By Jonna Parker, Fresh Center of Excellence, IRI
More consumers than ever are saying they want to eat a more plant-forward diet, and plant-based meat alternatives can play an important role in effectively meeting the needs of these consumers. However, these products need to be marketed strategically to the right customers and merchandised thoughtfully to maximize their positive impact. “Plant-forward” also doesn’t always mean “no animal protein” or “no taste” — there are many ways the entire meal-making industry can meet these increasingly complex and evolving consumer needs.
Vegetarians and flexitarians
While the debut of plant-based meat alternatives at fast-food outlets and refrigerated offerings in grocery meat departments has received tremendous buzz over the past few years, the proportion of U.S. consumers who are vegan or vegetarian has changed little. In IRI’s 20-plus years of tracking that specific data, vegans or vegetarians have consistently hovered at around 7% of the overall population.
According to the 2021 Power of Meat study conducted by 210 Analytics on behalf of FMI and the Meat Institute’s Foundation for Meat and Poultry Research and Education, 5% of respondents consider themselves vegetarian and 3% as vegan. A slightly higher percentage say they aspire to be vegan or vegetarian in the future (7% for vegetarian and 5% for vegan).
More interesting is the fact that 69% of respondents self-identify as meat eaters, while 53% aspire to be meat eaters in the future. While 14% of respondents today categorize themselves as flexitarian, 22% hope to define themselves that way in the future.
That means that a significant portion of those hoping not to self-identify as meat eaters in the future don’t aspire to forgo meat altogether. Instead, they want to be flexitarians who increase their consumption of things like plant-based foods, seafood and plant-based meat alternatives. They wish to increase their protein variety and permissibility while assuaging their guilt surrounding animal protein.
This is evident in recent IRI fresh foods shopper data, which indicates a huge overlap between meat and meat alternative purchases. In the first half of 2021, huge majorities of shoppers who bought refrigerated plant-based meat alternatives also purchased processed meat (85.6%), fresh meat (82.8%), ground beef (70.3%) and chicken breast (65.4%).
Plant-based meat can’t compete … yet
Plant-based meats offer the benefits of attracting a younger, affluent shopper who is engaged in the department, making these offerings an important part of the future of fresh departments. But these products are still not at 10% household penetration on the retail side. And about half of that penetration (47% in the first half of 2021) is one-time buyers. And as plant-based-meat trial and repeat starts to cool, the number of meat-alternative items being carried is also scaling back slightly.
The real superpower of the meat department is that it offers consumers so much choice in flavor and cut for diverse recipes. But plant-based meats can’t currently compete in that respect. We’re seeing about 17.5 refrigerated plant-based meat items in stores on average, with a lot of the options differentiated mainly by form and brand. While plant-based meat options in the frozen case have already whittled out many me-too products to achieve significant differentiation, we haven’t seen that yet in refrigerated. With ongoing product innovation, this should change over time.
But it’s also important to keep in mind the size of the prize. Organic produce is arguably the most developed claim in fresh foods. But it took 20 years to get where it is today — and that is penetration with just a third of consumers and about a 11% contribution to total produce department sales.
What retailers can do now
Despite these facts, plant-based proteins still offer a meaty opportunity for meat departments and grocers. To make the most of this opportunity, retailers should:
- Focus on plant-forward eating rather than meat alternatives in your marketing. There’s a larger opportunity to engage flexitarians through plant-based meats, veg/meat mixes and other plant-forward options.
- Understand what your shopper wants and tailor your media and store distribution for these products. Launching everywhere to everyone will not work in this space.
- Consider including plant-based meat products in veggie-forward refrigerated prepared meals to encourage trial and reach the right shoppers.
- Make the products shoppable, but consider the opportunity cost, too. Is the plant-based-meat SKU delivering enough in that desirable slot in the meat case? Or should it be in frozen or somewhere else?
- Look at your plant-based meat products across all your departments carrying meat alternatives — frozen, fresh and produce. Do you have too much duplication? Or are these products adequately differentiated?
- Consider the attributes people look for in meats (protein, saturated fat content, cholesterol, amount of sugar, desirable nutrients, etc.) and consider creating or adding products from that perspective.
When it comes to meat alternatives, it’s all about rightsizing and providing the right options to the right shoppers. Retail has always been a volume-driven industry, and plant-based meat alternatives aren’t positioned to do massive volume anytime soon. In the first half of 2021, refrigerated plant-based meat alternatives achieved $249 million in sales — a drop in the bucket compared with the $40 billion in sales for the meat department. Instead, plant-based proteins offer value for their margins, their ability to satisfy important customer segments and their contribution to the total basket.
In the future, innovations in plant-based meat alternatives will likely deliver additional variety, ongoing taste improvements and better value. But these products are currently still niche items, like grass-fed beef. They serve a hardcore dedicated segment of the population that loves them and continues to buy them and should be viewed from that perspective — at least for now.
To learn more, check out the recent webinar and podcast I did with Anne-Marie Roerink, principal and founder of 210 Analytics, and reach out to your IRI representative or IRI@IRIworldwide.com with any questions.