Veganism is taking the food and beverage sector by storm. Could the fast-growing vegan industry offer a healthy cash boost for your business?
Adopting a vegan diet has never been more popular. And as that popularity grows, driven by concerns about the environment and animal welfare, so some major brands are starting to develop more products catering for a vegan lifestyle – and changing the shape of the sector in the process.
We look at what is fuelling the sector's rapid growth, some key vegan industry statistics and how some businesses are embracing the opportunities in catering for a vegan lifestyle.
Source: Mintel
Trefor Griffith, our Head of Consumer Industry and Food and Beverage, agrees that more businesses will be likely to follow that consumer pattern. “Most of the largest food retailers actually think that veganism will be a relatively small element of their business, despite its publicity,” he says. “Vegetarianism, however, will be a much more mainstream option for the consumer.”
Veganism intersects with key issues for modern consumers by being seen as both ethical and environmentally friendly. Indeed, a recent UN report claimed that switching to a plant-based diet could have a major impact on the climate crisis.
Price is another factor affecting demand for vegan food. Some of the increase in those taking up a flexitarian diet is a pragmatic reaction to the price of meat.
“There is an emerging middle class in many of the countries from which we import meat,” Griffith explains. “Countries such as Argentina will sell more of their meat domestically than they would have done 10 years ago, which puts the price up for international markets.
He predicts that consumers in the UK will start to weigh up the price of meat alongside its ethical and environmental impact. But cost is not an issue confined to meat. It’s often a delicate balancing act between selling a product that is sustainable, organic and healthy – all key consumer desirables – and one that is still competitively affordable.
“Consumer behaviour can often be contradictory,” says Griffith. “Consumers want things to be organic, locally produced, environmentally friendly – and for the deck of ingredients to be clean. But if something similar is on offer for a pound less, they will tend to choose that instead.”
Until these products are at a consistently affordable price, says Griffith, they will remain niche.
One niche gaining traction, albeit slowly, is the emerging market in lab-grown meats. This involves growing meat from real animal tissue, in lab conditions made to echo those of an animal by feeding the cells proteins, sugar, salt and oxygen. It requires less land and energy than regular farming and one assessment has suggested that switching to meat grown this way could reduce greenhouse gas emissions by at least 78%.
Some of the largest meat producers are sufficiently spooked that they’ve invested in the competition themselves – American food giants Cargill and Tyson Foods investing in alternative meat producer, Memphis Meats, for example.
Other brands have seen hugely successful partnerships with specific products; some of the biggest success stories have come about as a result of strong marketing. Greggs, the high street baker, partnered with market leader Quorn to create its vegan sausage roll. Shares in the bakery jumped on the back of sales, which exceeded all expectations.
The surrounding PR effort is seen as a blueprint for marketing this kind of product. It also offers businesses an opportunity to reach new customers. GlobalData’s research highlighted that businesses launching vegan products often target a younger demographic. This group is not only more inclined towards a vegan or a plant-based diet than older consumers, but is also far more engaged on social media.
And, as Greggs’ marketing team expertly demonstrated, social media remains a powerful tool.
With no single type of product catering to all tastes, there is still plenty of scope for R&D in the sector, as consumer habits develop and food manufacturers incorporate new protein sources and plant-based versions of familiar products.
Until then, businesses should focus on engaging with a market open to limiting meat eating, conscious of sustainability and health benefits, and that wants to find a way to feed people for less.
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