“Right now, we're going through a difficult economic time when consumers have less money in their pockets and shopping behaviors are changing,” said Zusel, a high-flying alcoholic drinks exec who took the helm at Quorn Foods USA early last year. “Trips are down, dollars are down, consumers are focused on essential purchases, and they’re trading down within categories,” he told FoodNavigator-USA.
“The other thing that’s going on because the category is still at an early stage is that there's a massive amount of competition. I think over the last year over 115 new SKUs have come in, and not all of the food is meeting the expectations of consumers, so you see a number of brands having very low repeat purchase rates, in the 10% range.
“Our repeat is about 47%, which is the highest in the category, and on some of our core SKUs, we are seeing an increased rate of sale, so that is positive. But we really do need to see the economy come back a little bit and see consumers have a little bit more money in their pockets, so we won't be in the kind of share trading moment that we're in right now within the category.”
‘Our repeat is about 47%, which is the highest in the category’
He added: “So that's been our conversation with retailers: Let's make sure the most awarded and best food is on the shelf, as we want consumers to have a good experience, so they come back and repeat purchase. Right now, close to 70% of consumers in the category are flexitarians and meat eaters, and if they don't have a good experience the first time they might not come back.”
From a strategic perspective, however, the fundamental drivers of the category have not changed, he said: “What hasn’t changed is that consumers care about their health and doing what's right for the planet, and they want good food. So I think for the category right now, everybody's got to take a deep breath. We all have to put the best food that we can on the shelf because we have to recruit meat reducers and meat eaters to ensure the category continues to grow.”
But he added: “I'm seeing retailers being positive and thinking about it [meat alternatives] in the long run. So, for example the amount of in-store sampling that we're doing in the second half of this year with our key retailers, I think speaks volumes to the fact that they believe in the category. We've also partnered with a number of our retailers such as Kroger, in e-commerce.
“I think everybody sees long term that this will be a trend that is here to stay.”
Frozen vs refrigerated
When it comes to store placement, he said, while frozen meat alternatives are performing significantly better than refrigerated products right now (see box below), “I still think over time you will see a migration to fresher foods as the category grows and evolves, and we are looking at getting into other parts of the store like meat, deli, and produce next year.
“But right now, in this economy, we’re focused on frozen.”
US retail sales, meat alternatives: August 2022 vs August 2021
US retail sales of meat alternatives (frozen and refrigerated combined) were flat (-0.9%) in August 2022, with unit sales down -7.2% year on year. To place this in context, total food & beverage sales were up +8.7% with unit sales down -5%, according to IRI data crunched by 210 Analytics.
Within that, frozen meat alternatives, which account for two-thirds of category sales, are faring significantly better (dollars +6.9%, volumes +1.3% in Aug '22 vs Aug '21) than refrigerated meat alternatives (dollars -16.2%, volumes -16.7%) where some brands are experiencing double-digit growth and others are experiencing double-digit declines.
Best Friends… with Drew Barrymore?
High in protein and fiber and low in saturated fat and calories, Quorn mycoprotein is an edible filamentous fungus called Fusarium Venenatum first discovered growing in soil in Buckinghamshire in the UK in the late 1960s and grown at a commercial scale using a controlled fermentation process in large steel tanks.
Launched in the UK in 1985, Quorn was introduced to the US in 2002 and acquired by Monde Nissin - one of the leading consumer packaged foods companies in the Philippines – in late 2015.
However, it has only just really started to step on the gas in terms of marketing in the US, claimed Zusel, who teamed up with Drew Barrymore last fall in a ‘multi-year business partnership’ as the brand's first ‘Chief Mom Officer.’
“We're still not at the levels of awareness of some of the other CPG brands in the space so we put together our first ever advertising campaign called 'best friends' with Drew Barrymore and created the 'mycoprotein 101' animated series, and since last November, we've seen an 11-point increase in awareness for our brand.
“Our partnership with Drew has been absolutely fantastic. She loves the brand and she eats the brand, so it's been really, really fruitful.”
’Fewer, more impactful innovations’
While Quorn has pretty wide distribution in grocery, said Zusel, “We have spent time going to smaller second and third tier stores that are more health food driven. We're also focused on launching an innovation pipeline with fewer, more impactful items. So we’ve launched two award-winning chicken cutlet sandwiches, our Homestyle and Kickin’ ChiQin, which won Kantar’s best meat alternative product of the year this year, so we're pretty proud of that as it’s based on the views of 40,000 consumers.
“We also just launched pineapple chipotle chiQin dippers, which are pretty unbelievable and very different than anything else there on the shelf, and we're focused on taking these innovations into stores where we already have distribution.”
Foodservice, meanwhile, is a developing side of Quorn’s business, said Zusel: “We hired a VP of foodservice Kevin Eiden, and he has built a team in the US to go after everything from QSR to fast casual, non-commercial and broker business too, and we expect that to be a big part of our business in the next five years.
“We also signed a strategic partnership with restaurateur Chef David Burke, who fell in love with the product and now carries Quorn at the vast majority of his US-based restaurants.”
‘I think everyone in the category needs to talk about the health benefits, the taste’
Asked about the key purchase drivers for meat alternatives, he said: “The hierarchy that we see is, number one, it has to taste great, and then it has to be healthy for you, which is where our mycoprotein 101 comes into play. It's high protein, high fiber, low cholesterol, low saturated fat.”
He added: “I think everyone in the category needs to talk about the health benefits, the taste, and for us specifically having ingredients that are good for you and minimally processed is important, as mycoprotein is really an extremely healthy option when you talk about meat alternatives.”