Studies & Numbers

Report Predicts Further Consolidation in Plant-Based, Finds Consumers Prefer Products That Do Not Resemble Animal-Based Foods

A report by UK & Ireland law firm Browne Jacobson has found that almost two-fifths (39%) of UK adults are discouraged from buying plant-based products due to their cost. Notably, the firm also states that a third of UK adults report they are less likely to purchase such products if they “resemble animal-based food and half of those who follow a vegan diet (49%) would prefer plant-based foods to differentiate from animal-based products“.

25% of participants said they felt there were fewer plant-based options in supermarkets this year compared to last year, with this figure rising to 43% among vegans. The report cites this as evidence of further consolidation in the plant-based category, claiming that this trend will continue due to the cost-of-living crisis.

An opportune time

Says the report, “In the context of a slowdown in merger & acquisition activity amongst food & drink manufacturers, thought to be because of economic uncertainty, geo-political instability, and rising inflation, companies will need to have a strategy to expand market share and diversify product portfolios as well as investing in innovative technologies as digital and automated businesses offer higher productivity levels and are less impacted by persistent labour shortages.

“Companies with a strong financial position and private equity investors may view this as an opportune time to acquire emerging plant-based brands, especially those with innovative products or strong market niches.”

VFC portfolio brands

This sentiment has been echoed by The Vegan Food Group, recently formed as the new entity for VFC and its acquired brands Meatless Farm and Clive’s Purely Plants. The group said it planned to make further strategic acquisitions to become a “vegan Unilever”, noting that it would be mirroring the strategy of global food giants by focusing on consolidation in order to create streamlined operations, cost efficiencies, and a robust market presence.

“It’s clear that many of the plant-based startups have struggled to hit the fast growth trajectories expected, and with the appetite for investing in this space having cooled, there’s going to be a lot more consolidation required,” Matthew Glover, Chief Mission Officer at The Vegan Food Group, told vegconomist. “Some really exciting startups are going to need to consider whether to merge, sell, or disappear, and this is an opportunity for both VFG and the wider movement.”

Labelling confusion?

Browne Jacobson has simultaneously released the findings of a second report in which it claims one in five UK adults have confused plant-based products with animal products due to branding or labelling. The research also found that almost a third of respondents are less likely to buy plant-based products that resemble animal foods, while 49% of vegans prefer plant-based foods to be differentiated from animal products. The company claims these results represent a “call to action for the UK government”, saying there should be tighter regulations on the marketing of plant-based products.

However, this massively contradicts findings by other organisations, with research by Upfield concluding that the vast majority of consumers are not confused by plant-based dairy alternatives. A report by the Alternative Proteins Association also found that consumers had no difficulty understanding the difference between plant-based and animal-based foods.

Also worth noting in this context is that the French Supreme Court has just ruled in favor of the Nutrition & Santé Group which had been accused by the meat lobby Interbev of unfair competition and misleading plant-based meat labels. The court confirmed that a risk of confusion between “steak” and “veggie steak” had not been established. Inarguably, consumers around the world are not confused by the labels on products that they purchase.

© Upfield/Flora

“A ridiculous topic”

Andrew Allen, F&B consultant and prior CEO of Biff’s, refutes the idea that the marketing of plant-based products should be more heavily regulated.

“There are multiple strands to [Browne Jacobson’s] numbers, and whilst they’re an interesting snapshot of the complex environment in plant-based at present, I don’t think they constitute a call to action for the government,” he told vegconomist. “We’re seeing design trends that are clearly more focused on aligning with master ranges rather than highlighting vegan or ingredient attributes. This may initially mean consumers need a second look, but no brand is in the market claiming an alternative product is actually an animal product. Legal names, allergen labelling, and back-of-pack information are there to guide the customer. It’s a response to market preferences.

“The ‘right’ to use certain naming attributes is a different conversation, and one I hope we manage to collectively move on from. Whilst I know it’s another reflection of the complex nature of the wider opinions, it is, in my view, a ridiculous topic. We know active lobbying has played a big part in driving the debate; it’s not about customer preferences, it’s politics.

“We have a market full of ‘animal flavoured’ products that are already vegan but not specifically marketed that way. As far as I’m aware, there’s no clamour to restrict those, but they’re not looking to steal share from an animal-based alternative,” he adds.

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