Hormel Foods on September 4 announced the release of its new line of plant-based protein products and indicated that product launch is just the beginning of the diversified agrifood company’s foray into alternative proteins.
As the maker of Hormel pork and bacon products, and the parent company of Jennie-O Turkey Store, Applegate and Columbus Craft Meats, Hormel has already established itself as a leader with traditional meats. It has also successfully sold the Hormel Fuse Burger and the Applegate Blend Burger, flexitarian-friendly products that blend meats and plants.
Now, with the release of the Happy Little Plants plant-based protein line, Hormel Foods is ready to jump into the alternative protein space with both feet.
Hormel’s Jim Splinter, group vice president of corporate strategy, utilized his time as a speaker at the Braclays Global Consumer Staples Conference to introduce the Happy Little Plants line and discuss the company’s involvement in a growing food sector.
“We’ve been at this since 2014, we’ve been studying these trends. We thought now the timing was appropriate (to launch the new brand). It’s the early innings of this ball game,” said Splinter.
A competitive field
Presently, the plant-based meat alternative space is very competitive. Beyond Meat, which recently had a successful initial public offering (IPO) and Impossible Foods, both of which specialize in plant-based proteins, have been growing and gaining increased distribution.
At the same time, Canadian meat and poultry company Maple Leaf Foods has acquired two plant-based protein companies and utilized its presence in the plant-based arena to increase its penetration into the United States.
Meanwhile, Tyson Foods and Smithfield Foods have developed their own lines of plant-based proteins. Outside of North America, Brazilian companies JBS and Marfrig Global Foods, and European company Danish Crown are getting involved in the space.
While it may seem that the plant-based meat alternative sector is crowded and competitive, Splinter said opportunities abound. Plant-based meat analogues have less than 1% of the protein category, he said, so there is a lot of room for growth. He cites plant-based milk alternatives as an example of the potential. Plant-based products currently hold a 13% share of the fluid milk category, he said.
“There is a huge runway opportunity that’s in front of all of us that are innovating in the space, and we think we can be a contributor to the growth within the category,” he said.
Build vs. buy
Splinter was asked if Hormel Foods considered taking the acquisition route to enter and grow the plant-based protein business.
He said when the company looks to grow, it always goes through “a detailed build vs. buy process.”
But when it looked at start-ups in the category, Hormel Foods was unable to get an “acceptable valuation.”
Hormel Foods’ advantage
Splinter believes Hormel Foods’ long history as a successful branded foods company will help it successfully build the Happy Little Plants brand.
“I think we have proven through our 150-plus years of existence that we’re very good innovators and we believe we have enormous capabilities to bring to the marketplace in this space as well,” he said.
Also, with an infrastructure already in place, Hormel Foods has “a lot of internal capabilities” it can leverage, he said. For instance, it already has processing plant space, a refrigerated facility network, and knowledge and experience in those aspects of business.
Hormel's attributes that could help it be successful in the alternative protein space are similar to ones Tyson Foods Chief Financial Officer Stewart Glendinning described of Tyson when it entered the sector.
Hormel Foods has launched its new plant-based protein product, Happy Little Plants. (Hormel Foods)
Growing the Happy Little Plants brand
Initially, Happy Little Plants will have a somewhat limited, or targeted distribution. That will allow Hormel Foods to make sure the supply chain is calibrated and the company has ample experience before going into a wider distribution.
Another reason Hormel is starting with a smaller distribution is because the Happy Little Plants product is never frozen. But it is using its experience with another key Hormel Foods line to apply to the new brand.
“We have the capability through its Jennie-O Turkey Store logistics model to manage fresh distribution,” Splinter said. “We don’t want to overextend ourselves too quickly. We want to build a cadence, get the rotations figured out with the retailers, and then we’ll continue to build that scale going forward.”
The current Happy Little Plants product Splinter described at the conference resembles ground beef, and can be browned or cooked in a similar fashion. Promotional materials show the product used in tacos.
The branding of Happy Little Plants was “very purposeful,” because it will allow it to expand in other types of meat-like products. Splinter said the company is looking at further developing the product line and collaborating with retailers and the foodservice sector to meet consumer demands for plant-based meat alternatives.
“More and more retailers and foodservice operators are demanding these types of products and we’re there to respond, because the choice is there. The consumers are looking for a choice … and Hormel has dedicated itself to provide that choice,” he said.
“We’re going to be working with retailers going forward. Like I said, we’re in the early innings. We’re all trying to figure out what are the best category management principles.”