Mainstream brands are rushing to cash in on plant-based. But can they compete against established all-vegan operations?

The devil had better invest in some ice skates. For the closest thing to hell freezing over has happened in the vegan world. At last month’s 2019 Vegan Food Awards, Peta handed the coveted Best Vegan Pie title to none other than Fray Bentos. Yes, the meat-loving, steak-pie-wielding brand that is practically synonymous with carnivore culture.

Peta said the Vegan Steak & Kidney Bean pie, which is set to hit the shelves in December, manages to “appeal to vegans and meat-eaters alike”.

The unexpected award sums up a wider shift in the plant-based market, which is no longer the preserve of brands with all-vegan, specialist credentials. Mainstream brands - including market leaders in meat and dairy - are rushing to get involved with their own innovations. Richmond, Birds Eye and Ginsters are just some of the names looking to cash in on the plant-based boom.

If Peta’s reaction to Fray Bentos is anything to go by, they could be on to a winner. But will plant-based shoppers really accept offerings from meat giants? What is the opportunity in such a crowded market? And can mainstream brands compete with the expertise of fully plant-based operations?

The incentive to get it right is clear. Meat-free sales have soared 18% this year to £474.5m [Kantar 52 w/e 14 July 2019]. That was driven by an 8.8% boost to category penetration. “As well as new shoppers entering the category, growth has been driven by 5.6% higher frequency of purchase, rising to an average of 10 shopping trips a year,” explains Kantar analyst Sacha Francis. “That demonstrates an increasingly engaged nation of shoppers in meat-free.”

“As well as new shoppers, growth has been driven by 5.6% higher frequency of purchase”

That increasing engagement isn’t coming from staunch vegans. Only 3% of the British population identify as vegan, according to Waitrose’s 2018-19 Food and Drink Report. However, a substantial 21% consider themselves to be flexitarian.

That number is only set to grow. The Sainsbury’s 2019 Future of Food report forecasts an ongoing boom in meat reduction. “It’s expected that half of us will identify as flexitarians by 2025,” says Claire Hughes, head of quality and innovation at Sainsbury’s.

The flexitarian movement means plant-based is already reaching a large proportion of the British population. Half of UK consumers have bought into plant-based food in the past year, found an exclusive survey of 2,100 shoppers by Harris Interactive for The Grocer. Of those shoppers, 61% said they had bought more products than the year before.

Which bodes well for the meat and dairy brands with plant-based ambitions. In our Harris Interactive survey, six in 10 vegans said they would have concerns over buying from a non-vegan brand. But that figure fell to just 17% among the general population. Richard Harrow, partner at private label consultancy IPLC, says this is playing out in buying habits. “You only have to look at the popularity of the Greggs vegan sausage roll this year to see that flexitarian shoppers have no problem buying plant-based products from non-vegan operations,” he says.

“Flexitarian shoppers have no problem buying plant-based products from non-vegan brands”

Mintel stresses that this group is the most important to the plant-based market. “Currently, vegan consumers just aren’t a big enough group for the big players to lose sleep over,” says Kiti Soininen, director of UK food and drink research. “What really matters are the shoppers who are reducing their meat intake.”

 

Top 10 meat-free brands by value: meaty growth

Top ten meat-free brands  
  Value (£m) % growth
Quorn 182.0 5.1%
Linda McCartney 50.4 11.7%
Cauldron 27.5 -4.1%
Vivera 12.1 212.8%
The Tofoo Co. 8.5 63.3%
Bol 6.3 33.3%
Fry’s 5.6 211.2%
Gosh 5.2 1.4%
Strong Roots 4.2 109.3%
No Bull 3.1 220.2%
     
 Source: Nielsen 52 w/e 7 September 2019    
  • Meat-free brands are boasting some meaty growth. Nine out of the top 10 have seen an increase in value, equating to an extra £33.4m combined.
  • The fastest-growing by absolute value is Quorn, up £8.9m. Marketing director Alex Glen puts that down to “significant marketing investment combined with continuous innovation”. Indeed, Quorn sunk £7m into its marketing budget this year, alongside a raft of new launches like vegan Ultimate Burgers in March. More of the same is scheduled for 2020, says Glen. 
  • Rival brand Linda McCartney’s has also been investing in innovation. The past six months have seen launches including pea protein sausages, vegan southern-style ‘chicken’ and vegan fishcakes.
  • The fastest-growing brand in percentage terms is Vivera. The Dutch brand has more than tripled its value from £3.9m to £12.1m as a result of increased distribution and new listings in both Morrisons and Holland & Barrett this year. It’s hoping to build on that gain with its relaunch in September to include new, brighter packaging and two new products, vegan BBQ chicken goujons and vegan chicken tenders. 
  • The only top 10 player not to grow sales is Quorn’s sister brand Cauldron. Despite multimillion-pound marketing investment and new Teriyaki and Smoked Tofu lines in May, sales have slipped £1.2m in the past year.

Source: Nielsen 52 w/e 7 September 2019

 

Diverse shopper base

And these shoppers are a pretty diverse bunch. The media may have you believe that flexitarianism is all about millennials and Gen Z consumers. “But actually there’s this massive boom in older consumers moving towards plant-based food,” says Alex Glen, marketing director at Quorn. “Our research found that 67% of older plant-based shoppers say they’re making food choices based on how it impacts the next generation.

“The shift towards reducing meat for sustainable reasons has been huge this year,” he adds. “It’s now the second-biggest motivator for meat reduction in the UK after health, which remains the most significant driver for the category.” Indeed, Kantar data shows 37% of meat-free occasions were chosen for health reasons this year.

So it stands to reason that many of the big brands are debuting with strong health credentials. When Upfield turned Flora vegan in March, the messaging was clear. The packs touted a new formula that was ‘100% plant goodness’, helped to lower cholesterol, and contained healthy omega-3 and omega-6 fats to boot.

Birds Eye is similarly targeting health-conscious shoppers. Its meat alternative Green Cuisine lineup rolled out in March, promising a “succulent taste experience that’s rich in protein and a source of fibre”. Similarly to Flora, the range of products promise to be ‘full of goodness’.

That marketing seems to be hitting the mark. Flora has attracted “a wave of new customers” with its plant-based positioning, says Upfield executive VP David Salkeld. Meanwhile, Birds Eye says its Green Cuisine range has achieved 2.7% market share in plant-based frozen food within its first six months on shelf.

But it takes more than just health credentials to stand out in this market. After all, Mintel named the UK as the world leader in vegan food launches earlier this year.

So to stand out from the crowd, brands need to find a gap in the market. For Birds Eye, that lies in the frozen aisle. “Penetration in frozen plant-based was relatively flat between 2014 and 2017 because the products available were targeting the same consumer groups, namely pre-family and older shoppers,” says senior brand manager Anne-Marie Gayer. “What Birds Eye can do is access our homeland, which is families. Our Green Cuisine range is taking frozen plant-based food and making it mainstream.”

Jason Gibb, founder of vegan brand Planet Jason, agrees frozen options are yet to realise their potential. “The perception of frozen as ‘cheap food’ and chilled as ‘healthy and fresh’ is starting to turn around, which will lead to a gradual rise in frozen plant-based products and brands over the next year.”

It’s not just the frozen aisle that presents a fresh opportunity. Premier Foods took aim at the food-to-go fixture with the launch of its ‘positive nutrition’ Plantastic snack range in September. “We spoke to consumers about what their biggest frustrations were in looking for healthier plant-based options, and tensions were highest in food to go,” says Kate Yateman-Smith, marketing and innovation controller of the brand.

Plus, an on-the-go range offers the crucial advantage of convenience. Veronica Troy, consumer behavioural analyst at Canvas8, says this is increasingly important to food purchases. “Ease of preparation has overtaken speed as the main driver of food choices, which opens up a lot of potential growth for plant-based brands and retailers,” she says.

The proof lies in the fastest-growing plant-based products. Ready meals made the highest gain in terms of absolute value, racking in an extra £16m in the past year [Kantar]. Meanwhile, the biggest gain in percentage terms was in pizza , which also plays into demand for a quick and easy meal.

“Ease of preparation has overtaken speed as the main driver of food choices”

However, Kerry Foods believes there is a more fundamental gap in the market: taste. That was the focal point of its two launches in September, Richmond vegan sausages and new vegan brand Naked Glory. “We carried out a lot of research to understand where the gaps are in the market, and we found that many shoppers find the taste of plant-based products to be bland and boring,” says Naked Glory marketing manager Alison Lees.

“They told us they were having to add a lot of spices, seasonings and flavourings to make their food taste interesting, and that if the products tasted better they would shop plant-based more often.” Naked Glory’s debut range of chilled plant-based meatballs, sausages, mince and quarter pounders aims to solve that problem by providing “the meatiest thing since meat”. So confident is Kerry Foods in its proposition that it splashed out millions on a new dedicated vegan factory in Hyde in September. Meat brands get involved

That taste factor is difficult to get right, though. Creating a product with a meat-like taste has been a long-held goal of specialist vegan brands. So late entrants like Kerry Foods are having to work hard to get it right. Still, they believe they have an advantage. “We know how meat works, and that gives us an edge in the meat-free market,” says Naked Glory’s Lees. “Our meat mixologists have worked in the meat industry for a number of years, and we’ve applied all that knowledge, expertise and food science into meat-free applications.”

Someone who might agree is meat producer Tulip, which used its in-house team to develop its first vegan brand The Green Butcher. The new brand launched exclusively in the Co-op last month with its first product, packs of vegan sandwich slices.

“We found that many shoppers find the taste of plant-based products to be bland and boring”

On the flipside, other big names are drafting in experts. Premier Foods recruited a specialist marketing and innovation team to create Plantastic. And Unilever acquired The Vegetarian Butcher last year, in a move that gave it access to ready-made expertise and customers. Taste was a key driver here.

“The category is developing fast, but many unmet needs still remain when it comes to taste, texture, fragrance and look of products,” says Hazel Detsiny, VP of foods marketing at Unilever UK & Ireland. “These are barriers that The Vegetarian Butcher aims to address.” Detsiny claims the products “taste so close to the real thing that many people can’t even tell the difference”.

It seems there is no one way to achieve that lofty aim. Alpro says the overall approach is more important than the question of in-house or external expertise. “Brands who can introduce plant-based products with a credible nutritional profile that’s ‘full of something good’, such as being high in fibre or low in saturated fat, as well as tick the box when it comes to sustainability and taste, should succeed - irrespective of their size or expertise,” says Alpro CEO Sue Garfitt.

“If non-vegan companies want to be inclusive of vegan products surely that’s a positive change”

Morten Toft Bech, founder of meat alternative brand The Meatless Farm Co, has the same opinion. He welcomes the wave of mainstream brands entering the plant-based arena. “If larger non-vegan companies want to be inclusive of vegan products then surely that’s a positive change,” he says. “We have to remove the hypocrisy argument and unite around the greater good.”

 

Meat-free value sales: plants power up

Top eight meat-free sectors by value sales   
  Value (£m) % Growth  Market share
 Meal Centre   79.3 17.4 16.7
 Ready Meals   78.8 25.4 16.6
 Ingredients   70.0 15.6 14.8
 Sausages   59.5 14.8 12.6
 Snacks   49.1 20.7 10.4
 Burgers   46.1 9.0 9.7
 Pies+Pastry   40.7 11.9 8.6
 Deli   27.2 21.3 5.7
       
Source: Kantar, 52 w/e 14 July 2019      
Brands vs Own Label   
  Value (£m) % Growth  
Brands 357.4 15.2  
Own label 117.1 27.1  
Retailers   
  Category share % Growth  
   Total Tesco   24.5 3  
   Total Sainsbury’s   21.3 29  
   Total Asda   11.3 12.1  
   Total Waitrose   9.7 25.2  
   Total Morrisons   8.7 16.6  
   Total Marks & Spencer   4.4 77.2  
   Total Iceland   4.2 20.5  
   The Co-Operative   2.7 17.8  
   Farm Foods   0.5 -3.4  
  • The meat-free market has continued to enjoy significant growth. Value sales are up 18% to £474.5m on volumes up 13.7%.
  • All sectors are up on last year. The fastest-growing in percentage terms is pizza, which has tripled its value to £6.5m. That has been bolstered by new meat-free pizza ranges from the likes of Goodfella’s and The White Rabbit. 
  • Meal centres, defined as main meal components that don’t include carbohydrates, are the most important sector with 16.7% share. Plant-based ready meals are hot on its heels, however. Strong growth has pushed its market share up from 15.6% to 16.6%. 
  • Brands still dominate the market, accounting for three quarters of total value sales in the category. 
  • However, it is own label that has seen the strongest performance this year. Sales of retail ranges are up 27.1%, while brands are up 15.2%. The rise in own label has been driven by more shoppers, higher purchase frequency and an 11% average price hike. Own label has also seen some successful NPD that has contributed to growth.

Source: Sacha Francis, Kantar Meal centres 

 

NPD boom

Still, the stalwarts of plant-based won’t take this new competition lying down. They are pumping out NPD at a staggering rate. The Meatless Farm Co unveiled a new line of plant-based sausages in May. Quorn’s innovation drive has included everything from Tex Mex nuggets to vegan Fishless Fillets. Other notable innovations include the May launch of Vivera’s bacon-style pieces and Moving Mountain’s plant-based Banger with an algae skin, due to debut later this year.

That innovation is paying off. For meat-free specialists are making some impressive gains. Market leader Quorn grew a whopping £8.9m in the past year to be worth more than £180m [Nielsen 52 w/e 7 September 2019]. Vivera tripled its value to £12.1m. And Linda McCartney’s is up 11.7% to £50.4m.

It’s still early days for the mainstream brands. Birds Eye Green Cuisine racked up nearly £1m in its first six months, making it the 20th biggest meat-free brand, according to Nielsen data. Equals, the vegan burger range launched by meat processor ABP in February, holds 45th spot. None of the mainstream brands have yet made it into the top 10.

But if Fray Bentos can take home a vegan award, who knows what could happen in the next 12 months?

 

Innovations in plant-based 2019

 

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