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The Spoon

Daily news and analysis about the food tech revolution

CPG

Emily Elyse Miller Wants to Reinvent Breakfast Cereal. That Means Vegan Ingredients, Edgy Mascots, and (Of Course) NFTs

Emily Elyse Miller knows a thing or two about breakfast.

Not only has the one-time journalist and fashion trends forecaster written a book on the topic (complete with 380 recipes from 80 countries), but she’d also run a consulting company that helped world-renowned chefs like Enrique Olvera develop breakfast events.

But after years of writing and teaching about first-meal, Miller realized that cereal, the centerpiece of the American breakfast for generations of kids and adults, had gone stale. So she decided to start a cereal company of her own to reinvent the category.

Called OffLimits, Miller’s company created a line of irreverent brands like Dash and Zombie, each with its own ‘moody mascot’ and a clean ingredient list.

The funky mascots were important for Miller, because while she loved the rainbow-colored pop culture she grew up with in the cereal aisle, she felt it was time for something new.

“Tony the Tiger is not cool,” said Miller. “Cereal is one of the only products that carry culture in this unique way, and that culture has not been updated in decades.”

Emily Elyse Miller

Miller worked with artists to design the cereal brands’ characters and boxes. Now, she sees NFTs as a natural evolution to bring the creations to life and connect directly with the OffLimits’ community.

“The mascots have moody personalities, and there are highs and lows to those personalities too,” said Miller. “They have mental health issues as much as they have kind of successes and wins, and I think that’s what makes the brand so right for building out in the Web3 space.”

New to Web3, Miller initially started small by giving away NFTs during a pop-up at the Art Basel art fair last December in Miami Beach. Attendees of the pop-up scanned a QR code to claim an NFT for what Miller describes as the first-ever “NFT cereal toy.” The giveaway was gamified, so some who scanned got an “exploding cereal” NFT and given an OffLimits cereal variety pack.

The Art Basel NFT giveaway gave Miller confidence to go bigger. “My first NFT protect was just so I could understand who would claim it and if people would care at all,” said Miller. “People very much cared, so that helped just like solidify that I get to pay a lot more attention to this.”

That extra attention resulted in a new NFT project announced this week called “Best Cereal in the Metaverse.” The project will feature a collection of 2,500 NFTs (.111 Etherium (~$290)), each with its own unique artist-created spin on an OffLimits’ mascot. In addition to unique artwork, NFT owners gain access to the private discord and can participate in the custom cereal box design process by submitting an NFT they own to be featured on a custom-designed cereal box. Each NFT holder will also get four of the custom-designed boxes of cereal shipped to their home.

OffLimits is part of a bigger trend of upstart food brands pushing into NFTs. Startups like Bored Breakfast Club, Liquid Death, and Yerb have all launched NFT projects over the past few months as a way to directly connect with their customers and create a new commerce model. For Miller, while all of this is exciting and represents opportunity, there’s still lots of work to do.

“While people were excited to learn about an NFT (with the first project) and potentially claim it, the amount of questions that we got and education that we have to do for our community who are not crypto native is a lot,” said Miller. “So brands need to take their responsibility.”

That responsibility also means talking to other brands curious about the Web3 space and conveying what she’s learned.

“I’ve been talking to so many brands about how they can be more involved in the space,” said Miller. “For me, everything’s about functionality, which is why I wanted this project to have a lot of layers. I wanted to involve our existing community to help grow a larger community of artists and just keep a circle of engagement going. That’s why I feel like there needs to be a physical product for something digital, trying to keep a good balance.”

If you want to sign up for the OffLimits NFT, you can do so here.

Startup CPG’s Free Databases Help Emerging Brands with 3PL, Logistics and Donations

The phrase “The Passion Economy” refers to the increasing ability for people to build real businesses around whatever they are, well, passionate about (it’s also an excellent book).

And while there are a ton of fledgling founders passionate about food and launching a ton of upstart CPG brands, those same founders probably don’t hold the same zeal for things like logistics or inventory management.

That’s where a trio of free online databases from Startup CPG can help. Startup CPG is a volunteer organization of various experts and founders that provide knowledge, networking and community to small brands. Startup CPG membership is free, and includes access to an ongoing Slack Channel as well as events where members can learn more about things like venture capital, product law and marketing (full disclosure that I have volunteered and spoken at a Startup CPG event).

Earlier this year, Startup CPG created three free databases for its members that serve as national and regional directories for direct to consumer third-party logistics companies, e-commerce retailers where goods can be sold, and places where food about to expire can be donated instead of being destroyed. Last week, the list was migrated to a Google spreadsheet to make it more accessible, and its available to any brand that provides their email address to Startup CPG.

The database was created by Startup CPG volunteers crowdsourcing information and searching the web to include the name of relevant companies/services, as well as things like what regions they serve, the types of food accepted and the appropriate contact to reach out to.

In other words, these databases can help answer a lot of the business type questions a new brand just starting out might have. And with at least some of those questions answered, founders can continue to focus on what they are most passionate about.

Birdie Uses AI to Scour Reviews and Help Brands Understand Their Products

Thanks to our connected world, people who either love or hate a product, don’t have to keep their opinions to themselves. There is no shortage of platforms to express their thoughts.

This steady stream of opining is actually a source of fuel for Birdie, a company that uses AI to comb through product reviews and discussion forums (written in English) to surface product insights for CPGs and other other product brands.

For instance, by applying its AI to customer reviews of V8 juice, Birdie was able to show that people were often using the vegetable drink as a hangover remedy. By uncovering this data, V8 could then choose to create a specific line of drinks or marketing campaign that reaches this particular type of indulgent adult. The same idea applies to those pouches of pureed foods for toddlers. Birdie discovered that athletes and outdoors people carried these with them because they were easy to carry and loaded with nutrition.

Birdie is not a social media listening tool. It’s not just tallying up social mentions of a brand and analyzing timelines to see what is trending. Instead, the company is more focused on consumer product reviews on Amazon, Google and other places where purchases can be verified and are filled with more details about how the product arrived, how it was used, how long it lasted, etc.

“Our main differentiator is the fact that we chose to be very focused on products, and built a deep dictionary that relates to the buying journey of consumer products,” Patrícia Osório, CMO of Birdie told me by phone this week. “We capture the data related to a product attribute, or usage of the product, how they bought the product. With that, we can show our clients a detailed and easy to find view about how consumers are interacting with their brand.”

According to Osório, the number of product reviews in the U.S. has been growing quickly, with an increase of 60 percent year over year. She said there is an average of 621 new reviews written per day on food products, with an average of 342 reviews per SKU.

In a way, Birdie is like a distant cousin to Spoonshot, which applies its AI to vast datasets on food to uncover novel flavor combinations. Only in Birdie’s case it is uncovering novel uses for existing products.

Founded two and a half years ago, Birdie has raised $1.6 million in Seed funding and counts Procter & Gamble among its clients.

Birdie’s technology actually fits in with the larger hacker culture that we live in today. In addition to expressing their opinions, people love deconstructing and re-purposing existing products to fit their own needs, and sharing their findings with other people online. All this adds up to a never-ending source of data for Birdie’s algorithms, and more product insights for brands.

The Pandemic Made Self-Heating Instant Food Hot in China

Rather than inspiring bursts of creativity in the kitchen, the pandemic and continued lockdown has actually made me lazier when it comes to making food. Maybe that’s from working more hours, or feeling a constant state of stress over the state of the world, or just a general malaise. Whatever the reason, my meals are often whittled down into whatever I can stuff into a tortilla and cook in the panini press.

So when I read about how the pandemic has caused a surge in sales of self-heating packages of food in China, my first reaction was I get it. I mean, you don’t even need to stuff a tortilla or plug in the panini maker. My second reaction was where can I get self-heating packages of food?

Self-heating meals are pretty much what you think they are. Special packaging allows water to mix with powdered chemicals like magnesium and iron to create an exothermic reaction with the resulting steam heating the meal.

As the Mintel blog (h/t to Spoon contributor Stephen Bronner for forwarding) writes, in China the pandemic made self-heating meals hot:

The pandemic has seen sales of self-heating foods in China surge. Between late January and early February 2020, when the virus caused peak infections and China went into lockdown, sales of self-heating foods experienced the second-highest growth of all categories, year over year, according to Taobao, China’s largest online retailer. Sales of self-heating rice alone grew by 257%. They have enabled consumers to enjoy fuss-free dishes/hotpots/meals while restaurants were closed.

Mintel goes on to explain that even though these self-heating foods have a higher price point, they continue to be embraced by Chinese consumers, with Mintel projecting that the market for such products will double.

This type of self-heating technology is also attractive to brands. Mintel reports that hot pot chain HaiDiLao has its own line of self-heating packaged meals that offer an attractive alternative for consumers who can’t afford to eat at the actual restaurants more often.

We’ve covered similar technology here in the states from HeatGen, which uses chemical reactions for self-heating cans being used by La Colombe for individual servings of hot coffee on-the-go. You can also find a variety of self-heating meals when shopping for emergency preparedness or camping foods.

Given that I’ll be basically camping out at home for the foreseeable future, who knows, maybe self-heating meals will be added to my own pandemic menu.

Tastermonial Lets You Scan Grocery Items to See Which are the Best Fit for Your Diet

Sticking to a diet — or avoiding an allergen — is hard enough without having to worry about potentially hidden ingredients in grocery products. Does that jerky have soy in it, or do those potato chips actually contain dairy?

One startup is trying to make grocery shopping more transparent and personalized. Tastermonial is a new startup based in the Bay Area which offers a link between personalized nutrition services and actual food brands. Users can download the Tastermonial app and use it to scan products on grocery shelves. The app then extracts nutritional data and gives viewers a readout of the item, noting whether or not it would be a good fit for them to eat, based off of their pre-saved dietary profile. If it’s not, Tastermonial will recommend other, better-suited grocery products available via delivery through one of their retail partners.

Founded in July 2019 by Bude Piccin, the startup launched a beta version of its app in January 2020 and currently has about 200 users. Thus far Tastermonial’s database includes over 400,000 SKUs, including everything from CPGs to frozen and refrigerated foods. Piccin said that they pull nutritional data from public databases.

On a recent phone call, Piccin told me that the app can only scan items and give both a general evaluation (good choice for many diets) and a personal evaluation (not suitable for you based on your profile). They plan to roll out the ability to purchase through retail partners later this year, starting with Piccin’s former employer, Amazon.

Thus far, users have to input their own dietary preferences and any food allergens, however, Tastermonial plans to let users link its app to microbiome- or DNA-driven food personalization services to automatically upload their nutrition profile. The company is already in talks with DAYTWO, a personalized nutrition company which recommends recipes to individuals based on their microbiome.

Tastermonial’s app is free to use. The company plans to make money by adding a small fee (5 to 10 percent) onto each sale through their retail partners. There’s also a SaaS play. Piccin said that Tastermonial will partner with personalized nutrition services, like DAYTWO, to provide the ingredient layer to those recipe recommendations. She explained that Tastermonial’s database could help users select the most health-appropriate foods for their suggested meals — all of which could be delivered to their door.

Since the company is so early-stage, it’s hard to predict if it’ll be able to follow through on its plans to become the go-to interface for grocery shopping based on your nutrition. But Tastermonial is tapping into a trend that, like Hansel, is so hot right now: personalization. (So hot, in fact, that we had a whole conference dedicated to personalization a few weeks ago in NYC.)

In addition to Tastermonial, there are several other companies racing to bring personalization to the grocery store. Pinto (formerly Sage Project) and DNA Nudge are two startups that pull from individuals’ nutrition profiles to help them decide which retail products are best suited to their needs. According to Piccin, Tastermonial’s differentiator is its ability to connect users with alternative products that are better for them, if the grocery options don’t cut it. “We’re connecting to that practical side,” she told me.

My question is whether or not consumers will actually take that extra step. Will people really create an entire online grocery order for one or two items, pay a premium for delivery, and wait for it to show up at their door?

Tastermonial is betting on it. Considering that 81 percent of consumers never order groceries online, that’s a risky bet, which is why I think that Tastermonial’s SaaS play has more potential than the app itself. As personalized nutrition services become more popular, more and more people will be looking for ways to easily shop for the best ingredients for their individual needs. If it becomes part of the personalized nutrition services themselves, Tastermonial could help make the process just a little bit easier.

This Swiss Company Can Now 3D Print Tons of Personalized Chocolate

It’s February 14, which means there’s a good chance you’ll give or receive chocolate at some point today. The chances that that chocolate will be 3D printed? Slim to nil.

But all that could soon change thanks to Barry Callebaut AG, a company that makes roughly one-fourth of all the world’s chocolate, including that used by well-known brands like Hershey’s and Nestlé. According to a press release from the Swiss corporation, it will work with gourmet clients to let them print personalized chocolate designs en masse through Mona Lisa, its chocolate decoration brand. In short — Barry Callebaut will help brands print customized chocolate creations.

Business partners can develop their own custom designs and specify size parameters for their chocolate. They’ll then share those with Barry Callebaut, which will print the custom chocolates in large quantities at its Mona Lisa 3D Studio. Barry Callebaut can print thousands of a particular design succession thanks to its new 3D printing tech, which keeps melted chocolate at the perfect temperature for speedy printing.

Chocoholics will have to wait a while before they can buy these 3D printed creations in stores, though. Barry Callebaut will first work with high-end clients, like hotels, pastry chefs and coffee chains. Its first customer will be Dutch hotel chain Van der Valk. Down the road, Barry Callebaut will open up its tech to use with manufacturers such as Nestlé and Hershey.

For aspiring chocolatiers who don’t want to wait, there are some home options. Mycusini is a countertop chocolate printer (though it’s only available in Europe). The Mayku Formbox lets you print DIY chocolate molds at home. And while it’s not available yet, but the Cocoterra lets you make bean-to-bar chocolate right in your kitchen.

Barry Callebaut’s tech is perfectly situated to tap into a trend we at the Spoon have been seeing everywhere lately: personalization. The chocolate-maker can’t produce individualized chocolates for every person, obviously — the Mona Lisa 3D Studio will be printing chocolates on a large scale. But with this new 3D printing service, businesses can get more creative with their sugary marketing and branding efforts. For example, Starbucks could make a line of hot chocolate sticks (it’s a thing!) in the shape of their signature coffee cups. Or your favorite hotel line could make pillow chocolates shaped like pillows!

As consumer demand for personalization grows, CPG companies are hustling to figure out how to tap into the trend — even when manufacturing in massive quantities. In fact, that’s one of the questions we’ll be tackling at Customize, our food personalization summit happening in NYC on February 27th! If you want to come, use code SPOON15 to grab 15 percent off your tickets.

The Age of The Personalized Food Passport is Coming, Says Spoonshot CEO

It seems impossible for giant CPG companies working with thousands of retailers to make individualized products. But according to Kishan Vasani, CEO of Spoonshot, a startup that predicts emerging food trends, there’s still a way for these giant companies to mimic the effects of personalization in their wares.

How, exactly? To get the whole story you’ll have to come to Customize, our Feb 27th in NYC all about breaking down the impact of personalization on the food system. We did, however, ask Vasani a few questions recently about how he defines personalization, its wide-reaching effect, and how big CPG companies can capitalize off of individualization. He also explains his vision for the future in which we’ll all have a “food passport” which restaurants can use to tailor our meals.

Check out the Q&A below then grab your tickets to Customize here (pstt — use code SPOON15 to get 15 percent off).

Tell us a little bit about what Spoonshot does. 
Spoonshot is on a mission to power genuine agile innovation to the food and beverage industry. Our intelligence details emerging market and consumer needs by transforming long-tail, open information from diverse, authentic data sources. We connect these disparate data sets via our proprietary food science-infused algorithms to deliver personalized insights, predict trends, and identify innovation opportunities. 

How can large CPG companies, which have to work on a massive scale, create products that are personalized to consumers?
Firstly, it’s important to clarify what personalization really means (to me). To some it could mean customization (e.g., add blue cheese to a burger). To others, it might be about packaging that has your name on it. I firmly believe that personalization is about implicitly understanding an individual’s needs and desires. 

Today it’s not economically possible to create unique products for individual preferences, but CPG companies can create the same effect by having a deep understanding of evolving and emerging trends and innovating exactly against those growth opportunities. Of course, greater agility and efficiency is required at every stage of the product development cycle by employing the relevant technologies. 

Ask most CPG executives what the next big food trend is going to be and they will probably name a trend that is well established like plant-based [protein] or CBD. But ask them what’s [after that] and they won’t be so sure. There needs to be significantly more efforts to anticipate consumer needs, and perhaps the largest brands have the economic power to even shape consumer tastes. Too often they fail to exercise this — in contrast to the tech industry, which has been much more successful in pushing innovation upon consumers. iPhone, anyone? 

What’s the biggest challenge facing food personalization, specifically within the CPG space?
The biggest challenge to personalization within the CPG space is the way in which data has historically been used and continues to be or not be employed:

  • Over-reliance on (yesterday’s) sales data for decisions related to tomorrow’s innovation. 
  • The lack of use of large, external and diverse data sets. Instagram and Pinterest are not the answer; at best they are just a small part of it.
  • The internal data silos, especially in larger businesses who are potentially sitting on data gold and don’t even know it.
  • The slow adoption of new data and technology frameworks, particularly by R&D professionals.

How do you think that personalization will play into consumer dining and shopping habits over the next five years?
Personalization will play a central role across the consumer food landscape over the coming decade. 

Take personalized recommendations as one use case. Consumers have been used to personalized digital experiences for many years now thanks to leading tech companies like Amazon, Netflix, and Pandora. Yet somehow online food ordering lagged behind. We launched a personalized recommendation engine for online food platforms back in early 2017, but the market wasn’t quite ready. Fast forward two years and McDonald’s acquires Dynamic Yield to do exactly this, and today, the demand for personalized recommendations has never been higher. But this is just one way in which personalization will dominate the industry. 

We believe that there will be a “food passport” for every consumer so no matter where you eat, the business producing your food will know everything about your taste preferences and will have the ability to tailor your meal accordingly. There would be some interesting applications in terms of having a digital record of an individual’s consumption, and how health insurance providers might price their plans based upon this data. 

Since healthy eating is an established trend, consumers will increasingly demand personalized nutrition in restaurants as well, where science and technology can dictate what food is right for us — not only for weight management but, more importantly, to manage our overall health and wellness. 

Another innovation in personalization could be the emergence of (mobile) handheld scanners that help consumers identify allergens, nutrients, and ingredients in their food and provide them with a breakdown of the amounts of sugar, acidity levels and vitamins present in dishes,  as well as highlight potential allergens warnings.

Join us in NYC on February 27th to hear Vasani speak more about how CPG companies are leveraging personalization (and lots more). Use code SPOON15 to get 15% off your tickets now.


From Nestlé to Trader Joe’s, Six New Plant-Based Burger Brands Have Popped Up in the Last Month

A year or two ago, when you wanted to taste one of the new, ultra-meat plant-based burgers you could basically choose between Beyond Meat and Impossible Foods — assuming you were in one of the areas where one or both was available. A few months ago, you’d have a couple more options, like Lightlife and Meatless Farm.

But over the past four weeks alone (yes, just September), the faux burger space has virtually exploded with new players, all trying to take advantage of consumers’ burgeoning desire for plant-based meat. Six, to be exact. To help you keep track and figure out which alt-meat burgers to keep an eye out for in the grocery aisle, we’ve rounded ’em up for you:

“Protein Patties” from Trader Joe’s
A few weeks ago a Trader Joe’s employee posted on Facebook that the beloved grocery chain would soon launch its own meaty plant-based burger called “Protein Patties.” According to VegNews, the patties will contain 18 grams of protein each, and two-pack of the 4-ounce burgers will cost $4.99. The price is notable: the vast majority of meaty plant-based burgers out there, like Lightlife and Beyond Meat, cost $5.99 for a two-pack. Trader Joe’s can push its faux burgers in its store, which attract droves of consumers — especially millennials and Gen Z — because of its low prices, cheery staff and cult-status snack products.

“Better Than Beef” from Don Lee Farms
News broke last week that Costco would start selling Don Lee Farms’ Better Than Beef plant-based burgers in select locations. According to a press release, the new burgers will be available at Costco stores in six Western states, Texas grocery chain H-E-B and other retailers. No numbers were provided, but the same release stated that the burgers will have “the lowest calories, fat and saturated fat compared to other leading brands.” Don Lee Farms was one of the original copackers for Beyond and is now involved in a lawsuit with the plant-based meat company.

“Incogmeato” from MorningStar Farms
Earlier this month MorningStar Farms, a subsidiary of the Kellogg Company which has been making meat alternatives for over 40 years, announced it would launch a new line of meatier plant-based meats in retail in 2020. Called “Incogmeato,” the new line includes faux beef burgers as well as frozen chik’n tenders and nuggets. Though MorningStar Farms has been in the alt-meat biz for quite a while, their Incogmeato burger will be its first cook-from-fresh product, which will be sold in the refrigerated section of the grocery store.

The Awesome Burger by Sweet Earth Foods (Photo: Hardy Wilson)

“Awesome Burger” from Sweet Earth Foods (Nestlé)
Just last week Sweet Earth Foods, a U.S. company owned by CPG giant Nestlé, announced it would start selling its meaty plant-based Awesome Burger in foodservice and retail on October 1st. This is Nestlé’s first foray into more realistic alt-meat burgers in the U.S., but in Europe the Swiss company already sells the plant-based Incredible Burger to a variety of foodservice spots, including McDonald’s locations in Israel and Germany. The Awesome Burger has 26 grams of protein and a two-pack of the patties will likely retail for $5.99.

“Simple Truth Plant Based” by Kroger
At the Good Food Conference earlier this month Kroger, the largest grocer in the U.S., announced that it would soon debut its own line of plant-based products under its Simple Truth brand. In addition to alt-meat staples like burgers, the Simple Truth Plant Based line will also include cookie dough, creamy dips, and more, all with a pea protein base. The animal-free product line will debut at 1,800 Kroger stores this fall.

“Happy Little Plants” by Hormel
It’s not a pre-formed burger per se, but this month Hormel Foods, owner of brands like Skippy peanut butter, announced the launch of its Happy Little Plants line. Its first product will be a plant-based ground “meat” product that can be turned into meatballs, tacos, pasta sauce and, yes, burgers. Happy Little Plants are currently available in Hy-Vee grocery stores in select states.

If you want to know more about the plant-based revolution and the eater of the future, you better get one of the last tickets to the Smart Kitchen Summit {SKS} in Seattle next week! We’ll see you there. 

Meet the 10 Finalists of the First Ever SKS Future Food Competition

On Tuesday, we introduced you to the 12 Startup Showcase finalists who will pitch at the Smart Kitchen Summit {SKS} this October. Now it’s time to meet the first ever Future Food cohort: 10 startups creating innovative new CPG products out of groundbreaking or sustainable ingredients.

Read on to get acquainted with the Future Food cohort finalists, who are making everything from cricket seasoning powders to upcycled ice cream to chewing gum that boosts your immune system. Then be sure to snag your tickets to SKS to see both them and the Startup Showcase pitches live this October!

Future Food Finalists

BASE FOOD Inc is a Japanese startup which uses seaweed, beans, and whole grains to make better-for-you alternatives to carbohydrate-heavy foods such as noodles or bread.

Burden of Proof makes sparkling non-alcoholic cocktail with herbs, citrus, and adaptogen cold brew tea packaged in aluminum cans.

Ice Creem Social takes leftover ingredients from kitchens in NYC, such as grain from beer brewing, aquafaba, and hemp, and upcycles them to create sustainable vegan ice cream.

Mighty Gum is Seattle-based company that makes enhanced chewing gum. Their first product, Immunity gum, is packed with extracts of ashwagandha, astragalus, elderberry, reishi mushroom, and zinc meant to strengthen your immune system and help manage stress.

nufuuds combines sustainably grown algae with food staples to create sustainable and nutrient-rich products and meal alternatives.

Orchestra Provisions focuses on mending broken food systems by creating products with sustainable and responsibly sourced cricket protein. Its first product is a spice line with eight flavors, and it’s developing a series of milks and protein powders, too.

Planeteer fights plastic waste in oceans by making spoons that are completely edible, vegan, and healthy for the planet.

Rebellyous Foods is a food production company creating delicious, juicy and affordable plant-based meats for the foodservice market.

Route to India provides consumers with “better-for-you” snacks inspired by Ayurveda while enhancing the lives and livelihoods of rural farmers in India. Their first product is a light, crunchy, healthy snack made from Asian water lily seeds.

Sophie’s Kitchen provides plant-based seafood alternatives, including shrimp, fish fillets, smoked salmon, crab cakes, scallops, calamari and sashimi.

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Curious about this diverse group of future food startups? Join us at the Smart Kitchen Summit on October 7-8! Be sure to get your tickets today and save 25% with code THESPOON25.

Oatly Brought the Oat Milk Craze to America. Now They’re Hustling Not to Lose Their Grip

Chances are if you’re going to a fancy coffee shop, you’ll have the option to swap the cow’s milk in your latte for almond, soy, or oat milk.

If you haven’t heard of the last option, you’re kind of behind the times (don’t worry, that was me until recently). Oat milk is on a path to soon usurp almond milk as the top alterna-milk in coffee shops around the U.S. According to Nielsen, oat milk sales grew by 50 percent from 2017 to 2018, while almond milk sales grew only 11 percent.

Oat milk lovers can thank one company in particular for kickstarting the oat milk craze to the U.S. Ironically, they’re from Sweden.

Founded in 1994 in Malmo, Oatly was developed by brothers Bjorn and Rickard Oste, who were looking for a sustainable alternative to dairy milk. They began experimenting with oats and later patented their oat milk production process. In 2001 they launched a consumer-facing brand.

Oatly may have been around quite a while, but recently it has been experiencing meteoric growth. When I spoke to Bjorn Oste on the phone (who’s now on the board of Oatly’s parent company), he told me it took the company 18 years to reach a billion kronor (~$104 million) in sales. In the past year, they’ve doubled that number.

Oatly’s sales really started to climb when they made their way into the U.S. in 2016. They originally started out in coffee shops, but now their business is split 50/50 between cafés and retail. Oatly products are now in over U.S. 1,500 grocery stores including Whole Foods and Target. It’s also in over 2,500 coffee shops.

Unsurprisingly, Oatly’s explosive uptick in sales has brought its fair share of problems. The company is currently struggling with product shortages. To address this demand, Oatly — which is so secretive about its technology it doesn’t like to outsource production to copackers — recently cut the ribbon on a plant in New Jersey: its first in the U.S. They’re already building another plant in Utah set to open early next year.

“When we launched [in the U.S.] it was very hard to predict growth,” said Oste. “It’s been a shocking reception.” In fact, Oste told me that the non-dairy market is actually bigger here than in Oatly’s native Europe.

Photo: Oatly.

Oatly’s entrance into the U.S. was also strategically timed to take advantage of the growing alternative protein market. “We’re seeing a paradigm shift towards plant-based consumption,” Mike Messersmith, General Manager of Oatly, told me over the phone. He explained that Oatly waited to enter the U.S. until they thought that the market was strong enough to support their product.

And strong it is. Nielsen data indicates that sales of plant-based milk beverages rose 9 percent in 2017-18 and took in $1.6 billion. This growth is driven by flexitarians who are eschewing dairy milk for health or environmental reasons. Oatly is lactose-free and also friendly for those with nut allergies. It’s also markedly more sustainable than dairy from a cow and also takes much less water than almond milk, which attracts ethically-motivated Gen Z and millennial consumers.

As always in the alternative protein space, taste is king. A product can be sustainable as all get out, but if it doesn’t taste delicious in your coffee or poured over your cereal, it’s not going to make it. “Customers want to choose plant-based options without feeling like they’re compromising,” Messersmith said. With its creamy, latté art-friendly milk, Oatly seems to have nailed the taste and texture aspects.

Other companies are quickly trying to cash in on oat milk’s popularity. PepsiCo launched its own line of the beverage through Quaker Oats, and major brands like Califia Farms are also selling the oaty drink.

I haven’t taste tested every oat milk out there, but judging purely from what I’ve seen Oatly truly does seem to have at least the coffee shop market cornered (when it’s in stock). According to Oste, they have an advantage because unlike other companies, they have complete control of the entire production system. They even have founded a company which creates new non-GMO oat varieties that have higher protein and fat contents.

Oatly doesn’t seem to have any interest in making an “Almondly” or “Soyly,” either. Oste told me that over the years retailers had asked them to expand their repertoire and branch out into other milk alternatives, but he wasn’t tempted. “Pretty much anyone can make soy or almond milk,” he said. But when it comes to oat milk, “[we] own the space.”

For now, that might be true. Now Oatly has to ramp up production to maintain customer loyalty. With their first U.S. factory newly up and running and their second underway, it seems like they’ll be able to.

Next up, Oste hinted that the company might bring some of their other oat-filled products — like ice cream, savory spreads, and heavy cream — to the U.S. With the dairy-free ice cream market alone projected to hit $1 billion by 2024, I’d say that’s a pretty smart move.

Nestlé is the Latest CPG Company to Launch a Food & Beverage Accelerator

Nestlé is the latest mega food company to get in on the food & beverage accelerator movement.

Today the Swiss company announced that it was launching an R&D accelerator program in Lausanne, Switzerland. This is the first internal accelerator for Nestlé, who previously partnered with Rabobank and Rocketspace to create the Terra Food + Agtech Accelerator program in 2017.

In the press release, Nestlé was pretty vague on the details. We don’t know what type of startups or individuals they’re targeting, how many have been accepted, or how often the cohorts will cycle through. The release lists “Nestlé scientists, students, and start-ups,” so presumably it will be a pretty diverse mixture of participants.

However, we do know a few key things about the program. Accepted individuals and groups will get access to Nestlé’s R&D labs, kitchens, equipment, and expertise, as well as some office space. The accelerator will kick off before the end of 2019.

Nestlé joins an ever-growing group of big CPG companies who are launching accelerators to sniff out new, trendy brands. Chobani, General Mills, Kraft-Heinz, and Pepsi-Co are just a few that have done so over the past year. It’s a smart move: accelerators are a relatively low-touch way to give corporations access to agile, innovative companies, which they can either acquire or partner with for image, product and marketing purposes.

My colleague, Jenn Marston, predicted we’d see even more of these programs from Big Food in 2019. It seems like she was right.

Nestlé Introduces Plant-Based “Incredible Burger” to Disrupt Beyond and Impossible

Nestlé SA is hoping to carve out a piece of the plant-based pie — er, burger.

Today Bloomberg reported that the Swiss food company will launch a meat-free patty modestly called the “Incredible Burger” (not to be confused with the Impossible Burger) under its Garden Gourmet brand. The burger will be made of soy and wheat protein, and will join Garden Gourmet‘s meat-free lineup, which already includes smoked sausages, nuggets, cheeseburgers, and schnitzel. It’s expected to head to market in spring of 2019.

This announcement isn’t especially surprising. Nestlé is one of several Big Food companies investing more heavily in plant-based foods, taking advantage of growing consumer demand for vegetarian and vegan products. It isn’t even the first meat-free play by Nestlé: last year the corporation acquired meat-free company Sweet Earth and recently bought a majority stake of plant-based food company Terrafertil.

However, the Incredible Burger is the first notable Big Food effort to compete directly with meat-free products meant to look, cook, and bleed like the real thing. Beyond Meat and Impossible Foods — we’re looking at you. These startups have a lot of name recognition and are basically synonymous with the new wave of plant-based “meat.” Comparatively, Nestlé is late to the game.

But is it too late? It depends where Nestlé focuses their efforts. Impossible and Beyond may have a hold on the U.S. market, but they haven’t expanded much outside of the U.S. (yet). Nestlé would be smart to concentrate on the European market, where, despite several competitors like Moving Mountains and Naturli’ Foods, there’s still plenty of room for it to carve out its own space in the plant-based meat market. Given Nestlé’s size, it already has scale, manufacturing, and sales channels it can leverage to expand quickly. However, Beyond is set to go public in 2019, so it could theoretically raise enough money to present a challenge to Big Food players like Nestlé — or at least scare them a bit.

In the end, the plant-based meat market isn’t a zero-sum game. Demand for meaty meatless foods is widely predicted to grow over the next year, and Europe especially has a huge appetite for plant-based protein. It may be late to the game, but Nestlé’s new burger will still likely see “incredible” success.