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The U.S. Soy Market: An Update & Outlook

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Soyfood sales continue to outpace the growth of other retail food categories and are now clearly mainstream products rather than confined to a few health and natural food chains. In a recent report co-published by Soyatech, Inc., Bar Harbor, ME, and SPINS Natural Track, San Francisco, CA, soy product sales increased 21% from approximately $2.77 billion in 2000, and increased an additional 15% to $3.2 billion in 2001, driven by strong gains in soymilk, energy bars, meat alternatives and cold cereal products using soy ingredients. Growth estimates for 2002 are projected at another 10%, bringing total soyfoods sales to just over $3.5 billion at retail.

Not far behind soymilk sales, which exceeded $550 million in 2001, are meat alternatives with $440 million in retail sales, up over 14%in 2000. Within the soyfoods category, meal replacement beverages and powders have been the market leaders with a 2001 soyfoods market share of 24%, followed by energy bars with a 21% share, which are projected by Soyatech to become the market leader in 2002. Next in line are soymilk beverages with a 17% share, meat alternatives (14% share), tofu (7% share) and cold cereals (4%). Soymilk yogurt, cheese alternatives and soy-based frozen dessert products have been introduced, and have seen sales in the $20-50 million range. They are expected to grow in the double digits through 2004.

The Soyatech/SPINS report also calculated 27% overall growth for soyfoods in 2001 in mainstream supermarkets, compared to 12% growth in natural foods supermarkets and 5.5% growth in all other health and natural foods stores.

This year there were 800 new soyfood product launches, which is 40% more than last year. A brief list of these introductions can be found in Table 1.

Table 1

Milks: WholeSoy Soy Milk (WholeSoy, San Francisco, CA); 8th Continent Soy Milk (General Mills, Minnetonka, MN, and DuPont Protein Technologies, St. Louis, MO, joint venture)

Beverages: Soy Juicy fruit-based soy beverages (Country Pure Foods, Akron, OH); Chocoblock Soy Shakes (The Ultimate Juice Company, Basking Ridge, NJ); Probiotic Soy Smoothies (Wildwood Harvest Foods, Watsonville, CA); Ultra Smoothies, made with Galaxy Veggie Milk (Galaxy Nutritional Foods, Orlando, FL, and Tropicana, Bradenton, FL)

Ready to Eat Meals/ Entrees: Food Lunch Refrigerated Lunch Box, which contains deli meats and cheese alternatives made from soy (Hain Celestial Group, Bohemia NY, and Yves Veggie Cuisine, Vancouver, BC, Canada); Natural Touch Frozen Patties (Morningstar Farms, a division of Kellogg’s, Battle Creek, MI); Simply-Add-Veggies Soy Entrée Kits (Lindsey Foods, Marham, ON, Canada); Mori-Nu Creamy Soups, (Morinaga Nutritional Foods, Torrence, CA)

Tofu: Melissa’s All-Natural Baked Tofu Cutlets (World Variety Produce, Los Angeles, CA); Hearty and Healthy Tofu Steaks (House Foods America, Garden Grove, CA)

Desserts/Snacks: Soy Toppers—weetened and flavored soy nuts to top ice cream, yogurt (Blue Water Brands, Auburn, WA); New Skinny soy Chips (N-Spired Natural Foods, San Leandro, CA); Magicsoy Soy Cheesecake (Echo Top, Downers Grove, IL); Caramel Soy-Flax Chews (Margaret’s Kitchen, Boxborough, MA); Non-Dairy Desserts (Turtle Mountain, Eugene, OR)

Source: Marketing Intelligence Service (MIS), Naples, NY; miscellaneous trade publications

Consumer awareness of soy as a healthy food ingredient is not surprising because it has been present in so many different forms over the last several years. Pediatricians have recommended soy infant formulas for over a generation for babies intolerant of the protein called casein in milk-based formulas. The presence of soy formula on hospital obstetrics and pediatric floors and the formula gift packs that new moms took home with the new baby, so she had a small supply of either formula when she was ready to stop breastfeeding, helped bring respect to soy as a food that was healthy for babies.

Soy ground meat extenders became popular in the 1960s when the price of beef rose to unprecedented highs. For more than 30 years, consumers have seen soy proteins, tofu, soy fiber, soy oil soy flour and other soy-based ingredients on the ingredient statements of many of their favorite products.

Many of today’s popular soy products found their retail roots through the health and natural foods channel. However, the entry of very large, well known companies such as Kraft, Heinz, Unilever, Con Agra, General Mills, Dean Foods (now owned by Suiza) and Kellogg’s into the category has clearly been responsible for the sizeable gains in mainstream supermarket retail sales, thanks to their product development, distribution and marketing muscle.

Today’s products have started to overcome many of the historical problems with distinct off-flavors that soy has traditionally had, which had to be covered up with spices and strong flavored ingredients in soy’s early days. In addition to flavor improvements, today’s products also meet the consumer’s needs for portability, convenience and interest in finding healthy alternatives to traditional meat and dairy foods.

Another factor contributing to growth and awareness of this category is the Nutrition Labeling and Education Act (NLEA) health claim for soy, which received FDA final approval in late October, 1999. The health claim came at a time when the American consumer was ready for a good reason to try something new. Since 1999, Soyatech indicates that new soy-based product introductions increased an average of over 11% per year, from 1721 SKUs in 1998 to over 2300 in 2001. Soyatech’s data also show that soyfood sales have increased approximately $1.3 billion since the passage of the health claim.

Formulating for the Health Claim
The health claim final rule requires 6.25 grams of soy protein be used per serving of food that must also meet the criteria shown in Table 2. When these criteria are all met, the product may claim in product labeling that diets low in saturated fat and cholesterol and high in soy protein may reduce the risk of heart disease. The FDA indicated that four servings of different foods containing soy protein at this level would provide the 25 grams of soy protein daily needed to positively impact the risk of cardiovascular disease.

The 6.25 gram/serving protein requirement is a high standard that may be easy for only a select group of formulated foods to meet, such as soymilk, some meat alternatives or energy bars. This amount may not seem like much to include in a 12-ounce (340 gram) beverage, or even a 50 gram bar, however, the key word here is protein, and as shall be described later, not all soy ingredients are created equal in the protein department. Food product development specialists will find incorporating this level into new food categories more challenging because of the potential compromise of taste and textural qualities, given the soy protein ingredient choices available today. The good news is that the retail success of soyfoods is driving technology development at a rapid pace by companies selling value-added soy ingredients, such as DuPont Protein Technologies, ADM, Cargill and Bunge (who recently became the world’s largest seed-to-table, vertically integrated soy processor following its acquisition of Central Soya).

Other components of soy besides protein are used as either food and/or dietary ingredient sources. Soy oil consumption is huge, and is the oil most consumed around the globe today with about a 30% share of the world market for edible oils. Lecithin, soy germ and of course, soy isoflavones have found applications, the latter in dietary supplements.

Table 2

Soy Protein: Must have at least 6.25 grams of soy protein per RACC (FDA’s Recommended Amount Commonly Consumed).

Low Fat: Each serving or RACC must contain less than 3 grams of fat. If the product consists of or is derived from whole soybeans and contains no fat in addition to the fat inherently present in the whole soybeans, the 3 gram limit will not apply.

Low Saturated Fat: A serving or RACC must contain less than 1 gram of saturated fat. The total amount of saturated fat per serving must be 15% of total calories.

Low Cholesterol: A serving or RACC must contain 20 milligrams of cholesterol.

Sodium: A serving or RACC of food must also contain< 480 mg sodium. Exceptions are for main dish products, which must contain <720 mg per serving or RACC, and meal products, which must contain <960 mg sodium per serving/RACC.

*Note that the eligibility of the food to bear the soy health claim is based on the soy protein per RACC per eating occasion. For many foods, but not all, a RACC equates to one serving. Once the food qualifies for the health claim, the label statement for the amount of soy protein per serving is based on the actual serving size of the food.
Foods currently on the market that are eligible for the health claim include soy beverages, tofu, tempeh and soy-based meat alternatives.

Soymilk: Has the Market Finished its Adolescent Growth Spurt?
Soymilk alone was projected to be a $625-650 million category by yearend 2002, and the official numbers are expected in the first quarter of 2003 to confirm this estimate. Remarkably, soymilk has grown at a compound annual growth rate (CAGR) of just under 21% per year for the past decade. Mainstream supermarkets saw an increase in soymilk sales of 45% in 2001, and the category is projected to reach $1 billion in three to five years, according to the Soyatech/SPINS report. Further, sales of refrigerated soymilk across all channels grew in excess of 100% for three straight years by year-end 2001. Steve Demos, founder of White Wave, Boulder, CO, the manufacturer and marketer of Silk®, catalyzed the growth of the soymilk category by repositioning it to the dairy case in gable-top cartons familiar to consumers, and by sweetening and flavoring it to mask most of the “beany” and other less desirable flavor notes that are typical of many products high in soy. He then applied classic, brand-building marketing techniques that included significant spending as well as creative, “Ben-and-Jerry-like” package communications (“Shake well and buy often”, “Think globally, spoon locally” and “Have a nice life span”, for example) to build awareness and trial of a product priced significantly higher than the dairy milks next to it.

Working with the distribution power of Dean Foods,—White Wave’s parent company—the 1999 national launch brought Silk to over 25,000 mainstream retail stores in about 26 months. This translates to a shelf presence in over 80% of all American supermarkets. White Wave’s Silk therefore not only helped establish and grow the new soymilk category, but also helped further legitimize and build consumer interest in soy-based foods in general.
Soymilk has filled a need as a ready alternative for the growing number of U.S. consumers who either sought alternatives to dairy milk’s saturated fat and cholesterol, were chronically sensitive to cow milk’s lactose or protein or were otherwise seeking alternatives to milk because it is dairy-free. Soymilk sales are still only about 1-2% of dairy milk sales, however, so there is room for enormous growth. Soymilk will likely continue expanding at double digit rates for several years to come.

However, manufacturers should not get too comfortable because there are a host of unresolved taste issues that still haunt the soymilk category. As growth rates slow with industry maturity, companies will compete on taste more aggressively and the company that overcomes the remaining taste hurdles will ultimately lead the day and bring new mainstream users to the category.

A U.S. Soymilk flavor benchmarking study conducted by the Food, Health and Nutrition Group at Arthur D. Little, (which is now a practice of a privately held consulting and technology commercialization firm called TIAX LLC as of May 2002) provides strong support for this viewpoint. The study utilized a professionally trained taste panel that evaluated the sensory qualities of 35 brands of soymilk. The goal was to see if any of them met a time-tested, objective set of standards for flavor leadership, which have shown through the years to be the underpinning of consumer flavor expectations and are often found in food and beverage brands with longstanding market leadership. These characteristics are described in everyday terms in Table 3.

Table 3
1) An immediate impact of the identifying flavor upon tasting it.
2) Rapid development of a balanced, full flavor. A balanced flavor means that no outstanding flavors dominate and that all the flavors contributed by individual ingredients blend together well. A full flavor means that all sensory attributes (aroma, texture and flavor, etc) are well integrated so that it is “full-bodied” or, “rich” in consumer terms.
3) Compatible “mouthfeel” factors. Any sensations in the mouth are compatible with what would be expected for the product. (For example, a peppery burn sensation in spicy food, or the coolness of mint in a spearmint chewing gum.)
4) No “off” flavors. No flavors that are not inherently indicative of the product. (For example, a medicinal taste would be an off flavor in a whipped dessert topping, but not in a mouthwash.)
5) A short, clean aftertaste , that doesn’t linger in the mouth.

The study showed that no individual soymilk brand tested could capture the title of “Flavor Leader,” although some are very close. The aromatic characteristics vary strongly between brands and are a major differentiator in the total flavor experience across the products tested. Interestingly, “mother nature” created dairy milk that meets the flavor criteria listed in the above table. Does this mean that the next generation of soymilks has to duplicate the taste of regular milk? No, it means that winning and maintaining new consumers will require that a soymilk meet the objective characteristics described in Table 3 that dairy milk has met naturally. For example, unlike dairy milk, most soymilks have a slightly chalky, dry feel in the mouth, and some have lingering aftertastes that will discourage consumers from taking another sip. In addition, soymilk products are more viscous than beverages typically consumed for refreshment. Although most soymilk never intended to match the flavor of dairy milk, calling the product a “soy milk” rather than a “soy beverage” may create certain taste expectations in the minds of many mainstream consumers. The good news is that significant flavor improvements are possible and should be achievable through traditional downstream process and formulation adjustments.

Another important finding in the Arthur D. Little/TIAX study was that the 35 soymilks tested did not deliver the same sensory experience from one production run to the next. The level of variability within brands with regard to sensory quality characteristics such as aroma, overall flavor, texture, mouthfeel and color greatly exceeded food industry norms for mass market products. The differences identified by the professional panel were significantly large enough to conclude that consumers might experience different taste characteristics on subsequent purchases of the same brand. This may compromise long term repeat purchases. History has shown repeatedly that products that don’t deliver a consistent flavor experience to consumers have much greater difficulty in building long term, mainstream businesses for the companies marketing them.

Soymilk is generally manufactured by one of two primary methods, either from the whole bean, or, from formulating with soy isolates or concentrates. Manufacturers using either process must manage the same quality control issues associated with soybean sourcing, but downstream processing introduces different flavor quality and consistency challenges. Over the long term, improvements and innovations along the entire supply chain—from seed to table—will be required to overcome or eliminate the distinctive flavors associated with soybeans that carry through to many finished products. In the meantime, considerable improvement in flavor quality and consistency of current products could occur for a given brand if the product were manufactured to a flavor target or standard, rather than to a recipe. This approach would better control finished product flavor by taking into account the day-to day variability in soymilk ingredients that can impact finished product taste and textural characteristics from batch to batch.

The Ingredient Side
The future of new mainstream soyfoods at retail will be strongly influenced by new developments in soy protein ingredients available for food product formulators to use. The success of soy at retail is driving soy ingredient manufacturers to launch their own new and improved products for food manufacturers and ultimately, consumers. New soy ingredients can help food companies simplify the formulation process and broaden the potential new product applications because of characteristics such as improved dispersibility and reduced viscosity.

One of the greatest areas of research with soy at the moment however, is flavor improvement. Even though processors and ingredient suppliers have significantly reduced the beany off-flavors of soy-derived ingredients through the years, almost everyone agrees there is still considerable room for further flavor improvement in reducing various undesirable off-notes in currently marketed soy-based ingredients, and in turn, the consumer products that utilize them. Although this is one of the foremost industry needs, the flavor problem may not be totally resolved in the near term.

There are many soy ingredients and suppliers to choose from. Should the health claim on the finished product be the goal, the protein level of the ingredients available becomes key in selecting the appropriate ingredient to use in formulations. There are essentially four categories of soy ingredients, each with specific minimum protein contents. Most had found successful use in certain food applications based on their functionality and performance in the finished product, long before the health claim for soy was established. (See Table 4).

Table 4
Ingredient Protein% Fat% Fiber% Typical Applications
Soy Protein Isolates 90 (minimum) <5 0-3 Infant formula, milks, beverages, chewable supplements
Soy Protein 70 (minimum) <5 10-20 Bars, cereals, meat analogs Concentrates
Soy Powder Approx. 40 0-20 15-20
(most closer to 20)
Beverages, milks

Soy Flour
Approx. 50 5-10 15-20 Baked goods, fried pastries, some meat analogs

The protein isolates tend to be the most expensive but often their bland flavor provides the least interference in achieving the desired finished product. They contain very little fat, fiber and carbohydrates, and are often used in products where the composition of these nutrients is important, such as in infant formula.

Soy protein concentrates are less expensive than isolates, but provide additional carbohydrates or fiber. They have found a home in some beverages, as well as solid products such as bars, cereals and baked goods. Recent technology developments now allow for the manufacture of soy concentrates that contain isoflavones, if desired.

Soy powders, which are essentially the dried product of crushed, whole, dehulled soybeans have become popular as the base for a number of soymilk brands and other soy beverages. Process improvements have been developed that not only inactivate the soy trypsin inhibitor—the naturally occurring anti-nutritional factor in whole soybeans that interferes with our digestion of protein—but also improve dispersibility in liquids. These changes have allowed increased usage of this ingredient category and has contributed to its growth.

Soy flour has been used for years in baked goods, where it adds some protein and reduces fat pick-up in doughnuts and other fried pastries. It is not typically used to provide a significant source of protein for functional foods. Of the soy ingredient categories, it is one of the highest in fat and fiber. Other soy protein ingredients can be used with soy flour to boost a finished product’s protein content, however, soy flour has a distinct, grainy flavor and mouthfeel that limits its use in products designed to contain a high soy protein content.

Ingredient manufacturers have made strides in reducing the off-flavors associated with soybeans, and technology developments and innovation are underway to provide further improvements at many soy companies. Much of the product improvement has been achieved through new, proprietary processing technology.

Soy ingredient manufacturers continue to learn more about the cause of off-flavors that develop during processing. For example, it is well known that naturally occurring soybean enzymes, called lipoxygenases, are released from their storage sites in the bean during crushing and react with soy oil leading to oxidation and off-flavor development from oil breakdown. The byproducts of oil oxidation can contribute to various undesirable off-flavors in soy flours and concentrates that sometimes carry over to isolates. Various processing technologies have been developed to minimize not only the oxidized oil and other bitter flavors from lipid oxidation, but also the cooked and green bean aromatics that have historically been associated with soy. These unpleasant flavor notes have been significantly reduced, but not totally eliminated. The degree to which some of these off-notes are carried through to finished soy flours, concentrates and isolates sometimes depends on the variety of bean used as well as the bean handling conditions and process used in manufacturing the downstream ingredients.

It all Goes Back to the Seeds on the Farm
The introduction of new, specialty soybean seed varieties, which will ultimately produce ingredients that have essentially no discernable flavor or aromatics of their own, will occur routinely only after at least two major milestones are met. First, soybean genetics will require sufficient understanding to determine what traits and inherent compounds are responsible for objectionable flavors in soy in addition to those attributed to lipoxygenase activity. Once identified, soy research can develop new soybean varieties that at least minimize, or at best eliminate, these traits through plant breeding or genetic engineering. Second, a more sophisticated system for soybean identity preservation during handling and distribution is sorely needed to avoid co-mingling of beans with special characteristics with other beans that do not have the sought after traits. Right now, the vertically integrated processors such as Cargill, ADM and Bunge, are best able to control this and significant progress in meeting these milestones has already been made.

To date, a majority of new soybean varieties has addressed increased yield at harvest through increased pest resistance or tolerance to Round-Up (a pesticide). More recently, food grade soy producers are looking at a means to enhance soybean composition to make U.S. soybeans more competitive internationally, and also to address nutritional interests of the food and feed industries in the U.S. and abroad. Several funded programs address soy oil composition because soy oil is the predominant vegetable oil consumed in the U.S. and many other parts of the world. For example, developing soy varieties with lower saturated fats and high oleic content will produce healthier oil with more cooking and frying stability. There is some scientific evidence that high oleic oils may cut the risk of breast cancer significantly, according to an epidemiological study of over 60,000 women in Sweden by Wolk, et al. (Archives of Internal Medicine, 1998, volume 158). Beans have been developed that produce oil that requires no hydrogenation yet will successfully produce stable cooking oils and margarines with no trans fats. Much of the research in this area is funded by the United Soybean Board’s Better Bean Initiative, one of the programs developed through the soybean farmer check-off program. Soybean protein flavor improvement is under active investigation now at Iowa State University, where scientists have found a way to genetically remove several lipoxygenase enzymes responsible for flavor deterioration in processing. Other research is addressing the development of seed varieties with reduced or eliminated anti-nutritional factors, such as trypsin inhibitors, or reduction in phytates that can interfere with human mineral absorption, or the carbohydrates stachyose and raffinose, which are responsible for gas and flatulence in sensitive individuals following ingestion of soy or other legumes.

All these future varieties, including those with the least taste and the most protein will take time to develop. After all, one can only make a soybean grow so fast and growing enough newly developed seed to plant for food industry needs will take a number of growing seasons. Nonetheless, it appears that the technology is entering the pipeline to help the soyfoods industry expand and evolve beyond its infancy to a well-rounded, “grown-up” segment in the mainstream food industry

Soy Isoflavones
Soy isoflavones used in dietary supplements have grown to approximately $34 million at retail, about double the value in 1999, according to the 2002 Supplement Business Report from Nutrition Business Journal, San Diego, CA.

There are a large number of studies that show that Asian women who consume 40-80 mg of soy isoflavones daily suffer less from menopausal hot flushes, and this is the primary reason that they are marketed to women in the US. An epidemiology study published by Wu, et al, last fall (Cancer Epidemiol Biomarkers Prev, 2002, Volume 11) indicated that women with the highest intake of protein from soy sources had the lowest levels of estrone, the form of estrogen that predominates in post-menopausal women. The 15% reduction in estrone levels observed was not associated with any other modifiable lifestyle factor analyzed. This finding lends a clue to how isoflavones work in reducing or alleviating menopausal symptoms. The reduction in endogenous estrogen levels, particularly estrone, would support the hypothesis that a high soy intake might reduce the risk of breast cancer.

However, other research suggests that soy isoflavones may bind to the estrogen receptors on certain types of cancer cells that are known to be estrogen dependent. This could help the cancerous cells proliferate, based on animal studies conducted to date. Other investigators appear satisfied that isoflavones are a very safe alternative to hormone replacement therapy (HRT) based on studies investigating their use in postmenopausal women. Unlike HRT, there are no data yet confirming increased risk of any health problems with prolonged isoflavone use.

Following the extensive media coverage in late 2002 of the National Institutes of Health (NIH) sponsored Women’s Health Initiative clinical trials that terminated earlier than anticipated because of increased risk of various health problems in the HRT treatment group, sales of alternative therapies increased significantly according to anecdotal reports. It will be interesting to see how soy isoflavone supplements fare over the next year or two against similar compounds isolated from red clover, and especially black cohosh, an herb with substantial European data and experience behind it supporting its role in menopausal symptom relief. Smithkline’s Remifemin product contains this herb and the company has physician access through its pharmaceutical sales force to educate the medical community about their product as an alternative to HRT.

For now, at least one manufacturer—Cargill with its new AdvantaSoy® product—has developed soy isoflavone concentrates available in 2-2.5% or 40-50% concentrations. Two of the three products in this line are self-affirmed for Generally Recognized as Safe (GRAS) status, which opens up opportunities to utilize isoflavones as food ingredients. These ingredients have been developed to minimize objectionable soy flavors and improve solubility for use in beverages, entrees and a wide variety of other foods. Although the ingredients are ready for food formulators, the inability to communicate isoflavone health benefits in the absence of a health claim for them will be a barrier to rapid development for foods for women designed to increase isoflavone intake. With the new awareness of dietary supplements, the presence of a “contains ___mg of isoflavones from soy per serving” somewhere in package labeling might be enough to entice women already familiar with them. However, bringing in new users will be challenging for now.

The Future Looks Bright
The outlook for soyfoods at retail remains very optimistic, however rates of growth are expected to “slow” from the high teens to around 10-11% per year until 2005 as the market starts to mature. Growth at these rates will still be extremely attractive in the near term and the envy of many other food industry segments. The fact that the soy category is very large and that soy ingredients can be used in such a wide variety of products all contribute to market staying power.

As in 2001 and 2002, new soyfoods in 2003 are expected to continue to enter the marketplace, mainly in the forms of “smoothies” or other beverages, bars and breakfast cereals. Categories such as soymilk and meat alternatives such as veggie burgers that have been the foundation of the soyfoods market are now somewhat saturated and are seeing fewer new entrants. The food product categories that can easily incorporate soy without significantly compromising sensory qualities, with or without a health claim, have done so.

A significant expansion of soy protein into additional categories may await the development of improved soy protein-based ingredients that deliver not only on protein content so that the health claim may be considered for the final product, but also on taste. In the vast majority of cases, the less flavor a soy ingredient has to impart to a finished product, the better, so as not to interfere with or compromise the desired finished product taste and texture qualities.

About the author:
Kathie L. Wrick, Ph.D., R.D.,
has more than 20 years’ experience in food industry R&D and business development. She currently is a Principal with TIAX LLC, the former Technology and Innovation Practice of Arthur D. Little, Inc., that became a privately held company in May 2002. TIAX Food and Nutrition service offerings include market and industry analysis, strategy development and implementation, technology strategy and technology assessments, sensory and consumer insight and product development for foods and OTC pharmaceuticals. She can be reached at 617-498-5118; Fax: 617-498-7288; E-mail:; Website:

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