The flex factor: opportunities exist in times of change

By their very nature, consumer trends evolve and shift all the time. For the food industry, differentiating what’s a short-term fad versus a long-term mega-trend can be the difference between success and failure.

Over recent years, the vegan movements in Ireland, the UK and further afield have become increasingly noisy and are running attention-seeking campaigns targeted directly at animal farming. This new phenomenon has left many farmers and food businesses scratching their heads and asking themselves if veganism is an actual threat that’s here to stay or just a passing fad.

A recent study carried out by YouGov, the UK-based market research and data analytics firm, found that just 1% of the UK population identifies as vegan, which is to say consumers that do not eat meat, dairy, eggs or any product from an animal. The study found that the vast majority of vegans in the UK to be women aged from 18 to 34.

The study also found that 3% of the UK population identify as vegetarian, while another 3% describe themselves as pescitarian, which means they eat fish but not meat or poultry. Almost three-quarters of the UK population (73%) are meat eaters, according to the study.

However, perhaps the most interesting finding of the YouGov study is that some 14% of the UK population – twice as many as pescatarians, vegetarians and vegans combined – identify as flexitarians, which means that they mainly follow a vegetarian diet but occasionally eat meat.

Flexitarianism

Veganism is not the mega consumer trend the noisy animal welfare movement would have you believe. But flexitarianism almost certainly is.

In the study, YouGov found that more than a quarter (26%) of UK meat eaters said they plan to reduce their level of meat consumption in the next year, with health concerns the primary reason provided. Over 40% of respondents also identified animal welfare concerns as a reason for reducing meat intake.

The YouGov study paints a picture where the flexitarian diet will only become increasingly prevalent among UK consumers who are looking to cut down the amount of meat they eat due to health concerns.

Ask any employee in Kerry Group, a company right at the coal face in terms of the changing trends in the food industry, flexitarianism is a mega-trend and one that’s here to stay.

In an interview with the Irish Farmers Journal last year, Kerry Group chief executive Edmond Scanlon described the pace of change going on in the food industry right now as “unprecedented”.

“The food industry is switching back to being consumer-focused. In Kerry, we don’t see vegans as the big disrupter group. It’s actually the group we call flexitarians that are driving demand. These are people that may not want to eat meat every day,” said Scanlon.

Recognising this consumer shift, almost all of the biggest food companies right across the world are looking to develop new, plant-based products in order to protect their brands and avoid disruption.

Research

According to Kerry Group’s own research, 42% of all new food products developed in 2018 by the global food industry for the health nutrition category were plant-based. In recent years we’ve seen huge investments made by global food businesses to establish a presence in the plant-based, alternative protein market.

In 2016, Danone paid €10bn to acquire Whitewave Foods and its portfolio of dairy-free drinks, while Tyson Foods, the largest meat company in the US, has invested in startup companies that make synthetic meat-like products from plants.

Just last month, the world’s largest food company, Nestlé, made its move into the meat-free category when it launched its own plant-based burger to target consumer markets in Europe and the US.

There was a time when the big food companies such as Nestlé, Pepsico, Danone, Coca Cola and Kraft would wait patiently and watch consumer trends develop fully over time before making their move into new categories.

However, the unprecedented pace of change in the food industry as described by Edmond Scanlon, along with the fear of disruption and consumer backlash against established brands, means big food companies are being forced to react faster than ever to new consumer trends.

Twenty years ago, who would’ve predicted that Coca Cola would own a milk brand or that Tesco would sell a plant-based steak alongside traditional fresh meat cuts? Yet here we are.

Hearing that flexitarianism is a growing trend may be anathema to Irish livestock farmers but it’s important to look at the bigger picture. The consumer trend to reduce meat intake is very much a rich-world phenomenon in countries such as the US and Europe where per capita meat and dairy consumption is extremely high.

In emerging markets across Asia, the Middle East and Africa, meat and dairy consumption is only starting to rise. As economies get wealthier, the level of meat and dairy consumption rises accordingly. The billions of consumers in these emerging markets are coming from such a low base in terms of their consumption of meat and dairy products that even a modest rise in per-capita consumption will lead to enormous extra demand for traditional meat and dairy.

According to the OECD, global consumption of fresh dairy products will grow by 2.1% per annum over the next decade, while consumption of processed dairy products is poised to grow by 1.7% per annum in the next 10 years.

The OECD also forecast that global meat consumption will rise 15% over the next decade to more than 365,000t of carcase weight equivalent (cwe) as average meat consumption per capita rises to 35.4kg.

Global beef consumption is forecast to rise 15% to 78,500t cwe, while global sheepmeat consumption will jump more than 20% in the next decade to just under 17,500t cwe. Pork and poultry consumption will rise 11% and 18% respectively over the coming decade, according to the OECD.

Nearly all of this consumption growth for meat and dairy will come from emerging markets. So while flexitarianism is on the rise in Europe and the US, farmers must remember their produce will be needed elsewhere to fill demand in new markets around the world.

At the same time, there are farmers who will see the rise of flexitarianism for what it is: an opportunity. Although consumption habits change, consumer must still eat to survive. If there is a growing trend towards a more plant-based diet in rich countries, then new food products and innovations will be needed to satisfy this growing demand.

For the farmer or food company that can think differently and be agile in their business, huge opportunities will present themselves in the years ahead.