Denmark-based Naturli’ Foods has become the latest meat-free supplier from Europe to cross the English Channel to try to tap into the UK’s growing interest in plant-based food. Dean Best spoke to Naturli’ CEO Henrik Lund in London as the company marked its debut in the market.
Europe is coming. The rise in the number of UK consumers trying plant-based food has opened up opportunities for domestic suppliers – but has also attracted interest from across the English Channel.
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This spring, a number of companies from mainland Europe have taken the plunge and either launched into the UK market or significantly ramped up their presence.
Sweden’s Food For Progress, which dipped its toe in UK waters last autumn with a listing at the handful of Whole Foods Market outlets in the country, launched in almost 400 Tesco stores in March.
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Last month, Dutch vegetarian and vegan food specialist Vivera announced its own listing with Tesco, with the UK’s largest grocer deciding to stock the company’s plant-based ‘steak’.
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By GlobalDataThis week, Denmark-based dairy- and meat-free supplier Naturli’ Foods added the UK to the list of markets in which it sells plant-based ‘meat’, announcing a deal with Sainsbury’s the number two food retailer in the country that will see initially two SKUs sold in 400 of the grocer’s stores.
Speaking to just-food in London on Tuesday (12 June), Henrik Lund, the CEO at Naturli’, acknowledges the growing competition in the UK meat-free sector but argues the types of products the company will offer the country’s consumers – and how the products will be merchandised – will give the business a chance to carve out a foothold in the market.
“Naturli’ Minced and Naturli’ Burger Patties are chilled and Sainsbury’s will place them in the meat counter in the four hundred stores. It’s a new alternative in the meat counter,” Lund says. “We wanted to take plant-based food solutions to another level. Minced is an example. It’s not a pre-fried falafel [or] burger. It’s a raw, built component that the consumer can take in the direction they want to in their own kitchen.”
All executives are keen to point out how their products are different to what is already on sale, how their new wares can give them an edge on the competition. And Lund is no different. However, he also seeks to point to the performance of Naturli’s meat-free products in the company’s domestic market.
“We launched this product for the first time in January in Denmark and it was a huge success,” Lund says. “We actually sold out and had to move the production after 14 days because the capacity was way overdue.”
Danish retailers stocking Minced include Coop and Dansk Supermarked’s Netto, which has outlets outside Denmark. Lund says Netto has also decided to list the product in its stores in Sweden, Germany and Poland.
Naturli’, meanwhile, will enter Switzerland “in a short time”, Lund says, while the company has just started shipping to Australia, where it has secured a listing with Woolworths, that country’s largest grocer.
The business is also having a “trial” of its chilled meat-free products with an unnamed retailer in the US. Lund declines to name the potential US customer but adds: “We are in a trial phase, and a lot of samples crossing the Atlantic. So we hope sometime soon that we also can launch products in the States.”
It has, then, been a brisk period for Naturli’, a 30-year-old business that only entered the meat-free market in 2014. The company was set up in 1988, selling alternatives to milk in Denmark, such as soy, rice and almond ‘milks’. Lund says Naturli’ accounts for 70% of Denmark’s market for plant-based ‘milks’.
Four years ago, the company launched its first alternatives to meat, rolling out “traditional products like organic, pre-fried falafel, pre-fried burgers”, Lund explains.
Nevertheless, the company has continued to innovate on products offering alternatives to dairy. Last year, Naturli’ added to its domestic range of alternatives to dairy products with the launch of a vegan butter and the product is now also on sale in Sweden and Germany. The last 12 months have also seen Naturli’ roll out a range of vegan ice cream in Denmark.
“We have a very narrow vision about the categories we want to be in. Our main focus is chilled and we focus on the meat and dairy category,” Lund says. “We’ve just launched on-the-go drinks in Denmark and next year we will have more products such as alternatives to yoghurts.”
But how will Naturli’ seek to grab the attention of UK consumers showing more interest in alternatives to meat. Sainsbury’s, announcing the Naturli’ listing, said sales of the retailer’s existing meat-free products are “growing 20% each week”.
However, the category is not just being fuelled by the UK’s vegetarians and vegans but by meat eaters, either keen to cut down on their consumption for health and environmental reasons, or curious about the new products hitting the market. It is crucial for any new plant-based ‘meat’ brand hitting the market to target those consumers.
Lund says the way Naturli’ has managed to get its products merchandised with its existing retail customers in Denmark and now with Sainsbury’s would be a way of attracting the interest of those who still have meat in their diet.
“When we agreed with Dansk Supermarked that this product should not be on a niche shelf in the corner of their stores, that it should be placed in the meat counter, it totally changed the perspective [for the product] and also of the mainstream consumer,” he insists. “Plant-based is suddenly next to minced beef, chicken, lamb and it takes plant-based to a new level.
“Being in the meat counter takes the mystery out of plant-based”
“It also is a food culture journey for mainstream consumers. Because they are used to working with the minced beef in their own kitchen, they look down and see something that they recognise. It takes the mystery out of plant-based.”
By the end of the year, Lund expects revenue at Naturli’ – owned since 2010 by Danish margarine supplier Dragsbaek (itself majority-owned by Nordic food group Orkla) – to be “at nearly, nearly DKK180m (US$28.1m)”. He says: “For the past four years, our annual growth has been around 30%. Last year it was 45%. And this year we actually estimate that it will be about 65%.”
At the end of this year, around three-quarters of Naturli’ sales will still be generated in Denmark but, with new markets opening up, Lund is forecasting the company could see sales outside the company’s domestic market account for half the business in three years’ time. Strikingly, the push into meat-free four years ago has already meant sales of dairy alternatives no longer make up the majority of Naturli’s revenues, coming in at “around 40-45%”, Lund says.
Does Naturli’ make a profit? “That’s a secret number,” Lund says. “I would say the profit we make at the moment we reinvest in the market. It is cheaper to run a social media strategy than it is to buy very, very expensive TV commercials, but we also invest in technology on how to produce plant-based products, vegan products that takes the category to a higher level. Reinvesting in the category is what we’re in for, for the next couple of years.”
Lund, who joined Naturli’ as sales director in 2010 not long after the sale to Dragsbaek, before becoming CEO in August 2016, already has his eye on what he wants the business to become.
“In three years’ time I would like Naturli’ to have, let’s say, ten iconic products. If you look at our business now, we have three iconic products. The vegan butter that we developed is one. Minced is number two. The best vegan ice cream in the world made out of organic oat is number three. And number four is coming with the convenient, plant-based drinks we just launched in Denmark,” Lund says.
“My biggest dream is that we could have two handfuls of iconic products. We’re not a company that will go into the meat counter, or the section of cold-cuts with twelve different kinds of flavours. We really aim for a product that is iconic. That can do it all.
“And we want to fulfil all the waking hours of the day. If you choose to have a plant-based diet for the day, you can chose Naturli’.”
The bullish executive admits he sees some challenges. “There is the fact we are producing the products in Denmark where the logistics is difficult when you’re looking at markets like Australia and the United States,” he says. “Of course, as a company that also has a really big conscience about the environment, we would look at having production facilities near the markets where we are present. we would like to bring in more plant-based, tasty products to the markets all over the world.”
There is no denying the ambition of Lund and Naturli’. “In Naturli’ everything is possible. We just have to work out how to do it,” Lund says. “We act like every day is day one. And until now it has really brought us far.”
