“Demand is growing in markets where you would expect to see these types of products,” David McMonigle, marketing director of Vege USA, told FoodNavigator-USA. “The traditional markets aren’t growing as fast as the natural markets are in the number of products they’re carrying. But something interesting is happening there. Some consumers in those markets are starting to view vegan as another type of cuisine. Much like we can go for Chinese or Mexican or Italian, we can go for vegan tonight as well.”
Number of flextarians on the rise
Indeed, the meat-free market is growing, with about 7% of population now calling themselves vegetarian or vegan, according to a recent Gallup poll. And yet, 43% of the population eats vegetarian meals at least once a week, as a survey by the Vegetarian Resource Group found. Whether consumers are opting for "Meatless Monday" for animal welfare, sustainability or overall health reasons, the so-called flextarians are becoming a market force to be reckoned with.
“That’s the group that’s really growing—that’s where we’re shifting,” McMonigle said. “It’s an interesting prospect at this point.”
Over the past five years, Vege USA, which manufactures and markets the VeriSoy and Vegetarian Plus brands, has transitioned well over 90% of its products from vegetarian to vegan, which McMonigle said enables the company to attract a bigger slice of the market.
“One of the reasons we moved to vegan is they make up a bigger population than vegetarians,” he said. “Not only that, but vegans are not going to eat vegetarian, but vegetarians will eat vegan—so we’re capturing a bigger market. It’s more effective for us.”
Because much of the flextarian market is accustomed to eating meat, the biggest obstacle has been achieving the nuances of texture found in different meat varieties from lamb to chicken and pork—within the confines of veganism, McMonigle added.
“For us to try and increase our market, we have to be very close and particular about how we’re creating textures and tastes, because we’re going after people who know what meat tastes like,” he said. “When we create vegetarian items, we leave ourselves open to more ingredients that allow us to have correct textures. It gets more complicated to go from vegetarian to vegan.”
We’re where people expect to see a variety of vegetarian, vegan options
Despite the exciting potential for vegetarian and vegan products in more traditional markets, Vege USA continues to focus more on those that already widely accept its products—the company has universal distribution in Whole Foods throughout the US and Canada, and is sold at regional natural food chains including Sprouts and Mother’s.
We’ve found with traditional markets, you’re really buying space and slotting allowances, since that’s where their profits come from, rather than from actually selling your product. We’ve found that instead of putting up money and buying space for a market where people not expecting to buy vegetarian or vegan, it’s more important to be in markets where people are buying.
“We are specific to markets we need to be in. At some point, when something happens and everyone is looking for vegan, it will make sense for us to be in all markets.”
Frozen category already crowded; most new products in foodservice sector
But space is also a commodity at natural foods stores, which is why Vege USA sees a lot of promise for innovation on the foodservice side.
“The frozen category at Whole Foods is a very jam-packed category. Everybody is vying for space there,” McMonigle said. “Our biggest footprint in on the west coast, and as you head east, we’ll have fewer SKUs in the freezer. Because the freezer section is such a limited category, we’ve tabled our creation of retail products. We figure we’ve sort of saturated that sector."
Beyond retail, Vege USA supplies larger quantities of boxed finished products for foodservice. It also offers element items (unsauced) to chefs, who incorporate the proteins into their recipes for restaurant, hotel and college cafeteria menus. “These are all areas where we see a lot of potential growth, given that the textures are how the chefs want them to be and the product is very consistent. They can create a comprehensive meal with our proteins while also showing off their talent.”
This area is particularly promising for foodservice, as consumers seek more healthy fast food options in the quickservice and fast-casual segments. The element products can be customized and plated, giving the end consumer more variety and choice, regardless of their reason for eating vegetarian or vegan.
"On the foodservice side, we have a lot of new items," McMonigle said. "Don’t get me wrong; retail is a bigger chunk of what we’re doing. But we see foodservice really growing.”