Denmark’s plant-based dairy-alternatives company Naturli’ Foods took its message to the lion’s den of a major dairy industry summit recently but CEO Henrik Lund told delegates that he had come in peace.
The recent Dairy Innovation Strategies 2024 conference in Copenhagen, Denmark, might seem a strange place to find a company aiming to take market share from milk, butter and cheese providers but Naturli’ Foods boss Henrik Lund believes the industries can enjoy a symbiotic relationship.
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At the event, organised by Just Food’s sister organisation Arena International Events Group, he told delegates from major dairy businesses that he preferred to accentuate the positives about his own company’s products than to make negative claims about traditional dairy.
Something of a plant-based pioneer – Naturli’ was founded in 1988 -, Lund puts innovation and consumer approval at the top of his list of priorities and is hoping to see rapid growth in the UK after winning a listing with supermarket giant Tesco.
Previously a player in plant-based meat, Naturli’, which is backed by Norwegian food firm Orkla through the latter’s majority-owned margarine business Dragsbaek, now focuses on alt-dairy products.
Just Food: Henrik, you were keen to tell the conference that you would rather work with the dairy industry than criticise it.
Henrik Lund: We focus on our half of the pitch. We want to be partners with the dairy industry. It’s also possible for them to have our products in their own portfolio under their own brand.
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By GlobalDataJust Food: Is the balance between dairy and alt-diary changing in Denmark?
HL: In terms of future outcomes for plant-based dairy, in Denmark in 2023 cow’s milk was down 2.4% in volume while milk alternatives were up 8.4%. The market share is now 5.9%. It’s tiny but look at the potential. The journey will go on. It’s no longer a trend. It’s in the market and consumers like it. Also, closing the price gap between dairy and plant-based has already happened in Denmark.
Just Food: You also told the conference that, unlike many of your peers, you don’t promote veganism.
HL: The biggest stop sign in the world is vegan. We want to get into mainstream categories. That happened in Denmark and that’s a game changer. Our hero product is our butter alternative. It is sold in lots of countries around the world and people think it tastes a lot like butter. It was labelled vegan and vegan-spreadable but we removed that because of the stop sign.
Just Food: You also don’t push the sustainability message as much as some other plant-based companies.
HL: Everyone in plant-based is talking about climate change like it’s a new religious movement. We are about taste, functionality and price. Sustainability is like a side stream to everything we do. But Naturli’ is a positive choice for all consumers out there and we will use only organic oats from Danish farmers.
Just Food: You seem to have deliberately narrowed your focus as a business to become more targeted.
HL: We are an all-Danish company and plant-based pioneers in Denmark. Oatly is taking on the whole world. It is bold and brave and we like it but we are very focused on Scandinavia and some nearby markets. We have milk alternatives, butter alternatives and had plant-based mince – the first in the world to do this. We sold that [alt-meat] production facility to our uncle Orkla. It is taking care of the meat-free business. It is hard to navigate that so we focus on dairy.
Just Food: But in terms of overseas business, you are looking to boost growth in the UK, where your products are stocked by the likes of Sainsbury’s, Waitrose and independent stores, via a new listing with the country’s largest supermarket group Tesco.
HL: The UK is a fast-growing market for our butter alternatives. We are launching it in Tesco in the second week of May. We are looking forward to that. It will be crazy. Our butter will be in 300 large Tesco stores. If it performs we get more stores. It will be backed by an aggressive marketing campaign.
Just Food: Did the deal take a long time to negotiate?
HL: Negotiations took quite a while. One year.
Just Food: You stressed to delegates at this conference how important you think it is to continually innovate.
HL: Yes. Plant-based ice cream is a recent innovation. It is four years’ old and it’s on a nice journey. We are number one in Denmark. Half of the consumers who try it don’t even realise it’s plant-based. Every time we meet our customers we have three new ideas. One might not work but we get shelf space for the other two. If a product doesn’t work we cut it off. We do consumer-driven innovation. We have 750,000 Naturli’ ambassadors. We ask them what they think of new product ideas. That’s really important for Naturli’ to have this interaction with consumers. Speed to market is also very important and we always aim to get our products into mainstream areas of the store. That is happening in Tesco where our product will be next to the dairy butters and spreads.
Just Food: What other plans do you have in NPD?
HL: We are relentlessly innovating to bring plants to the people It’s all about taste and finding the next big new flavours. In Denmark, we have launched Naturli’ spreadable with a soured culture, which delivers on taste and quality. Also, some 60% of milk alternatives are used in coffee so that’s a market we look at. Inspired by visiting the US we have launched Naturli’ Tasty Pumpkin Spice. People have gone crazy for this product. It has sold out, sold out, sold out.
Just Food: You told the conference about how keen you are on limited edition launches.
HL: Limited edition is my new hobby. We are looking into other seasonal alt-milk product flavours, crème brulée perhaps or biscuit. Consumers love things like this. It’s an example of innovation. Bring it in temporarily, take it out and create a fuss. We also have a new rye drink. It’s like liquid rye bread. Rye is the new oats I think. It’s a lot like oats but milder, not so sweet. Crème Fresh is also a new product. People have asked us for this product for ages. It is based on coconut milk and has a lovely sour taste. It has just come into the market.
Just Food: Taste is one thing of course but how do you get people to try these things?
HL: We attend many events. People need to try out products to know what plant-based food can taste like. That will lead to greater penetration amongst all consumers.
Just Food: And you are banking on the UK’s love of football to get the message across. You are a food partner to Premier League side Brentford FC.
HL: Yes, their manager and half of their team are Danish and some players are Danish internationals. It’s a good fit and fans of other teams don’t seem to dislike them.
Just Food: Finally, you’re hoping to press the Danish government to make changes to the way it taxes plant-based food companies.
HL: We pay 25% VAT on plant-based food. Naturli’ initiated the founding of a task force, an organisation for the plant-based sector to help it to speak with a louder voice. We are trying to convince the Danish government that dropping VAT on plant-based alternatives could be important in nudging people to buy them. That could make a positive impact [on the nation’s health].
