April 2005

Much like antioxidants and fiber, soy has captured the awareness of a majority of consumers, who increasingly relate it to overall health. This is what every nutraceutical ingredient segment strives for, but as with any market approaching maturity, finding areas of opportunity becomes difficult.
Most experts believe the same product areas that brought fame to the soy market over the years— soymilk, meat alternatives and nutrition bars—will continue to serve as areas of opportunity. But new growth areas like personal care and cosmetics will help drive the soy category in new directions.

Current Market Dynamics
In 2004, the soy market surpassed the $4 billion mark, growing approximately 5% over the previous year, according to Peter Golbitz, president and publisher, Soyatech, Bar Harbor, ME, which publishes the Soya & Oilseed Bluebook. This includes all of combined soyfoods and supplement products (supplement oils, soy supplements, green food supplements). Women’s herbal formulas that contain soy or soy isoflavones grew about 11% in 2004. This would include, for example, women’s herbal formulas that contain not only soy or soy isoflavones, but also herbs like black cohosh, red clover and/or dong quai. Regular supplements containing soy, however, dropped about 24% last year. Topical herbal formulas containing soy grew about 27%, which could represent a nice growth opportunity for the market, as Mr. Golbitz says there have been several studies linking soy to appearance benefits.

The soy market is definitely showing signs of maturity, which, Mr. Golbitz says, is not surprising given the natural evolution of the market. “At some point most markets reach a certain level of saturation and the year over year growth starts to dwindle,” he said, adding, “For example, if soymilk had sales of $50 million and it grew to $100 million within a year, that would represent 100% growth. You can only sustain growth like that for a certain period of time before it starts to level off and become more steady.”

In previous years, Mr. Golbitz believes some of the strong growth the market experienced was a result of the introduction of meat alternatives like Boca Burgers and Garden Burgers, which experienced double-digit growth for several years running. Right around the same time, he said, Silk soymilk was introduced in the refrigerated dairy case, pushing that segment into double-digit growth as well. Another factor that helped grow the soy category was the nutrition bar phenomena, which really picked up steam around the late 1990s, into 2000. These factors combined pushed the soy market in general into 15-20% growth for a period of four to five years.

And let’s not forget about the significant investment of large food companies in the soy category—Kellogg’s purchased Worthington Foods, ConAgra bought LiteLife, Dean Foods made an investment in White Wave and eventually bought the company, Kraft bought Boca Burger and Heinz made an investment in Hain Celestial. This, Mr. Golbitz says, is what truly helped bring soy mainstream.

Interestingly, the health claim for soy and cholesterol, which was approved in 1999, had little impact on the category, Mr. Golbitz claims. “The health claim only had a small direct effect on growth. In other words, I don’t know how many more people bought soy products because they saw the health claim on the package,” he said. But what the approval of the health claim did accomplish was the generation of a lot of positive press, which validated what had been reported previously in terms of the health benefits of soy, according to Mr. Golbitz.

Talking Trends
Soy ingredients possess a lot of positive characteristics from both a processing and health benefits standpoint. This is why soy ingredients are so attractive to product formulators, says Doug Clairday, national sales manager—Active Nutrition, Protient, St. Paul, MN. “Soy ingredients can be low cost processing aids because of their different functionality traits,” he said. “At the same time, they can deliver a range of health benefits.”

It is soy’s versatility and wide availability that has allowed it to become a household word for a lot of consumers. And a segment that can certainly take credit for boosting that awareness is soymilk, which will likely be a billion-dollar market within the next couple of years.

However, in order for other segments, like meat alternatives, for example, to rise to the level of soymilk, Mr. Golbitz says they must perform more like their traditional counterparts—a goal that will not be hard to reach in the near future, as new and improved versions of meat alternatives are on the way. “The new high moisture extruded meat alternatives have more of a muscle meat texture, similar to what you would find with a chicken breast,” Mr. Golbitz said. “When you cut into a chicken breast you can see the muscle fibers. I think we are going to see more of that with the soy meat alternatives.” In fact, he said, some of these types of meat alternatives are in test market right now.

What will also help the meat alternatives category along is repositioning them in the grocery store. “Similar to what White Wave did when it put soymilk in a milk carton and put it in the dairy case, these new soy meat alternatives need to be sold fresh in the meat case and packaged similarly to meat offerings,” Mr. Golbitz explained. “I don’t think you can continue to sell these new meat alternatives in the produce department because you are only going to hit the same people that spend a lot of time in the produce department. You need to hit people in the meat case.”

Mr. Golbitz also feels the snack category will become a major target for companies. “We are already beginning to see major companies become involved in the launch of snack products containing soy. In fact, Quaker Oats has a product in the area and other major companies are eyeing the segment as well,” he said. “There is real potential for high protein-based snacks, especially if there is improvement in flavor.”

Cultured soymilk or soy yogurt is another category Mr. Golbitz believes will soon hog the spotlight. “It is probably growing at about 15-20% per year,” he said, adding, “But it has the potential to grow at 100% a year if given the right positioning or backing by the major food or yogurt companies.” The demographics of the yogurt consumer are very similar to that of the soy consumer, according to Mr. Golbitz. Because of this, he feels products based on spoonable or drinkable cultured soymilk have huge potential.

Mike Matthews, product director for Prolisse brand soy protein, Cargill Health & Food Technologies, Minneapolis, MN, pointed out some trends that are just starting to hit the market. “There are some new entrants, including fruit smoothie products and fruit-based products that contain soy protein,” he said.

Mr. Matthews also discussed growth specific to distribution channel. “Traditionally growth for soy has been strong in natural health food supermarkets, but I think future growth will come from the mainstream supermarkets,” he said. “The category has certainly gotten off to a nice start with soymilk because it is positioned very well in mainstream grocery stores.”

Jean Heggie, marketing leader—North America Food, The Solae Company, St. Louis, MO, says new growth areas for soy were created as a result of the now declining low-carb craze. “While low-carb diets may have waned in the marketplace, consumers learned from that experience that protein-centric foods can offer benefits in managing their hunger, controlling blood glucose and providing satiety,” she said. “This interest is driving many food and beverage companies to look at soy protein, not only for its intrinsic health benefits, but as a protein ingredient that can boost the protein delivery of their products, while providing health benefits. This trend is increasing the development of foods based on blends of different protein sources, most commonly soy, milk and whey. In these systems, soy, milk and whey proteins often complement each other well from both a nutritional and functional standpoint.”

Ms. Heggie also sees significant innovation opportunities in functional beverages containing soy protein. “Many new concepts pair soy protein with other functional ingredients, such as flax or green tea extract, to provide enhanced nutritional appeal and a great taste experience,” she said.

For dietary supplements, particularly in the area of sports performance, Ms. Heggie believes there are opportunities to create products based on the value of protein blends—combining whey and soy proteins. “While whey proteins are generally high in branched-chain amino acids, soy protein is very high in arginine and glutamine,” she said. “Together these essential amino acids play an important role in muscle synthesis and recovery, and by using a blend of soy and whey protein, you can optimize their levels and effects.”

Companies like Nutriant are headed in a different direction. With its recently introduced whole grain soy flour, the company hopes to capitalize both on the popular whole grain message, as well as the benefits of soy. Linda Wilson, commercial director, Nutriant, Cedar Falls, IA, which is a division of Kerry Americas, Beloit, WI, commented on this new development. “This is a new product for our part of the world. In one respect you can take advantage of the fact that it is whole grain, and in another you can exploit the fact that it is based on soy,” she said. And the applications are endless. With the exception of beverages, Nutriant’s new whole grain soy flour can be applied to a wide range of baked goods, nutrition bars, crackers and snacks to boost fiber content and include all the health benefits associated with soy.

Investigating Soy: Digging Deeper
Soy continues to be a hot area for researchers. The good thing is, according to Deborah Schulz, market development manager, Cargill Health & Food Technologies, Minneapolis, MN, a lot of the preliminary work has already been done, allowing researchers to embark on some of the more long-term feeding studies to confirm what is already known and come to more firm conclusions about the health benefits.

Offering her perspective on the health areas currently under investigation was Diana Steeble, who is a communications professional working with The United Soybean Board (USB), Chesterfield, MO. “Recent research suggests that soy may help to lower risk of prostate, colon and breast cancer, as well as osteoporosis and other bone health concerns,” she said. “Emerging research also indicates that soy protein may help reduce high blood pressure and some symptoms of menopause, namely the severity of hot flashes for women who experience them at high frequency.”

Currently, research seems to be particularly strong in the area of soy and cancer, which is precisely why The Solae Company filed a health claim petition last year firming up this relationship. The petition focused on 58 studies supporting the connection between the consumption of soy protein-based foods and the reduced risk of developing certain types of cancer. A decision was expected from FDA in February but that deadline has since passed. No one was able to offer information on when FDA would announce its decision, but one thing is for certain, many companies are anxiously awaiting that outcome.

Commenting on the soy and cancer claim was Monty Kilburn, director of marketing and sales, Devansoy, Carroll, IA, and treasurer of the Soyfoods Association of North America (SANA), Washington, D.C., who said that the level of soy protein required in the soy and cancer claim will probably be lower than the 6.25 grams required for the soy and heart health claim. If this winds up being the case, he said, “I think you will see a lot of companies formulating, or reformulating, to make that claim.”

Soyatech’s Mr. Golbitz agreed. “When Solae’s cancer claim is approved we will probably see some reformulations and re-packaging of products because there will be a certain amount of protein per serving required to be able to use the claim,” he said. “If the amount is lower than the previous claim, this will offer a flavor advantage.”

The Solae Company has also been busy putting together the body of research necessary to support structure/function claims linking soy protein to satiety/hunger management, bone health and menopausal symptom relief. “This information will provide marketers guidance on making such claims on their packages,” Ms. Heggie offered. For the future, she said The Solae Company will continue to be involved in studies examining a broad array of health benefits. “Some of these areas include benefits relative to blood sugar control, insulin sensitivity and kidney health, which are particularly promising benefits for diabetics, as well as consumers looking for healthy weight loss solutions,” she said. “There are also studies ongoing today focused on soy protein’s impact on cognitive function. Studies focused on performance nutrition benefits are looking at the unique role that soy protein plays in muscle recovery. Along with heart health, many of these studies point to tremendous opportunities for the future.”

Soy Isoflavones
For soy isoflavones, the primary market remains dietary supplements and the association between indication areas like menopause is well known. What is changing, according to Gary Brenner, marketing director, Solbar Industries, Ashdod, Israel, is dosage and delivery. He explained, “As opposed to taking several pills a day at a low concentration, the supplement industry is really moving toward offering consumers one pill a day at higher concentrations in a slow release formulation, which will cover a complete 12 to 16-hour span.” To back this up, Solbar recently conducted a study to assess the benefits of a high concentration, 30% slow release formulation, This study was published in the Journal of Agricultural and Food Chemistry in March. “In the study, our slow release formula actually demonstrated that the specific soy isoflavones genistein and daidzein could actually be sustained over an entire day,” he said.

Speaking of specificity, requests for soy isoflavones are also changing. Laurent Leduc, president, Acatris, Minneapolis, MN, says his customers are asking for more specific isoflavones like daidzein and genistein, whereas in the past they were just interested in isoflavones in general. This is because, Mr. Leduc said, “Researchers are starting to understand better the way isoflavones are working in the system. Some of the news in the past couple of years has focused around the isoflavone daidzein, for example, which has become popular for its role in bone health.”

Jocelyn Mathern, RD, technical specialist, Acatris, agreed. “Research on soy isoflavones for bone health is looking really positive,” she said. “For example, a study recently published in Menopause found isoflavones to have positive effects on bone mineral content (BMC) in postmenopausal women.” Researchers gave 203 postmenopausal women between the ages of 48 and 62 isoflavone treatment for one year. The women received either 40 or 80 mg isoflavones (aglycones) daily or a placebo. In addition, all women were given calcium and vitamin D. According to the study investigators, women taking 80 mg of isoflavones had favorable effects on bone mineral concentration at the hip.

The evidence for soy isoflavones and bone health is so convincing that they are being used in a two-year study called the Osteoporosis Prevention Using Soy (OPUS) project. According to the OPUS website, “The primary goal of the $4.5 million OPUS project is to determine whether isoflavones work, whether they are safe over the long term and the optimal dosage. The secondary goal is to communicate the study findings in easily understandable terms to both healthcare providers and consumers.”

Four hundred healthy, postmenopausal women have been enrolled at three U.S. sites in the two-year follow-up, randomized, double-blind, placebo-controlled study. One-third of the women will receive a placebo, one-third will receive isoflavone supplementation at 80 mg/day and the remaining one-third will receive isoflavone supplementation at 120 mg/day. To monitor safety, mammograms, well-woman examinations, Pap smears, stool guaiac tests and clinical blood chemistries will be performed. To monitor efficacy, total body and regional bone mineral content and density, as well as biochemical bone markers will be measured.

Diabetes has become a focus for companies like Solbar, according to Mr. Brenner, who said, “A study published in Diabetes Care last year was proof of a connection between isoflavones and diabetes.” In a randomized, parallel, double-blind, placebo-controlled trial 24 obese, postmenopausal women with type II diabetes were studied over a period of 24 weeks. The women were given sachets containing 30 grams of soy protein and 76 mg of phytoestrogens consisting of genistein (40 mg) and daidzein (28 mg). Consumption of soy protein fortified with isoflavones resulted in significant improvements in glucose indices, lipid profile and both systolic and diastolic blood pressure. The study authors concluded, “Soy protein with 76 mg of added isoflavones given to diabetic, obese, climacteric women could be a treatment option, which affords cardiovascular protection, without inducing an increased risk of breast and endometrial cancer.”

Discussing where research might be headed in the future was Megan Rooney, product support manager, Indena USA, Seattle, WA. “Research is moving toward discovering if isoflavones can provide the benefits observed with hormone replacement therapy (HRT) on the systems affected by menopause, such as reduction of menopausal symptoms, promotion of cardiovascular and bone health and support against cognitive decline, without having a negative effect on the breast or uterus,” she said.

Challenges
Taste issues still remain, although they are not as prevalent as they were a few years ago. Technology has helped companies make soyfoods taste like the traditional foods consumers enjoy. Creating products that mimic traditional foods is key, according to Cargill’s Ms. Schulz. “If you think about protein in general, the traditional delivery has been meat, milk and eggs. That is what most consumers grew up with and what they have come to know,” she said, adding, “So when we start looking for other ways to get protein, even with the health benefits that soy has, we still want the products that contain soy to taste like products that are already familiar to consumers.”

Food products should no longer have “beany” off-flavors, according to the USB’s Ms. Steeble. “The flavor industry has developed several very good masking flavors for soy proteins. Soy processing technologies have also made strides in improving soy protein flavors through processes like alcohol washing,” she said. “Our soy protein expert, Dr. Mian Riaz of Texas A&M University, also says that hydrocolloides and fiber can flatten flavor notes at high concentrations. Flavor testing should be conducted before and after formulating with mouthfeel modifiers and fiber sources.”

For others, resolving the flavor issue starts with the soybean itself. Nutriant’s Ms. Wilson commented, “One of the things we have done is identify select varieties of beans that offer a preferential flavor. This gives us a big advantage over a lot of other players because we can select and grow particular varieties. This also allows us to offer a cost advantage to our customers because they will not have to incorporate flavor masking.”

While technology is allowing companies to overcome the flavor challenges, Devansoy’s Mr. Kilburn actually believes consumers are starting to become more accepting of soyfoods and the inherent beany taste of these products.

‘Soy’ Many Predictions
Based upon past sales performance and the real need for consumers to adopt healthier eating habits, the long-term future for soy indeed looks bright. “Large multinational food companies such as Coke, Pepsi, Unilever and Nestlé, are all involved in soyfood products or projects at some level, either in the U.S, Asia, Europe or Latin America,” said Mr. Golbitz. “They all see the future.” In this country, however, Mr. Golbitz claims the real wild card may lie in the fast food market. “Many Americans get their cue from fast food. If these food purveyors were to embrace veggie burgers or tofu ‘chicken’ nuggets on a large scale, we could see a major shift in middle America’s perception of soyfoods,” he said. “The paradox for fast food is that if they start promoting meat alternatives it may send a message that there is something wrong with the meat items they already offer.”

Cargill’s Mr. Matthews believes the future will play host to continued growth for some of the key categories like soy-based beverages, soymilk, bars and meat alternatives. Further, he says there will be continued overall global demand for soyfoods because soy protein is a more affordable protein source when compared to meat and dairy protein. “There is an opportunity for what I would call ‘affordable nutrition,’ particularly in developing countries where the consumer base is beginning to eat more processed foods,” he said. “Soy ingredients can be incorporated into these foods for their health benefits and at the same time remain affordable.”

According Ms. Heggie, more and more products will feature nutrients/functional ingredients that are complementary to one another from a taste or nutritional standpoint. “Look for products based on blends of different protein sources, including soy protein, as well as products where soy protein might be paired with other complementary functional ingredients, such as omega 3’s, pre- or probiotics, whole grains or plant sterols,” she said.

Solbar’s Mr. Brenner said he sees isoflavones moving beyond supplements and into beverages, especially as companies continue to work on making them more soluble. He also said there has been quite a bit of development with regard to soy and personal care. “There has been a great deal of development with regard to soy and topical applications,” he offered. “It is mainly being used for its UVB protection in skin care and sun care products. It is also being utilized for its antioxidant activity.” In fact, Mr. Brenner says institutions like Mt. Sinai Medical School have studied genistein for its benefits in skin care and sun care products.

Offering several predictions for soy was Greg Ris, vice president, Sales, Indena USA, who said soy will continue to remain a strong market for both ingredient and finished goods manufacturers. From a product development perspective he said, “With the continued emphasis placed on formulation improvements to make soy products taste better, companies will need to devote more resources to change that perception amongst consumers.”

Mr. Ris also said tying specific soy ingredients to specific health benefits will be a key point of differentiation. “For supplement marketers to maximize market value of these components and the supporting research,” he said. “They must understand these may be best marketed as their constituent names as opposed to just ‘soy’ in general.” He continued, “Consumers closely associate soy health benefits with women’s health. For the market to maintain growth and sustainability, companies must work to leverage soy benefits to additional audiences, so that the perception for soy becomes that it is good for their overall health and that consuming soyfoods or supplements should be a part of their daily routine.”

Lastly, Mr. Ris discussed the potential danger of commoditization. “For soy ingredient manufacturers, the category may quickly become a commodity category driven by price if their ingredients do not offer a supplement or food company a compelling point of difference for the consumer,” he said. “For finished goods manufacturers, they must realize that their competition lies on a much grander scale than just other soy manufacturers. I think this will prompt them to begin marketing their products against more mainstream options. Can you imagine a soymilk vs. milk Pepsi-like challenge?”