Executive Summary
With the increasing momentum of the worldwide transition to plant-based diets, food service chains are recognizing the need to adapt and cater to the preferences of vegans, vegetarians, flexitarians, and individuals exploring plant-based options. This white paper explores the collaborative strategies employed by food service chains as they partner with plant-based product manufacturers to enhance their menus and meet the rising demand for plant-based alternatives.
Introduction
The increasing awareness of the environmental, ethical, and health implications of traditional diets has led to a surge in demand for plant-based alternatives. As consumers embrace plant-centric lifestyles, food service chains are proactively seeking collaborations with plant-based product manufacturers to diversify their menus. An increasing number of consumers globally are adopting a plant-based diet, or incorporating plant-based products (PBPs) into their diets. The PBP market sector is therefore gaining prominence and is a potentially profitable sector for new entrants and current plant-based food and beverage producers.
Data Bridge Market Research analyses that the global plant-based food market which was USD 17,963.65 million in 2022, is expected to reach USD 112,033.72 million by 2030, and is expected to undergo a CAGR of 25.7% during the forecast period 2023-2030. One of the key factors driving market growth is the rising prevalence of chronic lifestyle diseases and intolerance to animal protein.
To know more about the study, visit: https://www.databridgemarketresearch.com/reports/global-plant-based-food-market
Motivations for Collaboration
There are a variety of reasons that can motivate consumers to adopt a plant-based diet or to incorporate PBPs in their diet. A diet containing more plant-based foods, rather than meat and dairy, is considered to have benefits both for the environment and for health. Consumers can also be motivated to choose PBPs because of animal welfare concerns or because they do not enjoy some of the sensory aspects of meat or dairy products. Among younger people, veganism has become a badge of identity or a tribal marker.
Below are a few statistics showcasing the rise in consumer demand for plant-based diets:
- In February 2021, according to a study published by NCBI, in America, vegans increased by 500%, from nearly four million in 2014 to 19.6 million in 2017
- Similarly, a national USA survey published in 2018 found that two-thirds of participants had reduced meat consumption in the last three years
- In Germany, vegetarians increased from 1% in 2005 to 7% in 2018; in Italy, the meat-free population has increased by 94.4% from 2011 to 2016, and in Spain, flexitarians increased by 25% in two years
Data Bridge Market Research analyzes that the global plant-based meat market was valued at USD 9,820 million in 2022 and is expected to reach the value of USD 27,620 million by 2030, at a CAGR of 14.74% during the forecast period of 2023 to 2030.
To know more about the study, visit: https://www.databridgemarketresearch.com/reports/global-plant-based-meat-market
- Health and Sustainability
A plant-based diet is considered to offer some benefits for weight loss and has been suggested to be beneficial for sports performance. Plant-based diets are often praised for their potential to contribute to weight management by promoting a higher intake of nutrient-dense, low-calorie foods. Additionally, these diets are believed to enhance sports performance due to the abundance of complex carbohydrates, antioxidants, and essential nutrients found in plant-based sources, supporting overall energy levels, recovery, and endurance.
Moreover, the media play a role in informing and motivating consumers to change their dietary patterns, for instance, the drive for more sustainable diets is promoted both at an upstream level by region-specific policies and global agendas such as the Sustainable Development Goals, and also at the downstream level through popular media. Therefore, the adoption of PBPs is influenced not only by individual determinants such as attitudes, knowledge, values, and dietary motives but also by social influences and sociocultural factors such as social norms and identity.
In recent years, an increasing number of people have shown an inclination towards the adoption of a plant-based diet in their daily routines. A plant-based diet involves eating foods made from whole grains, legumes, fruits, vegetables, nuts, and seeds that undergo minimal processing. Manufacturers, retailers, and food service providers have both responded to this trend by launching new vegan-friendly plant-based product lines.
In addition, switching to a vegan or vegetarian diet can provide numerous health benefits due to the abundant natural nutrients in plant-based products. A 2023 study by the Journal of the American Medical Association indicates that following a diet mainly of plant-based foods can lower the chances of chronic diseases. For instance, a plant-based diet with fewer processed foods and no red meat may reduce the risk of heart disease and type 2 diabetes.
Strategies for Collaboration for Adoption of Plant-Based Diets by Food Service Chains
Food manufacturers and retailers have been quick to spot and respond to growing demands for plant-based alternatives to meat and dairy. Many operators are increasingly offering separate menus for these dietary needs. This is owing to various factors, which include a growing domestic demand for plant-based protein from vegans and flexitarians, and a growing global population fuelling the need for more plant-based protein sources. New Product Development (NPD) in this area has moved beyond traditional plant-based proteins such as tofu and more established entrants such as Quorn and Texturised Vegetable Protein (TVP).
The growth of the plant-based food industry is also driven by the increasing demand for vegetarian and vegan options in restaurants and other food service outlets. Huge FMCG businesses are targeting non-vegetarian consumers who are looking for alternatives to animal proteins.
Below are a few stats, that showcase menu expansions by key food service providers:
- In August 2022, ITC Master Chef IncrEdible brand, ITC introduced ecological plant-based protein products for consumers in two varieties - Incredible Burger Patties and Incredib le Nuggets
- In July 2022, Under the new brand ‘Tata Simply Better’, Tata Consumer Product Ltd (TCPL) announced its foray into the plant-based meat products industry and unveiled four variants: nuggets, burger patties, Awadhi seekh kebabs, and spicy fingers
- Businesses in the HoReCa (hotel, restaurant, and catering) sector are focusing on institutional clients, and various Quick Service Restaurant (QSR) chains, including Domino’s and Starbucks in India, have added plant-based meat options to their menus
- Vintage Inns has a vegan menu featuring 15 items including starters, sides, mains, and desserts
- ASK Italian and Zizzi have substantial vegan menus, containing over 20 products each
In addition, many food companies are introducing new plant-based products that cater to these needs, offering a range of flavors and textures, and working to create plant-based products that are indulgent and satisfying.
Eateries and coffee shops are increasingly stocking plant-based goods. Restaurant brands such as McDonald’s, Subway, and KFC already offer a greater selection of plant-based items. While Starbucks, the biggest coffee chain in the world with over 250 stores in India, provides its patrons with soy, almond, and oat milk, Café Coffee Day, India’s largest coffee chain with over 900 outlets, offers a variety of plant-based beverages.
Data Bridge Market Research report analyses the plant protein market is expected to witness market growth at a rate of 6.40% in the forecast period of 2021 to 2028. Major factors that are expected to boost the growth of the plant protein market in the forecast period are the increase in the need for health-enriching organic food and beverages and the inventions and advancements regarding plant-based protein to encourage the vegan trend.
To know more about the study, visit: https://www.databridgemarketresearch.com/reports/global-plant-protein-market
- Co-Creation and Innovation
There are a significant number of startup and disruptor companies in various geographies that are launching new and exciting products into the market to meet the increasing consumer base and demand for innovative products and flavors. Moreover, existing food and beverage companies are moving to protect and enhance their positions in the market, both through internally driven product development and innovation and inorganic growth through the acquisition of new disruptor brands and products.
Various statgies adopted by various plant-based food manufacturers are listed below:
- In April 2019, Nestlé launched its plant-based meat products namely Garden Gourmet in Europe and Sweet Earth in the U.S. to meet the rising demand for plant-based meats for vegetarians, vegans, and flexitarians. Moreover, Nestlé became the first food and beverage company to develop all three key elements - vegan bacon, cheese and burgers to achieve a no-compromise, completely convincing, vegan option
- Moreover, in August 2020, the vegan tuna alternative is Nestlé's first offering in plant-based seafood, which contains just six natural ingredients and delivers on texture, flavor and appearance. Following its success as the first offering in plant-based seafood, Nestlé introduced Vrimp, yep vegan shrimp, an incredible innovation made from combining seaweed, peas and konjac root
- In 2017, Nestlé with the plant-based foods company Sweet Earth Foods, have been meeting demand in the U.S. for delicious clean-label, meat-free foods
The rising demand for innovative products has driven a significant increase in new product development across chilled, ambient, and the frozen segments. This innovation gives the consumer a wider choice of products and brands, and allows plant-based products to gain increased shelf space and recognition.
Below is the data, which showcases development across the globe for rising vegan food demand:
- In 2018, according to a Mintel press release, the U.K. is now the global leader for vegan food launches. In 2018 approximately 16 per cent of new food launches were vegan
Marketing and Promotion
Product development has played an important role in the growth of the plant-based food market. Innovative offerings provided by the companies are generating interest among consumers. Marketers are constantly brainstorming the best methods to reach consumers as trends and products emerge. Since 2020, Unilever’s food brand Knorr has been running an educational campaign called PrzyGotujmy Lepszy Świat (‘Let’s cook a better world’) that is aimed at school children in Poland. ProVeg is a key partner in this initiative, working with teachers to develop interactive lessons and workshops. In this program, more than 43,000 children took part in the first edition of the program, preparing more than 84,000 plant-based meals together with their parents.
Benefits and Challenges
Benefits
- Diversified Customer Base
By offering plant-based options, food service chains attract a wider audience, including vegans, vegetarians, flexitarians, and individuals exploring plant-based diets. Over the last decade, target consumers of plant-based offerings have shifted from a small subset of vegans and vegetarians to a wider market of meat-eaters. This has been made possible by new products and reformulations that position plant-based meat as meaty, tasty, sustainable, and a healthy alternative to animal-based meat
Collaborating with plant-based manufacturers enhances the brand image by portraying a commitment to sustainability, health, and ethical choices. Consumers increasingly prioritize brands that share their values. A commitment to sustainability and health resonates with environmentally conscious and health-focused individuals, fostering brand loyalty. Associating with plant-based products creates positive connotations, portraying the brand as forward-thinking, innovative, and attentive to evolving consumer preferences.
In a competitive market, incorporating plant-based options differentiates food service chains, making them stand out in the industry. Recognizing and adapting to the rising trend of plant-based diets positions a brand as adaptable and responsive to changing consumer preferences, strengthening its competitive position. Even non-vegetarian customers may be drawn to establishments that offer plant-based options, either for variety or to accommodate diverse group preferences, further expanding the customer base. Incorporating plant-based options can generate positive publicity, especially as media and consumers increasingly focus on sustainability, providing free marketing and increased visibility.
Challenges
Despite the strong influence of the aforementioned motivations, barriers to PBP consumption remain for many consumers. These include unfamiliarity with these products, lack of sensory appeal, cooking skills, concerns about protein content and satiety, availability, and affordability. Although some consumers may be willing to reduce their meat consumption, actual behavioural change may be hindered by lack of knowledge, motivation, or capability; as well as the fact that eating meat and dairy products is a traditional cultural practice embedded in many societies and regions.
Ensuring a consistent supply of high-quality plant-based products can pose challenges in terms of logistics and distribution. Plant-based proteins were impacted by lower-than-anticipated global pea and soybean yields, and sanctions on Russia, which is the world’s largest fertilizer exporter. Moreover, elevated energy costs also drove up costs of production. Rising sea and rail freight costs also contributed to price increases for plant proteins and food products.
Plant-based products, especially those without preservatives, may have shorter shelf lives compared to conventional products. Managing inventory and minimizing waste become critical aspects of supply chain logistics. Transitioning to or incorporating plant-based options may entail higher initial costs. Balancing the affordability of these products with the desire to maintain competitive pricing poses a logistical challenge for food service chains.
Some consumers may be unfamiliar with plant-based options, requiring effective education and communication to encourage trial and acceptance. Overcoming preconceived notions about the taste and texture of plant-based products can be a hurdle. Some consumers may be hesitant to try plant-based options due to concerns about flavor or unfamiliarity with preparation methods. Effectively communicating the benefits of plant-based choices without alienating non-vegetarian customers requires thoughtful marketing and communication strategies. Finding the right messaging to appeal to a broad audience is a nuanced challenge.
Moreover, In regions with strong culinary traditions, introducing plant-based options may face resistance. Understanding and respecting cultural preferences while introducing plant-based alternatives demands a delicate balance.
Addressing these challenges involves a multi-faceted approach, including strategic partnerships, employee training, and comprehensive marketing campaigns to bridge the gap between supply chain logistics and consumer education. Successfully navigating these challenges can lead to increased acceptance and integration of plant-based options within the food service industry.
Conclusion
Food service is an important channel for shaping food culture and behavior. For the plant-based industry, food service represents an opportunity to increase trial and adoption by introducing new products in a curated and often social setting where consumers are interested in trying new things. Despite recent volatility, food service is a key market entry point for plant-based products.
The growth in the plant-based sector has largely been driven by the mainstream emergence of the ‘flexitarian’ consumer, as well as increased numbers of vegetarians and vegans, as consumers respond to a combination of ethical, environmental, and health concerns.
