Plant-based: find the secret to success

Antony Warner, Development Chef, Former Premier Foods Development Manager

My day job is as a development chef, and I have been involved in recipe development for major cooking sauce brands for many years. For decades, Britain’s best-selling cooking sauce was HomePride canned curry sauce, a product that cost the company I worked for huge sums of money. Although it was widely seen as outdated, inauthentic, cheap and of poor quality, it was consistently better than all other cooking sauces on the market.

Interestingly, all the other Indian cooking sauce brands want to think of themselves as premium, and end up competing for a small segment of the market, offering authentic taste, high-end luxury, and home-made products. We decided to offer a restaurant experience. Homepride, on the other hand, quietly offered simple, inexpensive, family-friendly products that people could trust, operating largely uninfluenced by other brands.

I saw something similar happen with the explosion of vegan meat brands from 2019 to 2021. Some are backed by food giants, others by venture capitalists, and all have exciting new products and huge marketing spend. And apparently they were all fighting for a slice of high-spending millennials, interested in ethical consumerism from their funky lifestyle brand, on the luxury end of the market.

Fast forward to 2023, and the ongoing cost-of-living crisis hits the ultra-premium plant-based market head-first, leaving casualties scattered across the tracks. As costs soared, desperate consumers abandoned plant-based brands, forcing many brands and manufacturers out of business. I can’t help but think that if any of these brands had been built around providing value to consumers, the cost of living crisis would have been their chance to shine. What we needed was plant-based home pride. What we got was a dozen Tesla wannabe cars.

On the surface, there seems to be little reason why plant-based shouldn’t offer better value than meat. After all, most of the ingredients in plant-based meat products are similar to those in animal feed. Is it really cheaper and more efficient to feed soybeans to pigs and make sausages from the pigs’ meat than to make sausages directly from soybeans?

Our latest report investigates the reasons behind the plant-based price premium and reveals a complex picture. This problem is not entirely due to the high profit margins of highly leveraged vegan startups. Yes, soy protein is cheaper than meat, but the cost of turning that protein into something delicious and functional is what makes plant-based command a price premium.

Our analysis shows that fragrances, gelling agents, emulsifiers, and colorants add significant costs. And perhaps more importantly, the complexity of plant-based formulations, with so many additional steps and processes, creates significant waste and inefficiency. Making a beef burger is as simple as mixing and shaping the meat with a seasoning pack, whereas plant-based equivalents often require four or five steps, all of which take time and create waste. also occurs.

In addition, plant-based products are much more expensive to stock in stores due to smaller quantities and shorter refrigerated shelf life. These inefficiencies leave plant-based producers extremely vulnerable once the cost of living crisis begins to deepen, forcing them to either cut already tight profit margins to keep up with production or sell at very low sales rates. If it goes too far, it will be at risk of being delisted. The fact that almost all new plant-based meat brands were premium options didn’t help, as consumers were never likely to buy the product for value. It was a disaster that could and probably should have been predicted.

Of course, the existence of plant-based meat home pride is predicated on the ability to provide plant-based burgers and sausages of sufficient quality and value. Even in high-value markets, families want delicious options and will turn away if a brand doesn’t meet that. The task is difficult, but our report shows it is possible. There are various approaches at the ingredient level that can help manufacturers significantly reduce formulation costs.

Flavoring can account for as much as 40% of raw material costs in many plant-based products, so optimizing its use is an important approach. Switching to less processed protein concentrates rather than more expensive protein isolates is also a way to save considerable costs and also reduces the carbon impact of your recipes. New methods to achieve meat-like structures are increasingly available, many of which are easier to label and cheaper than traditional methylcellulose-based approaches. Also, finding ways to optimize the use of side streams from protein extraction is becoming increasingly important and has the potential to dramatically lower the cost of formulations.

Plant-based requires concerted, step-by-step product development efforts to lower recipe costs, increase profitability, and most importantly, provide consumers with valuable choices. Once delicious plant-based burgers and nuggets become available at prices comparable to meat, and preferably at a lower price, there will no doubt be a significant switch. Most consumers buy processed meat products despite the fact that they are made from animals, not because of it. If we give them something better that they can afford, many barriers will disappear.

While many pundits think the future of plant-based is precision fermentation and cellular agriculture, I think what plant-based really needs is boring, old-fashioned cost-cutting. It may not generate as much investment cash as the promising lab-grown meat by 2030, but it will probably have a bigger impact on the food people eat.