How to Capitalize on the Demand for Plant-based Foods

5 questions to ask when growing your meat-free manufacturing business

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How to Capitalize on the Demand for Plant-based Foods

In case you missed the memo: Plant-based diets and meat alternatives (like the quinoa burgers above) are on the rise. U.S. sales of plant-based “meats” jumped 42% between March 2016 and March 2019 to a total of $888 million, according to Nielsen. Traditional meat sales only rose 1% to $85 billion in that same time frame.

Plant-based food manufacturers aren’t just targeting vegan and vegetarian consumers, either. Sales of meat alternatives are also being driven by an increasing number of “flexitarians” who are incorporating more plant-based foods into their meat-eating diets.

Thanks to all of this buzz, what was once just a niche market has now become more crowded. That means manufacturers of plant-based proteins and other animal-free foods are being forced to rethink how they can scale and remain competitive.

Let’s look at five questions plant-based food manufacturers should ask if they want to grow while staying cost-conscious.

1. Am I ready to invest in equipment and automation?

Given the new popularity of meat alternatives, manufacturers can’t just focus on the smaller market of consumers who have been willing to pay higher prices for a niche product. If a plant-based protein producer wants to reach a wider audience, its prices must be more competitive to appeal to the mass market.

For many smaller manufacturers, scaling up to meet that price point often means investing in additional equipment and/or automation because their current process may be basic and manual. For example, we recently worked with one plant-based startup that was developing and testing products in what was essentially a commercial kitchen. Introducing these products to a greater labor process allows these manufacturers to be more competitive.

Plus, flexitarians and traditional meat-eaters value taste and texture that is more familiar. In order to appeal to this broader consumer base, these companies may need to consider more advanced equipment to achieve that texture with a plant-based product.

2. Do I understand federal food safety regulations?

Startup food companies may not be familiar with all of the regulations that come with large-scale manufacturing. Usually, the entrepreneurs creating these foods are experts in the formulation of their product, not necessarily in the intricacies of commercializing it.

While the U.S. Department of Agriculture (USDA) has regulatory jurisdiction over the majority of meat and animal products, the U.S. Food and Drug Administration (FDA) oversees most plant-based food products, even plant-based “meats.”

However, the USDA does regulate egg products, so there may be some plant-based options that fall under USDA jurisdiction if they contain egg (i.e., are not vegan).

When taking your food production to the next level, it’s critical to understand the food safety regulations and requirements for your specific processing, because they can vary widely.


3. What distribution plan will I need?

Increasing your production and distribution usually requires more space. When stepping up your output, consider whether you have enough space to store your product before it’s handed off to a distributor or delivered to the consumer. An experienced partner can help you develop a strategy for your package engineering, storage and supply chain.

4. How do I engineer efficient processing?

When it comes to the nuts and bolts of your processing lines and product flow, a lot will likely change when growing your business.

  • How much space will you need?
  • How much equipment will be required?
  • What size equipment will be necessary?
  • How will packaging needs change?

It’s important to understand exactly what equipment you need and in what quantities to prevent bottlenecking, while also building in modular flexibility to adapt for future growth.

We often work with clients who have an idea of where they want their business to be in five years, but may not know exactly how to get there. Our team is able to analyze current operations against future projections to develop a roadmap of how to achieve that future growth, including what capital investments will be required and when.

5. Am I already considering a new facility?

Before rushing into selecting a new facility, partner with a firm who can help you understand what space you’ll need to accommodate your processing. We’ve worked with clients who invested in a spec warehouse first, only to realize that it wouldn’t suffice for the future growth they were anticipating.

Have questions about scaling your plant-based food manufacturing? Comment below or email us at mmittelsteadt@stellar.net and jschultz@stellar.net

 

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