We’re a few weeks into 2020, and there are already clear indicators that many of the trends we predicted are coming to life. We’re spending the week at the National Retail Federation (NRF) Big Show, and these concepts are being mentioned again and again by top retail insiders in their industry-leading sessions. We’ll be bringing all of the latest information to you soon, but we couldn’t resist filling you in on one 2020 grocery trend that’s making waves already this year: plant-based products.
It’s no secret that plant-based products have been around for awhile – vegetarianism and even veganism have become expected dietary restrictions throughout the United States. Those who practice these diets are no longer in the minority, and grocery stores have needed to pay attention to their needs and desires while stocking their shelves in order to maintain their consumer base.
However, plant-based products have exploded over the past five or so years, and they’re poised to have an even bigger impact on the grocery space in 2020 and beyond.
What you need to know about plant-based products
Grocers have needed to cater to vegetarian and vegan customers in the past to avoid losing their business, but today plant-based products are more than just a “nice to have” in the grocery world. They’re a necessity for any grocer who wants to position themselves as forward thinking. They’re a growing category.
Plant-based products represent an entirely new opportunity for revenue in an industry with notoriously thin margins.
At this stage in the game, plant-based products have entered just about every category within a grocery store, from the dairy aisle and the meat counter to the seafood section. It’s no longer abnormal for a customer to see a package of plant-based burgers nestled in amongst typical beef patties.
In fact, plant-based meat alternatives may be the most popular form of plant-based products. Companies like Beyond Burger and Impossible Burger have entered the mainstream conversation due to partnerships with well known brands like Burger King and Qdoba. These fast food mainstays have tied their success to the plant-based movement, and are advertising these options heavily to consumers. They aren’t just targeting the vegetarian and vegan crowd either – they’re telling die-hard carnivores that their plant-based options taste just as good as their meat-focused menu items – and that they could be a healthier alternative for those who are looking to cut down on calories and cholesterol.
Tyson too is investing in plant-based protein. The poultry leader launched vegetarian nuggets in June.
These companies have good reason to believe that plant-based is the category of the future. “U.S. retail sales of plant-based foods grew 11.3% in the past year,” according to the Good Food Institute and the Plant Based Foods Association. Sales were up 31.3% overall between 2017 and 2019, to a grand total of nearly $4.5 billion in revenue.
Here’s one more stat to consider: $1.9 billion was spent on plant-based milks in the United States over the past year, which made milk the “top-selling plant-based category”. These milks include varieties like almond, soy, and oat milks, and may have been spurred by the popularity of using these plant-based, wellness-focused alternatives in beverages like coffee and tea. Grocers have started merchandising these items in the traditional dairy case, which gives shoppers who may not normally come into contact with plant-based products a chance to, in a fit of curiosity, add them to their cart.
The numbers are convincing, and experts predict that the trend will only continue to grow in the coming decade. As a grocer, you can learn a few lessons about how to effectively integrate plant-based products into your inventory from your peers.
What is the best way to capitalize on the plant-based products trend in grocery?
The top technique for making plant-based products work in your store is to make them feel like they are an intentional addition to your offerings, not just an extra section in your store that is only shopped by those who have dietary restrictions or moral reasons for not eating meat or dairy products. To fully integrate these products, you need to place them near their meat and dairy counterparts.
Grocery stores across the country are moving away from having a specific “organic” or “vegetarian” section. Instead, they are putting these alternative products directly in their cases, Beyond Burger next to ground chuck, and almond milk next to the 1% and chocolate cow milk.
The main impetus for this adjustment is that, instead of organizing a grocery store in a way that makes sense on the backend to a grocer (inventory categories placed next to each other in a very structured fashion), grocers are beginning to layout their stores to suit the customer. They are considering the way consumers shop, and placing items that go together in the customer’s mind next to each other in the store. If a customer has “milk” on their shopping lists for example, it doesn’t matter if they’re looking for soy milk or dairy milk – they should be able to go to the same spot and pick it up, not head to a separate vegetarian section for their shopping. Reducing the friction around these plant-based products makes them a more natural purchase for any shopper, not just those who adhere to a vegetarian or vegan diet.
Call this idea a trend within a trend: negating marketing material and labels that categorize a plant-based product as “vegan” or “vegetarian” normalizes it for the mainstream shopper. Instead of feeling like they can’t purchase a product because they don’t fall into one of those two categories, they may be able to tap into their curiosity or health-focused mindset and choose a new plant-based alternative.
There are a number of grocery stores who are successfully implementing the tips above, but there are a few who are going above and beyond to actually create plant-based products for their in-store brands. Trader Joe’s and Whole Foods top the list, which may not be entirely surprising to based on their shopper demographics. Wegman’s is also leading the way in private label plant-based products, showing that the traditional grocery store can also get in on this 2020 trend.
Pros and cons of plant-based products in your store
Plant-based is a major 2020 trend, but it’s not magic – there may still be some roadblocks that can prevent these products from becoming a success in your store.
First and foremost, though big name brands are doing a lot of plant-based advertising for you there is still some hesitation with products such as plant-based cheese – and even those meat alternatives we mentioned earlier. Carrying plant-based products requires some education of your current shopper, informing them of what options are available and perhaps creating a few testing stations in your stores to introduce them to the product.
You’ll also be tasked with finding room in your limited inventory space for these new plant-based products. As we all know, there is a definite level of negotiation between grocers and brands when it comes to where products are merchandised, and adding in an entirely new category could cause some friction with brands who haven’t gone down this route yet.
Although there are challenges at stake, making an effort to carry and promote plant-based products in your store has some major benefits as well. The financial upsides of adding in a popular new category are just one reason why you should consider jumping on board with this trend.
When you carry meat and dairy alternatives in your store, you’re positioning yourself in a positive light. You are telling your shoppers that you are wellness-focused, that you understand the health benefits that plant-based products might bring. You also show that you are invested in your shoppers, no matter their dietary restrictions or eating habits. You want to offer them the food that they enjoy, that they feel good about eating, and you want to expose others to that same opportunity. Finally, you care about the environment. Plant-based products cut down on the carbon emissions caused by traditional dairy and meat processing, and shoppers are savvy about that fact. By promoting other options, you’re giving people a chance to exercise their moral compass, and feel good about what they’re purchasing.
This year, plant-based products are ruling the grocery aisles and the halls of NRF’s Big Show. We can’t get away from this topic, and the shopping data tells a clear story of why. To point your stores in the right direction, take a few tips from your peers, weigh your options, and then dive in feet first with a few plant-based offerings. Give your shoppers a chance to show you whether they are interested or not before writing off this trend entirely. You might just be surprised by which category has the largest impact on your P&L come 2021.