How to Succeed in Plant-Based:
Key Learnings to Avoid the Most Common Failures
“Plant-based brands accused of creating a category failure, maybe one of the biggest in food history”
In a recent report about failures in plant-based foods by NNB, its editor Julian Mellentin, observes that the same mistakes that we see in the plant-based foods category today were seen already 20 years ago in the then-hyped functional foods category. And yes, that is unfortunately true, but the good thing is that the same success factors still apply.
20 years ago, in 2003, our founder Peter co-wrote a book with Julian: “The Food & Health Marketing Handbook” with the subtitle “How to commercialise innovations in food & health”. This book was based on observations and analysis of market failures from the first generation of functional foods – with help of our FourFactors® of Success methodology.
This means we have a good idea of the success factors and learnings we can apply today for the plant-based category. Read further to find out!
Learning #1: The Value chain starts in the mind of the consumer
The initial FourFactors® are very simple. They are based on four questions relating to what goes through your target consumer’s mind at the point of purchase:
“ Do I…”
- Need the product?
- Accept the ingredient?
- Understand the benefit?
- Trust the brand?
You can health-check your product concept using simple consumer logic with these four questions. But who is your consumer target? NNB notes in its report that the consumer market is fragmented – and yes, it is. In our words: it is segmented. And the segmentation is based on consumers’ need for and attitude to innovations in food (whether it involves health or sustainability or both).
Learning #2: There’s not just one consumer
The most dangerous sentence is “THE consumer”. Startups are too often blinded by product innovation and its appeal to the world, i.e. THE consumer, where they mirror themselves. But the key to success and the right market entry strategy is to target the right consumer with the right message.
We have identified four different stakeholders from Technology to Late Mass market. By naming them stakeholders we indicate that they include both consumers and all others who you need to win for your new innovation. They are in order of appearance:
- Technology Stakeholders (Innovators)
- Lifestyle Stakeholders (Early Adopters)
- Early Mass market Stakeholders
- Late Mass Market Stakeholders
The first two stakeholders drive most startups and scale-ups in the plant-based and functional foods categories. The Technology and the Lifestyle Stakeholders. This is where we find those who have invested in your innovation and who believe in your vision. These are the early adopters and your first market. In the case of Oatly, they started ten years ago by bonding with the growing Vegan movement and proclaimed boldly on their packaging, “Yes, we are vegan, so what?”. From a commercial perspective, you are clearly in a niche. The way to grow a niche is to expand within the same niche and find your early adopters internationally. But what if you want to grow into the mass market?
Learning #3: How to bridge the chasm that separates niche from mass market
The Food & Health Marketing Handbook written by our founder, the Technology Push represented by the first two stakeholders, met by the Consumer Pull to be accepted by the mass-market stakeholders. Between these two, a chasm will engulf all brands that don’t manage the transition from Push to Pull.
One critical failure factor identified by NNB is that many brands go to the mass market too soon. A quick check with the FourFactors® on an Early Mass market consumer would have prevented that. But unfortunately, even some of our clients have been tempted to jump into the arms of retail too soon.
Understanding the drivers for the mass market before making the jump will help maximise your chances for success. Generate demand is the first challenge you will face, and then comes the crucial success factor for mass-market entry: taste, texture and familiarity of the product format. Plant-based brands, like any other brand, can succeed when they understand and address these factors.
Learning #4: Understand triggers & barriers for mass market entry
The triggers can be easily identified with the FourFactors® analysis of your target mass market consumer:
Awareness – Acceptance – Familiarity – Availability
So in a nutshell it means that the mass market consumer has heard about you, and they accept your new innovation that comes in familiar and convenient formats that are available where they normally go shopping.
But the barriers still remain and these are the ones that makes the your consumer buy your product.. again:
Antipathy – Complicated nutrition – Taste compromise – Price compromise
This simply means you are selling food, not politics. Your product brings easy-to-understand nutrition ie “free from bad and full of good” and ideally no strange or unknown ingredients. It must taste good of course but taste also means familiar flavours. Finally, the price compromise means you cannot be too premium in a retail environment. So a recommendation to a start-up or scale-up can be: Don’t go mass. Stay with your early adopters and manage your niche brand in premium distribution channels to keep a healthy price point.
A bit of good advice: when you bring a new idea to the market: Go for value, not for volume.
PS! You can download our triggers & barriers report right here.
So how to be a winner in the plant-based market?
Develop the market stakeholder by stakeholder. The desired progression can be described as follows:
- The Technology Stakeholders will help you educate the Visionary Lifestyle stakeholders
- Bond with the needs and beliefs of the Lifestyle stakeholders, who are the early adopters, so that they can serve as good references to the more pragmatic Early Mass market stakeholders.
- Develop aspirational solutions for the Early Mass market stakeholders respecting all the triggers and barriers for mass-market entry, which will help normalise your new product/category for Late mass market consumers.
- Becoming a commodity for the Late mass market may not be your ambition since it will involve a lower price point. You can bet that private label will beat you to these stakeholders.
Are you a change-maker in plant-based? Do you face similar challenges? Contact us here , and let us show you how we can create change together.