Consumers wanting to buy vegan alternatives to meat and dairy products have to date been directed to the specialty section of retailers, such as the free-from, natural or healthy aisles. Brands making these products have had little say in regards to the positioning of their goods, and indeed many are happy to be placed in these separate channels.
Meat-free Canadian company Gardein, for example, which was bought by Pinnacle in 2014, generates 100% of its US retail sales from the specialty frozen grocery section, typically being shelved in the meatless and/or ‘healthier for you’ sections of the store, according to Mike Barkley, president, Boulder Business Unit. “We recognize that plant-based purchases are most often planned shopping occasions, as people are specifically seeking out plant-based and other healthy products as part of their grocery trip,” he says. “We try to make the shopping trip as easy as possible for these consumers by shelving our products along with other healthy lifestyle options that they’re likely to be purchasing. Overall our vision is about making meatless eating accessible and convenient for the most people possible.”
However, there’s now a move by some of the creators of vegan and plant-based burgers, sausages and other alternatives to animal-based food products to encourage retailers to sell their range in the meat case, or alongside meat products in the frozen section.
Beyond Meat, for example, whose investors include Bill Gates and Leonardo DiCaprio, has taken the lead on this, even going so far as to refuse to sell its Beyond Burger to retailers unless they agree to place it in the meat case. “We made a rule that if they weren’t going to put it in the meat case, we weren’t going to sell it to them,” explains founder Ethan Brown. “If they put it in the meat case, they can also put it wherever else they’d like but it definitely has to go in the meat case.”
Brown’s argument is that when people are shopping for protein, they shouldn’t have to traipse through a store to a separate section to gain access to plant-based meats. “If you have to lure them over into another part of the store into the meat substitutes section – what we refer to as the penalty box – you lose an enormous amount of customers,” he says.
In addition, despite opposition from the US Cattlemen’s Association which has filed a petition to USDA to prevent plant-based products being labeled as meat, and France passing a law to this effect, Brown is adamant that plant-based meats are and should be recognized as meat.
“It’s just meat that’s been built from plants,” he asserts. “Our company observation has always been that you don’t need an animal to produce a piece of meat; you can obtain all of the core parts of meat – the amino acids, the lipids, the trace minerals and of course water from non-animal sources. And you can assemble those in the same architecture as animal meat. So if you have the same things, it’s presented the same way, tastes the same way, why can’t we call that meat? It kept coming back to the fact that you can, and so I wanted the Beyond Burger sold where meat was sold.”
Initially the company experienced resistance from retailers. “We requested as far back as 2012 that we wanted our products to go into the meat case and it wasn’t received well,” says Brown. “I think it’s fair to say our products weren’t ready and so we continued to invest in development to get them to be closer and closer to the animal protein equivalent.”
It was a bold move in 2016 by one of the vice-presidents of Whole Foods who was running the Rocky Mountains region in Colorado that tipped the scales after he agreed to put the Beyond Burger in the meat case. “We’re indebted to him for doing that because it created this whole trend where others were willing to do it and now it seems like most retailers agree that’s where we belong,” says Brown.
Because Beyond Meat is a nascent company whose technology – which allows its burgers to ‘bleed’ using beet juice – is continually developing, it’s still early stages when it comes to sales data, but there are already some promising results.
Figures from one of the largest conventional retailers in the US reveal that out of all its grocery stores in southern California in the five weeks up to 17 April this year, the Beyond Burger was the number-one-selling beef patty in the meat case, according to Brown. “So we’re selling more than Angus beef, more than 80/20 beef, more than grass-fed beef, by unit,” he says. “My expectation about being in the meat case was to simply hold on and not get thrown out. I never thought in a million years that we’d rise this quickly to be the number one seller in terms of patties in the meat case.” [article continues]Beyond Meat’s products – which now include sausages and strips and are priced at the high end of organic and grass-fed counterparts – are currently sold in 25,000 retailers across the US from Whole Foods to Walmart. Brown says the company’s sales doubled over the past year, and will double again this year. As the technology develops, he anticipates prices coming down and sales to continue to increase. “Our biggest issue is keeping up with demand,” he says.
Another sign that times are changing when it comes to the placement of vegan meat products in retail stores is the recent sales of Don Lee Farm’s organic plant-based burger. The California-based company – which also makes animal-based meat products – announced last month that it had sold more than a million of the burgers in less than 60 days. What’s particularly notable is that these sales came exclusively from Costco stores across the country where the product is placed in the freezer department alongside meat-based items such as Kirkland raw beef patties.
According to Don Lee Farm’s development expert Danny Goodman, the plant-based products – which are sold at several other mainstream supermarkets in the US including Publix, Vons and Stater Bros – have now become a majority portion of the company’s incremental sales, accounting for three-quarters of the total.
Goodman believes other retailers will start to follow Costco’s lead when it comes to positioning plant-based products. “Generally, our organic vegetarian and plant-based items are positioned in the healthy or alternative sections at retailers,” he says. “However, innovative club stores like Costco have always placed our items alongside other meat items in the same category. This thinking is more in line with how retailers will see our items in the future as they catch up to how shoppers categorize them themselves: all burgers together and all hot dogs together, whether it’s beef, pork, turkey or plant-based. The barrier separating the alternative sections and the meat sections has been blurring over the last several years and they’ll continue to fold into one another.”
DON LEE FARMS
His predictions carry weight, given that similar moves have been made by retailers to stock plant-based milks, cheeses and yoghurts alongside dairy products. “For decades, plant-based milks were tucked away, only for people who sought them out,” says Alison Rabschnuk, director of corporate engagement at the Good Food Institute. “During this time, they were a negligible portion of the market. Then Dean Foods bought [vegan milk brand] Silk and positioned it to compete on taste, price and convenience. Now plant-based milks are sold in the refrigerated section alongside dairy milk and comprise 10% of the market. That’s the way forward for growing the market share of other plant-based products – compete on taste, price, and convenience.”
This is the strategy that JUST – formerly Hampton Creek – is employing. Its shelf-stable eggless products, including its Just Mayo mayonnaise, are sold alongside mainstream items in more than 90% of its retailers, something that vice-president of retail partnerships Matt Riley says is key to the company’s success. “Achieving our ultimate goal of helping create a world where everyone eats well requires us to appeal to more than vegan, vegetarian and predominantly plant-based consumers,” says Riley. “Creating products that taste great and are priced right is half the battle. Ensuring our products are stocked alongside conventional competitors is also incredibly important.”
According to Riley, recent US retail point-of-sale data shows that Just Mayo is the only 30oz growing in the grocery category and at a top three national retailer, it leads growth in 30oz mayo. It’s these kinds of results that are leading retailers to be more flexible and willing to listen to brands in regards to where the latter’s products are placed in stores. “We’re helping bring growth back to all those categories that have been flat or declining for some time,” says Riley. “Our partners view us as part of the solution.”
Tommy McDonald, chef at long-running vegan meat company Field Roast in Seattle, agrees. “As plant-based food manufacturers, we’re in an interesting position because our category is growing so quickly,” he says. “Many larger grocery store groups feel like they’re behind the curve when it comes to what we do, so they seem much more receptive to our input than they have been in the past.”
An example of this is one of the US’s oldest conventional retailers, Stater Bros, which, according to Brown, recently ran adverts on its own dime promoting the fact that Beyond Burgers were available in the meat case of its stores.
With the continued fast growth of the plant-based meat and dairy markets, retailers would do well to continue to be open to experimenting with placement of vegan products. What’s needed is data comparing sales of the same products in a specialty section with sales made alongside animal-based foods. Given that shelf space is highly coveted, stocking the same product in different sections of the same store, is, of course, somewhat of a risk for retailers. But with new players continuing to enter – and shake up – the meat and dairy spaces with plant-based alternatives, it’s clear that old ways of doing things are even riskier.