ticks off five factors that combined to produce the right timing: environmental concerns; an aging population; a shift in demographics; the perceived credibility behind government and medical statements endorsing soy; and consumers' concerns about food safety.

The environmental concerns are ongoing. "The word sustainable has now become part of our everyday conversation," Demos says. "Even my competitors' products that aren't organic are perceived to be—and are—more sustainable than their animal counterparts."

Seeing Soy

Some of the more innovative soyfoods now on the market include:

  • Thai, Mexican and Italian entrées with meat alternatives
  • Soy "chicken wings"
  • Soy "bacon"
  • "Stake"
  • Soy tacos
  • Tofu pâté
  • Soy-nut butter
  • Edamame rice bowls
  • Soy brownie mix
  • Instant soy pudding
  • Frozen chocolate-mint sandwich cookies
Too, aging baby boomers are seeking ways to either stay young or live longer, Demos says—"and that leads you toward a change in diet." Adding to the soy surge is the fact that in many parts of the United States, there is no longer any ethnic majority. And the vast majority of non-Caucasians are lactose-intolerant, a fact of life that makes soymilk appealing. People are also concerned about food safety, with things like recombinant bovine growth hormone, mad cow disease and salmonella making headlines. "Regardless of whether there's truth to it or not, there's a fear element; it just leads consumers to think, 'Is there an issue in our food supply? Maybe I want to look at another alternative.'"

In 1999, consumers took such concerns to heart. That year, the Food and Drug Administration permitted soyfoods manufacturers to begin printing a health claim on their packaging, linking daily consumption of 25 grams of soy protein to improved heart health.

Ever since then, the category has been reinventing itself. Soymilk has relinquished its sales lead to energy bars, while soymilk and meal replacements duke it out for the No. 2 spot. Meat alternatives and the old standby, tofu—which now comes in various gourmet preparations, including pre-sliced, marinated and grilled—round out the top five products.

Chilling Out With Soy
Golbitz sees meat alternatives pushing ahead in the near future, however. "Meat alternatives that are already in frozen are beginning to take the brand name and put it in prepared foods." He cites DiGiorno pizza as an example. Kraft Foods, which owns both DiGiorno and Boca brands, is now putting slices of Boca on the pizza.

"Meat alternatives companies realized that it's not enough to sell a hockey puck," Golbitz says. "They need to reinvent the center of the plate, outside the hockey puck formula."

"Meat alternatives companies realized that it's not enough to sell a hockey puck." Demos agrees. "I think you're going to see soymilk in particular and, secondarily, some of the meat replacements, go deeper into the American home. It won't be indulgent products so much as it will be center-of-the-plate or staple items."

Soyatech and SPINS are also projecting that soy will be increasingly added to other products that have traditionally used ground meat, such as canned chili. Golbitz also thinks cold cereals with added soy will continue to expand, as will nondairy frozen desserts and handheld products such as individually sized soymilk and yogurts.

One thing is certain: the appeal of soy is growing. As Nelson says, "It's not just a bunch of tofu enthusiasts talking about how great it is anymore."

Natural Foods Merchandiser volume XXIV/number 11/p. 24, 27, 29

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