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Why there might not be a battle between big food and small food

May 19, 2016
Food & Drink

It’s not all kale and quinoa—or at least, not only that.

The growing popularity of plant-based diets and locally-sourced food has prompted many major food corporations to rethink both their branding and ingredients, but these shifts might actually be bringing the big food industry and small businesses closer together.

During a panel at Fortune’s Brainstorm E summit in Carlsbad, Calif., on Tuesday, industry executives discussed how food producers on both ends of the table could benefit from adapting to current trends while learning from each other.

“We’ve got to create things that are great first, and then with sustainability built-in,” said Adam Lowry, co-founder and co-CEO of Ripple Foods as well as the co-founder of Method, a brand of home cleaning products with an eco-friendly bent.

Ripple has recently drawn interest for its entry into the non-dairy beverage market: non-dairy milk made from yellow peas, which Lowry defended as high in protein but low in sugar. Acknowledging that sourcing milk from peas is unconventional to say the least, Lowry also touted that the non-dairy vertical is already worth $2 billion now but is expected to blossom into a $4 billion market within three years, reflecting an explosive shift that could spell big changes for the long-term.

“Plant-based milks are inherently lower cost than dairy milk,” Lowry explained. “As we grow, our ability to bring costs down are greater. We’ve gotta get a lot of scale to pass that on to the consumer, but structurally, they’re available to us.”

Suzanne Ginestro, chief marketing and innovation officer for Campbell Fresh, a subset of Campbell Soup, admitted that when she joined the well-known canned food maker through its acquisition of Bolthouse Farms in 2012, she wasn’t entirely excited.

“At that time, I was hesitant,” she recalled, explaining she had left big food, including stints at Nestlé and Kraft, to go into smaller and more entrepreneurial businesses.

But Ginestro soon found there isn’t as much of a war between big food and small food as some might speculate.

“We’re vetting companies just as much as they’re vetting us,” she said about smaller food companies, pointing toward Campbell’s recent purchase of salsa and hummus maker Garden Fresh Gourmet as one example of this industry exchange. “It’s all about having a portfolio of having smaller, authentic brands that meet consumer needs and finding the right cultural fit of those companies that feel comparable with us. We can enable their journey, but bring them resources and scale.”

Supermarkets would seemingly be one arm of big food that has scale down pat, but even these chains are being forced to learn how to adapt to rapidly changing food preferences and purchasing trends.

“There’s an explosion in demand for local,” observed Paul Lightfoot, CEO of BrightFarms, a New York-based group building and operating greenhouse farms at or near supermarkets. “We’re definitely trying to be a mainstream produce brand. Sustainability is part of our message, but our message is mostly local.”

Ginestro also underscored the small and local growth trend, hinting big food brands should keep these ideas in mind because every retailer—and even every store—is different. “It’s a very customized local approach for us,” he said. “It has been about partnering with retailers.”

Lowry concurred. “You’ve gotta think about how to operate larger organizations in smaller ways,” he said.

By Rachel King

Source: Fortune

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