In the early days of the pandemic, America faced a tofu shortage.
Fullerton food manufacturer Pulmuone Foods USA Inc., whose product line includes Nasoya, which it calls the nation’s No. 1 tofu brand, had to turn to its South Korea-based parent company for some short-term production help. Nearly a million packages of tofu were reportedly shipped to the U.S., while the company’s domestic plants caught up with demand.
Pulmuone’s local production has since caught up, and then some.
A recently completed, multimillion-dollar expansion to the company’s Fullerton operations has Pulmuone poised to take advantage of what market trends expect to be a continued boost in demand for the soy-based product over the next few years.
The domestic tofu market is expected to top $180 million in 2022, up from $91 million in 2018, according to data from market research firm Mintel.
That’s good news for Pulmuone, whose other brands include Wildwood, Azumaya, Pulmuone, Sansui and Soga, as well as locally based competitors like House Foods America, which counts substantial operations in Garden Grove.
Pulmuone estimates its domestic market share for tofu products to be in the 70% range, thanks to its presence in more than 22,000 grocery stores. The company reported revenue of about $110 million for its tofu products last year.
90% Opportunity
Company officials think they’re only scratching the surface of potential demand, as U.S. consumers learn more about tofu, and further embrace plant-based foods and healthier alternatives to meat.
Across U.S. households, plant-based food sales grew 57% in 2020, up from 53% in 2019, according to the Plant Based Food Association.
Around 8% of U.S. households use Pulmuone products, according to the company.
“That means we still have [over] 90% of households we can educate,” said Jay Toscano, executive vice president of Pulmuone Foods USA. “That’s why we’ve added capacity to Fullerton, as well as our [other] major facilities across the U.S.”
The company is a division of Korea’s Pulmuone Holdings Co., a conglomerate traded overseas with a market cap of $520 million.
110 New Jobs
Pulmuone recently unveiled its new, 100,000-square-foot manufacturing site near the Amerige Heights Town Center, and next to its domestic headquarters. It now occupies about 300,000 square feet of space in Orange County, much of which it owns. In addition to Fullerton, Pulmuone currently has offices in Buena Park.
Employees at the new Fullerton facility have dubbed it the “continuous tofu line” for its ability to produce tofu round the clock.
The company said it added an additional 110 workers as part of the expansion. It currently has just under 300 employees in the area.
The addition of the Fullerton factory increased the company’s monthly local production rate by over 50%, from 2.4 million units per month to 3.7 million units per month. Pulmuone produced almost 29 million tofu products last year in Fullerton.
In the short term, the company projects the Fullerton additions should help boost domestic sales by 20% this year. The company reported 17% sales growth last year.
Pulmuone thinks it can expand domestic production by 50% over the next three or so years, thanks to its growing operational presence in the U.S., which besides the Fullerton expansion also includes a new factory in New Jersey.
Pulmuone is also looking to purchase another building in the Fullerton area by the end of the year, Toscano tells the Business Journal.
Doubling Business
The company’s best-known brand, Nasoya, was founded in 1978 out of a barn in Massachusetts that was transformed into a tofu making facility. Pulmuone acquired the company in 2015, along with tofu manufacturers Azumaya and Sansui, according to Toscano.
Since that acquisition, Pulmuone has grown from $120 million in 2016 to $240 million in 2021, factoring in non-tofu sales.
An average growth rate of nearly 17% over that time “is cuckoo,” Toscano says. “Those numbers are just crazy.”
In addition to its 2015 acquisition, Toscano attributes Pulmuone’s exponential year-over-year growth of late to the company’s new products aimed at on-the-go consumers who don’t have the time to cook with the traditional, water-packed tofu.
“A hardcore tofu user has no problem taking the water out and pressing the tofu down. But if you’re a busy person, you want to open up a package, cut the tofu,” season it and cook it right away, Toscano said.
“Through the innovation and research we’d done, we were able to expand our portfolio to include baked tofu, vacuum-packed tofu and our new Plantspired line.”
Unlike water-packed tofu, vacuum-packed tofu comes ready-to-cook, while baked tofu is pre-seasoned and ready-to-eat. The Plantspired line includes plant-based pasta sauce, chili and skillets.
Other company products include plant-based, Asian-inspired foods, including vegan dumplings and wraps.
Not only is Pulmuone competing with tofu manufacturers House Foods America and Franklin Farms G.P. Inc., but it’s also up against brands like Beyond Meat (Nasdaq: BYND) and Impossible Foods Inc., which offer plant-based alternatives to meat-based proteins.
Education Continues
Despite its expanding portfolio of ready-to-cook and ready-to-serve tofu products, Toscano said the company is still keen on educating consumers about how to eat tofu.
“You wouldn’t eat pasta right out of a pot before you season it. Same thing with tofu: you need to season it, put on the spices and sauce that you like and pair it with another ingredient that you like.”
“People just have to learn,” Toscano said. “That’s why we’re spending a lot of resources and time to educate consumers.”Â
