Hormel Foods Corp. is launching a new line of plant-based meat alternatives, joining the year's hottest trend in food.
Hormel's Happy Little Plants brand debuts with a soy-based product that looks and cooks like ground beef. It will begin showing up in Hy-Vee stores across the Midwest this week.
Other products, such as plant-based Italian sausage, breakfast links and bratwursts, will follow. Executives formally announced the brand line at the Barclays Global Consumer Staples Conference in Boston Wednesday.
"We are definitely celebrating plant for the goodness of plant. We are not trying to replicate meat," said Jim Splinter, vice president of corporate strategy at Hormel. "We are offering consumers choice. They are looking to add plants to their everyday routine."
Like others in the market, Hormel's Happy Little Plants products will be sold at a premium price, currently listed at $8.99 per pound. The company said the products will be produced fresh and sold refrigerated instead of frozen, in contrast to veggie burgers that were forerunners in the alternative meat category.
The move by the Austin, Minn.-based company long known for bacon, ham, turkey and Spam is yet another sign of the potential of the plant-based food market.
The initial public offering of Beyond Meat, another company making plant-based meat substitutes, in May became a pivotal moment when investors endorsed a trend that had been taking shape for several years. That IPO was the most successful of 2019 so far, and Beyond Meat's shares are now worth more than six times their initial price.
Tyson Foods then unveiled a new line of plant-based and blended products, called Raised & Rooted, in June. Also Wednesday, Kellogg Co. announced its own plant-based burger patty, called Incogmeato, under its MorningStar Farms brand.
Competition in the meat-alternative market is steep. Hormel looked at acquiring a number of startups, Splinter said, but the smaller companies set their value higher than what Hormel was willing to pay.
Hormel turned inward, seeing potential to build a plant-based line itself. It already has the refrigerated supply chain and distribution capabilities, plus the technological capabilities to create a viable product quickly.
Hormel established a small team of people from across the company to work in a fast-paced, startup-like environment, dubbed Agile. This group of Hormel employees was able to get the Happy Little Plants from concept to market in less than 10 weeks.
While the grunt work was done in Austin over the summer, Hormel used proprietary research conducted by the company's ethnographer and a group of futurists who, two years ago, explored the motivations of the "plant-curious consumer."
Happy Little Plants products were designed as a one-for-one meat replacement, Splinter said. "We found it does not need to taste exactly like meat so long as it is meeting the consumers' culinary needs and packed with protein," he said.
Beyond Meat and Impossible Foods have garnered most of the faux-meat headlines recently, heralded for their meat-like texture and taste. But some critics said those products are no better nutritionally than a traditional beef burger.
Hormel said Happy Little Plants products will have a cleaner ingredient list and better health profile than those competitors.
"We are running toward the plant culture while others are maybe running toward the meat space and trying to replicate meat," Splinter said. "We have fewer ingredients and lower fat than those competitors, and our [20 grams] of protein is a complete protein."
The refrigerated plant-based meat space grew 10% last year but still accounts for just 2% of the overall packaged meat market, according to data published in July by the Plant Based Foods Association. The business still needs to prove itself, Splinter said, but "there's a huge runway of opportunity in front of all of us innovating in this space."
While this is Hormel's first new plant-based meat product line, the food maker has been dabbling in the market for years. In 2014, it launched its Fuse burger — which blends meat, fruit, vegetables and grains — for restaurants and other food businesses.
In March, it launched Applegate blend burgers, which are made of just turkey or beef, mushrooms and rosemary. And Hormel's subsidiary, Burke Marketing Corp., created a faux-meat pizza crumble topping for its food-service business.
Hormel on Wednesday also announced the creation of Cultivated Foods, an umbrella division within the company for all of its plant-based and blended products.