The Plant-Based Industry Needs Courage
The power of transparency, an inspiring interview with Miguel Serrano
Hello, Market Shakers!
We’re so happy to have you at our table, and we hope you’re thirsty for market insights on the plant-based industry!
After spending the last four weeks on what has been boiling up with meat alternatives, we’re ready to take a closer look at another category, milk alternatives.
But before we move forward with our Beyond Milk chapter, we’d like to share an exciting interview we’ve had with Miguel Serrano about the plant-based revolution, doing business in Japan, and the key to success in the industry.
Former EMENA General Manager at Nestlé and deeply passionate about plant-based alternatives, Miguel Serrano has over 27 years of leadership experience in the food, dairy, confectionery, and luxury industry. He has developed an expertise in plant-based food and alternative protein and is behind the success of Garden Gourmet Europe’s number one plant-based brand.
Miguel Serrano has worked extensively with the Asia Pacific region, where he helped leading multinationals and premium small and medium companies to achieve outstanding results. Today, Miguel Serrano has taken a step back from corporate life to become a purpose-driven advisor, empowering business leaders and teams to shift to a sustainable mindset and embrace consumer-centric approaches based on trust and the greater good.
“The plant-based category has experienced an exponential growth for the last 3 to 4 years.”
The food industry had not experienced such incredible growth in decades. We’re talking markets growing between 15 to 20% a year, some even doubling within a year if you look at Europe. The trend started in the United States.
“Interestingly, it wasn’t pushed by a brand dominance, as you’d expect. The movement came more from retailers trying to offer vegan and vegetarian solutions”.
As it often happens with trends in this industry, it landed first in Europe and then reached Asia.
“Asia can learn from the other markets and develop much faster. They do not need to make the mistakes the early plant-based companies made”. In this category, Japan can tap into the experience of Western markets and learn a lot.
Are the markets in the United States, Europe, and Asia so different from one another?
The Asian market has a different life cycle than in the US and Europe. But the borders blurry when it comes to the ultra-connected millennial generation.
“Millennials in metropolitan areas are very similar in the way they think and connect.”
They go to social media platforms and talk. They share their thoughts on sustainability, animal welfare, and health. Vegan and vegetarian communities are growing, reaching up to 10 to 15% of the total population.
“They have strong beliefs and are very active both on the market and in the media.”
The social media noise makes the community look even more prominent.
“In Asia, in particular, Japan, I expect that great plant-based products will be growing fast in metropolitan areas. ”
Many companies are targeting the Asian market, or have done so a couple of years ago, and a movement is picking up.
Millennials’ shared values cross markets’ borders. But an entry strategy needs to be based on regional food habits.
The industry looks for scalability. In other words, you need to reach the everyday consumer and not specific groups. To expand their consumer base, companies need to win over flexitarian consumers with quality and culinary experience. These consumers understand that their consumption of animal products is not healthy for them, and they also see the impact on the planet and animals. But because they also eat meat and dairy, their expectations on taste and texture experience are higher.
“That’s where the life cycle and the challenges are going to be different from one market to the next.”
Regional and local food habits are different than in the US or Europe.
“It doesn’t make a lot of sense to focus on a plant-based hamburger if the hamburger is not part of the local diet.” Of course, the hamburger is internationally famous today. But the game here is to translate top local dishes into relevant and high-quality plant-based versions. “Take a beef curry or the beloved tonkatsu (fried cutlet). How do you make these dishes perfectly plant-based so that it’s the same quality level of experience and enjoyment?”
Japanese manufacturers are focused on coming up with plant-based versions of typical Japanese dishes. Southeast Asian companies, too, focus on relevant local food traditions.
“International companies have to convert the local cuisine because that’s the best they can bring to the table.”
Could Japanese companies make it to the European stage?
Japanese foods are already globally highly recognized for the excellent quality. Japan inspires food safety and reliability. In Europe, Asian supermarkets have been around, and more are popping up as specific Asian cuisines such as Japanese, South Korean, or Southeast Asian are gaining in popularity. The demand for imported products is picking up.
“You have specialized stores, but also specialized sections in regular grocery stores. There’s an interest because the Japanese cuisine is well known worldwide and highly perceived.”
What’s the potential of Japan as an export destination?
For the industry experts, the Japanese market is mature, urban, and very dynamic. The country is a hotspot with a solid metropolitan structure. Health awareness is strong too, and the population is known for its longevity.
“Surprisingly, I feel Japan is often underrated and not on the radar of foreign companies because they don’t know how to enter and behave. It’s a territory where most don’t feel safe.”
Japan has always been a challenge for foreign companies. The top barriers to entry are the culture clash and the language barriers.
“There’s a certain rigidity in the Japanese way of doing things while international companies are more transactional and expect quick results.”
Foreign entrants often come to Japan with the instinct to move quickly and to do business on a short-term basis. But the lack of a long-term vision causes friction with Japanese companies’ values. Pushing the boundaries of traditions to some extent helps foster collaboration and a good dynamic. But foreign companies also need to embrace and trust the Japanese way and accept the long-term investment.
“They need to meet somewhere in-between, with humility and gratitude, to build trust.”
“You also need to add a unique trade structure and distinctive consumer insights to the usual suspects.”
Foreign companies need to work hard to get a deep understanding of the market, and they need partners that can build a bridge.
Japan is like a ‘little black box.’
Japan now counts several brands and plant-based product manufacturers, and more are coming up on the market. But they are not (yet) making enough noise that they’d pop up in industry professionals’ minds.
“The plant-based food industry doesn’t know well what’s going on in Japan because communication is not there. I don’t think it’s much clearer for local consumers.”
The category will be a game-changer.
Before jumping into the export business to Japan, the whole industry first needs to develop new tools.
“We’re all aware we’re facing a new era. We can’t go into such a novel, responsible, and purpose-driven category like we used to. The plant-based category is a powerful and positive force.”
The old tools alone won’t work, and companies have to look in a new way at the entire value chain, adopting a shifted end-to-end approach.
We are talking about a force-for-good industry. Hence unfair trading practices, labor abuse, or other unethical behaviors will not sustain.
“You can’t mistreat your partners and at the same time pretend that you want to do good for the planet, talk about a positive CO2 impact or lower energy consumption. It’s not consistent, and the well-educated consumers will see right through it.”
The leaders in this industry must step up to a new heart-led management approach and be transparent and accountable.
The power of consumers’ beliefs
Consumer groups are more empowered than ever before. New generations—millennials, generations X and Y, have grown up in the age of abundance. They did not experience shortages. So, they apply very different criteria when choosing products or brands. They are looking for brands that meet their belief system, which is very idealistic and altruistic.
“Today’s consumers want to do something for the climate, for the greater good. At the same time, they have busy lives, new rhythms, and care about their health and wellbeing. Plant-based products must address these needs in a wholesome way.”
Products entering a foreign market must meet the local consumers’ needs and expectations and fit their lifestyle and value systems.
“To sum up, to succeed in Japan, you need to understand metropolitan Japanese consumers and address what is important for them in a trustworthy way. This market is exciting and advanced. But it’s still locked, and if you don’t open your heart as a producer to it, it won’t open up to you.”
What will be the critical success factors for start-ups and mature companies developing plant-based products?
Taste, texture, and experience.
There’s a common misconception that plant-based business is all about the environment and animal welfare. These causes are indeed an essential component for the industry, but becoming more a hygiene factor. However, consumers are not primarily thinking about saving the planet when purchasing food products at their local grocery stores. While sustainability is at the core of this industry, the key driver for purchase is taste, texture, and the experience.
“Ingredients is the number one priority. Imagine you serve a product that looks like a burger, tastes like one, but isn’t one. For consumers, that’s confusing.”
The industry needs to be transparent and communicate clearly about what’s in these products and use ingredients familiar to them.
The second priority is to meet consumer needs for their health. Plant-based products’ nutritional values, especially proteins and fiber, are essential. Organic labeling is also a critical factor with today’s consumers. They either feel unsafe—what’s inside?’ or do not entirely give their trust.
“You must provide reassurances that it is safe and good for them.”
Convenience is also on the table. Consumers can’t spend hours in the kitchen, but at the same time, expect quality.
“You need products that can be ready after a few minutes in the pan or the microwave and ideally taste like a homemade meal.”
Sustainability only comes after you meet consumers’ needs on ingredients, health, and convenience.
Only after you meet their needs can you tell consumers that they’re doing something amazing on top of the direct benefits from eating plant-based.
“You can tell them they’ll contribute to a better world, with a better climate, less CO2, less animal cruelty. That they can feel great about themselves.”
Be transparent, be bold.
Japanese consumers are particularly concerned about additives and preservatives. So companies seeking to enter this market need to strive for complete transparency. Consumers need to understand the processes, which might be a bit more complex but is based on solid research, to make plants into a new food source.
“Companies need to create trust by opening up. Show both the qualities and explain the flaws—yes, there’s methylcellulose, an artificial thickener, and emulsifier, but it’s safe. We know you want natural products, and we’re working towards achieving a more natural process - and these are the steps we are undertaking to get there by 2025 (for instance).”
This trust will help create a feeling of confidence and be part of the producing company’s journey.
Striving for transparency in the food industry has not always been easy.
“It seems too risky, but you only need one brave company to do it first and gain consumer’s trust, and the rest will follow.”
Will the change come from a large company or a new entrant with nothing to lose? It is a human truth that you try to secure and manage your risk when you have a lot. Hence, big corporations fear to open up fully, and the stakes seem too high for them. That’s why I believe that such disruption will come from medium and small companies. And these companies will put collaboration before fierce competition because if more people eat delicious plant-based food, all living beings will ultimately profit from it.
“The time has come for us to step up. We can only do that by working together, working on ourselves and for companies that operate with trust and pursue a strong vision to create together a better future.”
That’s all, folks!
We hope you appreciate the wisdom shared by Miguel Serrano today. Feel free to reach out on LinkedIn to pursue the conversation on how the food industry can be more open and foster trust with consumers for the greater good.
Stay tuned for our next cycle, Beyond Milk, a deep dive into the ‘alt’ milk market.
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