Why plant-based retailing opportunities are hiding in plain sight
Consumers of all stripes are giving plant-based eating a go. But when retailers view the category exclusively through the lens of meat mimics and dairy alternatives, they limit consumers’ choices — and their profit potential. The upshot: The smartest plant-based product mix celebrates the full spectrum of the sector.
Plant-based innovation is on a tear — which is fantastic, given that more innovation generates more interest, more interest generates more purchases, and more purchases generate more consumption. And the more we make plant-based consumption the norm, the more everybody wins: retailers, public health and the planet as a whole.
The catch: Plant-based opportunities come in different shapes and sizes.
“Edgy” innovations make waves, but even in this era of meat mimics and alt-dairy, it’s just as revolutionary to innovate in the opposite direction — to bring plant-based eating back to earth, centering diets on vegetables, pulses, whole grains and other “good stuff.”
Not only do retailers who honor these roots elevate plant-based first principles, but they also generate broader loyalty and greater shopper traffic in the long run.
Imagine the unimaginable
The shopper traffic already navigating plant-based selections would be unimaginable — if it weren’t happening, and in a big way.
Data from the Plant Based Foods Association (PBFA) and Good Food Institute show that U.S. retail sales of plant-based foods grew 27% in 2020, raising the total plant-based market to a value of $7 billion. Over the past two years, plant-based sales even rose nine times faster than food sales overall.
“Plant-based really has exploded,” said Karen Jobb, chief customer and consumer officer, Amy’s Kitchen. “And though it was picking up steam as a trend pre-pandemic, the pandemic accelerated plant-based popularity tremendously — propelling it even further into the mainstream.”
Indeed, fully 77% of U.S. shoppers reported purchasing a plant-based product during the first six months of 2020, per Cypress Research Group, with 30% claiming that their consumption stemmed directly from COVID-19. Even more notable: Nearly 90% of respondents plan to make their changes permanent.
The changing face of plant-based
“Now that plant-based eating is no longer on the fringe,” Jobb said, “shoppers of all ages, backgrounds and demographics — and not just vegetarians — are seeking plant-based ingredients, prepared meals, snacks and other items.”
Data reveals the power younger consumers have to make plant-based eating not just a trend but a way of life. Aramark research from 2018 shows that 30% of millennials are trying to eat more plant-based foods; that same year, Acosta researchers found that 60% of Gen Zers also want to eat more, while 79% of them already eat plant-based foods one or two times per week.
“What this tells me is that although today’s plant-based consumers run the gamut from long-time fans to flexitarians to those just trying the category out, younger consumers hold so much promise for the sector’s future—and even better, their interest is sustainable,” Jobb said. “That presents golden opportunities for retailers to attract young shoppers and keep them through the years.”
The trick lies in offering plant-based products that appeal to these and other consumers — a task complicated by the fact that both plant-based products and their fans are remarkably diverse.
On one hand we have cutting-edge meat and dairy alternatives that let shoppers dial back their reliance on animal foods without forgoing the burgers, nuggets, lattes, ice creams and fully loaded pizzas they’ve always craved.
These items are changing what plant-based products look like. The PBFA reports that plant-based milks now account for 15% of the milk category (45% at natural food stores), representing the largest plant-based category overall at $2.5 billion in sales. Meanwhile, the market value for plant-based meat alternatives hit $1.4 billion in 2020, with sales growing 45% over the year before.
Back to basics
“Plant-based meat and dairy brands are making headlines and forming partnerships with major mainstream brands,” Jobb observed, “and this is a boon to everyone because it builds awareness for the whole category.”
But meat and dairy mimicry isn’t the only way forward.
“As this category keeps growing and evolving,” Jobb said, “consumers are evolving along with it.” That evolution has led consumers to “become more discerning about the ingredients that go into products and the processing they go through,” she said.
And that could land meat and dairy alternatives, which undergo quite a bit of processing and bear ingredient statements that can run to dozens of ingredients, in an unflattering spotlight.
The predilection for “clean” labels and minimal processing has been trending for so long that it’s more accurate to consider it a permanent change in how consumers approach food. As Jobb says, “The fact that consumers desire real, recognizable food, and that that desire underscores a lot of eating habits today is now established as a core consumer belief.”
So while tipping her hat to the food-tech ingenuity that goes into meat and dairy mimics Jobb emphasizes that consumers are thinking more mindfully about the future of food, filtering labels for recognizable, nutrient-dense, organic ingredients — “and demanding that those ingredients to be as close to nature as possible.”
Make it easy
But beyond burgers, Jobb emphasized that the plant-based category is a big tent and that consumers want options in every aisle.
“Consider frozen foods,” she said. “The Plant Based Foods Association says that plant-based frozen meals grew 29% in the past year, outpacing overall frozen-food growth by 8%. It’s now a $520 million category.”
Amy’s catalog of frozen SKUs comprises fan favorites such as pizza, macaroni and cheese, lasagna, pizzas — always plant-based and made with clean, organic ingredients. “And this is important,” Jobb said. “Younger shoppers especially are busy enough; they don’t want to research labels to know what they’re getting. And I know this because I am a busy shopper, and I trust our foods!”
Jobb added that busy consumers want convenience, too, and that products as familiar as canned soup can supply it. “Canned soup offers the ultimate in convenience but also packs in nutrition with lots of veggies, whole grains and — big with us — organic ingredients,” she said. “People who may not know how to approach plant-based cooking at home can find an entire meal in the canned-soup aisle.”
Finally, they don’t skimp on variety — “variety in ingredients, in tastes, in cuisines.” Millennials and Gen Z shoppers are open to internationally influenced foods, and if they’re plant-based — even better. “That’s why it’s great that so many global cuisines are grounded in plant-based principles,” Jobb said.
Her take-home lesson for retailers: “You risk marginalizing your customers — and shortchanging your own bottom line — when you build a plant-based product mix that elevates ‘alt-foods’ at the expense of inherently plant-based foods that consumers also love. There’s room for both.”
“The way we see it,” Jobb concluded, “anything that makes the plant-based choice the easy choice advances the movement.”
And advancing movements has been Amy’s mission from the start. “The very reason that our founders Rachel and Andy started the company was to make delicious organic, vegetarian and plant-based products accessible to shoppers everywhere. And that’s still why we’re here.”
Yet Amy’s mission-driven spoon stirs many pots, from improving their workers’ communities and reducing their environmental impact to supporting organic agriculture and more. “We recently got certified as a B Corp,” Jobb added, “to underscore our commitment to using our business as a force for good.”
And make no mistake: Mindful consumers notice. According to Mintel, 61% of adults prefer to associate with brands that share their core values.
“Retailers have a role here,” Jobb said. “The more people we get eating plant-based, the better off we’ll all be — including our planet. And despite the differences in products, we all believe in plant-based for the planet’s health.”