Plant-based brands may need to assess their pricing strategies in 2024 as consumers are put off by cost, according to the survey

Consolidation in the plant-based category is expected to ramp up in 2024 as the difficulties facing the sector continue this year, according to a new survey.

The report by firm Browne Jacobson revealed almost two-fifths of UK adults are put off buying plant-based products due to high prices, with 54% of respondents considering vegan options to be more expensive than animal offerings.

One in four felt there were also fewer options for plant-based products in supermarkets in 2023 compared with the previous year, with just more than two-fifths of those who are vegan agreeing.

Companies in the sector need to have a strategy to expand market share, innovate and diversify product portfolios if they are to survive, said the report, conducted on behalf of the law firm by Opinium.

The struggles in the plant-based category meant those with a strong financial position, as well as private equity investors, could be tempted to acquire emerging plant-based brands, especially those with innovative products or strong market niches, Browne Jacobson added.

The report follows news last week that the Vegan Food Group, owner of Meatless Farm and VFC, is stepping up the search for acquisition targets in the sector as it seeks rapid expansion.

“There is potential for increased M&A activity in areas of the plant-based market that are showing resilience or growth, such as indulgent categories or products offered by discount retailers,” said Sam Sharp, senior associate and head of the food & drink group at Browne Jacobson.

“Companies might look to acquire or invest in brands that have successfully navigated the current economic climate or are aligned with consumer trends towards healthier and more sustainable options.”

The law firm said manufacturers might also assess their pricing strategies by exploring more cost-effective production methods or focusing on products with higher price elasticity.

“Manufacturers should analyse product portfolios and assess now which categories are experiencing growth and which are declining,” said Paul Kirkpatrick, partner and head of the manufacturing and industrials sector at Browne Jacobson.

“The cost of living crisis is clearly having a continual impact on consumer habits, meaning pricing strategies must be analysed closely by plant-based food manufacturers. Cost should be carefully considered when expanding product ranges. Manufacturers should focus on strong market niches or innovative products here, to increase chances of achieving cut-through in the market.”

The survey was conducted over three days from 24 to 28 November 2023 to a nationally representative sample of 2,000 UK adults, weighted to Office of National Statistics criteria.