Why brands are receding from the plant-based food opportunity
Plant-based foods were supposed to be the next big thing so why are the top brands exiting the market?
Experts say plant-based options are in demand, but brands need to work hard to stand out / Adobe Stock
March was the cruelest month for plant-based ranges, as Nestle scrapped its plant-based brands Wunda and Garden Gourmet, saying it was “no longer viable.” Meanwhile, Innocent Drinks pulled its plant-based milk from shelves, openly mocking its poor sales (down by 42.0% to £3.4m in the 52 weeks to September 2022.)
NUTTERLY DISAPPOINTING NEWS
We're sad to say that our dairy free range will be leaving shelves in the next few weeks.
We know some of you really love our coconut, hazelnut and almond drinks, so we wanted to say a big thanks for buying them. We really appreciate all five of you. pic.twitter.com/MGE3Vz2JrR
— innocent drinks (@innocent) March 21, 2023
Shaun Okoh, senior strategist, M&C Saatchi London is open to this trend being fuelled by the cost-of-living crisis. Its research (asking 50 people questions over WhatsApp several times a month about how they are responding to the cost of living crisis) unearthed some evidence.
“The study showed that people are more likely to invest in things they feel are necessary for their wellness (however loosely they define ‘wellness’). When asked about planet-conscious purchases specifically, most people said that although they wanted to be planet conscious (and many had been eating less meat), they ultimately prioritized what they could get cheaper.”
Okoh believes that if plant-based options were cheaper, “they would be consumed more. In other words, it’s not that plant-based items are unwanted, they are just more expensive.”
But Camilla Yates, strategy director at Elvis says this oversimplifies what is “a move towards maturation for a relatively nascent category, likely leading to rationalization rather than overall contraction in the long term.”
Her views are in line with insights by Spark Foundry, which reveal that over 90% of searches for sustainable food are exploratory, relating to the category as a whole (vegan alternatives, plant-based food, for example), or particular products (jackfruit, vegetarian sausages, tofu recipes), rather than brand-specific searches.
“This is likely to be in response to the huge growth in flexitarianism,” Yates adds, “which means a much broader spectrum of people are buying into traditional vegan and vegetarian food, but maybe not 100% of the time. Laws of growth suggest that more people in a category creates more light buyers, which will filter out the 'me-too' brands as people dip in and out of a wider repertoire of options.”
Unfortunately, too many brands jumped on the bandwagon too quickly when it came to launching plant-based ranges, without taking the effort to really understand what drives consumers to the category. Ben Essen, global chief strategy officer at Iris explains.
“Brands facing their own ‘cost-of-marketing crisis’ aren’t prepared to spend the money to get educated. Instead, they’re favoring quick, cheap, short-term wins to help prop up the P&L for the quarter.
It’s not enough for Essen. He believes: “What society needs is brands who are prepared to actually get out and push. Sustainability is rarely a short-term win. It requires internal transformation and external changes in behavior change. These changes don’t happen overnight, and require sustained commitment.”
Julietta Dexter, founder and chief growth and purpose officer at ScienceMagic, goes one step further and worries about brands that are hopping on and off sustainable eating trends. “It shows they are focused on quarterly numbers at best, and are marketeers, nothing more. This is not the future.”
She says instead, brands should focus on innovation, transformation and providing customers with a sustainable way to feed themselves.
Essen agrees, adding that a lack of imagination is causing marketers to think they’re scrapping for a share of the existing plant-based pie. “The real battle is for something much more transformational. At this stage, any brand could succeed with the right innovation and commitment.”
So whether brands like Nestle and Innocent will revive their plant-based ranges in the future as the category matures and consumers increase their demands for sustainable alternative foods remains to be seen, but it’s clear that the desire for options has never been greater.