UK: Meat outperform their animal-free alternatives in January

Animal-free products were less of a hit with consumers in January, as meat-free volume declines outpaced their animal-product counterparts, informs AHDB. Dairy volumes grew year-on-year (YoY) in January while dairy-free products experienced less demand compared to last year. It seems food trends during January are changing, with greater opportunities for red meat and dairy to be eaten by consumers as more of a health-conscious start to the year.

Posted on Mar 13 ,00:15

In January 2023, we saw poor performance for both meat-free and dairy-free products compared to January 2022. This resulted in some retailers attempting to position animal-free products with health-focused messaging within stores this year, rather than promoting Veganuary as an occasion in its own right, according to IGD. This aligns with our marketing campaign Let’s Eat Balanced, showcasing the nutritional benefits of British meat and dairy and their role as part of a balanced diet.

While this limited promotion and product availability will have impacted sales of animal-free products to some extent, the cost-of-living crisis can also be attributed to a large proportion of the 12.8% and 3.8% YoY volume decline for meat- and dairy-free products, respectively (Kantar, 3 w/e 21 Jan 2024; Nielsen, 4 w/e 27 Jan 2024). This is because meat- and dairy-free products are 3.3% and 18.4% more expensive than their animal product competitors respectively. This continues the YoY volume decline seen throughout 2023, and was further highlighted during January with some consumers switching from meat-free products into red meat (Kantar).

Despite high inflation, spend on meat-free items dropped by 6.6% YoY (Kantar, 3 w/e 21 Jan 2024) due to the fall in volumes of both branded and unbranded products. This decline outpaced that of total meat, fish and poultry (MFP) (-1.9%) and came as many shoppers left the meat-free category due to its high price point at £7.82/kg compared to the average for total MFP (£7.57/kg). As a result, some shoppers also switched to buying primary MFP products.

Compared to the average 3-week period within the 52 weeks ending 24 December 2023, meat-free volumes increased by 25.9%. However, this was to be expected as retailers always try and drum up interest in meat-free products and are health focussed in January, e.g. through in-store displays and advertisements. This may be to counter the trend that the proportion of food chosen for health reasons is not typically at its highest in January, contrary to popular belief.

Looking at promotions more closely, 43.2% of meat-free products were on promotion during the 3 w/e 21 January 2024; this is a slight increase (+1.5 percentage points) compared to the rest of the year. Yet retailers’ efforts to try and increase the pick-up of meat-free products during this health-focused month failed, as the percentage of baskets with meat-free products fell 0.4 percentage points YoY, to 4.1%. This indicates that consumers’ interest in meat-free products is waning, despite attempts to market them as healthy following the indulgent Christmas period.

This trend is also apparent when we look at the number of people buying meat-free products, which has been falling since 2021. Linked to this, demand for meat-free products has been declining recently, as people turn to carbohydrates and cheese to create tasty meatless meals at a lower cost (Kantar).

Therefore, while we see this peak in interest for meat-free items in January, only 28% of shoppers who attempt Veganuary actually complete it, and most are unlikely to continue purchasing meat-free products for the rest of the year. This suggests consumers have a fleeting interest in a meat-free lifestyle, and meat-free products are not a big threat to the MFP category at this point in time.

The media has focused on the negative nutritional values of ultra-processed foods, which is putting many consumers off eating them (Mintel). This, alongside slowing inflation and the potential for real wages to grow in 2024, means health is becoming more of a priority for consumers. This provides the opportunity to promote the health benefits of meat and dairy in January, to align with consumer values.

With 96.4% of households buying MFP in January (Kantar, 3 w/e 21 January 2024), compared to 99.0% for the rest of the year (52 w/e 24 December 2023), there is a slight drop off in consumers purchasing red meat at the start of the year. Therefore, alongside promoting the health benefits of red meat and dairy, retailers could provide meal inspiration, both on-pack and in-store, to help encourage consumers to buy these items in the big post-Christmas shop.

With just 28% of UK adults completing Veganuary and volume sales of meat- and dairy-free products suffering, it is likely that new product development will be limited, but meat and dairy may still face competition from cheap staple alternative products.