Plant-based meat has been back in the limelight recently, but not for the positive reasons we saw at the beginning of the year. Headlines today are questioning whether we’ve had our fill of ‘fake’ meat as we witness the ‘death of vegan brands.’
News outlets have been quick to declare the potential end of plant-based in recent months, citing a lack of VC funding and declining sales. The reality is that brands across the food and beverage industry are all facing tougher times, it’s not just within the plant-based category.
“According to The Grocer, the number of food and drink business administrations has soared in the first half of 2023, with the number of failures in the sector on track to more than double year on year. Even meat brands are struggling” – Veganuary (1)
Which begs the question, why are we just talking about plant-based?
Tough to swallow
As the cost of living crisis rages on, everything from consumer choices as well as brands’ ingredient and energy prices are being impacted, so this issue is clearly not restricted to the plant-based category. Consumers are cutting costs across the board, removing items from their baskets and limiting the freedom to try new things. And as plant-based meat is still new to many, it’s understandable that this would have an impact on newly-formed brands.
We also need to recognise that meat and dairy industries profit from far greater public funding and subsidies than the plant-based category. And then there are the labelling headaches and regulatory hoops that plant-based products face (6).
All in all, it has been a tough year for many products, especially if they are seen as dispensable or carry a steeper price-point, whether that’s meat, dairy or plant-based innovations.
More peas please
Despite this, consumer demand for plant-based remains strong, as people reduce their intake of meat and dairy for health, environmental and ethical reasons. Within the EU, sales growth of plant-based milk, meat and cheese is outpacing that of animal-based counterparts (4). And according to one survey, one in 10 shoppers are even selecting plant-based alternatives because they represent better value (5).
In a very public call, over 650 academics recently joined with students in calling for UK Universities to switch to 100% plant-based catering on campuses, stating universities have ‘for centuries, been shining lights of intellectual, moral, and scientific progress” (7). Meanwhile, billionaire and plant-based alternative investor, Bill Gates, has stated that plant-based meat is ‘the future’ (8).
This little p*ggy went to market
One side of the plant category that is doing exceedingly well is supermarket own-label meat-free products, which are up 14% in sales over the past year (1). Sometimes selling for almost half the price of branded equivalents, these products make a tempting offer for consumers looking to reduce their consumption of animal-based foods(5).
M&S’s own-label brand, Plant Kitchen, now has a dedicated isle in the brand’s biggest food halls, featuring chilled, frozen and ambient plant products together (5). And that’s perhaps another clue as to why own-brand plant products are performing so well.
For busy shoppers, being faced by shelves of new brands offering new plant-based products with confusing labels is a challenge. Building trust among the clamour of packaging is hard. Whereas for supermarket brands that consumers already trust– making the leap from a meat or dairy-based own-brand product to a plant-alternative not too big of a jump.
Quality over quantity
Many new articles are blaming a higher price point for the fall in plant-based meat alternatives. However, this is single-minded as it misses the point that alt meat products are typically only pricier than the cheapest meat products, which are often highly processed.
In one study that found while 61% of respondents were increasing their plant-based intake, 40% were reducing their plant-based meat consumption. Interestingly, the top three reasons given were:
- Taste (47%)
- Artificial additives (36%)
- Processed nature of the products (36%)
In the latest wave of healthy eating, many consumers are looking at the amount of processed foods they eat, ditching items with lengthy ingredient lists and instead opting for products with fewer, less alien-sounding ingredients (something we’ve discussed at length). Beyond Meat’s Chief Executive, Ethan Brown, says the brand has seen this first-hand: ‘Demand has also been hit by an increased scrutiny of the health benefits of vegan products’ (2). Equally, if the initial experience of trying a new plant-based meat is disappointing, with a cardboard texture or bland flavour, consumers are unlikely to purchase that product again.
So perhaps instead of the death of vegan brands, what we are witnessing is a natural refinement of the category. When the plant-based alternatives market exploded, many brands leapt into the fray. In 2019, almost a quarter of all new UK food products were labelled vegan, with nearly two-thirds of Britons adding meat substitutes to their baskets (3).
Now, a few years later, the market is naturally separating the wheat from the chaff. With so many new alt meat products flooding the market at once, the focus on quality simply wasn’t good enough from some new entrants. With an average new product taking roughly three years to reach market, plant-based meats were reaching shelves within months (3). It was a bunfight, but now the dust is settling.
The plant-based market remains crowded, especially as big brands enter the ring. One thing that is clear is the brands that commit to understanding what consumers want, innovating and creating planet-friendly, healthy plant-based alternatives are the ones who will succeed.
So is plant-based dead? Far from it. This is only the beginning.
Continue the discussion
Where do you see the future of plant-based going? Register for our next online panel debate, Plant-based is Dead. This is a free event, which we’ll be holding on the 4th of October at 11am. There are limited spaces available, so reserve yours today!
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