With the Government intent on addressing the UK’s obesity crisis by targeting, among other things, sugar reduction and healthier ingredients in products, where does that leave the puddings sector?
Apparently, with an opportunity. A raft of start-up pudding manufacturers, many of them boasting a plant-based, free-from profile, are rapidly making themselves visible in the marketplace, some gaining high-profile listings with the multiples in a relatively short space of time.
Founded by Lucy Wager in 2012 after she was diagnosed with dairy egg intolerance, Pudology is a typical example of a brand that has blossomed in the current market environment. Having gained her first listing for an indulgent Chocolate Pud with a small wholesaler in the same year as launch, followed by Ocado in November 2012, the Cheshire-based company has gone on to gain listings with Asda, Sainsbury’s, the Co-op and Holland & Barrett.
Wager is excited about recent changes in the market as vegan, vegetarian and flexitarian diets gain traction. “In the early days, people were put off if we described the products as vegan or gluten-free, as this was associated with poor quality, lacking flavour, too much sugar etc – but now it’s a key selling point,” she explains. “More and more people are becoming interested and curious about vegan and flexitarian diets.”
The brand now offers other flavours, including Chocolate & Raspberry, Millionaires’ Pud, Banoffee Pud, Chocolate Orange and Lemon & Yuzu.
West Yorkshire plant-based puds manufacturer Freaks of Nature, meanwhile, has tapped into the soaring popularity of the sector with its seven-strong range of hot puddings, cold-eat desserts and yogurt alternatives – all free of dairy, gluten, soya and egg. “The fastest-selling are our hot puddings,” says founder and executive chairman Peter Ahye, who claims the firm has had a tremendous response.
Since initially supplying Tesco back in April 2017, the company has gone on to achieve listings with Waitrose, Sainsbury’s, Asda, Morrisons, Ocado and many independents.
The Ossett-based company, which started on the back of “significant investment in research and the vision for the brand”, prides itself on its dedicated 1,300m2 factory, which “doesn’t bring milk, gluten, soya or eggs into the production areas”, says Ahye. “So many others use the same equipment for dairy products and their ‘vegan’ products. We would never take that risk with our consumers in relation to those allergens.”
Another firm that started trading in early 2017 is Gâto & Co. In what it describes as “a whirlwind first year”, it had launched all three flavours of its puds – Chocolate & Coconut Brownie, Salted Caramel Sticky Toffee, and Salted Caramel Chocolate Ganache – into more than 100 Sainsbury’s stores by October of the same year and Ocado the following month.
The range can also be found in Whole Foods Market, organic and natural foods retailer As Nature Intended, Harrods, and other independent stores.
Gâto prides itself on being natural, with “no additives, preservatives or E-stuff”, far less sugar, and innovative ingredients such as oat milk, aquafaba “and even courgette”. “With natural ingredients like coconut and dark chocolate, there’s no need to add loads of sugar as there’s a natural sweetness that comes from great, simple produce,” says co-founder Kim Lamza.
With these just three of the companies now involved in the free-from puddings market, what do they think of the increasing competition?
Wager is unfazed. “I’ve been waiting for the competition to arrive,” she says. “Competition means the market is ready and growing … and gives us our best opportunity to prove our success in the marketplace.”
“It’s exciting to have more competition,” agrees Gâto’s Lamza. “More shelf space dedicated to plant-based options is great for consumers and the environment.”
“We embrace competition,” adds Ahye, who points out that as the market grows retailers are left having to make choices. “They don’t have expandable chillers. With our dedicated facility and innovation team based in the UK, we can provide them with a unique offering.”
Pudology says it will be launching some “exciting new products” this summer, with its “most challenging launch planned to date ready for Christmas this year”. The products will “push the boundaries of free-from and, hopefully, deliver a product that would have been impossible a few years ago”, promises founder Lucy Wager.
With seven products in its range, founder and executive chairman Peter Ahye says Freaks of Nature’s “substantial” NPD programme will mean it will treble this figure over the next 12 months, with extensions to its yogurt range and “more luxurious” cold eat desserts and hot puddings. “We are now making some products that are free-from the top 14 allergens. So, these products, if good enough, can be eaten by 99% of the population.”
NPD is ongoing at Gâto, too. “We’re about to launch a new range of nut butter cookie bites – our first snacks – which have the same ethos as our puds,” says co-founder Kim Lamza. “These indulgent, plant-powered treats are vegan, gluten-free, lower sugar and all natural.”
Each of the protagonists, however, faces varied challenges by being smaller fish in a bigger pond. Pudology’s greatest concern, says Wager is “the risk of being a small business that has never sought any form of investment”.
“This sometimes puts us at a disadvantage, because trying to grow a brand organically, when faced with much larger funding-backed brands, can be a true challenge,” she adds.
“With relatively few competitors in chilled desserts compared with other categories, our challenges are more around scale,” says Lamza. “For example, chilled logistics at our scale is very costly.”
Ahye cites packaging as one of the main challenges faced by his firm. “Both government providing the technology to recycle and consumers who discard their plastic irresponsibly have a key role to play. However, big corporates don’t want to face into this, so are changing materials and types of packaging even though this doesn’t deal with the issue of how consumers handle it. It is a difficult area for small businesses to deal with.”
Despite the obstacles, all three firms are excited about the potential opportunities ahead. Earlier this year, Pudology teamed up with Visionary Food Solutions to increase distribution in its key retail partnerships and move it towards more foodservice. “There’s a real need for good-quality, free-from and vegan products in foodservice at the moment and it’s a challenging area to execute,” says Wager.
Ahye reveals Freaks of Nature has already taken its first steps into exports as well as the foodservice sector. As such, he says, it is confident of growing sales to £8m–£10m in the next three years, from a reported £750,000 in 2018.
And, with emotive wording such as ‘decadent’, ‘sumptuous’ and ‘indulgent’ used on-packs, none of the three firms has any illusions about the consumer appeal of puddings, whatever Government edicts may come into play. “Indulgence is always going to be key in desserts. It’s about delivering products that have added benefits (less sugar, plant-based, gluten-free) without compromising on the taste,” says Lamza.
For Pudology, it’s firstly about ensuring the product tastes great and really delivers, says Wager. “The ingredients we use, like coconut milk, are inherently healthy, but the brand was founded on a promise that everyone can eat delicious, indulgent treats, regardless of dietary choices or restrictions,” she explains. “Eating puddings should always be a pleasurable experience.”