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24 May 2022

The industry uses innovation to push the creation of a plant-based category

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The performance of the consumption data for veggie products and the considerable effort being made by the industry to create the category, places us before of the niche with the greatest growth potential for the coming years in the packaged food supply. Meat analogues will lead the evolution of the segment in 2021, while the vegetable beverages category returns to its pre-pandemic growth rates.

ALIMARKET Gran Consumo

The plant-based segment continues to have the wind at its back, making the headlines for innovation in the national food industry. After a 2020 during which the main categories involved progressed at double digits, in 2021 alternatives to meat products were at the forefront of this growth, progressing at a rate of 19%, according to the data provided by the company IRI, to accelerate to 37% in the meat replicas segment, reaching a market value of €78.9m. Yoghurt and dairy dessert alternatives, followed closely, with a growth of 17.6% and a market value of €61.7m. Meanwhile, the vegetable drinks category, the most mature of the three, and certainly the big surprise of 2020 (+12%), remained positive, returning to its recent pre-pandemic records, to show a 3% increase in demand, reaching € 299 M.

The performance of these consumption figures, which are in line with the progressive growth of the flexitarian population, according to studies such as 'The Green Revolution', and above all the notable effort being made by the industry in the creation of the category, place us today in before the niche with the greatest growth potential for the coming years in the packaged food supply.

"The most important thing is to understand consumer motivations, to understand why this change is happening," Hugo Verkuil, CEO of The Vegetarian Butcher, Unilever's meat replication division, explained recently. "We see that consumers, on the one hand, value animal welfare, which is at the origin of why layers such as vegetarians and vegans started to adopt this diet. Then you see how it has evolved towards a type of consumption that is understood as healthy, and thirdly, there is concern for the environment, which is the fastest growing motivation. I believe that if the taste experience is good and the price is right, the consumer will be driven by these consumer motivations and will easily adopt the plant-based diet.

The MDD standardises the price of meat replicas to below 3€.

With this reflection, Verkuil also put on the table one of the key challenges facing this offer in order to face the democratisation of its consumption: price. Today, even in a really complicated context for the study of this variable, the leading national retail chain, Mercadona, markets its natural soya desserts under its own brand with an average price 120% higher than its natural yoghurt under the same brand. For its part, in the vegetable hamburger category, where it operates with the 'Kioene' and 'Tivall' brands, these have a differential of 70% and 132%, respectively, compared to the beef and pork burger. One has to go as far as the vegetable drinks segment to see how this differential is narrowing. Here, a litre of 'Alitey' vegetable oat drink, the variety most in demand in the category, is sold at a price 20% higher than a litre of 'Hacendado' semi-skimmed milk.

In an inflationary scenario such as the current one, in which the consumer's purchasing power is being eroded, different sources in the sector are already warning of the risk of a slowdown in the evolution of demand for the categories with the greatest price differential, which could be compromised in the coming months as consumers return to a more basic basket.

This inflationary movement, however, was not yet reflected in the data for 2021, where we see that the average price of vegetable beverages fell by 1.4%, to around €1.4/l, while the RRP of vegetable alternatives to meat products recorded a contained increase of 0.6%, to around €11/kg, driven upwards by changes in the product mix, where sales of the meat replica category, the segment with the highest average price, are gaining weight.

Precisely in this last category, the youngest on the shelves, which has been on the market for less than three years, we have been witnessing very significant movements over the last few months aimed at configuring the price segmentation of its offer. These are the moves made by three of the five main national chains (Mercadona, Carrefour and Lidl), whose positioning in this segment, with their own brands or with "ad hoc" brands, has standardised their price with private label below €3.

The latest to make a move was Carrefour, which last September, under the 'Veggie' banner, presented its first range of replicas, made up of products such as hamburgers, minced meat, sausage and escalope, produced by Sediasa Alimentación, part of Grupo Fuertes, which also represents the company's entry into the plant-based category. The chain's unit price is €2.99, and the average price per kilo is between €10.87 for minced meat and €13.29 for longaniza.

An interesting mix between corporations and startup’s

Over the last few months we have seen a more than notable increase in activity in the category, both from industry and distribution, with initiatives by leading operators such as Mercadona, Carrefour, DIA, Danone, Campofrío, Dacsa, Nestlé, Palacios, Liquats and Campofrío. Also from the startup ecosystem, we have gathered together outstanding projects such as 'Heura', Zyrcular Foods or Sanygran, among others, to configure a very complete mix of strategies, with very diverse industrial and commercial approaches (B2B and B2C), to respond to a potential consumer who continues to progressively join the veggie wave.