WhiteWave Foods brands - Silk, So Delicious, Vega
WhiteWave Foods' product portfolio features plant-based foods brands such as Silk, So Delicious and Vega.

NANTUCKET, MASS. — The market for plant-based food products in the United States is on trend, and executives from WhiteWave Foods expect to generate an additional $3 billion in sales as the category continues to grow. With a product portfolio that features such well-known plant-based foods brands as Silk, So Delicious and the recently acquired Vega, the company may be positioned to achieve its goal.

Gregg Engles, WhiteWave
Gregg Engles, chairman and c.e.o. of WhiteWave

“We believe the development of plant-based products is still in the early stages and there is significant runway to increase household penetration and broader usage by converting dairy milk households to plant-based households, targeting additional consumers into the plant-based alternative space, broadening usage occasions by broadening our portfolio of products, and expanding the category with new items,” said Gregg Engles, chairman and chief executive officer, on June 21 during the Jefferies Consumer Conference. “Also, plant-based has just a 9% share of the U.S. dairy category today. Using this relative share as a guide across our broad-based portfolio of beverages, yogurts, desserts, and novelties and other possible future areas of innovation, we’ve identified almost $3 billion of additional potential plant-based category sales.”

The company’s Americas plant-based foods and beverages business achieved approximately $920 million in sales during fiscal 2015 on 32% U.S. household penetration. The company claims its Silk and So Delicious brands are leaders in the markets for plant-based beverages, with a 75% share of the soy-milk category, 48% share of the nut-based beverage category, and a 94% share of the coconut-based beverage segment.

Silk and So Delicious dairy-free milk, WhiteWave Foods
WhiteWave said its Silk and So Delicious brands are leaders in the markets for plant-based beverages.

WhiteWave Foods acquired Vega Foods, a maker of plant-based nutrition products, for approximately $550 million.

“The overall nutritionals category is a $9 billion category and has been growing double digits for years,” Mr. Engles said. “The plant-based segment is underdeveloped in conventional channels, with only a 5% share in conventional retail compared to over a 60% share in the natural channel, so we see lots of opportunity for growth.

“Also, plant-based nutritionals are growing over 50% while the dairy-based offerings are up just 5%. Vega’s strong growth trend continued in Q1, with sales up over 50% over a very strong Q1 in the prior year. There is tremendous retailer excitement for Vega, and we’re in the mid-phases of building a robust innovation pipeline and continuing to expand our distribution into conventional channels.”

Vega products, WhiteWave Foods
WhiteWave Foods acquired Vega Foods, a maker of plant-based nutrition products, for approximately $550 million.

The growth of the market for plant-based foods has attracted competition, but Mr. Engles said he believes WhiteWaves head start in the category gives the company a significant advantage.

“We’re attracting competition,” he said in response to an analyst’s question. “There are some small entrants that have come into this space, and private label has come into this space over the last two or three years as these categories have gotten relatively large.

“But I think we have benefited greatly from the fact that these categories have grown as quickly as they have, because it’s allowed us to establish a really significant lead that’s going to be very difficult to overcome.

“If you look at it the last three years, we’ve invested over $1 billion in capital, and that’s taken not only a lot of money but a lot of time and a lot of planning. For somebody to put capacity on the ground to produce these kinds of products is expensive and it’s time-consuming. So I think it’s a daunting prospect actually to try and catch up to where we are today.”