Plant-based:Assessing consumer demand for alternative proteins

Susie Stannard, AHDB

Presentation Information

Plant-based NPD is proliferating in retail

2

*Co-Op’s Meat Free range was announced in January 2019

Food service outlets are also responding

3

26%

Gluten-free

55% 562% 46%

Data source: MCA Menu Tracker. 48 leading chain restaurants, managed pubs/bars and fast

food brands analysed. Spring/Summer menus 2018 vs 2019

Menu examples

Vegetarian Vegan Dairy-free7% share

of menu

Plant-based in the UK in context

*Total Meat, fish and

Poultry UK

£11.9 billion

+0.2%

*Total Dairy UK

£11.0 billion

+0.1%

1.77bnPlant-

based

Source: *Kantar Worldpanel 52 we Aug 2018. Plant-based includes dairy alternatives (£379.8 mn and meat alternatives including plant-based ready meals, pies and

pizzas worth £1.4bn)

+8

%

+14

%+7

%

Meat meal

alternativesDairy

alternatives

But what has driven this growth?

Healthy eating, environment and meat reduction are hot topics in the media

LINKQ

Social media has been a key driver of growth

But despite high media attention the vegan diet is still adopted by a minority

Claimed 2%

Actual 0.6%

7% 8%

Source: AHDB/YouGov Consumer Tracker & Kantar Worldpanel

Here we define flexitarian as

cutting back for health reasons

13% looking to reduce red meat

9

Should be consumed in

moderation:

58% sausage/bacon

46% beef

36% lamb

40% pork

19% chicken

Eat too much red meat and will try to eat less

Eat about the right amount

Don’t eat enough red meat and will try to eat more

Am not too concerned about the amount of red meat I eat

Don’t know

13%

51%

5%

25%

5%

Apr/May

2019

Nov ‘15 55%

Nov ‘15 8%

Base: All respondents in Meat 3 section (Apr/May-19: 1024)

YGq15: What do you think is a healthy number of times to eat red meat and meat products each week?

YGq16: Thinking about the amount of fresh red meat and meat products you currently eat, which of the following statements is most accurate?

15% say they are

eating less dairy

10

11% of meat free meals are

eaten by vegetarians

14% of plant based meals

are eaten by vegans

Kantar Worldpanel / Total Foods / 52 w/e February 2019

The plant-based trend is NOT about vegans

Health, the environment and animal welfare are the claimed drivers of meat reduction

Base: All respondents in Meat 1 section who ate less meat than previously (May-19: 266)

EQ8_rb2: Which, if any, of the following are reasons why your consumption of red meat has changed over the last month?

Top reasons for eating less red meat: (May-2019)

11

46%

31%

24%

19%

20%

I've changed my diet as Ibelieve it is healthier to eat

less red meat

I want to reduce my impacton the environment

I want to reduce my carbonfootprint

Red meat is too expensive

I'm concerned about animalwelfare

48% 45+

vs. 28%

16-24s

38% 16-

24s vs

23% 45+

Health now

accounts for a

third of all our food

choices….

£20.3bn

Health has grown

by 10% since

2015

Kantar Worldpanel / Total Foods / 52 w/e February 2019

32%Servings chosen

for health

Impact on animal proteins?

Long term losses to white meat

Source: Gov Family Food Survey

0

50

100

150

200

250

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

Quantity of food and drink purchased for UK households (Avg g per person per week)

Beef Lamb Pork Fish Chicken

Latest Year: Fresh primary beef and lamb volume decline. Strongest growth continues to come from chicken.

Source: Kantar Worldpanel 52 w/e 14th July 2019 Fresh primary proteins YOY % Change

Spend Volume

+2.4 +3.3

-1.5 -1.1

+2.5 -1.4

-0.8 +1.1

Leaner, more versatile cuts are

causing stability.

Larger joints are seen as expensive

with long cooking times.

16

Primary Meat & Poultry promotions have

pulled back heavily…

…promotions have reduced across the board,

but key competitive categories like pizzas and

ready meals have retained much higher levels

of promotion

Kantar Worldpanel – Meat, Fish & Poultry Comparative Universe – 52 w/e 16 August 15 vs 11 August 19

The biggest danger to primary beef lays within perceived healthier primary proteins

Primary Beef

Primary Chicken

Primary Fish

Primary Pork

Primary Lamb

Source: Kantar | Switching Spend Primary Beef - 52 weeks ending 14 Jul 2019

Primary beef loses Sources of switching

22.5m

switching into other

primary MFP

17.7m

existing shoppers

cutting back

Broadening the market to total MFP and

vegetarian, losses to all vegetarian

products account for 14%

18

-6%

-4%

-2%

0%

2%

4%

6%

FISHCHICKENLAMBPORKBEEFTOTAL

PROTEIN

Protein % change 2018 vs

2019

Kantar Worldpanel / Total Proteins / 52 w/e February 2019 vs February 2018

Despite this, consumer demand for protein remains high.

Plant-based milk alternatives are growing fast but from a low base

GB - Total MilkVolume (000 L) | Yr on Yr % Change | Total Market | Fat Level: Total Milk | Total Milk | 52 w/e

Plant-based

share market 4%

-40.0

-20.0

0.0

20.0

40.0

60.0

80.0

100.0

Volu

me (

000 L

)-Y

r on

Yr

% C

hange

09-Sep-18 08-Sep-19

-40000 -20000 0 20000 40000

20

-15.4%Fromage

Frais

+0.8%Yoghurt Drinks And

Juices

+0.3%Fresh Cream

-0.7%Butter

+3.4%Yoghurt

+1.8%Total Cheese

-0.5%Total Milk

-0.1%Total Dairy (Excl.

Lard Eggs M

YoY volume difference

Kg (000s) difference YoY

52 w/e 20 May 18 vs 52 w/e 19 May 19 | Total Dairy by type exc. alternatives | Volume change actual and %

Slight declines in milk volumes this year have been partially offset by strong growth in cheese and yogurt

Plant-based share milk

market 4%.

11% growth

Consumer views on plant-based?

Around a quarter of consumers are regular buyers of meat substitutes

Source: AHDB/YouGov | How often, if at all, do you eat meat substitute products (e.g. Quorn, Tofu, etc)? | Apr/May 2019

12%

12%

8%

15%

50%

2%

Meat substitutes

Less often

Don’t

know

Once a

week or

more

Every 2 to 4 weeks

Once every

few

months

Never

-5 WoW

+4 WoW

Non-meat products shouldn’t use

descriptions like sausage, burger and

steak

Putting the meat substitutes next to meat

in supermarkets is confusing

I have accidentally bought a meat

substitute product before

40%

27%

9%

Net: agree with the following (Aug-2019)

There are worries that it is too hard to get the right nutrients

57% are concerned they will miss out on key nutrients

• Source: 1 and 2 IGD ShopperVista, 30th Aug – 1st Sep’19. Base: 2,103 UK grocery shoppers. % excludes shoppers

who said they “Don’t know

52%

46%

50%

56%

33%

34%

34%

31%

15%

19%

16%

14%

Overall

Vegan shoppers

Vegetarian shoppers

Flexitarian shoppers

It's more complex following a vegan or vegetarian diet

Neither

It's easier following a vegan or vegetarian diet than a meat-based diet

% of shoppers following or considering each diet who agree with each statement…

45%

21%

34%

A vegan diet is less healthythan a non-vegan diet

A vegan diet is healthierthan a non-vegan diet

Don't know

Jul-19

Base: All respondents (Feb-19: 5277/(4094) / Not vegan (4053)

ERC_NEW: Considering these definitions, which of these best describes your usual eating habits?

V1_W11: How likely or not is it that you might become vegan in the future?

V3_wave13: In general do you think a vegan diet is healthier or less healthy than a non-vegan diet?

YGq63_wave_15: Did you take part in Veganuary this year? Veganuary is a charity that encourages people to try vegan for January.

Most consumers are not yet convinced that a plant-based diet is necessarily healthier

24

Healthiest option

If health is a major driver of demand for plant-based, can ultra processed products meet that need?

26

33%

Health

56%

Convenience

78%

Enjoyment

£20.3 billion

Kantar Worldpanel // Total in home and carried out consumption // 52 w/e 12th of August 2018

Health is a growing driver of food choice generally…but what about enjoyment?

Sensory qualities of meat and dairy substitute products have undoubtedly moved on: but not yet at parity

47% vegan foods don’t taste as good

• Source: 1 and 2 IGD ShopperVista, 30th Aug – 1st Sep’19. Base: 2,103 UK grocery shoppers. % excludes shoppers

who said they “Don’t know”; 3 and 4 Mintel

39% vegan meals are boring

39% vegan meals are over priced

Tricks like “bleeding burgers” are not for everyone

15% meat-free burgers that bleed are appealing

• Source: Mintel

The Future

Return to recessionary behaviours – animal protein’s heartland

KWP Usage: Total in home and carried out foods

52 w/e March 2019

More foods consumed because they ‘needed

using up’

More cooking from

scratch especially

in batches

More lunchboxes and

breakfasts carried from

home

Families eating

together more

57000

57500

58000

58500

59000

59500

60000

60500

In Home / Carried Out Foods

Millions of Occasions

Uncertainty around the

economy and Brexit are

driving short term

changes….

+126mscratch main meals

including MFP

More cooking from scratch

especially in batches

…plant-based is used less

in scratch-cooking. Some

challengesKantar Worldpanel Usage. Savoury scratch cooking. Main meals. MFP. Total In Home

52 w/e July 2019

The Future

• Still opportunities and headroom in plant-based growth – environmentally driven – but

growing awareness of “green washing”

• Challenges:

• Delivering taste/enjoyment credentials to bring in new shoppers/retain existing

• some early signs of market saturation – e.g. Nestle pulling launch of Garden

Gourmet. Product has to be absolutely right in such a competitive space

• Price point and pack sizes to enter the vital family market

• Consumer demand for health sometimes at odds with level of processing in some

products – those offering more natural benefits such as Wicked Kitchen offer less

compromise. Consumers realising plant-based is not a by-word for healthy

• Increase in retailers entering the space is likely to limit margin in future

(2016 27% market entries own label, compared to 38.6% now)

• More players entering the market, especially big FMCGs like Unilever and Kellogg’s.

How much is manufacturer/investor push compared to consumer pull?

• How will plant-based fare in a more challenging economic climate?

Thank you

Susie.stannard@ahdb.org.uk

www.ahdb.org.uk/consumerinsight

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