War And Peas

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What's going on?

Nestlé announced on Wednesday that it’s entering the plant-based milk market, as it vies to give the world’s heavy-hitters some healthy – very healthy – competition.

What does this mean?

While the world’s biggest food company has been expanding into meat substitutes for a while, it’s been slow to tap into the huge and growing demand for plant-based milk that’s been fueled by environmental and nutritional concerns. But unlike a rival-base that mostly uses soy, almonds, or oats for their plant-based milks, Nestlé’s opted to create “Wunda” using protein-rich peas. Only time will tell if that was a smart decision: pea milks have got some flack for their weird “legumey” taste in the past…

Why should I care?

The bigger picture: It’s getting cozy in the plant-based sector.
Clearly Nestlé’s looking to quaff a share of the plant-based dairy market, which was worth $16 billion in 2019 and is anticipated to hit $41 billion by 2025 (tweet this). But the company’s not short of rivals: it’ll be going head to head with French dairy giant Danone’s Alpro and Silk, as well as young upstarts Chobani, Planet Oat, and Califia Farms. At least Nestlé has something the new kids on the block don’t: an extensive distribution network that’ll enable it to effortlessly roll out new products across the world’s retail outlets.

For markets: Oatly schmoatly.
Nestlé’s Wunda range will include a barista-approved milk designed for steaming and frothing. That’s a pretty direct clapback at Oatly, whose own barista-style oat milk is used in every Starbucks store across the US. And if that wasn’t enough of a declaration of war, Nestlé’s announcement came just as Oatly prepares for a stock market debut that could value it at as much as $10 billion. Still, the company’s recent filings showed that it doubled its sales to $421 million in 2020, so if Nestlé’s coming at the plant-based king, it’d best not miss.

Originally posted as part of the Finimize daily email.

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