Tapping into the $5B Plant-Based Food and Beverages Market
Most brands need to perform a customer segmentation update periodically, to account for changes in consumer behavior, market trends and business realities. This case study shows how Silk transformed from soy milk to an array of plant-based products.
Plant-Based Market Growth and Expansion to $5B
Plant-based foods and beverages are popular and growing at an estimated 11% annually. In the US, 87% of consumers included plant-based protein in their diets, and the plant-based food market was estimated at $5B in 2019. Plant-based milk represented 40% of that market ($2B). In a narrower definition of a hard-core group, 9.7 million Americans were following plant-based diets in 2020, up from around 300,00 in 2004.
Growth and Expansion of the Silk Brand Required Customer Segmentation Update
Silk was one of the first national brands on the scene for plant-based foods and beverages. The Silk brand went national in 1996 with soy milk plant-based beverage. Fourteen years later, in 2010, Silk introduced almond milk. In 2011, Silk added coconut milk and creamers. In 2016, protein nut milk was launched, and in 2014 the Silk brand moved into yogurt. In 2017, Danone acquired White Wave (owner of the Silk brand).
The Silk brand successfully expanded from its origins in soy milk, at the same time American consumer adoption of plant-based foods and beverages was accelerating.
Customer Segmentation for Silk: Initial Focus on Soy Milk in Early Days
Silk saw an evolution in the most useful frame of reference for segmenting customers. Initially, the focus was more on growth of the soy milk business and getting to the customers who represented the greatest opportunity for soy milk. The consumer segments included “Soy Advocates,” “Soy Prospects,” and other non-target segments. This framework was highly actionable and used for new product development and consumer communications.
Silk’s Customer Segmentation Update to Value-Added Milks
In 2010, the brand team identified the need for a new segmentation model with a broader frame of reference: value-added milk. At that time, value-added milk included plant-based:
- soy milk
- rice milk
- almond milk
- oat milk
- lactose free and organic dairy milk
Three major themes drove the segmentation:
- nutrition and health interest
- openness to value added milk
- conventional milk involvement
Two consumer target segments emerged: “Believers” and “Convincibles.” There were also three segments who were not targets.
Updated Customer Segmentation: Target Believers and Convincibles
Detailed profiles of the Believers and Convincibles provided the guidance needed for marketing and innovation. For example, Believers can be characterized as having the opinion that “Value added milk nutrition is the way to go!” Overall, Believers are very highly motivated on nutrition and health, very open to value-added milk and low on conventional milk. Demographically, they were the most diverse, higher-income, and youngest group.
By comparison, Convincibles can be characterized as believing “If it’s nutritious I am willing to try it, but it should also taste good!” They share an interest in nutrition and health, and an openness to value added milk, but have more moderate involvement with conventional milk. Demographically, they are also higher-income, younger and more diverse when compared to the rest of the population. At that time, 65% of Believers’ milk spending went for value-added milks, while 30% of Convincibles’ spending was for value-added milks.
Marketing Implications of Silk Customer Segmentation Update
This case study illustrates how the frame of reference evolved and broadened as the brand grew and the plant-based market expanded. Distinct marketing implications were also developed for the two target segments. The focus on Believers was more around nutritional value and prevention, whereas the focus for Convincible was more on nutritional value and taste reinforcement. There were also different occasion opportunities, with Believers focusing more on breakfast replacement, and Convincibles focusing more on snacks.
Is it Time for a Customer Segmentation Update for Your Brand?
Given the disruption and new consumer behaviors emerging in 2020, we believe all brands should be seriously considering a customer segmentation update. More examples of customer segmentation are found in the Insight to Action resources page, or you can contact us for a consultation to update your brand’s customer segmentation.