Branching Out: Plant-based products rely on e-commerce as shelf space gets crowded

Nutritional Outlook, Nutritional Outlook Vol. 24 No. 2, Volume 24, Issue 2

Limited shelf space makes e-commerce and direct-to-consumer even more vital for plant-based firms.

Plant-based food sales are outpacing total retail food sales. According to the Plant-Based Food Association (PBFA), based on data from the 52 weeks ending April 2019 from market researcher SPINS (Chicago), plant-based food sales grew 11% to $4.5 billion while total retail food sales grew only 2%. The data also showed that plant-based alternatives outpaced sales of their animal-based counterparts. For example, plant-based meats grew 10% compared to animal meats, which grew 2%. Plant-based cheese grew 19% compared to dairy cheese, which saw no sales growth in that time frame. And plant-based milk grew 6%, while dairy milk declined in sales by 3%.

More recently, PBFA partnered with SPINS to look at plant-based food sales following the COVID-19 outbreak. Based on data from the 16 weeks ending April 19, 2020, panic buying at the beginning of March 2020 spiked sales of plant-based food by 90% at its peak, compared to the previous year. This spike was 25% higher than that for total food sales. After consumers settled down, plant-based food sales grew 27% in the four weeks post panic buying—but growth still remained 35% higher than growth of total food sales.

Clearly, plant-based foods are in high demand, and consumers are willing to spend their hard-earned money on them. However, as more and more plant-based products come to market, there is limited shelf space at brick-and-mortar retail to accommodate these products. This creates an immense opportunity to sell directly to consumers online or through other e-commerce channels. For example, Beyond Meat, one of the leading plant-based meat manufacturers, launched its own e-commerce site in August 2020 to sell directly to consumers. The advantage is that some people may not have access to these products at their local grocery store; therefore e-commerce gives them an alternative avenue for purchase. Also, loyal customers can buy larger-quantity bulk packs and combo packs not available at retail.

Seeing the potential for plant-based products at e-commerce and the value of having a centralized place to buy vegan products, Vejii was born. Vejii is an online marketplace that exclusively sells vegan products. While the site has only been operating for about three months, Vejii already has 3,000 products in its inventory. Launching and operating during the pandemic, Vejii demonstrates just how much retail has changed.

“I think that online shopping and online grocery ordering has increased a lot during the pandemic, and I know even for my family, we regularly get our groceries delivered to the door. So, I think there has been a trend toward e-commerce and online in shopping for groceries to begin with,” explains Kory Zelickson, CEO of Vejii. “And I think that was only further propelled by the pandemic.”

Vejii not only captures a growing base of consumers who are ordering groceries online but also the growing number of consumers experimenting with plant-based food. According to a survey conducted by Mattson back in 2017, 65% of plant-based consumers are omnivores, 29% are flexitarian and actively reducing their meat consumption, 4% are vegetarian, and 2% are vegan. With this in mind, Vejii is designed to be an inclusive place that accommodates all consumers and provides resources to remove some of the guesswork of transitioning to a plant-based diet, if that is the goal.

“I recognize that there are a lot more people out there who aren’t vegan but are interested in becoming vegan and interested in incorporating more plant-based products into their diets, and that’s not a segment of the population that we want to exclude in any way,” says Zelickson. “So, we encourage people who eat meat as much as people who are vegan to come and buy from the site. That being said, even our marketing and our strategy for customer acquisition doesn’t always focus just on the vegan community.”

“We have quite a few resources through our blog and social channels,” he continues. “We have unique recipes that we share, and to make things even easier, we are starting to bundle products with recipe designs that we have in partnership with different influencers.” So, if a Vejii customer sees a recipe on the site they want to make, they’ll be able to click a button and order the product necessary to make that recipe.

“We’re trying to do as much as possible to help provide better access to these products and help mainstream plant-based diets by providing the right resources for people,” says Zelickson.

The lesson? Consumers are already online looking for innovative products, so securing sales virtually is convenient for both you and the consumer.