US Consumers Demanding Cleaner Labels from Plant-Based Products in Wake of Ultra-Processing Claims
Source: USA News Group
via PRNewswire UK - 21 Sep, 2022
FN Media Group Presents USA News Group News Commentary
VANCOUVER, BC, Sept. 21, 2022 /PRNewswire/ -- USA News Group – According to trendspotting artificial intelligence platform Spoonshot, concerns over the clean label status and ultra-processing methods of plant-based products such as those from producers such as Beyond Meat, Inc. (NASDAQ:BYND) and B2B ingredient producers Ingredion Incorporated (NYSE:INGR). According to the International Food Information Council's (IFIC) 2022 Food and Health Survey, consumer preference for products labeled as "clean" and "natural" have continued to increase in 2022. This trend continues to benefit retailers such as Amazon.com, Inc. (NASDAQ:AMZN) subsidiary Whole Foods, and Costco Wholesale Corporation (NASDAQ:COST), while also opening doors for natural foods producer newly publicly-listed Pangea Natural Foods (CSE:PNGA).
The University of Minnesota conducted in early 2022, which found a growing "trust gap" among American adults, showing less than 25% strongly trust information about where their food is grown and how it's produced. By 2024, the clean label ingredient market is forecasted to grow to US$51.14 billion globally, while potentially growing at a CAGR of +17.5% through to 2030.
After successfully launching its GMO-free, natural products to over 250 retail outlets in Canada, recently-IPO'd Pangea Natural Foods (CSE:PNGA) announced its expansion into the United States through the H Mart chain which has 84 stores in the USA, as well as more outlets in Canada and the UK.
The retail distribution is starting with Pangea's plant-based patties made of pea-protein and free of GMO ingredients, fillers, antibiotics, hormones, and bioengineered ingredients.
"Building on the positive momentum of our recent distribution across Canada, we're excited to now expand into the United States," said Pangea CEO, Pratap Sandhu. "We look forward to introducing our products to a broader range of customers - making delicious, nutritious and sustainable eating more accessible than ever before."
After founding Pangea in April 2021, Sandhu was named to the sixth annual Bay Street Bull 30X30. His company officially began public trading on the CSE on July 4, 2022 under the symbol PNGA, successfully raising $1.4 million in its seed financing round.
Pangea recently announced a further Canadian expansion to a running total of over 250 retail outlets with a national product listing in approximately 23 IGA Marketplace BC locations and all seven Fresh Street Market locations.
All of Pangea's products are manufactured in the Vancouver lower mainland at an in-house facility approved by both the Canadian Food Inspection Agency and the U.S. Food and Drug Administration.
"Pangea Natural Foods has partnered with experienced food scientists to formulate its products, with a focus on delivering high quality food products to consumers," said Sandhu. "We believe the key to the Company's growth will be providing consumers with very nutritious, satisfying foods with great taste and texture."
Recently Pangea also announced the successful launch of its Old Fashioned Ghee and Plant-Based Patties products to popular Canadian retailers IGA and Fresh Street Market, adding to its national distribution footprint that also includes Save-On Foods, Loblaws and Superstore.
Seen as the flag bearer for selling natural foods and championing the Clean Label Movement is Whole Foods—the subsidiary of Amazon.com, Inc. (NASDAQ:AMZN).
But their efforts haven't come without challenges. Late last year, both Amazon and Costco Wholesale Corporation (NASDAQ:COST) announced recalls that included Fresh Express bagged salads.
In-house, Costco has had recent successes with the launch of its Kirkland Signature label's cookies, which boast a neat, clean nutrition label and only a few simple ingredients. For those who don't hold a membership at Costco, the cookies can also be bought from Amazon.
Both Amazon and Costco have agreed to launch a new Pumpkin Spice Energy Drink from plant-based US energy brand Yerbaé, which will be available for a limited-time in fall 2022.
"This new energy drink only has eight ingredients which are non-GMO and plant-based," said the Yerbaé company in a statement. "By trading in a PSL, Yerbaé provides good plant-based energy without the guilt that can come with consuming the unhealthy amounts of sugar, artificial ingredients and calories."
The Pumpkin Spice Energy Drink launches in September on Amazon and in select Costco stores in Southern California.
Helping to provide the right types of ingredients for these cleaner products, Ingredion Incorporated (NYSE:INGR) has been meeting demands from clientele through its specialty ingredients arm. Through the company's Q2 2022, Ingredion saw a 16% increase in net sales.
"In response to continued strong demand for clean label texturizing starches, we accelerated the commissioning of new capacity at our Indianapolis facility," said Ingredion President and CEO, James P. Zallie. "In addition, our Sugar Reduction and Specialty Sweetener platform had another excellent quarter, growing net sales by more than 20% led by a double-digit top-line increase of PureCircle's stevia franchise."
Much like Pangea and is Plant-Based Patties, Ingredion has worked to capture some of the consumers looking for plant-based alternatives to meat.
Perhaps the most well-known publicly-traded, pure-play plant-based meat company out there is Beyond Meat, Inc. (NASDAQ:BYND). Back in 2020, the company went on the offensive in wake of attacks on its "ultra-processed" plant-based meat, which pointed fingers at "industry-funded" ads from The Center for Consumer Freedom, which attacked plant-based burgers.
"In the coming months, and for the balance of 2020, you will see us tell our story on ingredients and process with content across digital and print media helping consumers have the information they need to make informed purchasing decisions," said Beyond Meat President and CEO Ethan Brown.
However, while many of the the biggest claims of plant-based meat's benefits also seem to revolve around their environmental impact, debate continues over how health friendly they actually are.
Unfortunately for Beyond, something seems to be hurting their balance sheets, as the latest Q2 2022 financial highlights showed a 1.6% decrease year-over-year in net revenues, and a gross loss of $6.2 million or gross margin drop of 4.2% of net revenues.
"In Q2 2022, we recorded our second largest quarter ever in terms of net revenues even as consumers traded down among proteins in the context of inflationary pressures, and we made solid sequential progress on reducing operating and manufacturing conversion costs," said Brown. "Our transition to mass market consumption will occur as we actualize our vision: providing consumers with plant-based meats that are indistinguishable from, understood as healthier than, and at price parity with their animal protein equivalents."
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