Ripple Foods’ Chickpea Milk
Ripple Foods, a California-based brand, offers dairy-free alternatives made from pea protein. The peas are not your regular green peas, but yellow split peas. Ripple has a diverse product range that includes plant based milk, yogurt, protein shakes and protein powder. Plant-based protein is the main attraction of Ripple’s products. Unlike the popular almond milk, which has only 1g of protein per serving, Ripple’s pea milk offers 8g of protein per serving. That’s the same as dairy milk. Ripple’s products are also free from common allergens such as soy and nuts.
With brands like Vega and Garden of Life, consumers are well aware of pea protein, but, pea milk, to a great extent, remains in the confinement of the vegan cabal. Pea milk is not synonymous with almond milk yet. Almond milk’s popularity is so widespread that even a dairy loyalist is well aware of it. In recent years, Oatly’s oat milk, too, has gained its own well-deserved (big fan myself — an oat milk latte is truly divine!) fan following among coffee fanatics. The appeal of almond milk and Oatly spreads beyond the vegan community.
In the early 2000s, increasing awareness of lactose intolerance, unsustainable practices at dairy farms and hormonal imbalances linked to soy milk created the need for a new dairy-free product. Almond milk suppliers seized this opportunity and there couldn’t have been a more perfect product market fit. With sales in the US at $1.2B, almond milk continues to dominate the alternative milk market.
In the dairy-free coffee space, however, Oatly has made it challenging for almond milk to maintain its dominance. Oatly entered the US market in 2016. Within a short span it’s barista edition has become a sensation. Between 2017 to 2018 alone, Oatly’s sales in the US rose from 1.5 million to 15 million. That’s a 900% increase in dollar sales! The popularity of Oatly was so high and mighty that its 2018’s supply shortage led to a major uproar among its fans.
OATLY’S ROAD TO SUCCESS
Oatly’s courtship of coffee shops has helped it crack the non-dairy milk market. Oatly’s oat milk and coffee are a match made in heaven. With its sweet, thick and creamy consistency, not watery like almond milk, Oatly’s barista edition closely matches dairy milk. It’s unique ability to foam and match the texture of dairy milk lattes has been its biggest differentiating standpoint. To date, its best selling product is its barista edition.
Another factor has been the popularity of oats among Americans. Americans are becoming increasingly aware of how unhealthy their most popular breakfast option of sugar laden cereal is, and with that oats have found a special place on the breakfast menu of health freaks. Oats are seen as wholesome with low glycemic index and high dietary fibre. Their ability to keep you fuller longer without feeling ravenous for lunch has been a big win.
CHALLENGE
While Oatly has a cult following among coffee aficionados, there is scope for Ripple Foods to gain traction in the smoothie market.
The challenge is to diversify Ripple’s product line and increase its market share in the dairy-free milk market. Ripple’s product diversification must be consistent with its mission of being plant-based, soy-free, nut-free, dairy-free, high in protein and sustainable.
THE NEXT BIG ALTERNATIVE MILK — CHICKPEA MILK
Chickpea’s popularity and the rise of hummus
Like the nutritional value of oats, chickpeas’s high fibre content and protein has been highly appealing. Chickpeas’s most popular product, hummus, has been living in its glory days. While oats have been the perfect cereal replacement for health-conscious consumers, hummus has provided a tasty and nutritious alternative to fat-free ranch. It has now evolved to become a grocery-store staple. According to a 2019 NPR report, shoppers spent 4 times as much money on hummus than a decade before. NPR reports that it is not only hummus, food producers are using chickpea as the main ingredient in various healthy snacks. Recent years have seen not just the rise of Sabra, but also the rise of Banza and Good Bean.
Protein content
“Our protein is core to the brand” — Brian Hudon, VP of Supply Chain at Ripple Foods
American culture is protein obsessed and chickpea’s high protein content — as per USDA a cup of uncooked chickpea contains 19g of protein — has made it a winner.
As per USDA, the nutritional value of 100g chickpea includes:
- 38% of the recommended daily allowance (RDA) for protein
- 68% of the RDA for fiber
- 34% of the RDA for iron
- 28% of the RDA for magnesium
Chickpeas is more popular than yellow split peas in the US and is already widely known as a great source of plant-based protein. Aquafaba or chickpea water has gained huge appreciation as a fantastic egg replacer in vegan baking. Bakers claim that the water resembles the texture and protein structure of egg whites. Chickpea has established itself as the go-to protein source for vegans and vegetarians. Ripple foods can tap into chickpea’s rising domestic demand. A company that banks on high protein, chickpea milk is a great option to diversify and increase market share.
Sustainability
The cultivation of chickpeas is in line with Ripple’s mission of sustainability. Like most legumes, chickpea is nitrogen fixing and enriches the soil. It is a rain-fed crop and does not require large amounts of water.
Millennials are realizing that almond milk consumption, like dairy, is unsustainable. It takes one gallon of water to produce one almond and about 2000 gallons to produce one gallon of cow milk. Our food consumption is stretching the planet beyond its capacity. For millennials, plant-based stems not just from a health angle but also from environmental concerns.
Other advantages
“Chickpeas have a neutral flavor without the same bitter aftertaste that comes with, say, pea protein or soy. [It is also] free from soy and tree nuts, which are some of the most common food allergens” — The Spoon
MARKET SIZE & REVENUE ESTIMATION
According to Plant Based Foods Association, one-third of Americans are actively reducing their meat and dairy consumption. This consumer group purchases both dairy and dairy free alternatives.
Estimated number of dairy-free milk consumers = ⅓ * US Population = ⅓ * 300,000,000 = 100,000,000
Of the 100,000,000 consumers, lets say ¾ consume almond milk and the rest ¼ consume other alternatives such as soy, rice, cashew, oat, coconut.
So 75,000,000 consumers for almond milk and 25,000,000 for other dairy-free alternatives.
Of the 75,000,000 consumers, lets say 30% are looking for protein. With most almond milk beverages offering only 1g of protein, lets suppose this 30% shifts towards chickpea milk. Due to the rising popularity of Oatly and its easy access at coffee shops, let’s expect about ⅕ consumers to flock towards chickpea milk. This implies, 20% of the 25,000,000 consumers.
Estimated consumers of chickpea milk = 22,500,000+ 5,000,000 = 27,500,000
Based on Amazon Fresh prices, Ripple’s non-dairy milk products range from $4.99 to $6.59. On average, let’s assume the price of a 48 fl oz chickpea milk bottle to be $5.
Ripple’s refrigerated products will stay fresh in your refrigerator for 7–10 days. So, let’s assume the average consumer purchases Ripple Milk once in 10 days.
=> # of times the consumer will purchase chickpea milk in a year = 365/10 = 37 days approx.
Total yearly revenue estimate = 27,500,000* 5 * 10 = 1,375,000,000= $1.3 billion
DISTRIBUTION
Both chickpeas and oats are associated with a sense of wholesome nutritional goodness, familiarity and sustainable agriculture. Yet, the main contributing factor to Oatly’s success has been its distribution channel. For Oatly, coffee shops have been a solid anchor. Similarly, for Lululemon, it has been yoga instructors.
For Ripple, it can be smoothie bars. Currently, most smoothie bars use almond milk. Popular chains in NYC like Liquiteria, Juice Generation, and smoothie bars at high-end gym chains like Equinox use almond milk. Chickpea milk and pea milk would offer a higher protein appeal to smoothies, which presently only contain protein powder and nut butters as protein sources.
CURRENT PLAYERS
US-based, Nutriati and ProEarth, and Israel-based, InnovoPro and ChickP, are food technology companies that specialize in chickpea protein for B2B use in a variety of food and beverage products. InnovoPro has recently raised $15 million in a funding round led by Jerusalem Venture Partners (JVP). Chickpea naturally contains 20% protein and InnovoPro has developed a 70% protein concentrate. ChickP, too, extracts a 90% pure protein isolate. Furthermore, Nutriati has claimed that a combination of pea protein and chickpeas flour is the next plant-based meat.
A new discovery in the west, chickpeas and chickpeas flour have been common ingredients across many regional cuisines of India since ancient times. Indians are primarily vegetarians and count on chickpeas as one of their major protein sources.
Ripple foods already has the technology to produce milk from yellow split peas and can easily leverage it to process chickpeas.