How to Harvest More Plant-Based Growth

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Covid-19 has catalyzed total in-store food and plant-based sales growth. How can you target plant-based buyers for success?


Covid-19 has catalyzed total in-store food and plant-based sales growth. How can you target plant-based buyers for success?

The Covid-19 pandemic is a global tragedy impacting humanity, healthcare infrastructure, economies, and politics. One of the lesser — but unexpected — consequences is the impact on consumer-packaged goods (CPG).

Preliminary 2020 data indicates that plant-based meat grew 46%, plant-based milk grew 19%, and other plant-based categories grew even more.

◆ Household spending on CPG grew double digits in 2020.

◆ Most in-store food categories, including frozen and refrigerated, grew at unprecedented levels.

◆ Nearly half of consumers tried new foods this past year.

◆ Plant-based products were at the cutting edge of these trends.

Preliminary 2020 data indicates that plant-based meat grew 46%, plant-based milk grew 19%, and other plant-based categories grew even more. We have seen interesting innovations that include bacon made with coconut oil and rice flour, eggs made from mung bean protein, and now cultured/lab-grown meat approved for sale in Singapore. In addition, as identified in our December 2020 article, plant-based snacks have huge potential. PepsiCo just recently announced a plant-based foods venture with Beyond Meat. So why should you care?

TREND DRIVERS

SOURCE: CADENT CONSULTING GROUP

◆ Plant-based foods are driving both double-digit sales growth and dollar margins that are 50-90% higher per unit versus their conventional counterparts. And further growth prospects are appetizing.

◆ The Covid-19 impact on 2020 growth was significant: Twice as many shoppers bought more versus fewer plant-based products compared to year-ago.

◆ In 2021, six times as many shoppers expect to buy more plant-based alternatives versus fewer. Cadent Consulting Group recently completed, under the guidance of our business analyst Torrey Foster, a comprehensive Covid-time-period-inclusive study of plant-based shoppers. This study incorporates research among 1,000+ shoppers including vegans, vegetarians, flexitarians, pescatarians, and consumers who will “eat just about anything.”

We ensured a strong, nationally representative sample covering the full age spectrum including 76+ (Silent Generation). Our goal was to better understand the who, what, when, where, why/why not, and how of plant-based purchasing and consumption in a Covid-19 driven environment. Our focus today is to take a look at “who” is driving this phenomenal growth.

Of particular note: purchasers of multiple plant-based alternative categories (e.g., meat, milk, and other) attracted six times more consumers who bought more rather than fewer plant-based alternatives in 2020. This is projected to grow to eight times more in 2021. As consumers build their base across plant-based categories, they continue to buy more overall and increase spending.

The primary drivers of plant-based purchases are twofold: Global and Personal.

◆ Global: The three critical reasons for purchasing plant-based are healthy lifestyles (78% agreement), environmental impact (48%), and ethical concerns (46%). Animal-based products clearly carry perceived health risks. Desire to lead healthier lifestyles was a critical driver of plant-based purchases during Covid, and that is projected to continue.

◆ Personal: Taste, texture, and price are all important. In fact, price remains the #1 reason for those who actually bought fewer plant-based alternatives in 2020.

Lifestyle plays a critical role in the purchase of plant-based products. About 90% of plant-buyers are purchasing these products for themselves, 72% of buyers with spouses are also purchasing for their spouse, and 62% of buyers with children are also purchasing for their children. We see broad consumption of plant-based products throughout the household. Additionally, an astounding 67% of plant-based food buyers classify themselves as “I eat most anything” (e.g., meat, vegetables, fish, etc.) and if we add in “I’m a flexitarian,” this jumps to 76%. The appeal of plant-based extends well beyond the approximately 8% of the U.S. population who classify themselves as vegans or vegetarians.

DEMOGRAPHIC DEMOCRATIZATION

The broad trend in 2020 was the democratization of plant-based foods. We have compared the plant-based development index (% of plant-based buyers/% of population: 100 = average) in 2020 versus 2019 across key demographic profiles. There has been a noticeable move toward broader acceptance across age, race, and geographies. Key differentiators for those who are more likely to purchase plant-based include: higher income, higher education, urban/suburban, and under age 76.

◆ Age: Both Gen X/Millennials and Gen Z/Boomers are reasonably developed. The “Silent Generation” (76+) is under-developed and a somewhat doubtful target. It is difficult to change behaviors at a certain lifestage.

◆ Race: There is little developmental distinction across Caucasian, African American, and other races with the exception of Asian Americans being more highly developed.

◆ Income: Income remains a key differentiator but broad acceptance includes those with incomes of $40,000+.

◆ Education: The skew remains toward college graduates.

◆ Geography: All geographic areas are of relatively average development with the exception being the West which is still over-developed with an index approaching 200. Urban areas continue to be more developed with rural areas less developed.

Segmenting and targeting your shoppers with a total portfolio of plant-based products from milk to meat to other products remains a significant opportunity. Don’t think of it as just meat or dairy substitutes. Rather, be creative with how you can more holistically target a shopper poised to grow at an accelerated pace, benefiting your total store sales and profitability.

5 TIPS YOU CAN USE

  1. Remember that it’s a shopper, not just a category: Offer a full repertoire of products for your plant-based buyers including milk, meat, and other products to trade up from conventional products.
  2. Offer enough selection: Retail presence is still limited and sporadic, with the exception of plant-based milk. All plant-based alternatives should be placed adjacent to their conventional counterparts.
  3. Leverage digital: As acceptance broadens, targeting is still important. In 2020, we saw exceptional growth in only one area of marketing spending – digital. While overall marketing spending declined by $16B in CPG, digital grew by 11% and is projected to grow by 17%+ in the next year. Manufacturers and retailers alike need to leverage digital to target plant-based shoppers.
  4. Be sure the price is right! Price remains the No. 1 reason for those who bought fewer plant-based products in 2020. We are in a difficult economic climate but some manufacturers have addressed this specific need with multiple price declines in 2020. We expect more aggressive pricing and promotion to continue in 2021.
  5. Smile when you say ‘cheese!’: That’s what your current shoppers are looking for now in plant-based. It’s the No.1 category that shoppers want to see more of in 2021!
Don Stuart

Don Stuart

Don Stuart is managing partner at Cadent Consulting Group (cadentcg.com) with offices in Wilton, Conn., and Evanston, Ill. He can be reached at [email protected]

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