While activity in some of the major plant-based categories is cooling, shoppers are still flocking to the sector and the potential for revenue expansion is vast.
“The top 20 growing categories are across all departments, showing consumers are looking for plant-based alternatives in grocery, dairy, meat, baby, and even health and beauty,” said Sherry Frey, vice president of total wellness for NielsenIQ, a Chicago-based global consumer intelligence firm.
Frey reported that 17% of consumers report currently eating a plant-based or plant-forward diet, and in 2022 there were 691,000 consumer searches on retailer websites for plant-based products.
“There’s been an increase in plant-based foods across the grocery store and consumer interest is high,” she said.
With plant-based options available in 30 grocery categories and many innovative items, including eggs, seafood, yogurt, and creamers, hitting the market, the sector is poised for growth, said Julie Emmett, vice president of marketplace development for the San Francisco-based Plant Based Foods Association and Plant Based Foods Institute.
Those kind of product enhancements include selections with more appealing taste and texture; the use of healthier ingredients, such as chickpeas, hemp, mycoprotein, B12, iron, and zinc; and the inclusion of nuts and seeds that contain vitamins, minerals, and dietary fiber.
A recent study by Cincinnati-based research and insights firm 84.51° found that shoppers are looking for better consistency, texture, ingredients and flavor, said Catherine Cowan, 84.51° lead insights account manager on natural and organic brands and plant-based initiatives.
Consumer preferences, however, differ by age, she said, noting that many mature shoppers want plant-based foods to taste like their animal-based counterparts, while younger consumers prefer unique offerings and tastes.
“Plant-based customers continue to look for innovation, price and flavor,” Cowan added.
The projected activity in the wide range of plant-based categories, meanwhile, will help offset purchasing declines in the most popular sectors.
While milk remains the largest plant-based category, with dollar sales of $17 billion for the 52 weeks ending Jan. 29, 2023, up 11.1% from the year-earlier period, volume sales totaled 26.5 billion, down 3%, reports Information Resources Inc. (IRI), a Chicago-based market research firm. Category prices were up 14.5% from a year earlier.
Plant-based meat sales, meanwhile, reached $404.3 million, a 15.5% decrease, with volume sales of 48.8 million, down 16.8%. Prices were up 1.6%.
Frozen meat activity also is declining. While dollars sales rose 5.3% to $768.5 million with a 9.8% price increase, volume sales fell 3.6% to 103.3 million.
“The early consumer excitement for plant-based meat is waning,” said Jim Wisner, president of Wisner Marketing LLC, a Gurnee, Ill.-based retail consultancy. “Many shoppers who said, ‘I must try it,’ in early trial have rejected the products, while others have made the meats part of their diets.”
Taste, nutrition, and cost are all vital elements for attracting and converting shoppers to a plant-based diet, but it’s also essential that merchandisers keep the products in the spotlight.
Julie Emmett recommends that retailers boost interest by situating plant-based foods next to, but apart from, their conventional counterparts, while also leveraging signage and shelf tags to make it easier for shoppers to locate options.
“Plant-based is a different category and integrating products with conventional items will be confusing to shoppers,” said Wisner. “How well retailers call out selections and make them obvious to the consumer is key.”
It also is important for retailers to identify newer selections, “instead of just sticking them on the shelf and hoping for the best,” and to educate shoppers on the major differences between category offerings, such as oat milk, almond milk, and real milk, he said.
“Merchandisers have to sell the story to get consumers to adopt the products,” Wisner added.
Yet, for maximum category expansion, operators still must attract the newcomers who have concerns about the taste of a new product taste, and additionally whether they should risk money on that new item, Wisner said.
Retailers can help ease such fears with product samplings, and by offering both money-back guarantees and money-saving coupons, Wisner added.
It also is crucial for supermarket operators to make plant-based foods a sales priority, Wisner said.
“There are 8 million things competing for their attention and many do not have the time to implement a comprehensive or coherent merchandising program,” he said. “You can do anything, but you can’t do everything.”
Among the active marketers is Cincinnati-based The Kroger Co., which is leveraging promotions that are designed to “offer meaningful savings and encourage exploration,” according to Holly Adrien, Kroger natural and organic strategy and innovation manager.
Kroger outlets also have increased the use of in-store signage to help customers locate products and is collaborating with consumer-packaged goods suppliers “to find new ways to highlight these exciting items,” she said.
In addition, Kroger is using data from its 84.51° unit to evaluate consumer demand for specific items, additionally working to provide more options across the dairy, meat and frozen categories. The company also is developing more plant-based options for its Simple Truth natural and organic brand.
“As is true across our eco-system, trends change year to year, and we look forward to continuing to learn about the category,” she said.
