The soy industry looks for the next big thing
Wednesday, February 23rd 2005, 11:53 am
By: News On 6
Soy milk, once a staple found only in natural and health food stores, is now sold side-by-side with regular milk in chain supermarkets. Soy's move into the mainstream has led to vigorous sales of such products in recent years.
But those in the industry are worried about a sales slowdown and are hungry for the next new soy thing. Will it be a more appetizing meat substitute, one that marinates easily and has a meatlike, veiny texture? Or will it be a new, tastier energy bar?
``We need another breakthrough product,'' said Peter Golbitz, president of Soyatech Inc., a market research firm in Bar Harbor, Maine.
Much of soy's growth occurred between 2001 and 2002, which saw an 18 percent spike in U.S. retail sales compared with just 6 percent from 2003 to 2004, according to a recent report by Mintel International Group, a market research firm.
``Those were unnaturally high growth years,'' said David Lockwood, a Mintel analyst. ``It's slowing down to what is sustainable.''
Meanwhile, manufacturers have been pumping out new soy products at a rate of 13 percent a year for the past three years.
Vegans and vegetarians have long depended on soy as an alternative protein source to meat. But in the past few years, a growing number of health-conscious meat-eaters have also relied on soy to supplement their nutrition.
Jane McGinn, a 47-year-old consultant in Bainbridge Island, Wash., is an occasional soy consumer. McGinn eats a mix of soy foods, but one thing she cannot tolerate is soy-based meat alternative because it tastes like ``cardboard.'' Nonetheless, McGinn aims to get 15 percent of her daily protein from soy.
``I choose soy products whenever I can,'' McGinn said. ``It's a clean alternative to meat.''
The initial aggressive growth of the soy market is due in part to the shift of sales from niche to mainstream. A change in soy food labeling also helped boost the market.
In 1999, the Food and Drug Administration allowed food suppliers to advertise soy-based foods as heart-healthy after studies showed that eating soy may help lower the risk of heart disease.
Industry groups such as the Soyfoods Association of North America, a Washington-based nonprofit trade association, want more. They are lobbying the FDA to consider a health claim that soy protein can help lower the risk of certain types of cancer. The petition is under review.
The low-carb craze, which emphasized meat protein, is partly responsible for the slowdown of soy sales in 2003 and 2004. Unfounded claims about the benefits of soy as an effective estrogen replacement for postmenopausal women also may have led some baby boomers to abandon soy products, market analysts say.
Although the overall soy market is leveling, certain categories such as soy milk and energy bars, which account for more than half of the market when combined, continue to be popular, mainly because of their ability to adapt to mainstream tastes. Soy milk, in particular, has evolved to be lighter in color and taste, similar to cow's milk.
This is not the first time the soy market has experienced a lull. After strong, steady growth in the mid-1980s driven mostly by sales of soy milk, tofu and tempeh, the market flattened out in the early 1990s. But by 1995, a combination of factors, including new meat alternatives, helped propel the market to new heights.
Analysts expect the current soy market to remain steady the next few years. To jump-start it, they say manufacturers need to reach out to occasional consumers with innovative new products.