Thanks to dramatic improvements in taste and availability, the market for meat alternatives is exploding – and CPGs, QSRs, and grocery retailers are all looking to get in on the action. There is so much hype surrounding these products that shares of industry-leader Beyond Meat have skyrocketed by 680% (at the time of writing) since the company’s IPO in May. Even insider reports suggest these products are here to stay; a projection from Grandview Research estimates the global market for meat alternatives will reach US$5.8 billion by 2022.
This presents an extremely attractive revenue opportunity, but one that is not without its challenges.
The biggest challenge? The industry’s knowledge of its consumer base has not kept up with the market growth. Specifically, these brands no longer know who’s really buying their products, or why. While these companies have assumed their customers continue to be vegetarians and vegans, that is no longer the case. The market actually comprises two distinct segments, both of which have their own purchase drivers, and must therefore be communicated to differently.
The first segment consists of non-meat-eaters: they have been and remain a prominent target for brands looking to enter this market. These are knowledgeable consumers who are well-established in this category, and are less concerned with price and more compelled by the ethics and sustainability of these products.
However, they are not the segment with the most purchasing power. It is the second group, meat-reducers, who now have a surprising amount of pull in the market. These consumers are primarily interested in meat-alternative products for health reasons, and are relatively new to the category. For them, cost is a key decision-making driver.
This means CPGs, QSRs, and retailers are now speaking to two distinct audiences. And companies who don’t have a solid understanding of these audiences—not just what they buy but also why—run the risk of disenfranchising both, and leaving significant market share on the table.