Noticing the exploding sales of meat substitutes, Nestlé will ramp up investments in Garden Gourmet. “We see a huge potential. We are at a tipping point, a unique opportunity to play a leading part in society.”
Exceptional growth
During the past Covid year, sales figures for meat substitutes went through the roof, says Arthur Duquesne, responsible for the plant-based category at Nestlé Belgium/Luxembourg. “For five years, the average growth rate was between 5 and 10 %, but last year growth was an astonishing 24 %. This year, we still see another double-digit growth, around 15 % for the first two months. Even in March, we managed to keep that up, despite the difficult comparative basis due to the first lockdown last year.”
One factor contributing to the trend was a successful edition of the Veggie Challenge, which is now coming to an end. “Never before have we given so much attention to this food category, working with stakeholders such as vegetarians’ associations, Colruyt, Foodbag and Deliveroo. We have never before invested so much ‘above the line’.” Nestlé also noticed a strong growth, not only for meat substitutes but also for the recently launched plant-based baby food NaturNes. For example, the plant-based yogurt alternatives are already selling almost as well as their dairy counterparts.
Moving towards a more sustainable food system
“Worldwide, we see consumption behaviour change. The demand for healthier products with a lower environmental impact is increasing everywhere”, CEO Michel Mersch confirms. “In this silent food revolution, we want to play a leading role with Nestlé.” He emphasises that the company’s focus on plant-based food is nothing new: “As early as 2000, we invested in Tivall, the producer of Garden Gourmet, and since 2016 we own 100 % of the company. That same year we also invested in American producer Sweet Earth. For more than twenty years, we have believed in the potential of vegetarian products.”
The switch to plant-based also plays a crucial part in the climate road map that the multinational set out at the end of 2020. “We are over-investing in research and development of plant-based products. The fact that we sold our meat brand Herta, despite it being an important business, shows that we truly mean it. We must move towards a more sustainable food system. It is fascinating: I truly believe that we are at a tipping point.”
Motivators and barriers
Within the plant-based meat substitute category, Garden Gourmet is the clear market leader with a 26 % share and is also responsible for most of the growth. “80 % of that growth comes from innovation. Consumers need a wider range of products. We still see a huge potential: research shows that 68 % of regular buyers are flexitarians. That has surprised us.”
Nestlé has commissioned research into the drivers and barriers of consumers. “The most important incentive to eat more plant-based food – especially among younger consumers – is sustainability. Other arguments that play a role include health, variety, convenience and animal welfare. A major barrier is awareness of the product category: only 10 per cent of consumers buy these products. That is still fairly low. Also, consumers still have questions about the taste. However, we have made progress regarding flavour in recent years. Suspicions about the health benefits of the products also play a role. Nestlé says that this is unjustified: 95 % of the range has a (healthy) Nutri-Score of A or B. Soy is a high-quality protein, and the products are also a source of fibre. The fat and salt content does not exceed that of meat products. A final barrier is the product’s price.
High expectations
In order not to force the consumer to choose between health and sustainability, Garden Gourmet will become climate-neutral in 2022. Furthermore, Nestlé will focus more on the awareness of the food category. “According to the FAO, 14.5 % of global carbon emissions come from livestock farming. We must take responsibility, but we cannot do this alone. Retail also has a role to play here. Compared to three years ago, we can already see a big difference: many retailers have made the switch. But they still see plant-based products mainly as a business opportunity and do not include them in their climate ambitions.
In any case, expectations are high: “Within a few years, plant-based products will be five times bigger for Nestlé than they are today. According to consultants A.T. Kearney, Meat substitutes will account for up to 25 % of the meat market by 2040. This would mean a growth rate of 9 % year on year. Other food categories rarely achieve such growth.” In the coming weeks, Garden Gourmet is once again launching plant-based novelties: marinated pieces of substitute chicken in three ethnic flavours. In Switzerland, the brand launched a tuna alternative with just six ingredients under the name Sensational Vuna. There are vegan variations of Nescafé and Dolce Gusto available on the market. And worldwide, there is also the launch of a vegan KitKat. “We believe in it, we have experience with innovation. When we launched Nespresso, there was a lot of scepticism too. And look where we are now…”
