4 tips for beginners in the plant-based dairy market
People care about climate change and animal welfare - so it's no surprise that demand for plant - based products has soared in the last two years. The milk market is expected to do more triple over the next decade, reaching $ 32 billion by 2031.
But what exactly determines success within this fast - growing industry? And what do startup companies need to know to get partnerships with the corporate companies that get the product on the map?
Well, in my experience, it all boils down to four main lessons - but let 's start by describing the research on which I base this before diving into each. one of them.
Getting to know the field
My team at TNW works with industry-leading companies and governments around the world who want to partner with or support innovative small businesses to expand their reach. Two of our most exciting recent projects involved exploring plant-based start-up dairy businesses for business leaders in the fast-moving consumer goods (FMCG) sector. ).
My following thoughts come largely from working on it this report, in which the TNW research and development team, together with nlmtd, mapped the most promising start - up collaboration in the plant - based dairy space.
Of course, I suggest you take a look at the full report - it's an interesting read - but that's what we basically saw although the number of bets on plant - based startups has been growing, the bar is still quite high for accepting these results on a large scale.
So here are my top four tips for beginners and scalers who want to attract the right partnerships to succeed in the other dairy market.
Tip # 1: Nutrition is one, naturalness is two
What I have heard a lot in my conversations with business leaders is that consumers are often misunderstood by nutrition and naturalness and sometimes misunderstood by beginners.
Claims that mention the level of a particular natural ingredient (for example, 'this product is 35% almonds') say very little about the level of naturalness of that food product.
Of course, naturalness, as seen by FMCG leaders, has more to do with the content of artificial sweeteners or preservatives - among other elements.
A study conducted by Hero Group with the University of Murcia and ETH Zürich, published in 2022, provides a helpful tripartite group to explain naturalness:
- If the origin of the food involves the use of locally grown organic raw materials
- If the production of the product is free of artificial ingredients, preservatives, additives, artificial colors and flavors, chemicals, hormones, toxins, and GMOs
- And finally, if the end result is healthy, environmentally friendly and fresh
Nutrition, on the other hand, is simpler. In milk, it is often related to protein content compared to fat and sugar levels. While high protein amounts are highly desirable, fats and sugars are not desired.
The balance between the three is very important if your goal is to get a good opinion of nutritionists in FMCG corporations. So if you want to attract participants, flavoring your plant - based snack that is high in protein and high in sugar may not be the best way forward.
Tip # 2: Taste and texture as custodians of future demand
Two other criteria that FMCG corporations repeatedly raised when discussing new dairy concepts based on plant flavor and texture.
It did not matter whether we were talking about milk, yogurt, butter, cheese, or spreads - taste and texture cannot be left out if the goal is to choose a product for which consumers change their diet.
While the undeveloped demand for plant-based products is large, consumer curiosity for product testing may not always be as high.
Once a few players in plant - based milk achieve what consumers are accustomed to experiencing traditional dairy products, their market will want to take over - or at least that's what leaders will business bets.
At present, the taste and texture levels of plant - based dairy products vary greatly from product to product, which is certainly natural for the experimental and innovative times in which the market is in full swing.
But as consumer preferences intensify, a great knowledge of taste and texture is going to differentiate between a successful and forgotten plant - based milk brand, especially when we 'talk about flavored dairy products, such as flavored yoghurt and cheese.
Tip # 3: Cheese is the Holy Grail
Cheese alternatives are considered to be the next frontier in product development and plant-based innovation.
Milk and other yogurt market - either made with legumes, nuts, or grains; or developed in cell-based laboratories - in a time of global expansion and adoption. The market for other cheeses is growing along with the new milk trend, but at the same time, there is more scrutiny from traditional milk and a degree of suspicion from consumers.
For an ambitious start-up, such a challenge is just another word for business opportunity. Indeed, we can easily see that the great desire for entrepreneurship in the cheese sector is based on plants.
As things stand at the moment, it seems to me that start - ups in North America, Europe, Latin America, and Asia are working non - stop around the clock to find out what the best combination of ingredients and what process will produce the most delicious plant. - fixed cheese. So you better be quick if you want to hit them.
Tip # 4: Online, visible, and (preferably) local
Sustainability, animal welfare, dietary requirements, healthy lifestyle. These are all consumer trends that have been directly driving the growth of the plant - based dairy industry.
In addition, I also see trends in convenience, consumer ethics, and community-led economics that are expected to have a significant impact on the way entrepreneurship is based. moving plants.
Our research research and discussions with FMCG industry leaders highlight the need for convenience and flexibility in creating space for new product formats as well as business models.
For example, consumers are already open to trying out membership models, in which plant - based products such as oat milk and almonds are delivered to their door at regular intervals. Another product offering is growing ready-made yogurt based on plants and milk bottles, a format already recognized by the traditional dairy industry.
But I also feel that we cannot ignore the fact that consumers have a broader understanding of the impact that their choices have on the wealth of society, the environment and the economy.
Information and publicity are essential for individuals to build trust in new and traditional logos. This has led to a preference for plant-based products that openly share information on the availability of the ingredient, as well as production methods and impact across the value chain.
Yes, established global brands may be far behind in terms of scale, experience, and accessibility - but young companies can outperform them when it comes to customer engagement.
So if your start - up business is aiming to make big waves in this area, I suggest you work with the local communities and wisely choose where your products come from. That approach can continue to be more closely linked to future generations indeed wanting.