The last two years have brought phenomenal growth for plant-based food.
In 2020, the category saw 27% growth, according to SPINS data released by the Good Food Institute and the Plant Based Foods Association. A total of 57% of U.S. consumers bought plant-based products last year. No comprehensive statistics have been compiled yet for this year, but SPINS sales numbers as of July 11 show that sales increases across all categories the firm tracks for plant-based compared to the previous year dwarf any sales boost conventional products have seen.
While there are many factors that play into plant-based product sales — including the category’s buzz, sustainability issues, animal welfare concerns, food allergies and the perception of a better health profile — retailers are an important link in the chain. Plant-based food is getting to be ubiquitous in grocery stores nationwide, but how grocers choose to present the products and where they place them in the store can make a big difference.
A study conducted by PBFA and Kroger between December 2019 and last February found that plant-based meat products sell 23% better when they’re in the meat section. Jeff Crumpton, senior manager for retail reporting solutions at SPINS, said just the fact that Kroger would do that kind of a study shows that mainstream retailers are serious about working with plant-based brands to ensure they are merchandised in a way that their customers can find and purchase them.
"The strategy for retailers becomes really different, depending on who their core shopper is," Crumpton said. "That's why things like shelf tags and being able to merchandise correctly and calling that out is really important: to make sure that you're helping your shopper discover those products in store, and make that path to purchase as easy as possible."
But grocers aren’t taking a unified approach to merchandising plant-based items. Some, like Asda and Tesco, are testing consolidated sections with animal-free products for one-stop shopping, while others are partially or fully integrating plant-based products with animal-based ones.
PCC Community Markets merchandises Beyond Meat, its top-selling planted-based product, in the frozen plant-based meals section and Beyond Burgers in the meat case, Scott Owen, the grocery co-op’s senior grocery merchandiser, wrote in an email. Aldi U.S. mixes plant-based products throughout the store with frozen, dairy and meat products, said Joan Kavanaugh, Aldi U.S. vice president who oversees national buying.
Here are some top considerations from consultants, brands and grocers on ways to improve plant-based merchandising.
Place plant-based items close to conventional ones
While a variety of plant-based food sales have increased in the last year and a half, SPINS’ Crumpton and colleague Scott Dicker, a marketing data analyst, said products got a big boost when they were placed next to their animal-based counterparts on shelf. This goes beyond meat, egg and dairy analogs, Crumpton said. If a consumer is interested in a vegan cheese curl-type of snack, putting that next to the dairy-derived cheese curls helps discovery.
"Any consumer that has a curiosity about plant-based is going to look where they normally would shop," Crumpton said. "The fact that they don't have to search the store for this kind of plant-based section means that they're able to discover and understand how those products move throughout the entire store."
Crumpton said that in general, when plant-based products are placed next to their more traditional animal-based counterparts, the growth rate is at least twice what it would be in a segregated section.
While retailers sometimes differ in where they think plant-based products should be placed, manufacturers speak with one voice on the matter. Companies that only produce plant-based meat, dairy and eggs say they are competing with the animal-based sectors.
"Where we're trying to be is in the meat set,” said Sam Terris, co-founder and chief operating officer of plant-based chicken company Simulate. "So that's kind of where we're laser focused on: being in as many meat doors as possible, meat bunkers like we are in Walmart, in terms of direct one-to-one competition."
Even the plant-based meat brands owned by traditional meat producers say their products belong in the meat section. They exist as alternative protein options to provide consumers more choices.
Matt Riley, senior vice president of global partnerships with Eat Just, has worked with big CPG companies including Conagra Brands and Campbell Soup. He has seen the strategy of shelving new types of products next to the more traditional versions bolster sales and consumer acceptance of other categories, including organic and ethnic food.
About 90% of retailers carry Just Egg next to the chicken eggs, Riley said. And for all sales purposes, Just Egg compares itself to chicken eggs. Eight out of 10 consumers who buy Just Egg also buy conventional eggs, Riley said. Nine out of 10 also have another animal-based protein in their average shopping basket.
"Consumers are interested in better-for-you food, health, and they're interested in environment and animal welfare," Riley said. "And all of those things span the broader consumer base, not just the narrow [group] of vegans and vegetarians, which, again, is validation for us to merchandise in conventional sets."
"Any consumer that has a curiosity about plant-based is going to look where they normally would shop. The fact that they don't have to search the store for this kind of plant-based section means that they're able to discover and understand how those products move throughout the entire store."
Senior manager for retail reporting solutions, SPINS
Of course, not every retailer is going to immediately give over shelf space to plant-based upstarts, especially not in categories filled with food industry stalwarts, including prepared meat products and yogurts and cheeses.
The PBFA is testing a couple of alternative merchandising ideas. One of them is a separate and standalone merchandising unit dedicated to plant-based meat that could move into the meat case, said Julie Emmett, the trade group’s senior manager for retail partnerships. With this sort of plan, Emmett said, no shelf space needs to be taken away from existing meat products. The unit can also go where the store wants it to, meaning it can move closer to the meat section as consumers become familiar with it.
Another strategy is committing to consistent multi-brand marketing efforts that promote different kinds of plant-based products — not just meat.
“There are many touchpoints,” Emmett said. “This addresses not just the mainstream, but it'll also speak to vegans and vegetarians and millennials and older generations. [It takes a] very targeted approach to how those different shopper groups consume their media, and how to communicate with them and really build that awareness."
Consider appointing a plant-based category manager
Plant-based categories are growing: What started as six major categories in 2018 has multiplied to more than 30 now, including meat, cheese and egg, with more expected in the future, according to the PBFA. With options exploding, it behooves grocers to boost their knowledge of plant-based not only to educate consumers but also to make informed merchandising decisions, sources said.
A category manager or in-house expert for plant-based could help grocers and brands navigate the space.
“The trend is absolutely towards a plant-based expert as opposed to each category manager managing it,” PBFA’s Emmett said. She would not say which grocers have these specialized managers in place.
Having a role focused on plant-based at grocery stores can help brands get dedicated shelf space, if it’s offered. That’s important because adding brands often results in the displacement of other products, said Sam McIntire, co-founder and chief revenue officer of Mosaic Foods, a DTC frozen plant-based meals company.
"Generally, what we found is that a lot of conventional grocery stores do not necessarily have dedicated shelf space for plant-based yet,” McIntire said.
Emmett said that without someone who truly knows and understands the plant-based space at a retailer, products that make it on-shelf could be hastily discontinued. Sometimes, stores look at sales velocities — how quickly products are selling — and use that metric to justify which products get to stay through category resets. Retailers want to do what’s right by shoppers, but they also have sales goals in different parts of the store, Emmett said.
“A category manager that manages both, for which plant-based is thrown in, all they see is low volume,” Emmett said. “They don't understand the strategy or how important it is for them, for their overall shoppers or for the overall health of the retailer.”
Part of what causes this problem, she said, is the rush of brands into the red-hot plant-based space. While anchor brands like Impossible Foods and Beyond Meat seem to perform well across the board, the plethora of newer plant-based brands are not known to the consumer. Even if the brand is from a large supplier, consumers may see it as a “me too” copycat, Emmett said.
Emmett said there are talks ongoing now between PBFA and other advocates, brands and retailers to help bring more understanding of how the plant-based sector works, noting both retailers and brands need a “strong strategy.” It generally takes 12 to 18 months for a product to take hold in a market, she said.
Along with placement, grocers also struggle with figuring out the right mix of plant- and animal-based brands — another area category managers can help with. As many grocers expand their coolers, plant-based brands are finding more opportunities for shelf space.
Link merchandising to consumer education
With plant-based placement varying from retailer to retailer, having dedicated sections, shelf tags and icons in stores and online can make it easier to locate products and understand how the category is different.
Grocers have a number of in-store and online options to earmark plant-based products. Target, for example, has an icon on its physical and digital shelves and signage on freezer and refrigerator cases to note which products are plant-based. Sprouts Farmers Market has one or more plant-based subcategories under its frozen and dairy and eggs categories on Instacart. Gelson’s Markets, meanwhile, has a plant-based category with nine subcategories including frozen, cheese, ice cream, dips, meat and yogurt on Instacart.
"Generally, what we found is that a lot of conventional grocery stores do not necessarily have dedicated shelf space for plant-based yet.”
Co-founder and chief revenue officer, Mosaic Foods
Grocers can also link plant-based to certain attributes. In the past year, shoppers have started to say plant-based products taste great, Emmett said. But wariness of taste and texture, especially in comparison with animal-based products, still remains. Trust and trial remain major barriers for plant-based, and Emmett said the category is ripe for education opportunities.
Carol Spieckerman, president and CEO of Spieckerman Retail, said brands need to provide information on the packaging about ingredients, taste and quality: “Is this product a 'taste-just-like' product? Is it being marketed as an analog or is it being marketed as ‘good for you and tastes great?’ ”
E-grocer Misfits Markets says that offering a curated selection of products in key categories like butter can help with the overwhelming amount of options, said Kai Selterman, its chief strategy officer.
Make branding a key focus
Sara Wheeler, the former vice president and general manager of Nestlé’s Sweet Earth brand, said that branding for the company’s plant-based line is extraordinarily helpful.
When Nestlé bought Sweet Earth in 2017, the brand already had a sizable portfolio with more than 50 items. Under Nestlé’s ownership, Sweet Earth has expanded considerably, debuting more than 45 new products in the first three years and expanding the brand to many different segments. Sweet Earth products include plant-based burgers, frozen meals, lunchmeat and tofu, and the products are often sold next to their traditional counterparts throughout the store. Consumers who recognize one segment of Sweet Earth’s line know the label and brand, and can identify the others as plant-based products, regardless of where they are sold, Wheeler said.
Other plant-based food brands have become instantly recognizable to shoppers. Most could probably pick out Impossible Burgers or Beyond Meat off of a shelf. However, they may find it harder to recognize the branding or the desired aspects of another product.
SPINS’ Crumpton said branding for many plant-based products tends to be less important than for products in other sectors because there are perpetually so many new entrants to the space, including stores' own private label brands. But consumers are looking for on-package language that does more than just say a product is plant-based and discusses things like specific ingredients, sustainability or health benefits.
SPINS' Dicker said that having the right merchandising, branding and promotions are important for plant-based products, but there’s still something foundationally more important for brands to do.
“I think the merchandising and the branding ...that's probably more important for discovery of the product,” Dicker said. "So for the first-time consumer, ...they're not going to keep buying it just because it's in the perfect placement with a perfect package if they didn't like it.”
Just as important to plant-based food makers as branding is price parity — making products that cost the same as their animal-based counterparts. With people starting to be a bit more cautious with where they spend money because of economic pressures, manufacturers don’t want curious consumers who may be interested in trying plant-based options to skip them because they are too expensive.
Companies that have worked to cut prices to consumers at the grocery store — including Beyond Meat, Impossible Foods and Eat Just — have had more flexibility, Crumpton said. There’s more availability of product, opportunity for store promotions and more of a chance that they can be seen on a level playing field with the animal-derived established brands.
“If it’s listed as twice as expensive, you'll get those true believer, core plant-based customers. But you're going to have very few people who are just curious who are going to be at least regular consumers of a product that is two times the price of the animal version,” Dicker said.
Look for opportunities to expand and move mainstream
While there are many plant-based items available to consumers now, the category still has emerging trends and product categories that are worth paying attention to.
Alternative seafood, in particular, is an emerging category that’s growing in popularity. In 2020, sales of alternatives made through fermentation or plant-based protein saw a 23% increase, according to a recent report on the sector by the Good Food Institute.
For Vejii, an online vegan marketplace in the U.S. and Canada, vegan shrimp are among the best-sellers, and plant-based seafood is outpacing plant-based burgers, said CEO Kory Zelickson. Instacart said plant-based fish saw 46% sales growth in September.
Emmett of PBFA expects upcoming categories to include eggs, which only has Just Egg at the moment; cooking sauces; dips; dressings; baked goods; and snacks. Shelf-stable milk alternatives are also seeing growth, she said.
Meanwhile, other categories that are oversaturated with brands will likely see consolidation in the years ahead.
But right now, SPINS’ Dicker doesn’t think bringing in more plant-based options in a category really hurts any single brand. There will always be a healthy degree of competition among brands, but Dicker also said retailers will curate their selection to match their shoppers. Health and wellness-themed products are also getting more popular, and plant-based easily fits under that trend.
“I think having more options in this set is certainly helping the retailer,” he said. “Of course, at some point, there would be a point of oversaturation for it. But at this point, I think giving people an option — different brands to try, different flavors — everything is a little unique.”
In the alternative protein space, many companies are striving to be considered as just another category offering. Simulate’s Terris points to an article that referenced how, in the 19th century, many people referred to Thomas Edison’s signature invention as the “Edison gas light substitute.”
“As it became more accessible and more ubiquitous, people didn't refer to it as a ‘gas Iight substitute’ anymore. They referred to it as electricity,” Terris said. “I have a feeling we're gonna see the same thing with plant-based meat and meat. It's just going to become one category.”