Why variety is the key to plant-based success

With the increasing spread and consumption of plant-based products, there is a growing need for greater market segmentation and differentiation. The category is drawing the attention of a wide range of consumers: from people interested in health and environmental issues to animal welfare. However, the market is in danger of stalling without constant innovation toward new product types. The need for differentiation in products-from size, to taste, to texture-is key to the success of the category, to its longevity over time. Let’s find out how plant-based product types differentiate adapted to different markets.

Europe

Since 2016, the number of people who identify as vegan has doubled from 1.3 million to 2.6 million in Europe, according to the report drawn up by EIT Foods.

In Europe, the most plant-based Country is the United Kingdom, which has long been a world leader in adopting plant-based diets. According to Mintel GNPD from 2020-2022 in the UK, product launches with plant-based, vegan and vegetarian claims covered 2.4% of total product launches, and included bakery products 19.5%, snacks 13%, sauces and dressings 12.6%, and dairy 10.2%. In the dairy category, 28% were product launches such as hard/semi-hard cheese, and yogurt (18.8%). In the meat and egg alternatives category, the format types are mainly cubed (23.5%), burger (22.2%), and sausage (13.6%). Launches of products such as sliced or fillets remain low.

The German market also turns out to be very active in the plant-based category: consumers are open to trying new products, despite the fact that regional cooking is very much based on meat dishes. The best-selling plant-based products – according to the aforementioned report – would be meatballs, nuggets and burgers. A missing category among meat alternatives is sliced and cured meats, to this day a segment that is still in the early stages of development, with alternatives on the market that do not appear to convince consumers.

However, in other European regions, the product offer is not as diversified: for example, in Poland–according to the report – the most popular products are sliced meats, burgers, cutlets, and wieners, but there is a lack of fresh meat alternatives such as, for example, mince or unfrozen burgers, as well as plant-based alternatives to typical regional products. Again, in Denmark for example, alternative products to fish and eggs are completely lacking.

Even within dairy alternatives, there are regional differences in the variety of supply and consumer choice. In Italy, Denmark and Poland, plant-based beverages, especially those made from soy, oats and almonds, are popular. Among the countries surveyed in the report, Germany appears to have a greater supply of dairy alternatives, such as cheese, spreads and yogurt. However, there is still a shortage in products as alternatives to cheese similar to animal products or that can have different uses.

America & Latin America

Even in the U.S., the trend of more plant-based diets is catching on: according to the State of the Industry Report: Plant-based meat, eggs, seafood, and dairy drawn up by the Good Food Institute, sales of plant-based food increased by 11% between 2018 and 2019, while overall sales of traditional foods at retail increased by only 2%.

Plant milk is the most developed category among plant-based food reaching $2.6 billion in 2021 and showing steady growth. Plant milk also leads in repeat purchase rates for the category (76%) which indicates a high level of consumer satisfaction. The supply of plant milk in the U.S. is very diverse, with a clear preference of purchases toward almond, oat, soy, and coconut beverages.

In contrast, plant-based meat sales remained stable in 2021, seeing meat analogs, which replicate the taste, appearance, and texture of animal meat, as the top products. Sales in dollars of non-analogue products, such as black bean burgers and veggie burgers, fell by 17% over the same period. Frozen vegetable meat accounts for the largest portion of the category in terms of sales in dollars, including 59% of total vegetable meat sales, followed by refrigerated vegetable meat at 40% and storable vegetable meat at 1%.

In the vegetable meat category, the most popular products are burgers, sausages, nuggets, and cutlets. Nevertheless, shelves are filling up with different products such as meatballs, nuggets, and sliced meats. There is still a lack of supply and differentiation in the category of fish and vegetable eggs, although the latter is growing rapidly.

Asia

Some areas of Asia, such as China and India, have adopted high meat consumption diets in recent years as a response to demographic changes and rising incomes. Dairy consumption is also on the rise, seeing China and India covering 39% of global dairy consumption.

Nevertheless, plant-based alternatives, such as soy-based meat, tofu, and tempeh, have long been present in Asian cuisine as part of their culinary tradition. Precisely because of the prior familiarity of the in Asia with alternatives to meat, there is greater reach of these products into the market, leading indigenous plant-based brands to focus more on product differentiation in their target market.  In fact, products such as hamburgers and sausages are not food normally consumed by Asian consumers. Their plant-based counterparts include only a portion of the Asian market, which looks to more familiar products.

For example, according to Mintel GNPD in China between 2020-2022, most product launches with plant-based, vegan, and vegetarian claims were of dairy alternatives (26.3%), followed by snacks (20.3%), juices (13.0%), baked goods (6.0%), and finally alternatives to fish, meat, and eggs (5.6%). In relation to dairy products, the most important category is plant-based beverages, especially soy-based and, as an emerging flavor, oat. In the category of alternatives to fish, meat and eggs, the main serving formats are cubed, burger, sausage and mince.

Innovation and diversification are the basis for the success and longevity of the plant-based category. The more brands launch new products with formats and cooking methods known to consumers, the more consumers will be encouraged and curious to try new products that are recognizable and easily integrated into their daily lives, allowing them to eat good, familiar and sustainable products.