Consumers of soy-based products tend to be health-minded individuals, and many soy suppliers are enhancing their products with functional ingredients, like omega-3 fatty acids and fiber, to appeal to the healthy eating trend and differentiate from competitors.
Soy-based Food and Drink
Though soy food consumption has been steadily climbing, nearly three quarters of Americans still do not use soy products, though not for a lack of awareness. According to a 2008 consumer survey sponsored by the United Soy Board, 85% of consumers are aware of soy’s health benefits, but Americans do not merely want foods that are good for them; they want foods that taste good, too. Negative taste perceptions are a key reason why more Americans have not embraced soy foods. In fact, an exclusive Mintel survey finds nearly half (45%) of soy non-users say they do not use soy foods or beverages, because they “don’t like the taste.”
All told, the soy-based food and beverage market (defined by Mintel as food/drinks in which soy is a primary protein source) reached $1.4 billion in sales in 2008. While this represents a 15% increase over 2003 levels, accounting for inflation, it actually demonstrates a 1% decline in sales.
An increase in awareness of soy products and their health benefits--heart health, bone health, cancer prevention—has had a positive impact on the market and helped boost consumption. However, this was offset by the decline of the low-carb diet trend, which hurt certain segments of the soy market, notably bars and weight-management products. Higher retail prices for many soy products, driven by the rising price of soybeans, may also be hurting sales.
Understanding the Soy-based Market
According to “Soy-based Food & Drink, December 2008,” from Mintel In-ter-national, the soy-based market includes a wide variety of products and spans multiple categories from yogurt to snacks. However, three segments--soy-based snack bars, soymilk and meat alter-natives--dominate the market, accounting for more than 90% of FDMx (food, drug and mass merchandiser sales, excluding Wal-Mart) sales.
At the same time, soy-based snack bars experienced lackluster growth of just 2%, largely due to the demise of the low-carb diet trend, which had given high-protein soy bars a big boost in the early 2000s. As a result, many consumers have turned to non-soy-based granola and cereal bars, which may offer superior taste at a lower price. Sales of soy-based meat alternatives also suffered over the last five years, with a slight rebound in 2008 stemming from strong sales of brand leader Morningstar Farms.
The two segments seeing the greatest growth during the past five years, soymilk and soy yogurt/yogurt drinks, are both categories where the word “soy” is prominent, often as part of the product name (e.g., Silk Soymilk, O’Soy yogurt). This is contrary to most soy-based snack bars (Clif Bar, PowerBar) and even meat replacements (Morningstar Farms veggie burgers, Smart Dogs), where the word “soy” is relegated to small print in the ingredient list. Given the high level of consumer awareness about soy’s positive impact on heart and bone health, as well as cancer prevention, overt publicizing of soy as an ingredient may be key to boosting sales.
Supermarkets remain the leading retail channel for soy-based food and drinks, accounting for some 88% of FDMx sales in 2008. However, facing a difficult economic climate, supermarkets’ share of soy sales declined slightly from 2007-2008, as budget-savvy shoppers opt for mass merchandisers like Wal-Mart and Target, which offer convenient one-stop shopping and, traditionally, lower prices. As the recession continues and consumers struggle to save money, mass retailers will continue to pull share away from supermarkets.
Rising Awareness and Consumption
Consumer awareness of soy’s health benefits is higher than ever, due in part to high-impact ad campaigns by brands like Silk soymilk and SOYJOY nutrition bars. Any health magazine is likely to feature an article touting soy’s health benefits. WebMD even includes soy in its list of the top Superfoods that will help consumers manage their weight, fight disease and live longer.
Women are the core marketing target for many soy food and beverages campaigns, and growing awareness of women’s heart disease--the leading killer of women in the U.S.--has also helped drive soy food consumption. Well-publicized efforts, such as the American Heart Association’s “Go Red for Women” campaign, helped raise awareness of heart health among women and, in turn, gave a boost to soy usage.
The healthy eating trend, combined with educational and marketing efforts by suppliers aimed to reinforce soy’s health benefits, will continue to favorably impact the soy foods market. Consumption is highest among the under-35 set, who are more open to trying new nutritional products. Indeed, the number-one reason these young consumers eat soy foods is simply to try them.
FDA Hearth-health Claim at Risk?
The majority of soy-based food/drink consumers buy these products because they believe them to be good for them, and challenges to soy’s health claim could be detrimental to the market.
In 1999, the FDA allowed the health claim: “Diets low in saturated fat and cholesterol that include 25g of soy protein a day may reduce risk of heart disease.” Not surprisingly, the claim gave a boost to soy sales and helped raise awareness of soy’s health benefits. In fact, “heart health” was the number-one reason, cited by 35% of respondents to Mintel’s survey, for purchasing soy foods.
However, the research that led to the heart-health claim has not been confirmed in a number of studies conducted since then, and, in 2006, the AHA retracted its support of this claim. The FDA is currently re-evaluating the scientific evidence for the soy heart-health claim. While consumers seem to be unfazed by--or, more likely, unaware of--the current controversy, disallowing the claim could have a negative effect on the soy market. Continued education of soy’s other health benefits will be key to future success in the market.
Obstacles
Nearly three quarters (72%) of consumers surveyed do not eat soy-based foods or beverages. About half--and more men than women--say they simply prefer “real food” or are just not interested and, as a result, are not a worthwhile target for soy product marketers.
Nearly half of consumers say they do not like the way soy foods taste, indicating that marketers have their work cut out for them in terms of changing taste perceptions. For about a third of respondents, price inhibits usage. These price-sensitive consumers tend to be younger (aged 18-24) and from lower income households (less than $25K/year). While price poses a challenge for consumers, it is also an obstacle facing soy-food manufacturers, fueled by the increased prevalence of private label products.
Store-brand products have benefited greatly from consumers’ penny-pinching, with sales increasing more than 50% from 2007-2008. As price-conscious consumers continue to trade down to save money, national label soy products will be forced to compete with private label prices. Competition is sure to heat up, as consumers feel the pinch in the wallet and search for the most cost-effective products.
Innovate, Innovate, Innovate
Organic and all-natural is an especially hot trend in the soy snack bar market, evidenced by new product launches, such as Clif Bar’s Luna Sunrise, made with 70% certified organic ingredients; Pharmavite LLC’s SOYJOY all-natural fruit and soy bars; and Kraft’s Balance Pure bar. Morningstar Farms, a division of Kellogg Co., has introduced an “Organic Soy” meat substitute line made with natural and organic ingredients. According to Mintel’s consumer survey, half of soy food users say they eat “all-natural” foods, and 42% eat organic foods.
Consumers of soy-based products tend to be health-minded individuals, and many soy suppliers are enhancing their products with functional ingredients, like omega-3 fatty acids and fiber, to appeal to the healthy eating trend and differentiate from competitors. Stemricks Heritage Foods introduced 8th Continent Soymilk Complete with omega-3 DHA, fiber and calcium, while WhiteWave introduced its Silk Plus sub-line in three varieties: Plus Fiber, Plus Omega-3 DHA and Plus for Bone Health in 2007.
New, ethnic-inspired products have helped increase usage and grow the meat alternative market more than 4% in FDMx from 2007-2008. Market leader Morningstar Farms recently introduced Asian Veggie Patties, Italian Herb Chick Patties and Ginger & Teriyaki Veggie Cakes. Gardenburger launched a Gourmet line, which includes Tuscany Veggie Steaks, made with Gorgonzola, caramelized onions and couscous. Amy’s Kitchen offers a variety of organic Asian, Indian and Mexican frozen entrées. pf
This article contains information from the Mintel report “Soy-based Food and Drink--U.S., December 2008.” Please visit http://reports.mintel.com for more information or call Mintel at 312-932-0400.
Website Resources:
www.PreparedFoods.com -- Enter “soy” or “soymilk” in the search field to discover the latest news relating to soy food products and developments
www.mintel.com -- Mintel International
www.soyfoods.org/?page_id=82 -- Soy fact sheet, courtesy of the Soyfoods Association of North America
