Vegan products are quickly gaining in popularity. The biggest driver of this growth comes not from the vegans, but from people who like to buy and taste plant-based products now and then, for whatever reason (health, animals, environment, variety… or just because they’re there and they taste good). Companies that are producing meat and dairy products and are not offering vegan products can respond to the growth of the vegan market (and possibly the decline of the meat and dairy market) in several ways. Below, I briefly go over these different types of responses, starting with conservative and defensive ones, and moving to more progressive and radical ones.
1. ignore the whole thing
There are still quite a few companies – though less and less of them – that believe the vegan trend is just a hype, which will blow by. Others do realize that the growth of meat and dairy may be permanently stagnating and may decline further in the western world, but hope to profit from growing demand for their products in developing countries. Indeed, as pro capita income in China, India and other countries in Asia as well as Latin America is increasing, demand for animal products, according to the business as usual scenario, is expected to rise dramatically (indeed to double by 2050). Meat and dairy companies hope to cater to this growing international demand. These opportunities for export, however, are not a given. Awareness of the issues is growing in these countries, and new technology like clean meat may throw a wrench in the machine. Also, in the future many of these countries will probably cater more and more to their own needs and acquire the necessary expertise, rather than importing meat and dairy products from the west.
2. try to slow it down or stop it
Some companies are proactively fighting or trying to sabotage the growing interest in plant-based foods or, for that matter, the growing awareness around animal welfare and animal rights issues. One obvious example is how the meat and dairy industry in Europe and the US have been lobbying to ban the use of meat- and dairy-style names (words like “hamburger” or “cheese”) for plant based products. In Europe, this lobbying has actually been successful and led tot he fact that soymilk or oatmilk can no longer be called “milk” but should carry other names (like “drink”). In France the same already goes for meat products, so a vegetarian or vegan hamburger can no longer be called that. In the US, similar initiatives have so far been unsuccessful, but on the other hand we have seen so called “ag-gag” laws (agriculture gagging) in many states. These laws prohibit things like taking pictures of factory farms, in an attempt to limit animal activists from making undercover footage. Similar repressive measures have been taken in particular in Austria.
3. “traditional innovation”
To keep selling enough products, many companies need to constantly innovate. “Traditional innovation” – the term is sort of an intentional oxymoron – is what I mean with meat and dairy companies creating innovative products that still involve animal products. An example of this is lactose free milk – a dairy product which the dairy sector wants to sell to those who are lactose intolerant – or milk with certain flavors.
Much more innovative – I’m still placing it here but it could also be under the next point – are hybrid products (see my interview with Jos Hugense of Meatless). These products are made up of both animal and plant products. Imagine “milk” that is partly cow’s milk and partly oat milk, or a sausage that is 70 percent meat and 30 percent wheat – both product categories that actually exist.
4. developping alternatives for meat and dairy products
More and more companies are taking an even bolder step, and are launching animal free alternatives of the animal products that they are already offering. Both the Ben and Jerry’s and Haagen Dazs icecream brands, for instance, have launched vegan flavors. In Germany the long standing meat company Ruggenwalder Muhle has launched many vegetarian or vegan products.
5. venture investments in plant-based companies
Some companies are hedging against or preparing for the decline of demand for animal products by investing in other companies that produce alternatives. Tyson Food‘s venture fund has famously bought a stake in the vegan company Beyond Meat and has also invested in startups trying to bring clean meat to market. General Mills has invested in Kite Hill (which offers plant based cheeses), as well as in Beyond Meat. And both Cargill and Tysyon foods have invested in Memphis Meat, a Californian start up trying to bring clean meat to market, and having already produced prototypes of clean meatballs and clean duck.
6 . acquiring a plant-based company
Meat and dairy companies also have to option of not just buying a stake in a plant-based company, but completely acquiring it. This can be a good idea when the meat or dairy company doesn’t have the expertise or the ambition to bring their own alternative products to market quickly enough. French dairy giant Danone bought Whitewave foods, which owns brands like Silk, Alpro (a European nondairy company), as well as some organic dairy brands. Danone paid upwards of 11 billion dollars for the acquisition, but it allows the company to make an entrance into the US market – where it was weak – as well as in the plant-based and organic market. There are many other examples of similar acquisitions, like Finish dairy company Valio acquiring Swedish oatmilk company Oddlygood, Canadian Saputo acquiring Morningstar, etc. Famous vegan cheesemaker Daiya was acquired by the Japanese company Otsuka.
For vegans who dislike that meat companies are getting involved in vegan companies, it’s important to be aware of the fact that through their venture investments or acquisitions, the investing or new parent company can support the further growth of the vegan company. Apart from cash for further product development or advertising budgets, an investing or parent company can also provide their expertise in research and development to make a product better. An Alpro exectutive for instance, talked about how their new parent company Danone’s expertise in fermenting would be very useful to further improve the quality of Alpro’s yoghurts. Other assets that a parent company can provide are all their contracts with supermarket (or maybe even restaurant) chains to help improve the distribution of these products. Also important to note is that very probably, a meat or dairy company will be much less likely to try to sabotage vegan growth (option two above) if they are already profiting from it.
7. completely transforming into a plant-based company
Finally, a meat or dairy company can transition into a vegan company. This is at this point a very rare phenomenon, but it does happen, and one can only hope it will happen more and more. An example is the traditional New York dairy company Elmhurst, which is now a plant-based company. It continues to sell milk, but switched from cows to nuts for their sourcing.
If we want the vegan lifestyle to spread further, it is necessary that traditional companies can jump on board somehow, and that they have a wider variety of options than just go bankrupt or to turn vegan overnight – both of which are very rare occurences.
Do you see any responses that I missed? Let me know.