Nestle Plans Vegan Push With No-Meat Burger, Purple Walnut Milk

(Bloomberg) -- Hold the ground chuck: Nestle SA sees the future in a meat-free burger made from soy and wheat protein. Soon you may be able to wash it down with purple walnut milk or a spirulina latte.

The Swiss company is gearing up for its biggest push yet into the booming vegan market: the Incredible Burger, to be introduced under the Garden Gourmet label next spring. As consumers swap meat for leafy greens, Nestle wants to turn the trend in plant-based eating into a billion-dollar business.

It's a big shift for the world's largest food company, whose products include Herta sausages and ham. While Nestle and its competitors have been dabbling in vegan fare for years, growth has become more essential amid stagnant sales of mainstream supermarket brands. Many of whose products contain dairy and meat, which vegans don't consume.

Read more: Inside a Too-Big-to-Kale Empire of Vegan Private Equity

Nestle is racing against rivals Unilever and new entrants like Beyond Meat, backed by Bill Gates and Leonardo DiCaprio, to find alternatives that resonate with a new generation of consumers turned off by animal protein and high cholesterol content. The Anglo-Dutch company in December snapped up Dutch plant-based food maker The Vegetarian Butcher, while the U.S. startup sells a burger that includes beetroot juice to simulate the myoglobin in beef.

The Swiss company's plant-based business may reach more than 1 billion francs ($1 billion) in sales within a decade, according to Laurent Freixe, chief executive officer of the Americas region. That's up from just a few hundred million francs now, with the bulk of Nestle's 90 billion francs in sales still coming from coffee, bottled water and other long-standing businesses. The company says about half of its protein used, including in pet food, comes from plant rather than animal sources.

‘Food Tribes'

Nestle Chief Technology Officer Stefan Palzer identified consumers who focus on plant-based eating as one of several fast-growing “food tribes,” along with those following gluten-free or lactose-free diets. Veganism's popularity with millennials makes it particularly appealing to food giants.

“While digging deeper into consumer trends, we found they changed a bit in the last couple of years depending on how consumers define a healthy diet,” he said in an interview.

Big Food has bolstered its vegan presence through acquisitions over the past two years. Nestle bought California-based Sweet Earth and snack maker Terrafertil, while Danone is looking at adding milk-free ranges to some of its flagship brands, such as Activia and Actimel, following its $10 billion purchase of WhiteWave.

Read mo re: Danone Swaps Cows for Almonds in Vegan Yogurt Brand Push

Snacks and drinks are one thing. The holy grail of veganism remains a meat substitute that tastes and feels like the real deal -- something a series of pretenders have claimed. Garden Gourmet has also introduced would-be chicken nuggets, while Nestle's Haagen-Dazs now offers a vegan ice cream line. Maggi offers sauces and seasonings that Palzer said complement plant-based meat alternatives, and even Herta sells veggie sausages and lunch meat.

Nestle signaled its interest in plant-based food at an investor seminar in London in 2017, attended by activist shareholder Dan Loeb, who's been pushing the company to revamp itself more aggressively. The company served a vegan dinner for fund managers more accustomed to expense-account steak.

Nuts, Berries

At Nestle's research and development center in Lausanne, Switzerland, scientists are exploring the potential for other vegan proteins. While the bulk of dairy-free milk available to consumers now is soy-based, for example, the company is experimenting with a liquid derived from walnuts and blueberries, with a purple hue. There's also a blue latte featuring spirulina algae.

“Vegetarianism has never been this popular before and it's here to stay, I'm convinced about that,” Palzer said.

To contact the editor responsible for this story: John J Edwards III at jedwardsiii1@bloomberg.net, Eric Pfanner

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