Premier Foods’ non-executive chairman David Kappler told The Grocer last summer of his discomfort at the supermarkets’ dominance of the food supply chain. “Is this a helpful trend?” he mused. “I’m not convinced.”
Eight months on, some of Premier Foods’ rivals feel similar discomfort at the company’s sudden dominance of vegetarian foods.
After acquiring Quorn maker Marlow Foods and the smaller Cauldron Foods last year, Premier has secured a fifth of the UK’s £657m meat-free market [TNS 52 w/e November 6, 2005], making it by far the biggest branded player in a field led by own label.
“We would never use the word ‘dominant’,” says Stephen Bolton, Premier Foods’ commercial director with responsibility for the newly acquired brands. But he acknowledges that with Quorn now worth £102m at retail it is “right up there among some big brands” and starting to become a signpost to the category. That’s literally true in Sainsbury stores, where the chilled vegetarian foods section is signposted ‘quorn’.
Bolton says the Quorn brand is also “starting to gain traction outside the vegetarian market”, which is what the meat-free market hinges on today. Only 5%-6% of British consumers are hardcore vegetarian, but up to 30% are meat reducers. At Simply Organic, whose products are both meat-free and organic, co-founder Belinda Mitchell says: “I think there will always be a core of pure vegetarians whose numbers may be
steady or rising a little. But the main growth is coming from the healthy-eating ‘demi-veg’ population - the meat reducers for health reasons rather than the no-meaters for reasons of principle.
“Retailers are starting to catch on to this, merchandising veggie alongside other healthy eating ranges.”
Bolton says Premier Foods will be pursuing a two-pronged strategy: improving penetration of the meat-free category in general and ensuring the core vegetarian has as many options as possible. This will include further moves into snacking, where Quorn has already launched meat-free microwaveable pizzas, satay sticks and chicken-style dippers.
But Mitchell is unsure that Premier Foods’ gobbling up of Quorn and the more traditionally vegetarian brand Cauldron is good for the true veggie consumer. It could lead to less choice, not more, she fears. “With multiple buyers measured on short-term, bottom-line performance, one could easily see vegetarian ranges in the supermarkets dictated by the deeper pockets of Premier Foods rather than by the demands of customers for a wider range of veggie choices from trusted, smaller brands,” she says.
At another smaller brand, Goodlife Foods, sales director Tim Clifford says it’s too early to say what Premier Foods’ arrival will do to the sector. But he thinks Quorn has done a good job focusing attention on the category. “The marketplace needs strong players that are focused on vegetarian foods. So if Premier Foods is going to bring more dynamism, that’s a good thing.”
It’s noticeable that Quorn has dropped the ‘v’ word from its marketing, stressing its meat-free and relatively healthy, low-fat credentials.
And that’s a stance that is understood by Cranks, the ‘eat good, feel good’ brand that emerged from Britain’s most famous vegetarian restaurant. Eighteen months ago the brand was repositioned minus any overt vegetarian tag and it has proved phenomenally successful, says MD Phil Lynas. “Only 6% of the population are vegetarian, but 30% are meat reducers. Add the two together and you’ve got a much better target market. People eat vegetarian food because they believe it’s better for them. We are pushing the route of ‘when you eat our products you feel good’.”
After kicking off with bread and a few sandwiches, the Cranks brand now extends to salads, wraps, smoothies and juices - not a nut roast in sight - sold through foodservice as well as retail. And the company has just won a listing in Tesco for a range of pasta sauces.
So these are vegetarian lines in mainstream categories? “Just being a vegetarian offering is slightly old-fashioned,” says Lynas. “Consumers want to find products that meet their needs at the point where they shop. It’s the same with organic: they don’t want to be treated as a sideshow freak.”
The exception, says Lynas, is in the chiller cabinet, where consumers need to be clearly pointed towards a separate vegetarian section. And it’s a category he expects Cranks to enter in due course, putting it directly up against the likes of Quorn and Cauldron Foods.
While Lynas is encouraged that Premier Foods sees opportunities in the meat-free sector, like Williams he fears consolidation will make life harder for smaller operators. “We’ll just have to be faster and cleverer,” he says.
Lynas says Premier Foods has done a great job with individual brands such as Loyd Grossman, but it will have to take care that Quorn and Cauldron don’t get lost in the ‘corporate whole’. “There are plenty of examples of big companies taking over little companies because they want newness and innovation - and then squashing it.”