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Entrepreneurs Poised To Capture Growth In Plant-Based Foods

Bill Swindell The Press Democrat

WWR Article Summary (tl;dr) As Bill Swindell reports, "Plant-based foods are positioned for huge growth, with recent notable milestones such as Burger King adding a patty from Impossible Foods to its menu in 2019 — and meatless alternatives to chicken nuggets having landed at Gott's Roadside in September."

Sonoma County

Starting with wine and expanding to include beer, organic dairies, seafood, meat and artisan cheeses, Sonoma County has built a reputation as one of the world's premier farm-to-table regions.

But as culinary trends evolve, you need to adapt, and several of the region's food producers are poised to capitalize on the growing interest in plant-based diets.

Plant-based foods are positioned for huge growth, with recent notable milestones such as Burger King adding a patty from Impossible Foods to its menu in 2019 — and meatless alternatives to chicken nuggets having landed at Gott's Roadside in September. Beyond Meat has a growing portfolio of meatless products in supermarket aisles as it navigates being a publicly traded company. Eleven Madison Park, a three-star Michelin restaurant in New York City, pivoted this year to an all plant-based menu.

Beyond those headlines stands the opportunity for potential revenue. Bloomberg Intelligence research firm said the plant-based food market could grow from $29.4 billion in 2020 to more than $162 billion by 2030 and represent up to 8% of the worldwide protein market.

Those involved in the local plant-based food sector said Sonoma County is well positioned to take advantage of mainstream interest in vegetarian and vegan dishes. It stands to gain market and mind share not only from food manufacturing but systemwide, from farming to retail establishments to dining — where even more wineries are ensuring that they have a plant-based options for visitors. The main spark begins with the region's agricultural roots, analysts said.

"We just have a rich heritage of that pioneering in the natural products industry," said Carolyn Stark, executive director of Naturally North Bay, a trade group for producers of specialty food and natural products in the region. "We have been innovating all along to our commitment to people, product and planet."

The local pioneer has been Amy's Kitchen of Petaluma, which started in 1987 when Rachel and Andy Berliner introduced their homemade vegetarian pot pie as their first product. The brand has steadily grown, now employing 2,850 workers over four production facilities across the country, which includes 860 workers locally. The company had revenues of $600 million in 2020 as homebound customers flocked to its entrees and soups. Its just launched five new soups and a vegan bean-and-cheese burrito.

"I think it's going to continue to grow, maybe not as dramatically as the last couple of years with Beyond Meat and Impossible getting so much press," said Andy Berliner, who serves as chief executive officer for the company. "The environmental passion of young people is influencing everybody, and plant-based is a huge, huge part of it."

The biggest local story so far this year has been the activity at Miyoko's Creamery also in Petaluma, which recently received $52 million in a round of investor funding to help ramp up production of the plant-based products crafted under the watchful eye of founder and chief executive officer Miyoko Schinner.

Dairy is especially poised for growth, with the potential to build on the success of plant-based milk, which now represents 15% of the milk category, according to the Plant Based Foods Association. Other plant-based dairy products total about $2 billion in retail sales, but the growth rates are remarkable in certain categories: plant-based yogurt had a 20% yearly increase while plant-based eggs were at 168%. Cheese had a 42% spike, almost twice the rate of conventional cheese, according to the trade group.

"We've scaled very rapidly and we're at a point where we have to expand the team and bring in more C-suite level people. All of that takes money. But not only do investors want to see us continue to grow at a rapid pace, I want to go at a rapid pace because I feel the bigger we get the bigger impact we have," Schinner said.

The company is focusing now on a new liquid mozzarella product that properly melts on a pizza to mimic regular cheese, in contrast with the market's current plant-based options that result in a crusty texture.

"Where we differ from other vegan cheese companies is that most of them combine oil, starch and natural flavors. We start out with a (plant-based) milk just like dairy cheese and then we ferment it and we make something out of that," Schinner said.

"The liquid mozzarella was a unique concept, in that one of the biggest problems that people mentioned is that vegan cheese doesn't melt," Schinner said. "So, we thought why go through this whole thing of solidifying it and getting it to melt again? Let's just reverse engineer it ... vegan cheese science is still relatively new."

While Amy's and Miyoko's have garnered much of the attention, other smaller producers are also crafting out a niche in their product categories with a focus on premium products. They include Renegade Food, which is based in Berkeley but produces its charcuterie in Petaluma; and Wildbrine of Santa Rosa, which has expanded to its Wildcreamery to offer plant-based cream cheese and sour cream items. The effort for these makers is to make a premium product in the categories similar to what the local vintners have done with wine.

"We really had this interest in plant-based dairy. It's just a huge opportunity with double- and triple-digit growth and with some of the innovation we can bring," said Chris Glab, co-owner of Wildbrine and Wildcreamery.

Like others, Glab said that Sonoma County is well positioned to become a hub of the plant-based food movement given the reputation that it can build upon. That is centered specifically around agriculture when the area decades ago was a bastion of prunes and apples that gave way to more profitable wine grapes. Cannabis also has now emerged with legalization. Some even have put the label of "Sonoma" within their business name to highlight the area's reputation.Those activities are further boosted by fresh retail markets as well as restaurants that specialize in farm-to-table menus, which lure in visitors from across the world.

"You got a really food-aware community with great restaurants, great fresh produce and innovative products," Glab said. "You got an adventurous community."

The movement also can be seen in the supermarket aisle, such as at Oliver's Market where Beyond Meat has four of the top 20 most popular natural frozen products, said Dustin Canter, natural foods buyer for the local grocer.

"It has become an overwhelming category to review with such a high volume of innovation," Canter said. He echoed others, saying that with more entries into the categories that the quality of the product can range from those that have questionable ingredients to others that "really focus on making a clean product with an ingredient list that even the most stringent label checker would be proud to eat."

Another important area for growth is dining. Amy's has led the way with its popular drive-thru restaurants that offer fast casual dining from a vegetarian and vegan menu. It has three restaurants, including in Rohnert Park, where on its opening day it had long lines of customers backed up. The company will open a new drive-thru in Roseville next month and one in Orange County next year as part of its plan to have at least 25 restaurants within the next five years, Berliner said.

"You go to Los Angeles and there are so many vegetarian and vegan restaurants. Not surprisingly, not so many here," he said.

But that is steadily changing. One notable shift: operators of winery tasting rooms and sommeliers are realizing that there is a growing clientele seeking plant-based food options with their wine pairings. For example, Domaine Carneros in Napa County offers Miyoko's vegan cheese products for its tasting menu. Migration Winery will host its first vegan winemaker dinner with Schinner in March, said Alison Kilmer, a consultant for the local plant-based food industry who assists with vegan events under her Wine Country 2.0 campaign.

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