Which food giants are leading the charge on plant-based?

A new report has revealed what retailers and manufacturers are doing to capitalise on the lucrative alternative protein trend while also addressing sustainability concerns. 

30 July 2019

Unilever, Tesco and Nestlé are the best prepared among 25 giant food retailers and manufacturers to capitalise on the plant-based boom. That’s the conclusion of a new report from investor network Farm Animal Investment Risk and Return (FAIRR), which spent three years investigating the food industry’s response to the increasing demand for alternative proteins.

Marks & Spencer and American packaged foods company Conagra were also praised in the report, which rated the five companies highly for having developed a proactive strategy to building a sustainable protein portfolio. Measures included risk assessments on their protein supply chains and expanding their range of plant-based products over the previous year. 

FAIRR expects alternative proteins to capture 10% of the global meat market and reach £100bn in value in the next 15 years.

Its research revealed that 56% of retailers recognise the growing sustainability challenges associated with animal proteins and the business risks of being dependant on them, particularly Tesco, Sainsbury’s, Carrefour and ICA Gruppen.

But only 28% had set targets to reduce supply chain emissions, the report found, with food companies reliance on animal protein suppliers a big concern. According to FAIRR’s analysis of 60 global protein producers, only 26% currently include some emissions from animal agriculture in their carbon reporting, yet do not address risks such as water pollution, scarcity, antibiotics use or manure disposal.

Jeremy Coller, founder of FAIRR, said factory farming is the largest user of freshwater resources in the world and is a primary cause of deforestation and growing antibiotic resistance.

Livestock supply chains also account for 14.5% of global greenhouse gases – more than the transport sector – and climate change can’t be tackled, unless food companies rapidly diversify their protein portfolios away from animal agriculture, he commented. 

“The growth of alternative proteins, from meatless meats to fishless fillets, offers a promising opportunity for food companies to meet the lucrative demand for protein with fewer impacts on land, water and biodiversity,” he explained.

“For too long big food has been playing catch up to consumers and start-ups on alternative proteins, when they should be leading this transformation. This report shows that some food multinationals are seizing the moment by setting clear strategic goals to increase their alternative protein exposure, supported by relevant metrics that are tracked and reported.”

However, retailers and manufacturers need to improve branding, merchandising and tracking of alternative protein products to expand their appeal across a broad swathe of consumers, he added.

Amazon, owners of Whole Foods, along with Costco and Canadian dairy company Suputo were singled out by FAIRR as falling behind their peers, despite the alternative protein market being valued at £19.5bn.

Big plans for big dollars

Overall, 87% of retailers have ramped up their own-brand plant-based products, the report found. Tesco announced in June it was planning to increase its own-brand range of plant-based products to 300 – up from the 32 it currently sells.

Sainsbury’s revealed it has more than 10 product developers working on plant-based categories and has also partnered with Oxford University to find ways to promote healthy and sustainable diets. It’s testing messaging on promotional coupons and online to encourage customers to try meat-free products, as well as trialling plant-based items in the meat, fish and poultry aisle to encourage customers to try them.

Meanwhile, Nestlé said that it expects its plant-based sales to reach $1bn in 10 years, while Danone is predicting its sale in the category to match those in the yoghurt segment within 10 years.

Perfect Day, the cow-free dairy outfit, announced this month it would retail its ice cream in three flavours – vanilla blackberry toffee, milky chocolate and vanilla salted fudge – and also has plans to sell flora-based dairy protein as an ingredient to food companies.

When it comes to nutrition, several companies are focusing on eliminating negatives like sugar, fat or salt without a complementary approach to adding beneficial ingredients such as wholegrains and vegetables, added the report. Only seven of 25 companies, including Sainsbury’s, Nestlé, Unilever and Coles Supermarket, explicitly include references to increasing the consumption of plant-based, wholegrain and/or vegetables as part of their nutrition programmes.

Attracting new customers

The boom isn’t just happening in retail or manufacturing. FAIRR found when Burger King debuted its Impossible Whopper in April in America, sales surged by 28% and the number of unique customers rose by 15% in the five-week trial. The huge response has prompted plans to roll out the burger to all 7,200 stores in the US by the end of the year.

In the UK, Greggs’ vegan sausage roll became its fastest-selling product in the last five years, with one in eight buyers of the product new customers. Since its launch, awareness of the company’s brand has reached its highest level since 2012, FAIRR highlighted in analysis from the bakery chain.

“There is a clear shift underway among consumers who are increasingly aware of, and concerned by, the climate impacts of the food they eat and how sustainably it is produced,” said Elly Irving, head of engagement at British investment fund Schroders. “Companies that don’t adapt risk falling behind and missing the growing market opportunity that is emerging. FAIRR’s research has been valuable in helping us to identify leaders and laggards.”


Changes needed to supply chains

  • To reduce emissions associated with supply chains, global food companies need to invest capital to support climate mitigation strategies, such as feed additives that reduce methane and manure management systems to capture emissions and reduce their reliance on fertilisers to grow feed.
  • Food companies will need to devote resources to certification schemes and independent auditing systems to eliminate deforestation from feed production and cattle grazing.
  • Introducing better welfare practices, including a system of production that emphasises responsible antibiotics use, slower growing breeds, no confinement and no routine mutilation.

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