Texturized Vegetable Protein Market to reach global value of $1.4 billion in 2028

23 July 2018 Consulting.us

Soy, pea, and wheat-based texturized protein products are expected to see strong growth as consumer preferences and attitudes change, says a new report. Global market value for texturized vegetable protein (TVP) – including chunks, slices, flakes, and granules – is expected to reach $1.4 billion in 2028, with most of the market being held by soy TVP.

Americans are increasingly turning to plant-based food substitutes, whether it’s almond milk, tofu, or vegan cheese. And these substitutes aren’t just for health-food nuts and vegans, as the products are now taking up expanding sections of traditional supermarkets. Concerns about health and wellness, environmental sustainability, and animal welfare have leeched into mainstream sensibilities, consequently driving growth in the plant-based food substitute segment. According to LEK Consulting, the market grew over 8% to $5 billion in 2016.

One part of the segment, texturized vegetable protein (TVP), can expect to see strong growth in the future. TVP is an inexpensive protein product usually made from soy – and shaped into chunks, flakes, and granules. It can also be derived from wheat and peas, among other vegetables. TVP is commonly used as a meat analogue or meat extender – replacing all or part of traditional meat dishes like lasagna, chili, burgers, tacos etc. Textured soy protein is particularly popular as a meat extender in US prison and school cafeterias – reducing total fat and the cost of meals.Texturized Vegetable Protein Market to grow at CAGR of 4.9% over next decadeA new report from market intelligence and consulting firm Future Market Insights (FMI) expects the texturized vegetable protein market to grow at a compound annual growth rate of 4.9% between 2018 and 2028 – reaching a global market value of $1.4 billion by 2028. FMI links shifting consumer preferences to market growth, as more people switch to flexible vegetarianism (flexitarianism) and drastically reduce meat intake while increasing plant-based protein intake. This shift is expected to take TVP out of cost-cutting institutional kitchens and increasingly into the homes of health, animal welfare, and sustainability-conscious consumers.

According to the report, soy-based TVP is expected to maintain a dominant share of the market, with a revenue share of 85.9% by 2028. However, texturized pea protein is projected to have a higher growth rate because of its allergen-free and non-GMO profile. Indeed, FMI identifies organic and non-GMO offerings as a key differentiation strategy in the market to satisfy demand for additive, chemical, and GMO-free foods.

TVP mostly ends up in the food processing industry, where it is further segmented into ready meals, meat extenders, functional bars, and other products. According to FMI, TVP’s application as a meat extender accounts for over 42% of revenue in the food processing industry segment. With greater ability to blend in with meat in frozen lasagnas and burritos and other food, the granules form of TVP is expected to remain the dominant shape – beating out chunks, slices, and flakes.

Meanwhile, the household segment for TVP was valued at $217 million in 2017, and is expected to grow at 5.6% CAGR to 2028 – as people increasingly buy textured vegetable protein for use in their own home cooking.

In terms of regional breakdowns, North America is the largest market for TVP – with a value of $303 million in 2017. FMI projects 4.6% CAGR in North America’s texturized vegetable protein market to 2028. According to the report, the Asia Pacific region (which includes Japan) is expected to see its TVP market grow at an even stronger rate of 6.3% - owing to increasing production capacity for soy-based products in the region.

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US grocery sector in store for further hard discounter expansion

01 April 2019 Consulting.us

Hard discounters offer customers bulk food at low prices in an unassuming shopping environment. German firms Aldi and Lidl have considerable clout in Europe, and in recent years have globally expanded their store footprints. Aldi is well-positioned in the US, garnering high-level support from consumers, while Lidl, which entered in 2017, has quickly built a strong reputation. As the rollout of the discounters continues, local brands face stiff competition.

Competition among supermarkets has heated up in recent years as consumers increasingly sought out discounters and moved away from hyperstores. German discounters Aldi and Lidl in particular have asserted their dominance across global markets with the former opening of hundreds of new stores and the latter entering the US market in 2017.

New analysis by Bain & Company analyzes how far the rise of discounters has affected grocers in the US market. The report, titled "How US Grocers Are Standing Up to Europe’s Hard Discounters," is based on a survey of 17,400 consumers, among other data sources.

Hard discounters NPS

To better understand the impact of hard discounters Aldi and Lidl on the US market, the firm’s recent survey of consumers asked respondents about their grocery shopping habits using the Net Promoter Score function. The Net Promoter Score measures how likely it is that a consumer will recommend a product, service, or brand to friends and family. 

In terms of the regular grocery shopping trip, hard discounters have managed to top the market at 43 points, with supermarkets around seven points behind. Mass merchants have the lowest score in the category at around 20 points. For big stock-ups, hard discounters, with their large bulk offering and appeal, score 60 points – well above that of warehouse clubs (45) and supermarkets (38). The analysis shows that even for quick trips for a couple of items, hard discounters top the score at around 10, compared to six for supermarkets and negative scores for warehouse clubs and mass merchants. The only category in which the hard discounter segment performs relatively poorly is buying prepared foods for today – at 25 compared to 50 for warehouse clubs and 35 for supermarkets.

Aldi customer advocacy

Aldi, which has been in the US market since 1976, has resonated strongly with consumers, coming in the top three for NPS for consumer advocacy. The company has managed to increase its position on last year by nine points, arriving at 55 – 15 points behind the leader. Aldi was noted in particular for its delivery of “best everyday low prices” and “best value for the money.” Lidl, a relative newcomer to the market, has a middle-of-the-road score.

Consumer advocacy is crucial to success within grocery

The success of discounters generating high consumer advocacy scores, according to the Bain, mean they are likely to show strong performance in the future, The firm notes that promoters purchase more than twice as frequently as detractors, with 70% of promoters shopping two times a month or more compared to detractors at 32%. The firm also found that the average monthly amount spent among promoters is almost three times as high as detractors, at $111 against $39. Promoters additionally tend to be more loyal to their chosen company, netting 28% of the total wallet compared to 11% for detractors.

“Lidl and Aldi are just beginning to flex their competitive muscles,” Mikey Vu, a partner with Bain & Company’s Retail Practice and a coauthor of the report, said. “What we’re seeing is that US grocers can effectively stand up to these hard discounters, but that they need to remain vigilant and innovate in strategic areas to keep their edge.”