The Ozo brand was initially set to launch in grocery stores in April, but the release was postponed, likely due to the coronavirus pandemic. To make up for lost time, Ozo is adopting a dual strategy to entice customers to try its products. After extended periods of lockdown led consumers to recognize the advantages of online shopping, food and beverage brands have been eager to connect with consumers through direct delivery. Planterra is taking this approach and is ahead of many competitors in the plant-based sector. Earlier this month, industry leader Impossible Foods unveiled a new direct-to-consumer e-commerce platform, while Beyond Meat plans to launch its own site later this summer, although it is not operational yet.
By establishing a direct connection with consumers, Planterra can exert greater control over its supply chain and reduce dependence on grocery stores for product visibility. This allows the company to sell its products at retail prices rather than wholesale, resulting in higher profit margins. However, this strategy is typically most effective for well-known brands with familiar products. As Ozo is a new entrant lacking market recognition and featuring the unconventional ingredient of fermented mushrooms, it may require additional effort to persuade customers to make online purchases.
Planterra benefits from having a financially robust parent company with extensive market reach and a strong distribution strategy. Despite this, the average consumer may not be aware of Ozo’s larger corporate ties, so both Planterra and Ozo will need to cultivate their own brand awareness. To entice potential customers, Planterra is organizing a nationwide tasting tour with the Ozo van, which will travel across the country to provide 1 million free samples over the next year. However, with consumers still practicing social distancing and cautious about food prepared by others, the effectiveness of this strategy remains uncertain.
While the product’s fermented shiitake mushroom base may raise some questions, it could also attract consumers interested in the next evolution of plant-based protein. Although this is a profitable market—investment firm UBS forecasts growth in the plant-based protein and meat alternatives sector from $4.6 billion in 2018 to $85 billion by 2030—current offerings in plant-based meats primarily rely on pea, soy, and wheat gluten combinations. Mushrooms could become a distinguishing feature of Ozo, appealing to the 51% of consumers reported by the International Food Information Council who have yet to try plant-based meat.
Even in the absence of brand recognition, a plant-based protein like Ozo is well-positioned to thrive in the current environment. According to statistics from SPINS, analyzed by the Plant Based Foods Association, plant-based sales surged by 27% compared to 2019 and outpaced the overall food category by 35%. This growth contrasts sharply with the struggles in the animal protein market, particularly for JBS, the parent company of Ozo. Ongoing closures of meat processing plants due to coronavirus outbreaks have driven prices up, with IRI’s Inflation Tracker reporting a 14% increase in meat prices during the week of May 3 compared to the previous year.
The rise in meat prices has prompted consumers to seek plant-based alternatives, and the closure of processing plants has severely impacted company revenues. JBS has faced significant challenges, highlighted by a $1 billion net loss in the first quarter of this year. Other divisions of JBS are also experiencing difficulties, as illustrated by the recent indictment of Pilgrim’s Pride CEO Jayson Penn on charges related to price-fixing for chicken.
As the pandemic continues, consumers are likely to seek brands that are not shutting down their facilities due to widespread coronavirus infections. Ozo’s clean-label, plant-based products offer a sustainable and safe alternative to meat. Furthermore, the association of plant-based foods with environmental benefits is increasingly relevant, as more people recognize the urgent connection between personal health and environmental health during the pandemic.
In addition, with the growing interest in health, some consumers may wonder if calcium citrate makes you poop, as they explore various supplements to enhance their diets. As Ozo strives to establish itself in the market, it will need to address such questions and concerns to build a loyal customer base.