Meat-free 2023: Plant-based feels brunt of tight budgets

It’s been a year of drama for the meat-free market. First came the withdrawal of Nestlé’s Garden Gourmet in March, for a second time, due to disappointing sales.

Three months later, Plant & Bean fell into administration – and so did Meatless Farm. The latter was only saved by at the last minute by vegan challenger VFC, which confirmed a rescue deal just days later.

Then LoveSeitan ceased trading in August. Finally, in November, US brand Beyond Meat announced it would axe 19% of non-production employees, in a bid to drastically reduce costs and reverse its declining fortunes globally.

In the UK, at least, the picture for Beyond Meat is more positive. Volume sales are up 26.2% in grocery, helping the plant-based brand add £2.7m. That’s down to increased distribution and NPD such as frozen ready meals and chicken alternatives.

But Beyond Meat’s positive performance is the exception, rather than the rule. It’s one of only three top 20 meat-free brands in volume growth, and the top five brands have together shifted 4.3 million fewer kilos.

What’s behind free-from meat’s 2023 fall?

Overall, the category has lost 4.2% of its volumes, and £38.4m of its value.

Budget constraints have been a driving force behind this decline. “After many years of strong growth, the meat alternatives market has fallen into decline,” notes Carol Ratcliffe, NIQ senior insight analyst.

“Shoppers are less willing to pay the premium associated with meat alternatives and are switching to cheaper sources of nutrition.”

Category leader Quorn, which is down 8.1% in volume, can confirm the extent of these challenges. “We have seen huge changes in consumer behaviour led by turbulence in the global economy and this has led to a slowdown in the meat alternatives category, but it comes against a backdrop of many years of strong growth,” says Gill Riley, Quorn Foods UK consumer director.

Still, at least Quorn has held onto its value. It’s edged up 0.2% to £155.8m. That means it’s worth three times as much as closest rival Linda McCartney’s, which has suffered a loss of £6.6m – the largest in the top 30.

Other major brands haven’t fared much better. Cauldron, for instance, has lost £3.4m after selling one million fewer kilos. And Richmond has shed 3.1% of value on volumes down 13.4%. Its sister brand Wall’s has also lost volumes as, like many others, its average price per kilo has risen in the mults.

“Inflation of meat-free ingredients has been ahead of meat, which has meant meat-free has become a pricier option,” says Chris Doe, UK marketing & innovation director at Pilgrim’s Food Masters. “In turn, the industry has seen flexitarian shoppers increasingly switch back to meat.”

Among those who are sticking to vegan and vegetarian diets, challenger brands are increasingly taking share. Take This. It’s up 46.6% in value on volumes up 66.6%.

Big meat-free brands shedding sales

Those numbers are the result of significant external financial backing this year, which allowed This to invest in R&D, explains NIQ’s Ratcliffe. “Innovation has been a core part of its growth over the last two years as it has diversified into a wider range of segments, including frozen, ready meals and food to go, as well as continuing to launch new products in its core segment of chilled meat alternatives,” she says.

Recent launches have included a roast chicken & stuffing alternative and This Isn’t a Chicken & Bacon Pie, made in partnership with Pieminister.

The quality of these innovations has been crucial, says marketing director Dee Bulsara. “The number one This rule is that we don’t proceed to launch unless we think the product can trick a meat-eater once it’s in a dish.”

The growth is also down to new listings for This in the past year, at a time of mass rationalisation in supermarket meat-free ranges. “The market is consolidating, with declining brands coming out, which has allowed us to really grow,” Bulsara explains. “No supermarket needs 18 types of burgers, so it’s really important to make the category easier to shop.”

If other brands are to hold their space on shelves, NIQ’s Ratcliffe says maintaining quality should be top of mind. The winners “will be those that can hold their space in the major accounts and justify their price premium to shoppers via clear flavour, format or nutritional benefits”, she says.

Squeaky Bean marketing controller Becky Youseman also points to innovation as a crucial factor. “Successful brands are offering NPD that either brings something totally new to the market or fills a gap to answer a consumer need,” she says. For her, it’s about  “truly innovating and creating products that get shoppers excited”.

Squeaky Bean is one of those trying to create excitement. In the face of a 8.8% fall in volumes, it has brought out a raft of new products designed to revive interest – from frozen alt chicken and vegan sausage rolls to chorizo-style sausage and tuna-like flakes.

When launching such lines, it’s important to bear in mind “that taste and texture really are king”, says Georgina Bradford, marketing director of nutrition at Unilever.

Unilever’s meat-free sales push 

“It sounds obvious, but growth will only follow if shoppers love the taste of the product,” she adds. “It’s why our R&D teams are focused on taste and texture. We go through countless prototypes and iterations before we go to market with a new plant-based product.”

The strategy is clearly working for Unilever’s The Vegetarian Butcher brand, which has enjoyed respective value and volume growth of 8.2% and 9.9%.

Now less buoyant brands are raising their game. Pilgrim’s, for instance, is “investing heavily in the renovation of our products to ensure our Richmond Meat-Free range continues to offer the best possible quality”, says Doe. This is even more crucial given the category is likely “to face ongoing pressure as shoppers watch their spending well into 2024”.

Riley is more optimistic. The market will “recharge, rebuild and head back towards growth”, she predicts. Ultimately, as Riley sums up, there is still “sustained interest in eating meat-free”.