If you haven’t yet familiarized yourself with the term “flexitarian,” now would be a good time to do so. Defined as “a person who has a primarily vegetarian diet, but also eats meat and fish,” this word has been loosely broadened to describe a growing number of U.S. consumers who desire to eat more healthfully and be kinder to the planet by adding more plant-based ingredients to their diet.
Around 30% of the U.S. population follows some sort of flexitarian diet, and these people are shopping not only in health food stores and larger health-centric chains like Whole Foods Market, but also in conventional supermarkets. During the initial outbreak of the COVID-19 virus in 2020, sales of plant-based products surged a whopping 90%, led by burger alternatives and plant-based milks, according to SPINS data analyzed by the Plant Based Foods Association (PBFA). Even more impressive, after this initial surge, sales growth hasn’t wavered.
“Once panic buying calmed down and we started to see things come back to somewhat normal levels, plant-based foods continued to grow,” observes Julie Emmett, senior director for retail partnerships at San Francisco-based PBFA. “We know that during the last six months, 77% of shoppers have purchased a plant-based product, which is very significant. In terms of the outlook, we certainly expect the continued exponential growth that we’ve been experiencing.”
The primary reason consumers are choosing to eat more plant-based foods is health, notes Emmett. But sustainability is the fastest-growing reason that they choose these products. “That can be attributed to general awareness, but we can also easily point to Millennials and Gen Z consumers based on their values,” she says. “That, combined with concerns for food safety and overall health during the pandemic, have been huge. And then the tremendous, consistent product innovation we’ve seen has only added to that.”
The innovation happening in the plant-based food world is astounding — reminiscent of the natural and organic revolution of the 1990s and early 2000s. In recent years, new burger brands like Impossible Burger and Beyond Burger have come onto the scene, while plant-based milks, which make up the largest percentage of plant-based product sales, have expanded with ingredients like oats, almond and cashew. Now plant-based cheeses and yogurts are becoming more popular, and even plant-based versions of ingredients like flour are being made. In the frozen case, brands such as Brave Robot and Eclipse have introduced plant-based ice cream. Virtually no part of the supermarket has been untouched by the plant-based craze, and leading suppliers (including traditional meat companies like Smithfield and Tyson) have been investing in plant-based products.
In the fast-food world, McDonald’s has said that it will test a plant-based burger called McPlant in key markets this year. This move follows successful plant-based rollouts from Burger King and Dunkin’.
An emerging product segment that may pick up steam in 2021 is plant-based seafood, as this category is still relatively new but speaks to both health and sustainability concerns.
Austin, Texas-based Gathered Foods is already seeing success with its Good Catch Plant-Based Tuna, now being sold in tuna aisles at 6,000 retail locations in the U.S. market.
“While our target consumer is the flexitarian, we’ve seen great success with both natural food retailers and more conventional food stores,” explains Christine Mei, CEO of Gathered Foods.
The company is now moving into new seafood categories, as it introduces New England Style Plant-Based Crab Cakes, Thai Style Plant-Based Fish Cakes and Classic Style Plant-Based Fish Burgers. Its frozen entrées and appetizers are crafted from a proprietary six-legume blend (peas, chickpeas, lentils, soy, fava beans and navy beans) that provides plenty of protein and helps the company create a texture that mimics the flakiness of seafood, according to Mei.
Meanwhile, we’re starting to see plant-based meats marketed as ingredients, providing consumers the option to add more meat alternatives to their own recipes. “In 2021, we expect to see a growing demand in the meat alternative space for flexible, convenient formats like crumbles and shredded meats, which lend themselves to a variety of uses in the kitchen, from stir-fries to sandwiches to tacos,” observes Ana Ferrell, VP of marketing for Archer Daniels Midland (ADM), based in Chicago. “In fact, our research finds that 41% of U.S. consumers are interested in trying alternative shredded and pulled meats.”
In the alternative dairy category, Ferrell anticipates key growth in plant-forward cheeses, alternative dairy foods and beverages, and blended proteins such as almond and coconut drinks.
As an ingredient maker itself, ADM provides “responsibly and sustainably sourced” ingredients, including plant proteins with a “clean taste and neutral flavor,” according to Ferrell. She also notes that ADM is seeing a lot of potential in blending animal and plant proteins to develop more nutritious products.
While the future looks bright for plant-based foods, there may be a few hurdles to overcome. Dasha Shor, global food analyst and registered dietitian at Chicago-based market research firm Mintel, says that in her view, plant-based alternatives must address taste and texture to become more mainstream. “The success of the meat alternatives comes from meeting consumer expectations for meatier flavor and texture profiles,” she observes. “However, manufacturers will be challenged by consumers about the high use of additives in meat substitutes in order to mimic the taste and texture of real meat. The next frontier of plant-based innovation is addressing consumers’ concerns around the level of processing, number of ingredients and overall healthfulness of plant-based meat substitutes.”
In just one example of a supplier reformulating its products, Beyond Meat is launching new versions of its plant-based burger early this year. The El Segundo, Calif.-based company says that its two new iterations will feature lower saturated fat and overall fat, fewer calories, and B vitamins and minerals comparable to the micronutrient profile of beef.
Private Label, Merchandising Considerations
Not surprisingly, retailers are capitalizing on product innovation by adding more plant-based products to their private label portfolios, which conveniently provide their shoppers more affordable options. Cincinnati-based Kroger took the lead by launching its own dedicated brand, Simple Truth, in 2019. Last October, the national retailer expanded the line to include an impressive 75-plus items, ranging from the Emerge Chick’n line of patties and grinds to nondairy cheeses and oat milk ice cream.
“Private label is presenting a sizable opportunity,” affirms Emma Ignaszewski, corporate engagement specialist at The Good Food Institute (GFI), a nonprofit based in Washington, D.C. “At least 30% of consumers who tried new private label products during COVID-19 plan to stick with them.”
Kroger has also been experimenting with merchandising strategies in the plant-based space. The retailer worked exclusively with PBFA in a three-month study that ran from December 2019 through February 2020 across 60 test stores in three states, in which Kroger placed plant-based meats in a dedicated 3-foot set within its meat departments. Across test stores, plant-based meat sales increased an average of 23% compared with the control group
Sean Brislin, merchandising director at Kroger, noted at the time of the study: “This test provides one more proof point that plant-based meats have moved from niche to mainstream. Kroger continues to experience double-digit growth in the plant-based category, and this test demonstrates the viability of shifting product placements to reach even more consumers.”
According to Ignaszewski, GFI recommends what it calls an “integrated-segregated merchandising strategy,” in which plant-based meat, eggs and dairy are placed next to conventional items in an adjacent but separate plant-based set.
The institute worked with independent Heinen’s Grocery Store in the Midwest to incorporate an integrated-segregated merchandising plan, and the Wooster, Ohio-based retailer saw a 43% year-on-year increase in dollar sales of plant-based meat in the year ending March 25, 2020, and a 106% increase versus the prior two years, notes Ignaszewski.
In categories where it’s harder to separate products, signage and brand blocking can help highlight plant-based offerings, advises PBFA’s Emmett. “Hannaford is putting bib tags across their entire store to make it easier for shoppers to find the plant-based items within sections,” she observes.
Mintel’s Shor suggests positioning certain products based on usage, such as plant-based grilling sausage placed on shelves next to sausages containing animal protein, as well as the items being offered alongside one another in online shopping platforms.
Advice for Newbies
This past summer, in a webinar about the plant-based boom, Jeff Crumpton, manager of retail reporting solutions at Chicago-based market researcher SPINS, provided some advice for retailers that are seriously considering highlighting plant-based foods for the first time. “Milk is a good entry point,” he noted. “I’d expect conventional grocers to go after the largest categories first to make sure they have the right assortment. This gives them the ability to understand if there are legs behind this. Then test to see if you bring in plant-based burgers and cheeses, are you seeing the uptick that you’re hearing about in the rest of the industry?”
Crumpton also stressed the importance of promotions and offering larger pack sizes to capture impulse buys, as well as developing private label versions of popular plant-based items.
Last but not least, he advised retailers to consider the importance of store associates in promoting and educating consumers about plant-based foods. “The most important thing is the people you have in your stores who interact with your customers,” he stressed. “You need to be the resource. Educate yourself to know what plant-based diets mean, and how your assortment can react to someone who’s vegan or flexitarian. Being a trusted advocate means customers will keep coming back to you.”
PBFA’s Emmett concurs. “Our Kroger merchandising test included an entire educational package we created that went out to store personnel,” she notes. “Whole Foods is the gold standard in how they educate their store personnel, so we’ve actually used some of their best practices.”
PBFA is further promoting the plant-based lifestyle in its official partnership with the Plant Based World Conference and Expo. While the 2020 trade show wasn’t able to take place in person due to the pandemic, virtual meetings were set up with the help of the organization. “We’ve had more than 100 meetings where we’ve connected with retailers, including Walmart, Target, Kroger and many more,” says Emmett. “We’re continuing those meetings from January through April, and then the focus will be turned to the expo.” (As of now, the 2021 Plant Based World is slated to take place at the Jacob K. Javits Convention Center, in New York City, June 16-17.)
The trade association has also formed a retail merchandising advisory council that brings in experts from all areas of the industry, including distributors, retailers and suppliers, she continues. “Despite the fact that the Kroger results were so positive, a merchandising shift like this also poses challenges,” admits Emmett. “You can’t just pick up an entire section and bring it over without understanding how best to manage that.”
She adds that she’s optimistic about how the industry will move ahead with this new attention to plant-based foods. “The great thing about all the enthusiasm is that we can create a common voice,” explains Emmett. “We want a unified voice, a unified message and a unified approach, so that not every brand is approaching the retailer with a different way of recommending how these merchandising changes happen.”
Mintel’s Shor urges retailers to consider all proteins and how they fit together in consumers’ lifestyles as they ponder their merchandising plans for 2021. “The future protein tool box will include animal, cultivated and plant-based proteins,” she predicts. “The role of retailers will be to show consumers how all of these options fit in their everyday lives.
As the Jan. 2021 issue of Progressive Grocer was going to press, the world’s first cultivated meat product was approved for sale, in Singapore. San Francisco-based Eat Just conducted the first commercial sale of cultivated chicken bites to 1880, its restaurant partner in Singapore. While such an introduction could still be years away in the U.S. market, this launch is historic for the global food industry.
Cultured meat, also sometimes referred to as clean meat or lab-grown meat, is meat produced directly from cells outside of an animal instead of from slaughtered animals.
“We are hoping and expecting that the U.S., China and the EU will pick up the gauntlet that Singapore just threw down,” says Bruce Friedrich, executive director at The Good Food Institute (GFI), a nonprofit based in Washington, D.C.
According to GFI, there are more than 60 startups, numerous international food and life sciences companies, and a host of academic researchers conducting research and development and commercialization efforts in cultivated meat.
While it isn’t exactly clear when these products will arrive Stateside, Emma Ignaszewski, corporate engagement strategist at GFI, says: “Accounting for technical challenges, infrastructure construction needs and regulatory uncertainties, our best guess is that cultivated meat will be more broadly available at upscale restaurants by the late 2020s and potentially available in mass-market restaurants and possibly grocery stores by the 2030s. Hybrid plant-based and cultivated products, which contain only a small constituent amount of cultivated meat, may be available in mass-market restaurants by the late 2020s.”
Dasha Shor, global food analyst and registered dietitian at Chicago-based market research firm Mintel, predicts that blended products that combine cell-based meat with plant-based protein will be the ideal avenue for cultured products to enter the market.
Shor also cites research suggesting that three out of 10 consumers say that they’d be interested in trying cell-based meat. “This is a relatively large number, given the products are not on the market yet,” she notes.
Cultured meat meets the consumer need for realistic meat taste, but familiarity, texture and price will be key challenges in the early days of commercialization, she predicts. “Blends that combine cultured and plant-based proteins in familiar formats like sausages and hamburgers are a win-win: Plant-based ingredients will help to bring down the cost when blended with more expensive cell-based meat, and cultivated meat will deliver the taste consumers crave without using meat from animals,” observes Shor.
She also notes: “It will take some time to normalize cellular agriculture in our society and get over the ‘eek’ factor of producing food in laboratories. There will also be concerns around the level of processing: The final product prepared using the cells requires additives to resemble the color, texture and taste of meat from animals. Any potential legislation that would prevent the use of ‘meat’ terminology on labels for cell-based meat could become a barrier.”