(Published in the November/December 2006 Issue)

Taste and Texture Improvements Keep Soy Competitive
Soy products continue to climb in sales. The focus now is on choosing what to stock. Here are a few tips in doing just that.

By Scott and Ann Springer

For many consumers, the word soy conjures up images of tasteless entrees with a cardboard-like meat substitute, and milk with a grainy texture and undesirable aftertaste.

Soy continues to enjoy a popular following among select consumers, including vegans, those with food allergies, or others who seek out soy for their health benefits. However, some manufacturers of soy products are actively working to change the perception of soy and spread the attractiveness of these products to the masses.

Bob Jones, CEO of Vitasoy, USA, Inc., Ayer, Mass., is one of them. Since his first days as CEO, he has asked consumers their thoughts on soy. The most common response they give? “It’s good for you, but it tastes horrible.”

“If you make soy the headlining actor instead of a supporting actor, it changes people’s perception of the product,” Jones says. “With that approach, you’re selling to those who are already enthusiasts, but you cut out the mainstream consumer market.”

According to ACNielsen, dollar sales of total soy products at all food, drug, and mass merchandisers in the United States except Wal-Mart continued to climb in the 52 weeks ending February 25, 2006, although at a slightly shrinking rate. Dollar sales increased 6.2% over that 52-week span, to the tune of $618 million. By comparison, the previous 52 weeks netted a 7.3% gain, and the same weeks between 2003 and 2004 produced an increase of 9.0%.

Total units sold of soy products in the 52 weeks ending February 25, 2006 followed a very similar path to total dollar sales. Units sold increased 6.1% to roughly 606.5 million, a dip from the 7.2 increase in units sold experienced the previous year. Unit sales did go up by 35 million over that stretch, however.

So what do these data mean? It means soy is an ever-expanding segment of the refrigerated and frozen foods sector that has grown steadily the past few years. It also means that selecting the most profitable soy products and displaying them efficiently is more important than ever.

Consider More Than Just Milk
One of the biggest mistakes a retailer can make in selling soy is to group all soy-based products into one section of the store and merchandise them in a clump with a sign stating, “Soy Products,” Jones says.

“People will dedicate a whole section of the store to soy products and put everything together, including meat alternatives and soy-based cheese, but they are not all the same,” Jones says.

Instead of calling it the “Soy Products” section, try labeling it the “Health Foods” section of the store. “It broadens the appeal of the products enormously,” Jones says.

Placing milk-alternative beverages in the non-dairy section is the No. 1 way to increase sales of these products, says Julie Morgan, retail promotions manager, Organic Valley Family of Farms, LaFarge, Wis.

After all, soy milk (drinks and shakes) comprised $368.5 million of the $511.6 million in soy dairy products over the 52-week period ending February 25, 2006.

Stocking soy milk is a basic in your store. But don’t stop there. Sales of other dairy items, including refrigerated pudding and refrigerated fruit juice, are showing promising growth. Dollar sales of pudding were up 92%, with unit sales up 111%, while dollar sales of fruit juice spiked 70%, with unit sales rising 124%.

Frozen soy-based foods boasted an increase in dollar sales of 15.6% over the same 52-week time frame. Product categories showing impressive sales growth included frozen mixed vegetables, frozen plain pasta, and frozen soup.

The deli segment remains the adolescent of the soy market with total dollar sales of deli items amounting for just 1.2% of the soy industry. But total units sold in the deli industry has increased for the third straight year, and certain product lines, including refrigerated/frozen sandwiches and ready-made salads, showing healthy gains.

Demo Soy to Sell Soy
Where you stock your soy products in your store is critical to sales growth.

“People aren’t going to look for soy beverages in the dairy case,” Morgan says. “You have to put it where people are looking for it.”

Double-face each skew to be certain you have enough inventory on the shelves to meet demand. “This way you won’t have to keep restocking and restocking throughout the day,” Morgan says.

Another tip is to merchandise items together with other healthy, convenience foods such as bagged salads, precut vegetables, and organic dressings. “Instead of selling soy you are selling great taste, convenience, health, and affordability,” Jones says.

Cross-promoting soy-based beverages with fresh-cut fruit will draw in consumers looking for health and convenience in one package. “People who come into the section with the fresh-cut fruit are already thinking about their health,” Jones says.

“The most compelling thing I’ve seen to increase sales of soy products is demos,” Jones says.
Demos work especially well at convincing soy newcomers of the benefit of paying a higher sticker price over non-soy products.

“Four-dollars is a lot to dish-out for a product you’ve never tried before,” says Xin Kong, vice president of marketing, Soya Foods, Dorchester, Mass. “Sampling helps us get new customers. Once people have tried our product they write to us and say, ‘How can I order a case from you?’”

Look for ways to cross-promote demos with other products. For example, soy-based meat substitutes can be paired with salad and vegetable providers, so that consumers will walk away saying, “I can make this for dinner tonight because I’ve tasted it and I know my husband and kids will eat it.”

A fun match-up is vanilla soy milk swirled with orange juice to create a drinkable “cream-sicle.” “It’s something that is easy for the retailer to do because we provide everything they need to do the demo,” Morgan says.

Be Sure the Price Is Right
The bottom line is that customers demand good taste, no matter how healthy the product claims to be.

“Taste still determines whether customers will buy the product or not,” Kong says. “Soy companies are focusing on marketing how healthy soy is and not many are focusing on flavors or textures.”

Soya Foods is one company focused on taste. The 2-year old company manufactures a line of snack-based frozen and refrigerated products that can be incorporated into a meal. Available in exotic flavors such as Jamaican Jerk and Jambalaya, these soy items appeal to high-end tastes. Soya plans to expand into the deli meat category by the end of this year.

One thing Kong knows about successfully selling soy is that price matters. Pricing these products too high may put them out of reach for your customer base. “For our products, the major problem is that they are priced too high in many cases,” Kong says. “As the prices are decreased to a reasonable cost, there are more people buying them and eating them.”

Don’t ignore the demographics, either. The primary consumer of a soy beverage is generally a health-conscious mother between the ages of 25 and 45 with some expendable income and college education. Often, these mothers are seeking products for a lactose-intolerant or dairy allergic member of their family, Morgan says.

Recently, younger consumers and college students have caught the soy bug as they look to improve their health. These same consumers often buy vegetarian and vegan products.

One way to capture this younger market sector is through enticing promotions, because college student tend to have little expendable income. Coupons are one way, but they aren’t the only way. “In supermarkets I see successful sales from BOGOs and two-for’s,” Morgan says. “People respond well to that.”