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
- 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.
- 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.
- 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.
- 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.
- 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!
