Why B2B is the place to be: the ingredients companies selling business to business

Why B2B is the place to be: the ingredients companies selling business to business

By
Louise Burfitt
October 20, 2020

There’s a great deal of buzz in the food innovation sector: barely a week goes by without news of a groundbreaking new consumer product or a futuristic manufacturing method. The hype around products and production processes means that ingredients themselves are often overlooked although the companies that make them are busier than ever beavering away at novel innovations to support these trailblazing end products. As a result, companies working on key trends like insect and plant-based proteins, algae-based substitutes and alternative dairy – to name just a few – are experiencing rocketing investment, and many in this sphere are choosing to capitalise on the trend by targeting B2B sales.

B2B sales and distribution, defined

B2B stands for ‘business to business’ sales and contrasts with B2C distribution, where businesses sell directly to individual consumers. A B2B ingredient startup might sell its ingredient, say plant-based mince, to a food manufacturing company, which then processes the mince into plant-based meatballs and distributes these to retailers and restaurants. A B2C company, on the other hand, would sell the mince directly to end consumers through its own shop or a third-party marketplace.

Trend drivers: stability, scalability and sustainability

Selling products to an established business is likely to yield a more stable relationship over time - and that feels especially important in a year of economic turbulence. Big distributors and retailers are likely to stick with successful partnerships, given the cost and time involved in finding reliable suppliers. While an end consumer might buy your product as a one-off impulse purchase, never to return, B2B contracts generally offer bigger upfront payments and provide businesses on both sides of the transaction with greater security due to longer time frames and guaranteed distribution.

Ingredients companies who score B2B contracts can also hand over some of the marketing of their products to the other stakeholders involved, even if the initial tender process with a big retailer is likely to be long and costly. Thankfully, this tends to pay off more swiftly: B2B sales mean young companies can scale more quickly while keeping their prices competitive. They can achieve a bigger impact across a shorter time scale and are able to reach a broader cross-section of consumers with the weight of large-scale CPG and food distribution companies behind them.

Business-to-business ingredient sales are still heavily shaped by end consumer preferences. Research tells us that customers want more ethical, sustainable products, so alternative protein companies and others working in innovative ingredients supply are extremely well-placed to find a home for their inventions. Retailers and restaurants are keen to get on board with the latest trends, knowing that consumers will flock to where these are available. Let’s take a look at which ingredients are leading the pack ...

Which categories are topping the ingredients charts?

Sustainable sources of protein are a particularly hot trend in the ingredients sector due to a growing population. Insects could offer one solution: the global insect protein market has an estimated worth of $62.55 million and is expected to grow at a CAGR of 20.96% by 2025. Several companies, including Ynsect in France, Tebrito in Sweden and Entoprot in Finland, are going the B2B route, allowing them to reach a wider section of customers and outsource marketing. Partnering with manufacturers rather than selling directly to consumers also means the manufacturing process is in place to convert their ingredients into ground insect protein powder, which can then be added to products like energy bars and cookies, thus helping consumers overcome any ‘yuck’ factor.  
Plant-based protein is another massive trend in the ingredients world. Competition is fierce among the many brands vying for airtime in the crowded B2C marketplace, so some are opting for B2B models where there is less competition and startups can scale quickly while keeping prices low. Impossible Foods, which uses soy and potato protein to create meat-mimicking products, have shown how this can be done successfully: founded in 2011, the multi-billion dollar company supercharged its growth by partnering with large B2B distributors such as Sysco and US Foods. Other plant-based meat startups, like Nova Meat, are following suit, recognising the higher volumes and wider reach selling business to business can offer.

And it’s not just protein: the same B2B trend can be observed across other categories. Cubiq Foods are supplying smart fat solutions to industrial clients in the dairy industry, and recently raised €5 million for further product development. French startup Algama are harnessing the potential of algae to make plant-based mayo, which they then sell on to mass market retailers. In the same field, algae biotech innovators Algenuity recently joined forces with Unilever as the consumer goods giant looks to expand its plant-based portfolio.

Case Studies: Perfect Day’s alternative dairy and Rebellyous Foods’ ‘chicken’ nuggets

Perfect Day is reimagining dairy protein through fermentation – no cows needed. The US alternative dairy protein company is a prime example of why a brand might choose to pivot from a B2C model to B2B. The founders initially planned to sell their product as a Perfect Day-branded ‘milk’ product and released an initial prototype in 2019. However, they later realised they could achieve a far broader impact by working with big dairy suppliers rather than competing against them. They raised a record-breaking $300 million in Series C funding this year and given their investors’ relationships with influential food and beverage companies, it looks likely that they’ll be able to scale up their ‘dairy’ protein much more quickly than they would have going it alone.

Rebellyous Foods are also honing in on a B2B model: the startup sells plant-based chicken nuggets to wholesale operations like hospitals and university cafeterias. By concentrating on supplying their products to B2B foodservice outlets, they believe they’ll be able to sell their chicken substitute for the same price as chicken within a year. In April 2020, the company raised $6 million in Series A funding, which they are using to accelerate their specialised equipment R&D and broaden their product range.

Challenges and planning for the future

Partnering with other businesses, especially larger ones, is not without challenges. While contracts with food retailers can mean lucrative opportunities, retail giants require a consistent supply at a fixed price with delivery at specific times. B2B selling also requires greater initial research and investment due to the scale and breadth required when working with major national or international chains.

Then there’s 2020’s particular plot twist: some existing B2B companies have abruptly shifted to B2C sales this year as many foodservice operations, like restaurants, were forced to close abruptly due to the coronavirus pandemic. Beyond Meat, for example, launched a dedicated website to sell to consumers stuck at home amid shutdowns. This doesn’t mean B2B sales are totally off the menu – supermarkets have experienced a massive uptick in demand this year - but it’s a (potentially short-term) trend worth taking into account.

Despite this blip, sustainable ingredients businesses are still extremely well-placed to meet the moment the world is facing, as other food actors recognise the pressing need to move to sustainable supply chains using ethical, environmentally conscious ingredients - whether that’s novel proteins, meat-mimicking inventions, dairy substitutes, or something else entirely.

30-second pitch: B2B ingredient sales

📦 What

  • Key trends like alternative dairy and sustainable proteins are leading to a growing demand for new ingredients. Although the ingredients themselves are often overlooked in favour of shiny new end products, a growing number of food businesses are focusing on the B2B ingredients market.


🤷 Why 

  • B2B supply contracts offer increased stability and upfront payments for young food businesses.
  • Companies who are successful in the B2B space can often achieve a greater impact in a shorter time scale by working with national or international manufacturers, distributors and retailers.
  • End consumers' desires for ethical and environmental ingredients mean companies innovating in the plant-based, alternative protein and dairy categories are likely to find a home for their products.


⚙️ How

  • Alternative proteins (insects, algae, alt dairy)
  • Alternative dairy proteins
  • Plant-based meats
  • Sustainable ingredient solutions


👀 Who


👍 The good

  • B2B sales offer the opportunity for longer-term contracts which provide more security and stability.
  • B2B ingredients companies can often achieve a greater impact in a shorter timeframe by scaling more quickly and reaching a wider audience.
  • Targeting businesses means a lower upfront marketing spend to reach end consumers as business partners will take on marketing responsibilities.


👎 The bad

  • More initial research and investment are required to convince large food manufacturers and distributors compared to the general public.
  • The coronavirus pandemic has seen some existing B2B companies pivoting in the opposite direction to B2C sales due to the abrupt closure of their foodservice clients.


💡 The bottom line 

  • The move towards innovative new ingredients is only likely to accelerate in the coming months and years as sustainability, transparency and traceability become even more important topics. Therefore, food ingredients companies who invest in research and get their positioning right potentially have a great deal to gain from B2B ingredient sales.

Written by
Louise Burfitt

Louise is an editor and writer based in Oxfordshire. When her nose isn’t buried in a dictionary, you’re most likely to find her taking long weekend walks or nurturing herbs and vegetables in her container garden.

Become a FoodHack+ member to get unlimited access

  • Access premium publications
  • Get listed on our directory
  • Join a Global Community

There’s a great deal of buzz in the food innovation sector: barely a week goes by without news of a groundbreaking new consumer product or a futuristic manufacturing method. The hype around products and production processes means that ingredients themselves are often overlooked although the companies that make them are busier than ever beavering away at novel innovations to support these trailblazing end products. As a result, companies working on key trends like insect and plant-based proteins, algae-based substitutes and alternative dairy – to name just a few – are experiencing rocketing investment, and many in this sphere are choosing to capitalise on the trend by targeting B2B sales.

B2B sales and distribution, defined

B2B stands for ‘business to business’ sales and contrasts with B2C distribution, where businesses sell directly to individual consumers. A B2B ingredient startup might sell its ingredient, say plant-based mince, to a food manufacturing company, which then processes the mince into plant-based meatballs and distributes these to retailers and restaurants. A B2C company, on the other hand, would sell the mince directly to end consumers through its own shop or a third-party marketplace.

Trend drivers: stability, scalability and sustainability

Selling products to an established business is likely to yield a more stable relationship over time - and that feels especially important in a year of economic turbulence. Big distributors and retailers are likely to stick with successful partnerships, given the cost and time involved in finding reliable suppliers. While an end consumer might buy your product as a one-off impulse purchase, never to return, B2B contracts generally offer bigger upfront payments and provide businesses on both sides of the transaction with greater security due to longer time frames and guaranteed distribution.

Ingredients companies who score B2B contracts can also hand over some of the marketing of their products to the other stakeholders involved, even if the initial tender process with a big retailer is likely to be long and costly. Thankfully, this tends to pay off more swiftly: B2B sales mean young companies can scale more quickly while keeping their prices competitive. They can achieve a bigger impact across a shorter time scale and are able to reach a broader cross-section of consumers with the weight of large-scale CPG and food distribution companies behind them.

Business-to-business ingredient sales are still heavily shaped by end consumer preferences. Research tells us that customers want more ethical, sustainable products, so alternative protein companies and others working in innovative ingredients supply are extremely well-placed to find a home for their inventions. Retailers and restaurants are keen to get on board with the latest trends, knowing that consumers will flock to where these are available. Let’s take a look at which ingredients are leading the pack ...

Which categories are topping the ingredients charts?

Sustainable sources of protein are a particularly hot trend in the ingredients sector due to a growing population. Insects could offer one solution: the global insect protein market has an estimated worth of $62.55 million and is expected to grow at a CAGR of 20.96% by 2025. Several companies, including Ynsect in France, Tebrito in Sweden and Entoprot in Finland, are going the B2B route, allowing them to reach a wider section of customers and outsource marketing. Partnering with manufacturers rather than selling directly to consumers also means the manufacturing process is in place to convert their ingredients into ground insect protein powder, which can then be added to products like energy bars and cookies, thus helping consumers overcome any ‘yuck’ factor.  
Plant-based protein is another massive trend in the ingredients world. Competition is fierce among the many brands vying for airtime in the crowded B2C marketplace, so some are opting for B2B models where there is less competition and startups can scale quickly while keeping prices low. Impossible Foods, which uses soy and potato protein to create meat-mimicking products, have shown how this can be done successfully: founded in 2011, the multi-billion dollar company supercharged its growth by partnering with large B2B distributors such as Sysco and US Foods. Other plant-based meat startups, like Nova Meat, are following suit, recognising the higher volumes and wider reach selling business to business can offer.

And it’s not just protein: the same B2B trend can be observed across other categories. Cubiq Foods are supplying smart fat solutions to industrial clients in the dairy industry, and recently raised €5 million for further product development. French startup Algama are harnessing the potential of algae to make plant-based mayo, which they then sell on to mass market retailers. In the same field, algae biotech innovators Algenuity recently joined forces with Unilever as the consumer goods giant looks to expand its plant-based portfolio.

Case Studies: Perfect Day’s alternative dairy and Rebellyous Foods’ ‘chicken’ nuggets

Perfect Day is reimagining dairy protein through fermentation – no cows needed. The US alternative dairy protein company is a prime example of why a brand might choose to pivot from a B2C model to B2B. The founders initially planned to sell their product as a Perfect Day-branded ‘milk’ product and released an initial prototype in 2019. However, they later realised they could achieve a far broader impact by working with big dairy suppliers rather than competing against them. They raised a record-breaking $300 million in Series C funding this year and given their investors’ relationships with influential food and beverage companies, it looks likely that they’ll be able to scale up their ‘dairy’ protein much more quickly than they would have going it alone.

Rebellyous Foods are also honing in on a B2B model: the startup sells plant-based chicken nuggets to wholesale operations like hospitals and university cafeterias. By concentrating on supplying their products to B2B foodservice outlets, they believe they’ll be able to sell their chicken substitute for the same price as chicken within a year. In April 2020, the company raised $6 million in Series A funding, which they are using to accelerate their specialised equipment R&D and broaden their product range.

Challenges and planning for the future

Partnering with other businesses, especially larger ones, is not without challenges. While contracts with food retailers can mean lucrative opportunities, retail giants require a consistent supply at a fixed price with delivery at specific times. B2B selling also requires greater initial research and investment due to the scale and breadth required when working with major national or international chains.

Then there’s 2020’s particular plot twist: some existing B2B companies have abruptly shifted to B2C sales this year as many foodservice operations, like restaurants, were forced to close abruptly due to the coronavirus pandemic. Beyond Meat, for example, launched a dedicated website to sell to consumers stuck at home amid shutdowns. This doesn’t mean B2B sales are totally off the menu – supermarkets have experienced a massive uptick in demand this year - but it’s a (potentially short-term) trend worth taking into account.

Despite this blip, sustainable ingredients businesses are still extremely well-placed to meet the moment the world is facing, as other food actors recognise the pressing need to move to sustainable supply chains using ethical, environmentally conscious ingredients - whether that’s novel proteins, meat-mimicking inventions, dairy substitutes, or something else entirely.

30-second pitch: B2B ingredient sales

📦 What

  • Key trends like alternative dairy and sustainable proteins are leading to a growing demand for new ingredients. Although the ingredients themselves are often overlooked in favour of shiny new end products, a growing number of food businesses are focusing on the B2B ingredients market.


🤷 Why 

  • B2B supply contracts offer increased stability and upfront payments for young food businesses.
  • Companies who are successful in the B2B space can often achieve a greater impact in a shorter time scale by working with national or international manufacturers, distributors and retailers.
  • End consumers' desires for ethical and environmental ingredients mean companies innovating in the plant-based, alternative protein and dairy categories are likely to find a home for their products.


⚙️ How

  • Alternative proteins (insects, algae, alt dairy)
  • Alternative dairy proteins
  • Plant-based meats
  • Sustainable ingredient solutions


👀 Who


👍 The good

  • B2B sales offer the opportunity for longer-term contracts which provide more security and stability.
  • B2B ingredients companies can often achieve a greater impact in a shorter timeframe by scaling more quickly and reaching a wider audience.
  • Targeting businesses means a lower upfront marketing spend to reach end consumers as business partners will take on marketing responsibilities.


👎 The bad

  • More initial research and investment are required to convince large food manufacturers and distributors compared to the general public.
  • The coronavirus pandemic has seen some existing B2B companies pivoting in the opposite direction to B2C sales due to the abrupt closure of their foodservice clients.


💡 The bottom line 

  • The move towards innovative new ingredients is only likely to accelerate in the coming months and years as sustainability, transparency and traceability become even more important topics. Therefore, food ingredients companies who invest in research and get their positioning right potentially have a great deal to gain from B2B ingredient sales.

Become a FoodHack+ member to get unlimited access

  • Access premium publications
  • Get listed on our directory
  • Join a Global Community
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There’s a great deal of buzz in the food innovation sector: barely a week goes by without news of a groundbreaking new consumer product or a futuristic manufacturing method. The hype around products and production processes means that ingredients themselves are often overlooked although the companies that make them are busier than ever beavering away at novel innovations to support these trailblazing end products. As a result, companies working on key trends like insect and plant-based proteins, algae-based substitutes and alternative dairy – to name just a few – are experiencing rocketing investment, and many in this sphere are choosing to capitalise on the trend by targeting B2B sales.

B2B sales and distribution, defined

B2B stands for ‘business to business’ sales and contrasts with B2C distribution, where businesses sell directly to individual consumers. A B2B ingredient startup might sell its ingredient, say plant-based mince, to a food manufacturing company, which then processes the mince into plant-based meatballs and distributes these to retailers and restaurants. A B2C company, on the other hand, would sell the mince directly to end consumers through its own shop or a third-party marketplace.

Trend drivers: stability, scalability and sustainability

Selling products to an established business is likely to yield a more stable relationship over time - and that feels especially important in a year of economic turbulence. Big distributors and retailers are likely to stick with successful partnerships, given the cost and time involved in finding reliable suppliers. While an end consumer might buy your product as a one-off impulse purchase, never to return, B2B contracts generally offer bigger upfront payments and provide businesses on both sides of the transaction with greater security due to longer time frames and guaranteed distribution.

Ingredients companies who score B2B contracts can also hand over some of the marketing of their products to the other stakeholders involved, even if the initial tender process with a big retailer is likely to be long and costly. Thankfully, this tends to pay off more swiftly: B2B sales mean young companies can scale more quickly while keeping their prices competitive. They can achieve a bigger impact across a shorter time scale and are able to reach a broader cross-section of consumers with the weight of large-scale CPG and food distribution companies behind them.

Business-to-business ingredient sales are still heavily shaped by end consumer preferences. Research tells us that customers want more ethical, sustainable products, so alternative protein companies and others working in innovative ingredients supply are extremely well-placed to find a home for their inventions. Retailers and restaurants are keen to get on board with the latest trends, knowing that consumers will flock to where these are available. Let’s take a look at which ingredients are leading the pack ...

Which categories are topping the ingredients charts?

Sustainable sources of protein are a particularly hot trend in the ingredients sector due to a growing population. Insects could offer one solution: the global insect protein market has an estimated worth of $62.55 million and is expected to grow at a CAGR of 20.96% by 2025. Several companies, including Ynsect in France, Tebrito in Sweden and Entoprot in Finland, are going the B2B route, allowing them to reach a wider section of customers and outsource marketing. Partnering with manufacturers rather than selling directly to consumers also means the manufacturing process is in place to convert their ingredients into ground insect protein powder, which can then be added to products like energy bars and cookies, thus helping consumers overcome any ‘yuck’ factor.  
Plant-based protein is another massive trend in the ingredients world. Competition is fierce among the many brands vying for airtime in the crowded B2C marketplace, so some are opting for B2B models where there is less competition and startups can scale quickly while keeping prices low. Impossible Foods, which uses soy and potato protein to create meat-mimicking products, have shown how this can be done successfully: founded in 2011, the multi-billion dollar company supercharged its growth by partnering with large B2B distributors such as Sysco and US Foods. Other plant-based meat startups, like Nova Meat, are following suit, recognising the higher volumes and wider reach selling business to business can offer.

And it’s not just protein: the same B2B trend can be observed across other categories. Cubiq Foods are supplying smart fat solutions to industrial clients in the dairy industry, and recently raised €5 million for further product development. French startup Algama are harnessing the potential of algae to make plant-based mayo, which they then sell on to mass market retailers. In the same field, algae biotech innovators Algenuity recently joined forces with Unilever as the consumer goods giant looks to expand its plant-based portfolio.

Case Studies: Perfect Day’s alternative dairy and Rebellyous Foods’ ‘chicken’ nuggets

Perfect Day is reimagining dairy protein through fermentation – no cows needed. The US alternative dairy protein company is a prime example of why a brand might choose to pivot from a B2C model to B2B. The founders initially planned to sell their product as a Perfect Day-branded ‘milk’ product and released an initial prototype in 2019. However, they later realised they could achieve a far broader impact by working with big dairy suppliers rather than competing against them. They raised a record-breaking $300 million in Series C funding this year and given their investors’ relationships with influential food and beverage companies, it looks likely that they’ll be able to scale up their ‘dairy’ protein much more quickly than they would have going it alone.

Rebellyous Foods are also honing in on a B2B model: the startup sells plant-based chicken nuggets to wholesale operations like hospitals and university cafeterias. By concentrating on supplying their products to B2B foodservice outlets, they believe they’ll be able to sell their chicken substitute for the same price as chicken within a year. In April 2020, the company raised $6 million in Series A funding, which they are using to accelerate their specialised equipment R&D and broaden their product range.

Challenges and planning for the future

Partnering with other businesses, especially larger ones, is not without challenges. While contracts with food retailers can mean lucrative opportunities, retail giants require a consistent supply at a fixed price with delivery at specific times. B2B selling also requires greater initial research and investment due to the scale and breadth required when working with major national or international chains.

Then there’s 2020’s particular plot twist: some existing B2B companies have abruptly shifted to B2C sales this year as many foodservice operations, like restaurants, were forced to close abruptly due to the coronavirus pandemic. Beyond Meat, for example, launched a dedicated website to sell to consumers stuck at home amid shutdowns. This doesn’t mean B2B sales are totally off the menu – supermarkets have experienced a massive uptick in demand this year - but it’s a (potentially short-term) trend worth taking into account.

Despite this blip, sustainable ingredients businesses are still extremely well-placed to meet the moment the world is facing, as other food actors recognise the pressing need to move to sustainable supply chains using ethical, environmentally conscious ingredients - whether that’s novel proteins, meat-mimicking inventions, dairy substitutes, or something else entirely.

30-second pitch: B2B ingredient sales

📦 What

  • Key trends like alternative dairy and sustainable proteins are leading to a growing demand for new ingredients. Although the ingredients themselves are often overlooked in favour of shiny new end products, a growing number of food businesses are focusing on the B2B ingredients market.


🤷 Why 

  • B2B supply contracts offer increased stability and upfront payments for young food businesses.
  • Companies who are successful in the B2B space can often achieve a greater impact in a shorter time scale by working with national or international manufacturers, distributors and retailers.
  • End consumers' desires for ethical and environmental ingredients mean companies innovating in the plant-based, alternative protein and dairy categories are likely to find a home for their products.


⚙️ How

  • Alternative proteins (insects, algae, alt dairy)
  • Alternative dairy proteins
  • Plant-based meats
  • Sustainable ingredient solutions


👀 Who


👍 The good

  • B2B sales offer the opportunity for longer-term contracts which provide more security and stability.
  • B2B ingredients companies can often achieve a greater impact in a shorter timeframe by scaling more quickly and reaching a wider audience.
  • Targeting businesses means a lower upfront marketing spend to reach end consumers as business partners will take on marketing responsibilities.


👎 The bad

  • More initial research and investment are required to convince large food manufacturers and distributors compared to the general public.
  • The coronavirus pandemic has seen some existing B2B companies pivoting in the opposite direction to B2C sales due to the abrupt closure of their foodservice clients.


💡 The bottom line 

  • The move towards innovative new ingredients is only likely to accelerate in the coming months and years as sustainability, transparency and traceability become even more important topics. Therefore, food ingredients companies who invest in research and get their positioning right potentially have a great deal to gain from B2B ingredient sales.

There’s a great deal of buzz in the food innovation sector: barely a week goes by without news of a groundbreaking new consumer product or a futuristic manufacturing method. The hype around products and production processes means that ingredients themselves are often overlooked although the companies that make them are busier than ever beavering away at novel innovations to support these trailblazing end products. As a result, companies working on key trends like insect and plant-based proteins, algae-based substitutes and alternative dairy – to name just a few – are experiencing rocketing investment, and many in this sphere are choosing to capitalise on the trend by targeting B2B sales.

B2B sales and distribution, defined

B2B stands for ‘business to business’ sales and contrasts with B2C distribution, where businesses sell directly to individual consumers. A B2B ingredient startup might sell its ingredient, say plant-based mince, to a food manufacturing company, which then processes the mince into plant-based meatballs and distributes these to retailers and restaurants. A B2C company, on the other hand, would sell the mince directly to end consumers through its own shop or a third-party marketplace.

Trend drivers: stability, scalability and sustainability

Selling products to an established business is likely to yield a more stable relationship over time - and that feels especially important in a year of economic turbulence. Big distributors and retailers are likely to stick with successful partnerships, given the cost and time involved in finding reliable suppliers. While an end consumer might buy your product as a one-off impulse purchase, never to return, B2B contracts generally offer bigger upfront payments and provide businesses on both sides of the transaction with greater security due to longer time frames and guaranteed distribution.

Ingredients companies who score B2B contracts can also hand over some of the marketing of their products to the other stakeholders involved, even if the initial tender process with a big retailer is likely to be long and costly. Thankfully, this tends to pay off more swiftly: B2B sales mean young companies can scale more quickly while keeping their prices competitive. They can achieve a bigger impact across a shorter time scale and are able to reach a broader cross-section of consumers with the weight of large-scale CPG and food distribution companies behind them.

Business-to-business ingredient sales are still heavily shaped by end consumer preferences. Research tells us that customers want more ethical, sustainable products, so alternative protein companies and others working in innovative ingredients supply are extremely well-placed to find a home for their inventions. Retailers and restaurants are keen to get on board with the latest trends, knowing that consumers will flock to where these are available. Let’s take a look at which ingredients are leading the pack ...

Which categories are topping the ingredients charts?

Sustainable sources of protein are a particularly hot trend in the ingredients sector due to a growing population. Insects could offer one solution: the global insect protein market has an estimated worth of $62.55 million and is expected to grow at a CAGR of 20.96% by 2025. Several companies, including Ynsect in France, Tebrito in Sweden and Entoprot in Finland, are going the B2B route, allowing them to reach a wider section of customers and outsource marketing. Partnering with manufacturers rather than selling directly to consumers also means the manufacturing process is in place to convert their ingredients into ground insect protein powder, which can then be added to products like energy bars and cookies, thus helping consumers overcome any ‘yuck’ factor.  
Plant-based protein is another massive trend in the ingredients world. Competition is fierce among the many brands vying for airtime in the crowded B2C marketplace, so some are opting for B2B models where there is less competition and startups can scale quickly while keeping prices low. Impossible Foods, which uses soy and potato protein to create meat-mimicking products, have shown how this can be done successfully: founded in 2011, the multi-billion dollar company supercharged its growth by partnering with large B2B distributors such as Sysco and US Foods. Other plant-based meat startups, like Nova Meat, are following suit, recognising the higher volumes and wider reach selling business to business can offer.

And it’s not just protein: the same B2B trend can be observed across other categories. Cubiq Foods are supplying smart fat solutions to industrial clients in the dairy industry, and recently raised €5 million for further product development. French startup Algama are harnessing the potential of algae to make plant-based mayo, which they then sell on to mass market retailers. In the same field, algae biotech innovators Algenuity recently joined forces with Unilever as the consumer goods giant looks to expand its plant-based portfolio.

Case Studies: Perfect Day’s alternative dairy and Rebellyous Foods’ ‘chicken’ nuggets

Perfect Day is reimagining dairy protein through fermentation – no cows needed. The US alternative dairy protein company is a prime example of why a brand might choose to pivot from a B2C model to B2B. The founders initially planned to sell their product as a Perfect Day-branded ‘milk’ product and released an initial prototype in 2019. However, they later realised they could achieve a far broader impact by working with big dairy suppliers rather than competing against them. They raised a record-breaking $300 million in Series C funding this year and given their investors’ relationships with influential food and beverage companies, it looks likely that they’ll be able to scale up their ‘dairy’ protein much more quickly than they would have going it alone.

Rebellyous Foods are also honing in on a B2B model: the startup sells plant-based chicken nuggets to wholesale operations like hospitals and university cafeterias. By concentrating on supplying their products to B2B foodservice outlets, they believe they’ll be able to sell their chicken substitute for the same price as chicken within a year. In April 2020, the company raised $6 million in Series A funding, which they are using to accelerate their specialised equipment R&D and broaden their product range.

Challenges and planning for the future

Partnering with other businesses, especially larger ones, is not without challenges. While contracts with food retailers can mean lucrative opportunities, retail giants require a consistent supply at a fixed price with delivery at specific times. B2B selling also requires greater initial research and investment due to the scale and breadth required when working with major national or international chains.

Then there’s 2020’s particular plot twist: some existing B2B companies have abruptly shifted to B2C sales this year as many foodservice operations, like restaurants, were forced to close abruptly due to the coronavirus pandemic. Beyond Meat, for example, launched a dedicated website to sell to consumers stuck at home amid shutdowns. This doesn’t mean B2B sales are totally off the menu – supermarkets have experienced a massive uptick in demand this year - but it’s a (potentially short-term) trend worth taking into account.

Despite this blip, sustainable ingredients businesses are still extremely well-placed to meet the moment the world is facing, as other food actors recognise the pressing need to move to sustainable supply chains using ethical, environmentally conscious ingredients - whether that’s novel proteins, meat-mimicking inventions, dairy substitutes, or something else entirely.

30-second pitch: B2B ingredient sales

📦 What

  • Key trends like alternative dairy and sustainable proteins are leading to a growing demand for new ingredients. Although the ingredients themselves are often overlooked in favour of shiny new end products, a growing number of food businesses are focusing on the B2B ingredients market.


🤷 Why 

  • B2B supply contracts offer increased stability and upfront payments for young food businesses.
  • Companies who are successful in the B2B space can often achieve a greater impact in a shorter time scale by working with national or international manufacturers, distributors and retailers.
  • End consumers' desires for ethical and environmental ingredients mean companies innovating in the plant-based, alternative protein and dairy categories are likely to find a home for their products.


⚙️ How

  • Alternative proteins (insects, algae, alt dairy)
  • Alternative dairy proteins
  • Plant-based meats
  • Sustainable ingredient solutions


👀 Who


👍 The good

  • B2B sales offer the opportunity for longer-term contracts which provide more security and stability.
  • B2B ingredients companies can often achieve a greater impact in a shorter timeframe by scaling more quickly and reaching a wider audience.
  • Targeting businesses means a lower upfront marketing spend to reach end consumers as business partners will take on marketing responsibilities.


👎 The bad

  • More initial research and investment are required to convince large food manufacturers and distributors compared to the general public.
  • The coronavirus pandemic has seen some existing B2B companies pivoting in the opposite direction to B2C sales due to the abrupt closure of their foodservice clients.


💡 The bottom line 

  • The move towards innovative new ingredients is only likely to accelerate in the coming months and years as sustainability, transparency and traceability become even more important topics. Therefore, food ingredients companies who invest in research and get their positioning right potentially have a great deal to gain from B2B ingredient sales.