As we enter 2023, each week we will explore one of our 10 trends for the new year. We approach this a bit differently as our trends are developed for suppliers in the food and beverage industry. They are based on what we learn talking to different retailers, suppliers and stakeholders in the industry.
Our sixth trend is Next generation of plant-based protein products. It has been enough to be plant-based protein, now the products need to taste good and sell. There are opportunities for products that perform like the products they are designed to replace. Plant-based is not enough anymore.
Consumers are changing faster than ever. People decided they wanted to reduce or eliminate animal protein from their diet. In the past, our industry did respond to consumers looking to follow a vegan lifestyle, but this was different. Eating vegan is a real commitment. Certainly, it is possible, but people do have to limit their choices. The most recent change included a bigger percentage of consumers and the value chain jumped on board. The more recent changes to the market could be a family eating plant-based protein 2-3 nights per week as opposed to trying to do this 7 nights per week.
Significant choice for consumers
The shift in shelf space to plant-based proteins has been swift. Perhaps too swift. Producers, processors and retailers all reacted relatively quickly to get products into the market and on the shelf.
Last year at SIAL in Montreal, Jo-Ann McArthur from Nourish Food Marketing talked about why consumers want to eat plant-based proteins. The two biggest reasons were their own health and reducing the impact on the planet, from the food they eat.
Overall, older consumers were more concerned about their own health and younger consumers were concerned about the planet. Certainly, it is not all based on age, but for the purposes of marketing and communication, those are good guidelines.
Later, in the program at SIAL, Jane Drummer from Jane Drummer consulting spoke about plant-based proteins. One of the takeaways I had was they need to taste good. Many of these products have taken valuable shelf space and I am not sure who is really enjoying the eating experience. I do recall her saying “please, not one more, bad tasting, plant based imitation chicken nugget”.
Relatively quickly, even during the pandemic, we saw the linear footage of plant based-protein products expand rapidly. There were branded products and private label. It was interesting because retailers often wait to see how products will sell before they dive in with their own brands. Some might say retailers let the suppliers do the hard work to get products established and then swoop in with their own brands. Regardless of your perspective, we did see a lot of new items in the market.
Great ideas need to translate into cases
Regardless of whether they buy for their own health or the impact on the planet, they will probably only buy again if the product tastes good.
It was apparent there was innovation in processing to develop some of these items and this got people excited. We saw full bunkers in the meat department devoted to Beyond Meat and other brands. Maple Leaf invested significant amounts, to only change their mind about the category.
When I want to explain why items come and go, I use the analogy of an apartment building. Retailers are like landlords and they are looking for the tenants who are willing to pay the highest rent. A portion of this rent can be listing fees, which is more of a short-term solution. Retailers are really looking for products that maximize the sales and margin in their stores.
It is possible to buy shelf space with listing fees. It is more desirable to earn it with sales and margin. We did see products getting shelf space with up front investments and perhaps the belief from both retailers and suppliers they would sell.
Now we will see which products are earning their space on the shelf with baseline sales performance. In other words, if they want to stay in the apartment building, they need to pay the rent. If they don’t, other products will be there to take their place.
Delivering sales with plant-based protein
For me it must start with the eating experience. We do purchase these products in our house because we have a daughter who is making the commitment to eat a pescatarian diet. She is also lactose intolerant, which adds another layer of complexity to our menu planning and grocery shopping. I have not kept an accurate count, but if I were to guess, of the plant-based protein products we have purchased we would only buy 50% of them a second time. They just are not that enjoyable to eat. I am not arguing the protein we are getting, I am sure it is in there but I do want to enjoy what I eat.
I am also not always sure where to find these products in the store. Should I look in meat? Should they all be together to make it easier to find them? Is this space in the natural food section? I am not sure I have the answer but I do believe as an industry we need to figure out how to merchandise these items better. Some retailers consider it a category within a department and others put them in natural food. It is difficult to generate sales when consumers are confused about where to find the products. While we figure it out suppliers of these items need to do a great job helping consumers understand where to find their products in the stores.
One other opportunity is to reduce the processing and simplify the ingredients. It is ironic people make the choice to eat ‘healthier’ with these products, but they are more processed and contain preservatives that their competitors do not. As processors learn more about the items and how to produce them, I hope we do see less processed and more natural products and ingredients.
Consumers, suppliers and retailers have been excited about these changes to the market. This year we will get a much better indication of which plant-based proteins will pay the rent and stay on the shelf.
If you have any questions about our SKUFood trends, you can always send me an email peter@skufood.com or call me at (902) 489-2900.
Peter
Coca Cola introduces Simply Mixology
We see more products aimed at consumers looking to enjoy an adult beverage that does not contain alcohol. These SKUS from Coca Cola can be used as a mix for alcoholic or non-alcoholic drinks.
Mixing orange juice with vodka is not new. These SKUS are designed to stand on their own or be a mix. We see more and more non-alcoholic spirits coming from Europe. This category will likely grow exponentially and Coca Cola are getting ready to take advantage of this change.
No resolution to bread price fixing
After several years, we still have not seen any concrete action from the competition bureau relating to the fixing of bread prices in Canada. If you remember, Loblaw admitted to being part of a group of retailers and suppliers artificially inflating the price of bread.
In this issue that impacted such a large percentage of the population over 15 years it does make you wonder what the end result will be? We do know consumers paid too much but it remains to be seen if there will be any penalties imposed.
Where is Peter Speaking?
Learnsphere
Perfect your Pitch Part 1 Feb 14th
Food and Beverage Atlantic Masterclass
Sales and Marketing Feb 15th
Learnsphere
Perfect your pitch Part 1 Feb 16th
Learnsphere
Perfect your Pitch Part 2 Feb 21st
Centre for Women in Business
SPICE program vision idea generation Feb 21st
Food and Beverage Atlantic Masterclass
Sales and Marketing Feb 22nd
Learnsphere
Perfect your Pitch Part 2 Feb 23rd
Learnsphere & BCFB
Supply chain 123 Feb 28th
Centre for Women in Business
SPICE program market research Feb 28th
Food and Beverage Atlantic Masterclass
Sales and Marketing Mar 1st
Food and Beverage Atlantic
Sobeys pitch Mar 2nd
Learnsphere & BCFB
Supply chain 123 Mar 7th
Learnsphere & BCFB
Supply chain 123 Mar 28th
FCC Winnipeg
Getting on the shelf Apr 4th
