Nestlé makes ‘immediate entry into the plant-based foods segment’ via Sweet Earth acquisition

Nestlé enters plant-based foods segment’ via Sweet Earth acquisition

Nestlé has gained an “immediate entry” into the plant-based foods category via the acquisition of fast-growing California-based brand Sweet Earth for an undisclosed sum.

No figures have been disclosed as part of the announcement, but speaking to FoodNavigator-USA last summer, Sweet Earth co-founder Kelly Swette said the brand was on course to generate revenues of $20m in 2016, just five years after Swette and her husband Brian acquired the trademark and set about building a healthy food empire targeting mainstream consumers.

Under the deal, the Swettes will continue to run the business with support from Nestlé USA’s Food Division, said Nestlé USA chairman and CEO Paul Grimwood: “In the United States, we’re experiencing a consumer shift toward plant-based proteins. In fact, as many as 50% of consumers now are seeking more plant-based foods in their diet and 40% are open to reducing their traditional meat consumption.

“One of Nestlé’s strategic priorities is to build out our portfolio of vegetarian and flexitarian choices in line with modern health trends. With unique and nutritious food for all times of the day, Sweet Earth gives Nestlé a leading position in this emerging space.”

While some fans of the brand expressed their disappointment that the founders were getting into bed with a multinational, Sweet Earth CEO Kelly Swette said the brand would "continue to lead and operate independently out of our facility in Moss Landing," and said teaming up with Nestlé "will allow us to accelerate and intensify our goals and reach a more sustainable future."

Asked about manufacturing going forward, a Nestlé  USA spokeswoman told FoodNavigator-USA: "Production will be retained at the Moss Landing site.  As the business grows, we may use existing Nestlé USA facilities to make certain Sweet Earth products."

She added: "As part of Nestlé, Sweet Earth will gain scale in distribution and sales execution, as well as manufacturing and purchasing; they’ll also gain access to Nestlé’s recently developed technologies for plant-based protein taste and texture."

"I think there’s something wrong with a system that thinks it’s great for technology companies to invest in companies that want to change the food system, but somehow it’s not right for big food companies to invest in them..."

Kelly Swette, co-founder and CEO, Sweet Earth (read what Swette says about the deal HERE)

'Creating a little niche called ‘meat-alternatives’ is not helpful and it’s not progressive ...' 

Sweet Earth frozen meals, burritos, breakfast sandwiches, and chilled plant-based burgers and proteins - manufactured in a 40,000 sq ft facility in Moss Landing, CA – are sold in more than 10,000 stores, including independent natural grocers, Whole Foods, Target, Kroger and Walmart.

While its products are made with a variety of plant-based proteins from soy and seitan (wheat-based protein) to beans and peas, Sweet Earth is not a ‘meat-alternative’ brand targeting vegans and vegetarians, Kelly Swette told FoodNavigator-USA last year.

“A lot of our fans are often surprised when they find out that none of our products contain meat. They buy them because they love the products. Millennials want flavor-forward food that is fun and functional, so we want to take them on a culinary adventure.”

She added: “I don’t see our brand as a ‘meat-alternative’ brand. We’re just selling delicious food that happens to contain no meat.

“We’re seeing a fundamental shift towards more plant-based foods, so creating a little niche called meat-alternatives is not helpful and it’s not progressive. At Target, they’ve gotten rid of the label ‘meat-alternatives’ and they talk about plant-based foods.”

While many legacy brands in the frozen case have ‘cleaned up’ their labels by ousting artificial colors, flavors and preservatives, they are struggling to engage Millennial shoppers, who are buying brands such as EVOL, Saffron Road, Amy’s and Sweet Earth in part because they are seen as smaller, sexier brands, but in part because they are selling “more flavorful, more diverse, more globally-inspired, more interesting products,” said Swette.

What these big brands have missed is that the consumer has moved on

“What these big brands have missed is that the consumer has moved on. Millennials want variety and adventure, food that’s better or more interesting than what you make at home.

“It’s not just about calories and clean labels, it’s about nutrient dense, flavorful and colorful foods,” added Swette, whose resumé features stints as global VP of marketing at Calvin Klein and director of national sales at the Pepsi/Lipton tea joint venture.

And retailers, said Swette, are devoting more space to brands that will bring younger shoppers to the frozen case, a part of the store that market researchers say many consumers are simply walking past as they focus on the store perimeter.

“This sense of holistic wellness, functional, healthy, flavorful food, wasn’t really something that people were talking about in frozen when we started, but that’s changing. The market is there, and retailers need to see that the market isn’t just about ‘vegan’ or ‘vegetarian food’.

“I don’t see our brand as a ‘meat-alternative’ brand. We’re just selling delicious food that happens to contain no meat."

Kelly Swette, CEO, Sweet Earth

Sweet Earth is based in Moss Landing, California, and manufactures its products in-house at a 40,000sq ft facility it took over in 2012 (a year after co-founders Brian and Kelly Swette acquired the trademark from the former brand owner).

Its product range includes burritos, entrees, breakfast sandwiches and meats, veggie burgers, seitan (a wheat-protein-based food with a chewy texture similar to meat), and savory grounds.

It is run by husband and wife team and CPG veterans Brian and Kelly Swette (Brian's resume includes stints as CMO at PepsiCo, COO at eBay, board member at Burger King and director at Jamba Juice and Shutterfly; while Kelly's previous roles include global VP of marketing at Calvin Klein and director of national sales at the Pepsi/Lipton tea joint venture.

The Swette family owned more than half of the business, with other investors including Stonyfield Farms founder Gary Hirshberg and CPG veteran Tyler Ricks (Plum Organics, Peet's, Bear Naked).

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