JBS’ plant-based Ozo comes to stores and e-commerce

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Dive Brief:

  • Planterra Foods, a plant-based startup owned by JBS, is debuting its first Ozo products this month in grocery stores in 12 states and on military bases across the country. The plant-based protein line will also be available through a direct-to-consumer e-commerce website.
  • The company’s introductory line will include Ozo Burgers, Ground and Mexican-Seasoned Ground. 
  • The plant-based products are made from pea and rice protein and fermented by shiitake mushrooms, which the company says makes the protein more easily digestible for the body. The products are non-GMO, vegan and cholesterol-free. The company also says its products have less calories, fat and saturated fat than 80% lean ground beef and other rival plant-based meat brands.

Dive Insight:

The Ozo brand was initially scheduled for grocery store release in April. The delay, likely a result of the coronavirus pandemic, may be made up as the brand has a dual approach to convince customers to try it.

After months of lockdown convinced consumers of the benefits of online shopping, food and beverage brands have been scrambling to meet consumers where they are with direct delivery. Planterra is starting there, and is ahead of many plant-based competitors on that front. Earlier this month, industry heavyweight Impossible Foods launched a new direct-to-consumer e-commerce website. Beyond Meat said it expects to launch a direct-to-consumer site later this summer, but it is not up and running.

By providing a direct link to consumers, Planterra can maintain greater control over the supply chain and not be as beholden to grocers to display its items. The company can also sell its products at retail price rather than wholesale, and reap the benefits of higher margins. The only problem with this strategy is that it’s best suited for well-known brands with products already familiar to customers. Since Ozo is a new brand that does not have market penetration and features the unusual addition of fermented mushrooms, it may take more convincing to persuade customers to order online.

Planterra has the benefit of having a parent company with deep pockets, wide penetration and a top distribution strategy. But the average consumer won’t know Ozo’s deeper roots, and Planterra and Ozo will need to build their own brand recognition. To help tempt customers, Planterra is planning a nationwide tasting tour with its Ozo van that will crisscross the country to deliver 1 million free samples during the next 12 months. With consumers still social distancing and leery of food prepared by others, it’s unclear how successful this strategy will be.

At the same time the product’s fermented shiitake mushroom base may raise some eyebrows, it could also attract the attention of consumers looking for the next evolution in plant-based protein. Although a lucrative segment — investment firm UBS projects the plant-based protein and meat alternatives market will increase from $4.6 billion in 2018 to $85 billion in 2030 — current plant-based meat options are heavily reliant on combinations of pea, soy and wheat gluten. Mushrooms could prove to be the defining trait of this brand, and its taste profile may entice the 51% of consumers that a study from the International Food Information Council reported still haven’t tried plant-based meat.

Even without brand recognition, a plant-based protein like Ozo is likely to do well in this current climate. Plant-based sales grew at a rate of 27% more than 2019 and 35% faster than the food category in general, according to SPINS statistics analyzed by the Plant Based Foods Association. This growth in plant-based is mirrored by less-than-stellar statistics in animal protein, parent company JBS’s primary product. Continued closures of meat processing plants due to outbreaks of coronavirus have pushed prices up. According to IRI’s Inflation Tracker, prices of meat were up 14% the week of May 3 compared to a year before.

Not only have meat prices caused consumers to look for plant-based alternatives, but the plant closures have had devastating effects on company revenue. JBS has had a particularly rough time, evidenced by its $1 billion net loss in the first quarter of this year. Things are difficult in other JBS business units, too. It also owns Pilgrim’s Pride, whose CEO Jayson Penn was indicted this month on charges of conspiracy to fix prices for chickens sold to grocers and restaurants from 2012 to 2017.

As the pandemic rages on, consumers will continue to look for brands that are not shutting their plants due to mass spread of coronavirus infections. Ozo’s clean-label and plant-based product offers a sustainable and safe substitute for meat. It also doesn’t hurt that plant-based foods are associated with helping the environment, an important consideration for more people as the pandemic has framed the direct link between personal health and environmental health in a more urgent way.

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Author: Usama Younus

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