Caring Confectionery #1: The world VS Japan

Are we melting for plant-based confectionery?

Hello Market Shakers, 

Welcome to Market Shake’s brand new cycle, Caring Confectionery, a treat for sweet-tooth! We stay on course with the plant-based revolution and take a closer look at what’s baking in Japan and the world. 

When we think about plant-based, the core categories are meat and dairy alternative products. However, recent trends show that the green revolution is getting some steam for sweets and treats, too. From major groups to up-and-coming start-ups, launches of better-for-you snacks are on the rise. With Caring Confectionery, we focused on plant-based cookies, chocolate, and gummy candies. 

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The world VS Japan

Two remarks before we start… 

You’ll quickly notice that we use alternatively “plant-based” and “vegan” appellations. We made this editorial choice for the sake of comprehensiveness. We’re conscious that plant-based isn’t synonymous with vegan (the reverse, however, works better!). Contrary to meat and dairy alternatives, the plant-based confectionery category strikes us with its strong relationship to vegan trends. Generally speaking, we found that brands, products, and data tend to mix up both categories. 

In Japan, our research bumped into some walls. The market is a niche, not ready yet for a big break. Consumers we spoke to did not show the same enthusiasm as for plant-based meat or oat milk. We wandered in sweet, snack, and cookie store aisles but ran out of luck most of the time. A few imported brands are already well implanted, however. Some Japanese food manufacturers are also testing the water.

Worldwide, however, the plant-based confectionery category seems promising. So let’s jump in!

Summary of this edition

  • The plant-based confectionery category is rapidly rising 

  • What are the trends in the world?

  • Is Japan craving for plant-based treats, too?

The plant-based confectionery category is rapidly rising.

Around the world, the demand for animal-free products and healthy and indulgent snacks is growing, carried by younger generations, more conscious about their food purchasing habits. The green revolution moves beyond its core categories, meat and dairy alternatives, and is visible in new product development. Fast-growing, the confectionery category remains “an untapped opportunity.”

A shift away from animal products is currently underway, as described by the research company’s 2017 Global Food & Drink Trend ‘Power to the Plants’. After a boom in other categories, the vegan and vegetarian trend can now be seen in both chocolate and sugar confectionery.

Marcia Mogelonsky, Director of Insight, Mintel Food and Drink
Nearly Half Of Young Germans Want More Vegan And Vegetarian Sweets

According to Mintel’s Global New Products Database, vegan confectionery product launches grew by 140% between 2013 and 2017. In 2020, the vegan sweet market was valued at US$995.5 million, with an anticipated growth of 11.8% by 2027.The category is dominated by chocolate with over a “40% share of the total revenue in 2019.

A recent report from Innova Market Insights noted that confectionery launches with vegan claims grew by 17% between 2016-2020. The interest in the label shows “vegan” is getting some weight next to “free-from” and “organic.” The shift to embracing a vegan label is notable. Allergen-free claims — dairy-free, gluten-free and health claims such as sugar-free tend to dominate the confectionery packaging. In mature vegan markets such as in the United Kingdom, food start-ups are not afraid to go vegan all the way. (In Japan, however, food manufacturers tend to steer away from vegan claims and even plant-based claims.) The same year, new product launches with plant-based claims more than doubled

The pandemic leads people to find solace in comfort food, and confectionery plays a significant role in supporting our emotional well-being. But consumers seeking to sweeten their daily routines are not ready to lose ground on health, a key driver in the plant-based acceleration. With health and wellbeing a priority, better-for-me alternatives are on the rise. 

Plant-based products are definitely fitting the needs of the younger generation – the Centennials. They look for products that are good for them and good for the planet. Good for them from a nutritional point of view, but most importantly good in taste."
Camille Lannoy, brand development manager at Barry Callebaut for FoodIngredientsFirst

Quick timeline of what’s happening in the confectionery sector: 

What are the trends in the world?

In North America

Veganism is thriving in the United States and Canada. This trend is reflected by the growth of plant-based food sales (29% from 2017 to 2019 in the US). The market is expanding rapidly in this region and, in 2019, holds 35% of global revenue in this sector. 

Chocolate

Founded in 1993, chocolate maker ‘on a mission’ Endangered Species became a prominent player in the vegan confectionery market with US$50.6 million in annual revenue. In January 2020, they launched an oat milk chocolate bar, the most successful new product launch in its history. 

Originating from France, where it was first founded in 1998, AlterEco expanded to the United States in 2003. After an exceptional growth in the 2010s, the company was acquired by NextWorld Evergreen, a San Francisco-based private equity firm, in 2017. The ‘American’ version of AlterEco has chocolate and sustainability as its core and offers a line-up of vegan chocolate. In 2019, they launched vegan truffles, believing “it was time to offer health-conscious consumers a vegan treat that tastes indulgent.”

Theo Chocolate is another United States-based chocolate maker delivering organic and fair-trade chocolate. Founded in 2006, they’re proud to be the first Certified Organic and Fair Trade Fair for Life bean-to-bar chocolate factory in North America, and they report US$25 million in annual revenue. In September 2018, they raised over US$2 million in venture capital funding. Widely distributed in the United States and Canada, they have an extensive soy-free and vegan line-up of dark chocolate bars. 

Candies

YumEarth, a subsidiary of the Riverside Company, a global investment funds, since its acquisition in 2015, is a reference for friendly sweets. Founded in 2007, they specialize in allergy-free organic candies and have an impressive line-up of snacks and sweets. In 2017, they launched their online store and frequently announced new product launches. Their latest addition to their portfolio includes Chewys™, launched in February 2021

Founded in 2012, Sugarfina quickly became a million-dollar candy company, disrupting the confectionery industry with an innovative approach. The company filed for bankruptcy in 2019 and recovered after its acquisition by the Bristol Luxury Group. Today, the company is thriving and launches its first equity crowdfunding campaign with a US$25 million target in January 2021. In February 2021, they announced their first fully vegan Candy Bento Box

SmartSweets is a market leader in the low-sugar sector in both Canada and the United States. Launched in 2015, the Canadian company is now a US$30 million business. In April 2020, they went plant-based based and developed the ‘world’s first low-sugar and plant-based chew.’

Coconut milk candy confectioner since 2009, Cocomels has been acquired by the organic food company and first coconut sugar brand in the United States Madhava in 2019.  In 2020, they announced a new plant-based chocolate snack product launch.

Founded in 2003 in California, Chimes offers 100% plant-based ginger chews based on traditional Indonesian recipes. 

Snack

Clif Bar & Co, one of the top 60 candy manufacturers in North America, offers products that fit within a plant-based diet, with limited to no animal ingredients. Over the years, they have launched various new vegan products. In 2021, the company aims to expand its portfolio, consumer reach, and sustainability.  

Founded in 2004, KIND is an American food company that produces plant-based (and not necessarily vegan) snack and granola bars. After buying a minority stake in the company in 2017, Mars took ownership of the snack-bar firm in 2020, a deal valued at US$ 5 billion

Company Enjoy Life Foods, acquired by Mondelez in 2015, is a leading brand in the free-from confectionery category and has a sizeable vegan product portfolio (approximately 90% of their products are vegan-certified). In 2018, they became the first food company in the U.S. to receive the Palm Oil Free Certification for its newest product launches. Their estimated annual revenue is currently $54.3 million per year. 

Partake Foods is another American food manufacturer that specializes in selling allergy-friendly cookies. Founded in 2016, “the allergy-friendly food brand closed a $4.8 million Series A funding round in late December [2020].” Partake Foods counts celebrities Rihanna and Jay Z as venture capital partners. 

Canada-based MadeGood is another free-from organic snack bar brand that is growing steadily since its launch in 2011. In March 2021, they launched a new granola bar in the United States and announced their first savory snack line-up later in May. 

Founded in 2014 in the United States, SimpleMills is a “free-from” food manufacturer with a strong portfolio of alternative flours and vegan products. In 2020, they ramped up production to meet surging demand from retail. 

The venture capital firm Blue Horizon has recently backed up two small players, Yes Cacao, a functional chocolate maker since 2013, and Hail Merry, a plant-based confectionery start-up founded in 2008. 

In Europe

The plant-based confectionery European market has been growing since the middle of 2010s, carried by a shift of consumers’ expectations. Beyond typical dietary restrictions (food allergies or intolerance), younger generations of consumers seek plant-based sweets—candies, chocolate—that are ethical and sustainable. The United Kingdom and Germany, both mature vegan markets, are leading with plant-based confectionery innovations and the competition is stiff. In the United Kingdom, The Conscious Candy Company, founded in 2018 to fill the gap in the market for vegan sweets, became the first retailer to sell plant-based chocolate. 

It has been picked up by confectioners in Western Europe, where launches of vegan chocolate confectionery products doubled between 2014 and 2018, reaching 465 in 2019 (...). With the UK and Germany being the countries with the most NPD plant-based launches in the past year, 195 and 128 respectively."

Plant-based - from niche to mainstream

Let’s do a tour of key players for chocolate, snack, and gummy candy.

Chocolate

Before becoming incorporated and an American multinational food manufacturer, Mars was a British company. So it’s naturally back ‘home’ where the vegan market is on the rise that Mars chose to expand its offer with vegan ‘milk’ chocolate by the end of 2019. Mars became “the first major confectionery company to offer a plant-based alternative to milk chocolate (CNN).” In January 2021, Mars announced the UK launch of two new vegan products based on its most popular brands —Bounty and Topic. 

Founded in 1912, the German chocolate maker Ritter is a leader in Europe and sells its product in 100 countries worldwide. Since 2017, their Ritter Sport line offers two certified vegan products. They released more options in the United Kingdom in January 2021 in support of the Veganuary campaign.

Top-tier chocolate manufacturer and global player Lindt & Sprüngli announced their first vegan chocolate in summer 2020. Sold initially in Germany, their vegan portfolio is now available in the United Kingdom. While not labeled as vegan, some of their dark chocolates were already plant-based, with no animal ingredients. 

British manufacturer of vegan food products since 1965, Plamil Foods launched its new 100% plant-based chocolate brand So Freein 2017. They sell vegan chocolate worldwide, including Australia, Norway, Dubai, Canada, and Hungary. In December 2020, they launched an entirely recyclable sharing format.

In the United Kingdom, LoveRaw rose from a small start-up launched in a home kitchen in 2013 to an award-winning confectioner on a mission to make plant-based eating the norm in 2020. In January 2020, they announced a US$1.6 million funding from the venture capital firm Blue Horizon Ventures. In April 2021, they launched a white chocolate version of its popular wafer bars. LoveRaw “has expanded to Kuwait, Malta, France, Spain, and Switzerland, as well as 500 UK Co-op stores and approximately 1,200 forecourt retailers including Motor Fuel Group, Rontec, and Harvest Energy.” 

The family-owned German confectionery company Katjes has reached an international level since its founding in 1910. In 2019, they announced the launch of their vegan chocolate line “Chocjes” and garnered national media attention with a TV ad criticizing the dairy industry. Katjes also offers a line-up of vegan gummy candies. 

Candy

Founded in 1928, Swizzels Matlow Sweets now reached annual sales of US$140 million across 25 export markets. Specialized in vegetarian and vegan candy products, they discreetly launched a line-up of plant-based shortbread biscuits in 2021. 

Freedom Marshmallows was launched in 2013, after ten years of extensive research and development. The British ‘mallow’ maker is the first European manufacturer to produce a gelatine-free marshmallow on a commercial basis worldwide. In February 2021, they announced three new vegan chocolate products. 

Replacing gelatin is one of the key challenges facing the confectionery industry and the demand for plant-based and vegan confectionery is growing. In our concept we use pea protein with high whipping properties, neutral color and bland taste.” 

Svenja Konradt, senior communications specialist at Brenntag for FoodIngredientsFirst

Part of the Nestlé group and famous confectionery brand in the United Kingdom, Rowntree's Fruit Pastilles launched a vegan line-up in October 2020. 

Founded in 2012 by Made in Chelsea and Strictly star Jamie Laing, Candy Kittens is a vegan confectionery company dreaming big. By the end of 2020, they sealed a US expansion deal with Walmart

Snack

In February 2021, giant food manufacturer Nestlé announced the future introduction of their first certified vegan KitKat. The product was developed in the United Kingdom and will be launched in several countries during the year. 

We’re curious to see if this plant-based edition will make it to the Japanese market, where Kitkat is a success story with over 300 flavors. 

British manufacturer Burton’s Biscuit is behind the most beloved biscuits in the United Kingdom. Accidentally plant-based, their iconic Jammie Dodgers brand went through a recipe changed in 2016. In summer 2020, the company announced that the recipe is back to being vegan. 

Australia and New Zealand

Like in the American and European markets, veganism is trending in both countries. 

Founded in 1947 in Australia, The Natural Confectionery Co is today a subsidiary of Mendelez International. In 2020, they released gelatin-free jellies.

We couldn’t ignore the requests from Aussies asking for a Vegan-friendly option. We believe all lolly lovers deserve to enjoy The Natural Confectionery Co.’s delicious jellies, so we’re proud to be able to offer Australians a sensational new product that doesn’t compromise on taste.

Lauren Fildes, Marketing director
The Natural Confectionery Co. launches vegan range

Reinventing itself in 2019, Cole’s Nature’s Kitchen brings 100% plant-based products to Australia’s kitchen, biscuits included. Their line-up also consists of a very popular vegan cookie dough. 

As early as 1996, Aussie company Leda nutrition started offering gluten and dairy-free health food bars. Melbourne-based, Pana Organic is another player sharing green business value and providing organic, vegan chocolate since 2012.

In Asia

In east and southeast Asia, the consumption of milk, butter, or cream is recent. Many traditional Asian sweets and treats are accidentally vegan—their original recipes do not contain animal ingredients. So the need to innovate in plant-based confectionery isn’t expressed as well as in the West. However, vegan chocolate innovation is on the rise, and despite a lower consumption overall, young generations are willing to experiment with new flavors. There’s a growing demand for dairy-free and plant-based products in the region, stimulated by an increasing health consciousness, notably in China and Japan.

In India, the 19th producer of cacao, the organic fair-trade chocolate, has been growing steadily since 2012. A few chocolate start-ups are in the race to develop high-end products—organic, vegan, and sustainably sourced chocolate: Paul and Mike, Naviluna, Pascati

Piperleaf is a 100% plant-based food company founded in 2020. One of their first products has been vegan mylk chocolate. MilkinOats, India’s first homegrown oat milk brand launched in fall 2020, has also come up with vegan milk chocolate bars

In Vietnam, two French chocolate makers combined their know-how with local cacao and built Marou Chocolate. In 2021, private equity firm Mekong Capital invested in the company

Is Japan craving for plant-based treats, too?

‘Accidentally’ plant-based traditional sweets

On a national scale, the plant-based confectionery innovation isn’t making some noise in Japan yet. The market isn’t as developed as in other countries, and we found little social media noise for “plant-based” sweets.

Local traditional sweetswagashi, senbei, candies— are already using little to no animal ingredients. However, these sweets and treats are not labeled or presented to consumers as “plant-based” or “vegan.” 

The JR East plant-based confectionery initiative

In 2019, the JR East company called for confectionery manufacturers to join a plant-based project targeting inbound tourism. Three Japanese souvenir manufacturers answered the call: Tokyo Banana, Tokyo Campanella, and Gateaux de Voyage. They came up with a new line-up of plant-based souvenirs based on their popular products. Unfortunately, the project failed from a sales perspective, as the pandemic significantly disrupted inbound tourism, and the domestic demand wasn’t there.

Free-from allergies confectionery

Interestingly, you can find some sweets that are plant-based but not advertised as such. These products are aimed at consumers with food allergies. For instance, OEM food manufacturer Nikkoh sells 28 allergen-free chocolate bars since 2018.

In October 2019, major retailer Aeon launched a dairy-free chocolate bar under its Top Valu private brand, in a new line-up aimed at consumers with food allergies.

Is that to say there is no demand for plant-based confectionery in Japan? 

At the moment, it is hard to find a craving similar to what can be observed in other markets. Some local bakeries and pastry shops do offer some plant-based products for communities of vegan consumers. In the cooking book section, plant-based recipe books are garnering some attention. 

Consumers seeking alternative confectionery can turn themselves to e-commerce platforms, such as Amazon, Rakuten, and iHerb, where they’ll find imported products. Foreign brands, Katjes and Pana Organic, are also limitedly available in retail.

Japan’s major online cake and sweet store, Cake.jp, was propelled to the top by the pandemic in 2020. The platform offers a limited choice of vegan and plant-based products (frozen cakes, biscuits, chocolate, and ice cream).

Founded in 2019, Japanese start-up True Food & Design offers 100% natural low-sugar vegan chocolates. After months in R&D, they launched through the crowdfunding website Makuake and reached 239% of their target. A success that shows there’s a burgeoning interest in premium plant-based chocolate.

Quick timeline of what’s happening in the confectionery sector in Japan: 

  • In March 2021, donut chain Floresta partnered with Morinaga for a time-limited line-up of plant-based donuts (in Japanese)

  • In April 2021, the Marui Group announces the launch of "vee ga boo," a mail-order service that delivers an assortment of vegan sweets for May 2021 (in Japanese).

  • In June 2021, organic and macrobiotic food company Biokura add a new cake to their vegan cake line-up (in Japanese). Vee ga boo will hold its first event at real stores in two locations in Tokyo (in Japanese).

That’s all, folks! 

Hungry for more? 

Stay with us because next week, we get to the heart of Japanese consumers’ thoughts on plant-based confectionery.


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