BY DENISE LEATHERS

A wider range of consumers is responding to new flavors, textures and forms emerging in the meat substitute segment, driving growth and expanding the category’s prospects among increasingly health-conscious grocery shoppers.

Sales are expected to top $1.6 billion within five years. As the category has evolved, so have meat substitute consumers. Now more likely to shop in conventional supermarkets than natural food outlets, the majority of meat substitute consumers today consume meat, but many are looking to reduce their consumption for health and other reasons.

“The veggie foods category does appeal to consumers who subscribe to a vegetarian lifestyle,” acknowledges Ami Krishan, associate director of frozen food marketing at Battle Creek, Mich.-based Kellogg Co. (269-961-2000), maker of the category-leading Morningstar Farms and Gardenburger brands.

Yet the number of vegetarians in the population has remained relatively flat, she points out, so advances made by meat substitutes have occurred among consumers who aren’t committed to a plant-based diet.

“We believe this group represents a big opportunity for growth,” Krishan says.

The numbers support that notion. A recent poll by The Vegetarian Resource Group, Baltimore, revealed that only about 3.4% of U.S. adults are true vegetarians, eschewing red meat, poultry and fish/seafood. But 8.0% of U.S. adults do not eat red meat. And as many as 26% are actively working to reduce — but not eliminate — red meat consumption.

“The ‘sometimes vegetarian’ who eats three or more meatless meals a week represents about 40% of the population,” says Seth Tibbott, founder and president of Hood River, Ore.-based Turtle Island Foods (800-508-8100), maker of the Tofurky brand. “And those people tend to shop in mainstream supermarkets, which is where we’re experiencing the most growth.”

The dedication of true vegetarians committed to a meat-free existence regardless of cost helped the meat substitute segment weather the recession better than many other better-for-you categories. But its strong performance during the third quarter — when the economy finally improved — underscores the growing importance of more mainstream “flexitarians.”

According to figures provided by Chicago-based Information Resources Inc., dollar sales of frozen meat substitutes in conventional supermarkets, which generate almost six times as much meat alternative dollar sales volume as the natural channel, jumped 6.5% to almost $55.4 million over the 12 weeks ending Oct. 4, significantly outperforming the frozen department as a whole. For the year, however, dollar sales were up only 3.5%. The result suggests that consumers who are less devoted to cutting out or back on meat began returning to the substitute category as the economy improved.

Although IRI does not track the much smaller refrigerated meat substitute category, anecdotal evidence suggests that segment is not growing quite as fast as frozen, at least in conventional supermarkets. Many refrigerated meat substitute suppliers are relatively small and do not have the marketing muscle of the frozen category’s heavy hitters, which may explain the lag.

Quality Considerations
Consumers’ growing interest in better-for-you alternatives is the primary driver behind the meat substitute category’s recent gains, but manufacturers are doing their part to keep the momentum going. Improving the quality of products offered to broaden their appeal beyond core vegetarians is clearly job one.

“Consumers want a product that tastes good and has a meaty texture to it, and they aren’t willing to compromise,” reports Darrell Askey, chief operating officer at Vancouver-based Garden Protein International Inc. (714-315-8309), maker of the gardein lineup. “They want an item that can legitimately be the centerpiece of a meal,” and that doesn’t require masking by other flavors or dressing up in a bun, he explains.

Garden Protein's new frozen line includes just that kind of product.

Manufacturers also are looking to introduce meat-free products that can be consumed across a broader array of eating occasions. They have the three main meals pretty well covered.

“But finding tasty and healthy appetizers and snacks, for example, can be a challenge for vegetarians and people eating less meat,” says Pete Lewis, director of marketing for Turner Falls, Mass.-based Lightlife (800-769-3279).

To help fill the void, the company recently added Buffalo and Honey Barbecue-Flavored Wings and Smoked-Style Sausage to its Smart products roster.

Garden Protein’s gardein collection also incorporates a couple of meatless appetizers, including Buffalo Wings and Seven-Grain Crispy Chick’n Tenders, along with several “very easy-to-prepare” center-of-the-plate type items, Askey reports.

“Convenience is becoming increasingly important to [meat substitute] consumers,” Krishan says, citing the addition of two new “complete meal solutions” to the Morningstar Farms lineup next month.

“Our new Lasagna and Sweet and Sour Chik’n frozen entrees give the consumer a complete meal that they can prepare quickly at home or even at the office while still satisfying their desire for meatless dining,” Krishan notes.

Hey, vegetarians lead busy lives, too.

Convenience was also on the minds of the folks at Turtle Island when they developed fermented tempeh strips that cut prep time from two hours to two minutes. The product comes in three flavors, Tibbott says, pointing to yet another category trend: line extensions that offer increased variety.

“Providing consumers [with] variety across meal occasions is always important,” Krishan confirms, “so we are constantly looking for ways to provide new flavors and forms for our consumers.”

Coming this January, she reports, are two new additions to Kellogg’s Morningstar Farms burger lineup, including a quarter-pounder and a California Turk’y variety. A new Hot and Spicy Sausage Patty will give consumers an additional meat-free breakfast option.

Windermere, Fla.-based Morini Brands (407-964-1283), maker of the industry’s first rice-based meat alternative, is looking to do something similar, reports company President Christopher Morini. This January, he says, it will introduce a 5-ounce peppadew-flavored “Grand Beach” version of its flagship Bahama Rice Burger. The company also plans to roll out Swingin’ Italian rice-based sausage and Tuscan-style rice-based meatballs.

Despite the plethora of new items, the category has welcomed surprisingly few organic meat substitutes. According to Cole Jones, general manager at Fort Atkinson, Wis.-based Sunshine Burger (920-568-1100), the meat substitute category is populated by a lot of small companies that buy into the organic philosophy but cannot afford certification. Although larger companies recognize the value of the USDA seal, especially among core consumers, most do not think it is important enough to warrant a significant investment on their part, although a handful straddle the fence by offering products “made with organic ingredients.”

“We’re sort of the exception,” Jones says, noting that Sunshine Burger’s new Breakfast Patties and Falafels are, indeed, USDA-certified organic. “But we don’t play in a lot of the big mainstream supermarkets.”

Still Experimenting
Proper merchandising is critical to the success of the meat substitute category, but according to suppliers, many conventional retailers still are tinkering with their approach. Although natural or organic products such as Sunshine Burger’s newest items often are placed in separate natural/organic sets in stores that have them, the majority of meat substitutes are merchandised with like products in the produce or dairy department, if they are refrigerated, or in the frozen food aisle.

Retailers also can cross-merchandise meat substitutes with functional foods in other parts of the store that appeal to some of the same consumers, including those looking to reduce fat consumption or boost dietary fiber or protein.

Sampling can be a particularly important promotional tool in the meat substitute category. Yes, it can be costly, and good demonstrators are hard to come by, but the strategy is very effective because it gets consumers to consider a product many believe simply does not taste good.

“Once people try our products, they finally understand that meat substitutes taste great,” says Askey, who is also a proponent of trial-stimulating coupons and temporary price reductions.

Instantly redeemable coupons also work well, particularly for small companies with limited promotional budgets, since little cost is involved, Tibbott adds.