How the growth of the vegan market has affected retail
Posted over 4 years ago by Julia Williams
With the vegan markets value anticipated to soar to £1.1bn by 2023, it is undeniable that the retail and FMCG markets are undergoing a period of significant development, driven by consumer demand.
As consumers are seeking more diversity from retailers, brands have been made to evaluate the performance of their product portfolio. This has led to the culling of unprofitable ranges to free up expenditure for research and development into more appealing lines, which ensure differentiation and retained consumer interest.
However whilst this figure proves promising for UK brands, growth in this area is predominantly motivated by own-brand supermarket launches, sparking an emphasis on branded goods firms to innovate to ensure continued growth.
Growth Avenues
Product
Whilst 55% of consumers consider vegan food to be healthy, the categories natural credentials can act as a source of deterrence for many, prompting the need for brands to tap into the comfort vegan food trend.
Whilst the burger market is reaching a saturation point, dairy is yet to receive the same attention.
Though supermarket shelves are brimming with alternative milk options, little competition exists for Crème fraîche alternatives and desert options which are both ethical and flavoursome. Helping to explain Oatly’s rapid 89% UK growth during 2018, which is projected to bring the firm £30 million in turnover during 2019, if market competition does not intensify.
Packaging
According to Mintel, only 40% of consumers find vegan food packaging to be appealing. Whilst relative to non-vegan products, as the market becomes more competitive, those who inject personality into packaging and move away from the traditional health orientated imagery are anticipated to outperform competitors.
Free-from doughnut store, Borough 22 took this to heart in their recent re-brand. Here an injection of colour and creativity has peaked the interest of retailers and consumers, increasing sales in Selfridges alone by 55%.
People
As recruiters it is our duty to spot market developments ahead of the pack and report back to clients. One of the key trends we are recognising is an increase in sustainability driven roles.
Whether for Sustainability Marketing Managers or Events Officers, as brands increase R&D budgets into vegan and sustainable food options, the number of specialists they will want to hire should increase proportionally to ensure a successful launch.
It is clear if brands wish to maintain strength throughout the growing vegan movement, they may wish to examine the performance and potential of their entire marketing mix (product, price, place, promotion, people elements) comparatively to competitors. A failure to do this may result in brands loosing consumer appeal and profitability moving into the new decade.
For a more in-depth discussion about current developments in the marketing and retail industry, or how we could potentially help source you the right people for your business, feel free to get in touch today.
