Understanding consumer usage and satisfaction is the key to generating repeat and long-term demand for plant-based foods.
It has been a remarkable three years for plant-based foods from pandemic surge to supply chain shortages to manufacturer closures. We’ve all had a crash course in business development and survival.
NEGATIVE REVIEWS?
In order to understand the keys to repeat- and long-term demand, it is important to assess consumer satisfaction. Moreover, it is also important to evaluate if your consumers are walkers & talkers; walkers leave the brand behind, while talkers also express their dissatisfaction to the world, in person and online. In an ideal world, usage/satisfaction can be a key accelerant for the demand generation flywheel. If consumers are satisfied and they share the word, other shoppers will respond and retailers will meet the demand. This can be better understood by assessing how consumers specifically react to positive or negative experiences with plant-based foods.
The most common response is to talk to family/friends about the product and either encourage or discourage purchase. About 34% state they will discuss with family/friends if they have a negative experience. But a full 20% will communicate via online media after a negative experience. Amplifying the message through the internet results in a greater impact on demand for both current users and potential users.
Conversely, a positive experience with a Plant-based product can have a nearly equal and opposite impact with the power of the flywheel, stimulating demand and ultimate long-term product/category success.
About 34% state they will discuss with family/friends if they have a negative experience. But a full 20% will communicate via online media after a negative experience.
The press also appears to be hopping on the walker & talker bandwagon. The headlines are glaring:
• Beyond Meat loss widens as revenue declines 23%.
• Companies are slashing operating expenses following
disappointing Q3 results.
• Is plant-based over-hyped?
A look at data across categories reveals that the pace of growth has clearly slowed but there are still vibrant categories in plant-based: milk, creamers, meals, yogurt, ready to drink beverages, and cheese. In addition, according to IRI, the Chicago-based market research firm, sales of meat alternatives for the 52 weeks ended in October are basically flat. But there are stark differences between the much-smaller refrigerated segment (down by 11.1% to $432 million) and the larger frozen meat alternatives segment (up by 6.7% to $765 million). Manufacturers expected hyper-growth rates to continue and over-invested in plant and inventory. The result is significant declines in sales and profit. It’s time for manufacturers to focus on the growing categories and the next version of plant-based meat.
Understanding consumption patterns and usage is also critical for success. Plant-based milk is a frequently used product whereas plant-based meat usage is less frequent.
Increasing purchase and consumption frequency needs to be a focus in conjunction with penetration. It is helpful to understand the key barriers to penetration, which are price and taste. Fully 40% of consumers state they would purchase more often if plant-based meat and milk had lower prices. Some 37% of plant-based meat buyers and 31% of plant-based milk buyers agreed that they would buy more often if the products tasted better. Other factors such as promotion, flavors, and cleaner ingredients are part of the consideration set, but not as significant an influence for current users.
While it is essential to drive usage with core users, it’s also critical to expand penetration. The growth of plant-based meals, cheese, yogurt, creamers and similar alternatives vs. base commodity products – either milk or meat – indicates significant upside.
BELIEVE THE CONSUMER!
So, who do you believe? Ultimately, we believe the consumer. While Chobani exited oat milk, and JBS has shuttered plant-based meat in the United States, Kellogg claims the business is healthy and just taking a pause. We ultimately have to understand shopper and consumer behavior and the usage experience must drive consumer satisfaction. These positive experiences generate positive word-of-mouth and reviews and negative experiences generate negative word-of-mouth and online reviews. Let’s create positive flywheel momentum and avoid those walkers and talkers. n
Don Stuart is a managing partner at Cadent Consulting Group (cadentcg.com) with offices in Wilton, Conn., and Evanston, Ill. He can be reached at don.stuart@cadentcg.com.
