What do Benedict Cumberbatch, Natalie Portman and Ariana Grande have in common? Apart from being talented, successful, and incredibly famous, they’re all vegan. And it’s not just celebrities that are eschewing animal products. 

Over the past decade, veganism has evolved from an extreme diet followed by animal rights activists to an applauded and embraced way of protecting the environment and living a healthy lifestyle. And it’s creating lucrative new opportunities in the plant-based food and beverage space. 

But what exactly is the size of the prize? And how can brands maximize share in this growing market? Let’s take a closer look… 

How big is the plant-based food and beverage market? 

Globally, demand for dairy and meat alternatives is soaring year-on-year. Analysts predict that plant-based food and drink sales will rise at a compound annual growth rate (CAGR) of 11.9% to reach $74.2 billion worldwide by 2027.

2020 was a particularly successful year for vegan food sales. Consumers started taking their health more seriously during the pandemic, and also developed their relationship with nature and the environment during lockdown.

In the US, plant-based food sales rose by 15% in 2020 – twice as fast as the overall retail food market – with 57% of Americans now purchasing animal-free alternatives. In the UK meanwhile, plant-based brands enjoyed bumper profits. A good example of this is bean protein brand Oumph!, which increased its sales by 400% during the first quarter of last year. 

And it’s not just meat-free burgers and sausages catching consumers’ eyes. According to TheVeganKind Supermarket, 2020’s top-selling plant-based products included cheese, butter, milk, chocolate, crisps and egg substitutes. And with Netflix documentary Seaspiracy driving interest in vegan alternatives to fish, there are further growth opportunities within the market during 2021. 

Why do more consumers want to eat a plant-based diet? 

One of the most interesting aspects of plant-based sales growth is that it’s not being driven by a complete conversion to veganism. Nielsen research has revealed that 98% of meat alternative buyers also purchase meat, as more people adopt a ‘flexitarian’ approach to eating. 

Why? For 62% of consumers, the primary driver is environmental concerns, the Nielsen study disclosed. Meanwhile, separate statistics show that 65% of people believe it offers them general health benefits, 53% believe it encourages them to eat more vegetables, and 30% feel it is helping them lose weight. 

Interestingly, only a quarter (26%) of the general public have cut down or eliminated meat and dairy products on the grounds of animal cruelty – the traditional key motivator for adopting a vegetarian or vegan diet. 

As we’ve already mentioned, the pandemic has also had a transformative impact on people’s eating and drinking habits. 1 in 5 UK consumers (18%) increased their plant-based food consumption during the height of the coronavirus crisis, while they had the time and focus to readdress their dietary habits. And a fifth of these people anticipate becoming fully vegan in future. 

Several supermarket retailers capitalised on this trend for free-from alternatives over the 2020 Christmas period, marketing plant-based products such as the no-turkey crown, veganettone, and faux gras pate as festive treats.

How can brands successfully enter the plant-based space? 

The market is growing, the consumer appetite exists… so how do food and beverage brands grab their share of the plant-based plate? 

A clear brand identity and well-thought-out product range is critical for competing with current market leaders, and compelling customers to step away from their usual meat or dairy purchases. 

It’s no longer a battle to become the best vegan alternative; increasingly, retailers are marketing animal-free options alongside mainstream products, to appeal to flexitarian shoppers who want to try something different. In fact, plant-based meat sales are shown to be 23% higher when products are placed in the meat aisle, rather than their own dedicated section. 

Also, dedicated plant-based brands are competing with generalist food and beverage manufacturers that are diversifying their product range to grow overall sales. For example, Heinz has launched vegan mayo and salad cream, Bird’s Eye recently added vegan chicken burgers and grills to its Green Cuisine range, and Mars has expanded its Galaxy product base to include vegan Galaxy hot chocolate. 

How important is marketing, packaging and labelling to plant-based product sales?  

With any market disruptor, the way in which brands package and market their product to curious consumers will determine its success. However, promoting a plant-based product is not as simple as slapping ‘vegan friendly’ on the label. 

In fact, focusing on vegan suitability may not be the best approach. In a US consumer attitudes study by food development specialist, Mattson, 73% of people said products marketed as ‘100% plant-based’ sounded like they would taste better than something labelled as vegan.

Adopting a plant-based marketing angle also appeals to consumers who are interested in the health and environmental credentials of their food choices. Vegan gourmet sweet brand Candy Kittens is a prime example of this: its packaging promotes a wealth of ethical ingredients and measures, including the fact its confectionery is palm oil free and uses natural flavours. 

But while the main marketing approach may be focussed on plant-based composition, it’s still critical that each product’s exact dietary criteria and allergens are still clearly listed, to ensure consumer safety and confidence. And the naming conventions of the actual products need to be considered carefully as well: while the EU rejected calls to rename non-meat burgers ‘veggie discs’ last October, a growing number of US states are banning plant-based protein products from being referred to as beef, chicken or meat. 

Finding a foothold in plant-based food and beverages 

As we’ve seen from the stats already shared, plant-based food and beverage sales will grow exponentially over the next 5-10 years. And this level of mainstream adoption will open the door for an even more diverse selection of vegan products to hit the shelves.

To find a foothold in this space, brands – whether they’re focussed on free-from or looking to introduce new plant-based alternatives to their range – need to create products that appeal to curious and flexitarian consumers. 

Branding and packaging design is key to reaching this audience, as focusing on the item’s health and environmental credentials (as well as its taste) is far more likely to get people reaching for a plant-based alternative than simply pointing out that it’s vegan-friendly. 

For more insights on the plant-based food and beverage market and help with your labelling, follow Hooley Brown on LinkedIn. 

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