Conagra Brands (Gardein) talks alt meat: ‘There's no way the space supports 20 manufacturers making plant-based burger patties’

By Elaine Watson contact

- Last updated on GMT

Conagra Brands (Gardein) talks alt meat: ‘There's no way the space supports 20 manufacturers making plant-based burger patties’

Related tags: Conagra Brands, Gardein, Meat alternatives, plant-based, plant-based meat

“12-18 months ago, refrigerated plant-based meat was growing at three times frozen and we were thinking should we try and jump into that?” recalls Bob Nolan, SVP demand science at Conagra Brands, which acquired alt meat brand Gardein in 2018 via the acquisition of Pinnacle Foods.

“But if you take a step back, those spaces are highly commoditized spaces that are dominated by private label brands,” ​Nolan told FoodNavigator-USA, following the release of IRI data​ showing double-digit declines in sales in refrigerated meat alternatives vs modest rises in dollar sales in frozen products.

If you have slow-turning products in a place that's fairly perishable, that’s high risk, and there's no way the space supports 20 manufacturers making burger patties.”

In the frozen aisle, by contrast, “products are almost exclusively branded,” ​said Nolan, who said there was a solid rationale behind putting meat alternatives in the fresh meat case, with early data suggesting this could unlock an incremental growth opportunity, but that the recent weakening performance had prompted some discussion about store placement.  

And while things may change, right now at least, frozen is more affordable than eating out, and represents better value than fresh, he added.

Frozen products are not going to be thrown away, you don’t have a ton of preservatives, and for us, it’s a place we feel we can deliver value.”

Gardein retail sales +13.3% to $154m versus a year ago, 52 weeks to August 7, 2022

Unit sales of Gardein​ products – which are in the frozen case at retail - are flat, but its retail sales* were up 13.3% to $154m versus a year ago in the 52 weeks to August 7, while the brand has gained market share through the acquisition of new buyers and increased repeat rates among existing consumers, said Nolan.

As for pricing, meanwhile, “The frozen value has always been better than the other solutions, and our elasticity is lower than our competitors,” ​he claimed, noting that younger consumers are also “increasing their repeat rates at a higher level than our total buyer base.”

Gardein ultimate chicken nuggets
"The Ultimate line is driving a disproportionate amount of our growth..." Image credit: Gardein

He added: “In the frozen space, of the large companies, we're the only one that's growing and we’re outpacing the category.

“The Ultimate line is driving a disproportionate amount of our growth. In the first year we launched our Ultimate burger, which did better than our original burgers. But then we really hit our stride this last two years with chicken strips, nuggets, filets, wings, and now we're launching sausage links, breakfast sausage, and dinner bowls.

 “The Ultimate chicken productswere designed to deliver that QSR-type experience as people are demanding high quality solutions in the chicken space.”

‘The long-term structural drivers behind meat alternatives haven't changed’

So what is Conagra’s take on the long-term prospects for meat alternatives? Is an over-hyped market approaching some kind of natural ceiling, or are we just going through a period of correction after a period of rapid growth?

“I think it'll be a slow build over time, solid growth. It won't be the crazy growth that you saw for those two years,” ​predicted Nolan. “But I think the long-term structural drivers behind meat alternatives haven't changed.

“I think for dairy, the biggest one has been digestive health. But there’s certainly a health and wellness message when it comes to meat alternatives as well. It may not be digestive health, it may be more cardio health and weight management and then there’s the sustainability message.”

‘A lot of flexitarians came in and went out’

But, at the risk of sounding like a broken record, he said, “if it doesn't taste great, folks that are in for the short-term will leave, so a lot of flexitarians came in and went out.  

“There was a lot of hype and a peak in interest; every day you’d read about someone launching a new plant-based product in foodservice and we saw that transferring to retail where everybody and their brother was jumping in.”

‘Retailers can't support products on their shelves that aren't selling’

This, he said, attracted some consumers that were trying meat alternatives for the first time: “Consumers that were saying maybe those structural things aren't things I care about, like animal welfare or sustainability. But wow, there's a new burger out there and I want to try it, so there was a spike

“But the folks that are focused on structural changes, they're still around, so we do feel confident that this space is going to continue to grow over the next 5,10, 20 years, it’s just going to revert back to its original curve.”

Retailers, he said, “are quick to get on a fad, but they're also quick to rationalize as they have a business to run and they have very low margins, so they can't support products on their shelves that aren't selling,” ​which means there’s likely to be a shake-out of less productive brands.

‘We won't get ahead of our skis and we won't go into categories where there's not real demand’

Looking ahead, Gardein is continuing to monitor new technologies and ingredients in the space from fermented proteins to other innovations, said Nolan.

“We're evaluating three or four new things every couple of months.We launched crab cakes a couple of years ago and I’d love to have a plant-based bacon that actually tastes great. But we're not going to just launch products for the sake of it, and we’ve got to attract more folks than just hardcore vegetarians and vegans.

“So we'll introduce new forms, but we won't get ahead of our skis and we won't go into categories where there's not real demand.”

*IRI Panel Custom Data, Total US All Outlets, 52 Weeks Ending 8/7/22, Gardein Frozen Meat Substitutes. According to Gardein, retail dollar sales in the frozen meat alternatives category overall were +6.6% vs. the previous year while unit sales were down -5.8% vs. the previous year (IRI POS Custom Data, Total US MULO+C, 52 Weeks Ending 7/24/22, Frozen Meat Substitutes).

Gardein repeat rate
Source: Slides, Conagra Brands investor day, July 2017, 2022
Gardein-consumers -NielsenIQ Panel, Total Outlets, 52 Weeks Ended May 14 2022
Source: NielsenIQ Panel, Total Outlets, 52 Weeks Ended May 14 2022, featured in slides from Conagra Brands investor day, July 2017, 2022
Gardein market share frozen plant-based meat
Source: Conagra Brands investor day slides, July 27, 2022

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