Few industries have grown as fast in the last decade as the foodtech sector. Being somewhat of an antidote for several of societies biggest issues today, from obesity to carbon emissions, plant-based food continues to gain importance as a player on the food market. Swedish foodtech company Veg of Lund is bringing green food innovation from Sweden to the UK, using a crop very close to heart for both the Swedes and Brits: the potato. Veg of Lund CEO Emma Källqvist and UK Sales Director Graham Stonadge told us why they think the plant-based heydays have only just begun.
“The opportunities are massive. The growth in the plant-based food sector is exploding at the moment, I would say that it's hard to find another industry where we see a growth similar to this one. And it's not just in the UK, but a growth on a global scale, making it a very interesting industry to be working within,” Emma says.
Operating in this relatively new field, both Emma and Graham think it’s an advantage to be a Swedish business, as they are regarded with credibility when it comes to producing healthy products.
“From a UK consumer perspective, a product that has a Swedish heritage or a Swedish basis, is perceived to be more natural, healthier, and has a good sort of ‘quality of life’-feel to it. That is just inherent with the UK perception of Scandinavia, and Sweden in particular,“ says Graham.
Entering the green scene
Founded in 2016, Veg of Lund has its roots in the southern Swedish region of Skåne, producing plant-based food using local, unexploited products. Both the products and the business itself, are results of research made at the well-renowned university of the region, the University of Lund.
“We are inventing and selling non-dairy options to traditional food products, that are based on an emulsion of potato and rapeseed oil. The products are produced through research made at Lund
University – innovation is really one of our core values as a business,” says Emma.
Veg of Lund’s first product was a smoothie, and now the business is launching a second, milk-like product, called DUG. The origin of the product comes from Eva Tornberg, professor in Food Technology at University of Lund, who found potato protein to be an excellent emulsifier with no taint, making it an appropriate base for plant-based food options.
Bringing innovation to the UK
Having set up in Sweden, Emma and the team wanted to explore new markets. She says they found the decision on where to head next quite easy.
“We were thinking about where to go next, and found that UK just ticked all the boxes: it is international yet close to Sweden, it is English speaking which makes it easier for us language-wise and it has a large population.“
According to Emma, the UK is not only a good place to pilot a product due to its large and international population, but also thanks to the population being open-minded and curious to try new things.
“For our industry particularly, I find that in the UK, people are very open to try new things and products, making it a great market to pilot our product outside of Sweden. The UK is definitely ready to try new plant-based products, it is already sort of trendy, but also something that will be needed as the UK is increasing its efforts to reach net zero.”
Having feet on the ground
Before launching the products in the UK, Emma says Veg of Lund wanted to set up a physical presence in the country, in order to get a better understanding of the market.
“For us, it was a natural step – we needed feet on the ground and people that are based in the UK that know how to run the business and how the market works here. I mean, you can certainly find other ways to do it, like finding a good partner or an agent, but for us, it was clear that we wanted to have a presence here.”
In 2019, Veg of Lund established in the UK, but the initial business plans were interrupted due to the COVID outbreak, giving the team more time to focus on research and administration.
“We registered the company in January 2019, and initially launched a smoothie product, which was kind of a pilot to test the market response to a potato-based drink. Then COVID hit, and even if that forced us to change our plans a bit, the disruption gave us more time to fully develop our new product, and a chance to assess what the next steps would be,” says Graham.
Sweden and the UK – not potato-potahto
Comparing Sweden to the UK, the team points at a few differences that are important to consider. Even if the two countries have many things in common, it is not ideal to use the same strategy in the UK as one would do in Sweden.
“The UK market is a bit more complex in terms of the route to market, identifying the decision makers and finding a way to contact and convince them. UK retailers like to be centrally controlled, whereas some Swedish grocery stores are franchised, and therefore, the decision making is more local,” says Graham.
Emma agrees and adds that having a good network is key in the UK. “When it comes to doing business, I think it's a bit more of a hierarchy in the UK than you would see in Sweden, when it comes to the structure with the customers. I think connections play a larger role in the UK – it is more important that you talk to the right person in UK compared to Sweden. Here, you often find your way through finding the right connections.”
Finding the right people
When asked for advice for other Swedish startups looking to expand to the UK, Emma emphasises the importance of having the right resources to help you with things such as policies and admin.
“If you are trying to register a company or establish a business in the UK, it is crucial to have someone with you, either in-house or outsourced, that knows the British rules, regulations, and other legal aspects. Because otherwise, all that admin stuff could become a nightmare. Don´t think that you can do that yourself if you don't have any previous experience of the UK marketplace,” Emma says.
Graham agrees, and adds that finding the right people, with the right knowledge, is a well spent investment. “If you decide to outsource these things, make sure to identify and invest in finding the right people. These steps are so important, and always worth the effort in the end,” he says.
He believes that organisations such as the Department for International Trade can be a good first point of contact for a business needing more information about the UK market. “Initially, the DIT helped us with provision of data at a very top line level in terms of the UK market versus the global market, and also some recommendations as to potential sources of further information. I found this helpful, and it is always good to get that to know that support is there if you need it.”
But even if the first steps might be tricky, Emma thinks that the UK is great go-to, whether the UK is the end goal or just the first step towards a worldwide presence. “If a product is successful in the UK, the step isn’t that big to expand to a lot of other places – not least the Commonwealth countries. I think the UK is the perfect steppingstone to global expansion.”
A green food transition
Emma and Graham believe the future is looking bright. Being back after COVID, Veg of Lund launched the potato-based milk product DUG in mid-2021, and have already received a great response.
“We launched the product officially in June 2021, and went live into a number of wholesalers in the autumn. And we already got the great news that we got listed on a number of online wholesalers, such as Ocado and Waitrose. Our first retail listing came in February of this year.”, says Graham.
Moving forward, the aim is to focus both on marketing and distribution, and Graham thinks that being successful in one of them could generate success in the other.
“Initially, we want to build on the distribution that we've already got, and to extend into other retailers. But the main challenge for us this year is to create consumer awareness and get consumers to try the product. Because we find that when people try the product, they generally tend to like it. So, the more people that we can get to try the product, the better it will be for us.”
And with more and more people wanting to lower their footprint on both their cholesterol and their carbon emissions, the plant-based food trend seems to be going strong. “I think sustainability is an increasingly important reason for people to choose the products they choose, and more people are motivated to choose the plant-based options because it has several benefits – not only from a sustainability aspect, but also from a health aspect as it is healthier than many of its non-plant-based counterparts,” says Graham, and Emma agrees:
“Everyone is really eager to try it, and I think many consumers are realising that this is the future – that they can't eat meat seven days a week, that they will need to find ways to change their habits. Also, it is getting more and more common to become a flexitarian, making even more people included in the group of people who are interested in these products. So, I would say the market is rapidly growing, and it's for sure here to stay.”
