Massive growth and little sign of slowing, it seems like a no-brainer to get on board the plant-based express. Future Market Insights co-founder and managing director Sudip Saha lays out seven things to remember when you do. This article was first published in Food & Drink Business April 2021.
It’s no exaggeration to say that the plant-based market has seen massive growth with little sign of slowing down. In fact, it’s predicted to surpass $480 billion by 2024, with a projected CAGR of almost 14 per cent. Entering the industry is becoming a no-brainer for many businesses who seek to assure consumers they are mitigating environmental impact and animal cruelty.
However, the road to success isn’t as easy as simply taking animal products out of the picture. Plant-based offerings are working hard to shake off old preconceptions that vegetarian and vegan food is bland, inaccessible, and expensive.
Added to that, businesses struggle with building up loyal communities, tailoring the right messaging, balancing nutrients, and sustaining their business models with transparent supply chains. The plant-based market represents a huge opportunity, so what should you know to navigate it successfully?
1. Meat alternatives with a twist
The plant-based meat market had already been growing before the pandemic; sales of plant-based meat grew by 38 per cent from 2017 to 2019. The current wave of health awareness drove even more people to explore alternative diet options. According to The Good Food Institute, plant-based meat sales during one week of March 2020 were 454 per cent higher than in the previous year.
Another reason for this growth is that conventional meat producers were hit hard by imposed lockdowns. With many consumers stocking up in the early weeks of the pandemic, plant-based alternatives were in the spotlight.
While plant-based burgers and chicken were consumers’ go-to, companies shouldn’t shy away from innovation. Beyond taste, texture is an important aspect of plant-based foods, so exploring products such as plant-based fish can present great opportunities. For example, the plant-based tuna market is expected to exhibit a CAGR of around 18 per cent between 2020 and 2030.
2. Know the trending ingredients
Bland tofu, soy milk, and peanut butter… These were some of the signature plant-based offerings of the past. However, food innovations have leaped ahead with vegetarian and vegan foodies now enjoying new options entering the market – from pistachio milk and pumpkin seed oil to vegan shrimp made of seaweed. Legumes, such as lentils, chickpeas, and groundnuts also keep growing in popularity, presenting sustainable and inexpensive ingredients rich in proteins and micro-nutrients.
The debate on nutrients is also relevant. Various studies found that vegans can be more prone to depression or headaches, which can be related to different vitamin deficiencies.
Vegan supplements with carefully optimised ingredient profiles aimed at specific nutritional needs (such as vegan iron, vegan B12, protein supplements, or vitamin D), are growing in popularity.
3. Packaging matters
The single-use plastics conversation is still very much alive, and pandemic-induced no-touch policies with plastic overuse have even intensified it. The environmental aspect plays a fundamental role in plant-based diet preference. Brands that turn to sustainable packaging, which is expected to become an over $400 billion industry this year, are likely to win both the taste buds and the hearts of their consumers.
Whether it’s paper-based packaging, cornstarch compostable bowls, coconut-husk containers, or sugar-cane tubes, adopting an innovative approach to product design and packaging can also help you score big with increasingly environmentally-minded venture capitalists.
4. Choose your words
The way plant-based products are branded matters more than you’d think, and many companies have had to learn this the hard way. When tailoring your messaging, it’s better to focus on the positive characteristics rather than elaborating on what is missing or what a product isn’t like. Using the term “veggie” or “plant-based” is proven to work better than “fake meat” or “meat-free”.
Interestingly, even the word “vegan” tends to raise negative sentiment, triggering associations with boring, gross, and expensive. Instead, brands should rely on symbols such as a green leaf.
Rather than highlighting the healthy aspect, consumers want to know about the taste and origins. A restaurant that switched the name of its “low-fat vegetarian black bean soup” to “Cuban black bean soup” saw a 13 per cent uplift in sales. Strategies like this can also work wonders to attract flexitarian consumers or those curious to explore meat-free options.
5. Convenience wins
There are no limits on plant-based offerings. Plant-based ice cream, for example, could reach the volume of 500,000 tonnes in sales by 2027.
The vegan fast-food segment also holds huge promise. Convenient meal prep kits or ready-made meals will be the next level, especially when centred around core consumer values: taste and health.
Whether launching an innovative ingredient or a twist on a signature product, it is important to think about how your offering fits into the quest for convenience.
6. Transparency is key
Sustainability, health credentials, and full transparency are becoming the standard in the plant-based industry as consumers hold companies more accountable than ever before. Using these values as guiding principles will be a major determinant for success in 2021 and beyond.
The consequences of unsustainable farming practices and devastating impact on local of quinoa farming in Peru and southern Bolivia opened the eyes of many, providing a distressing testimony to the risks of unsustainable farming.
With rising demand, farmers sold most of their production for export, leading to negative impact on the nutrition of individuals in local communities and fuelling soil infertility and more pests and diseases as a result of mass-scale organic farming.
It’s not enough to have a low environmental impact anymore; a positive environmental impact must be the goal. For example, those leveraging regenerative agriculture techniques that enrich soil help prolong the usage of land rather than deplete it, are helping mitigate climate change and stop deforestation for agricultural purposes.
7. Keep up with change
One would hardly find a more dynamic environment than the plant-based market. While global companies and retail chains are moving quickly into the market, it is often budding start-ups pulling the industry strings.
Carrying out your own continuous market research to understand their progress can be key to better product development and brand positioning.
Experts believe that now is the perfect time to invest in plant-based food start-ups. Venture capitalists and start-up incubators like Berlin-based ProVeg Incubator are looking to support plant-based and cultured food tech start-ups globally.
There are many plant-based market opportunities on the horizon: but those that will harvest the sweetest fruits are companies working on alternative proteins to expand the market’s offerings while ticking off the most important aspects of all: taste, convenience, and price.
