CBD and plant-based meats are the next big things in store brands

Discussion
Photo: Neurogan
Nov 20, 2019
Ron Margulis

I’m seeing a pattern here.

Earlier this decade, the Summer Fancy Food show in New York City started featuring a lot of organic and non-GMO products. Several months after that conference at the Private Label Manufacturers Association show in Chicago, there was a new crush of store brand organic and non-GMO products.

A few years later, the same thing happened with gluten-free products, first at the Fancy Food show and then at PLMA. And this past June, the fancy food show featured dozens of plant-based protein products, as well as a burgeoning number of CBD-laced products. This week in Chicago, we saw the same at the private label show. 

Like organics and gluten-free products before them, plant-based protein and CBD items are appearing in dozens of store brand categories. On the PLMA show floor, there were CBD dietary supplements, soaps, soups, pet food, kosher items, juice and hydrating sports beverages and much more. Innovation is spreading fast and wide on the plant-based proteins side as well. The private label show featured non-meat replacements for everything from chicken fingers for kids to meatballs on pizza and, of course, hamburgers.

Photo: Improved Nature/Facebook

Research firm Research and Marketing reports that plant-based meat replacements are the fastest growing segment of plant-based foods with 23 percent growth in 2018 and sales expected to reach $3 billion within five years. Virginia Lee, CBD Research Manager at Brightfield Group, which focuses on the legal CBD and cannabis industries, said the U.S. market for hemp-derived CBD is expected to reach $23.7 billion by 2023. That’s some serious growth.

All of this begs the question, how can retailers best take advantage of both CBDs and plant-based proteins?

Jim Wisner, president at Wisner Marketing Group, said retailers must partner with suppliers to be first to market with new products that will help create a new image, not only for any individual department, but for the entire store. “You can’t just sit and wait and watch. You need to be there,” he said.

DISCUSSION QUESTIONS: What are retailers doing right when it comes to the latest product trends like CBD and plant-based proteins in private label? What could they be doing better?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The time is now to jump on the plant-based proteins trend. "
"The big trick? To make all of these products more credible, to manage to label better, and to keep costs down at the retail level."
"To fully capitalize on this opportunity, retailers need to educate as well as sell."

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10 Comments on "CBD and plant-based meats are the next big things in store brands"


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Neil Saunders
BrainTrust

CBD is a big growth category as consumers are interested in it from a health and wellness perspective. That said, many consumers remain confused about the specifics and want help to guide them through the world of CBD. That’s the job of good product manufacturers and good retailers. To fully capitalize on this opportunity, retailers need to educate as well as sell.

Lisa Goller
BrainTrust

Retailers are wise to take consumer trends seriously and invest in exclusive, desired products. Creating in-demand private label innovations differentiates retailers, and gives them more control over supply chain processes and margins.

Speed-to-market matters because prompt responses create competitive advantages. As CBD grows in popularity in beauty, grocery and wellness, East Coast chain Fairway Market stood out as a leader by launching its own brand of CBD products.

To capitalize on consumer demand for plant-based protein, Tesco launched a new private label range in September to give consumers more choice.

Areas where retailers could improve are collaborating with supply chain partners to keep private label costs low, and scaling faster because consumers reward convenience, variety and speed.

Michael Terpkosh
BrainTrust

U.S. grocery retailers “upping their game” in the private label space has been a great success story over the last 20 years. Today, private labels at most retailers have annual sales growth two to three times better than major CPGs. The ability of retailers to be progressive and innovative, with their private label manufacturers, has been key to this growth success. The time is now to jump on the plant-based proteins trend. The question for retailers is… Can they find a quality manufacturer partner to develop a whole line of plant-based proteins? One or two items won’t work. An entire broad line of products will drive private label success in this category. As for CBD, I suggest a wait and see approach, watching for national CPGs to start to move into using CBD in products. Retailers need to be ready (with manufacturer partners) to move quickly, but not too far ahead of what might end up being more of a fad than a trend.

Paco Underhill
BrainTrust

Marion Nestle, NYU professor and author of many books on food and food politics points out that plant-based protein concoctions are another form of processed food.

Doug Garnett
BrainTrust

What? Plant-based protein store brands already?

Nothing says “fad” like a product which moves from “the unique unicorn revolutionizing meat business” to “generic” within 12 months.

The best thing for retailers is to offer and promote the products. But take care. These are short-lived fads that will die quickly.

James Tenser
BrainTrust

Both CBD-infused products and plant-based meat-like products are presently commanding premium prices at retail. That leaves tempting price gaps just underneath where store brands love to play.

I’d be shocked if there weren’t a wave of new private label entries in these sectors. There is a point of difference, however. They are so far driven by startup or “disruptor” brands. As major CPG houses buy in to these categories (and they will) the marketing noise will intensify and the pricing headroom may be compressed.

Retailers may have a rare (but short) window to establish their CBD store brands ahead of the big brand marketers.

Ryan Mathews
BrainTrust

I am a little bearish when it comes to jumping on these bandwagons. CBD holds a good deal of promise in certain categories, but we are a little way away from having standardized formulations. Standardization will come when the big CPG players invest and it’s likely the completion will then move to purity (higher) and price (lower), so I’m not sure what retailers should, or shouldn’t do, until the market settles. As to plant-based protein products, they are processed foods and so we will have to wait to see how big the market is once the hype settles down.

Craig Sundstrom
Guest

Personally, I’m reluctant to lump CBD with (other)”plant-based” products, for the simple reason that I think the former is a fad, while the latter is not.

That having been said, I don’t see a lot of private label in either of these categories for the obvious reason that both are still small and unsettled markets. I don’t expect that to change for a few years yet.

Ralph Jacobson
BrainTrust

Promote the benefits of the products better. Traditional human carnivores need a bit more enticement to make the leap to plant-based proteins.

Bill Hanifin
BrainTrust

Attending NACS this year, the growth in CBD products was astounding. The noise around CBD is at a high level and the challenge for retailers and manufacturers is to communicate their product benefits clearly to the consumer. That’s not so easy when products are being launched by the bushel load and regulation of many of these products is subject to the same “flexible evaluations” as vitamins and supplements.

The plant-based trend is strong among all types of people and the appeal of plant-based diets is broadening to everyday athetes as well as the core group of vegans and eco-concerned people.

The big trick? To make all of these products more credible, to manage to label better, and to keep costs down at the retail level.

wpDiscuz
Braintrust
"The time is now to jump on the plant-based proteins trend. "
"The big trick? To make all of these products more credible, to manage to label better, and to keep costs down at the retail level."
"To fully capitalize on this opportunity, retailers need to educate as well as sell."

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