Kroger’s Test Finds Plant-Based Foods Make Sense In The Meat Department

Moving plant-based meat, dairy and egg alternatives out of their niche sections and into the cases alongside the traditional animal-based versions of those foods has been a growing trend at some supermarkets in recent years. 

Now, a 12-week pilot program at 60 Kroger

KR
stores shows the strategy could be the right one for growing sales, according to results released this morning.

Last December, Kroger partnered with the Plant Based Foods Association on the project, which placed the full selection of plant-based meats in three-foot sets in the meat departments at stores in Colorado, Illinois and Indiana. 

During the project, sales of the plant-based meats grew 23% at the test stores compared to control stores in the same markets. 

“The number one question that PBFA hears from retailers is: ‘How should we merchandise plant-based foods?’ Now for the first time, we have data-driven answers, and not just individual opinions,” said Julie Emmett, PBFA’s senior director of retail partnerships.

Sales at the Kroger-owned King Soopers stores in Colorado, a market where there were already a large number of plant-based consumers, grew 13%. In the Illinois and Indiana locations, which were measured together under the Central Midwest Region, plant-based meat sales surged 32% compared to the control stores.

“No longer is plant-based eating just a ‘trend on the coasts’ but rather, even in the heartland of America, consumers are quite eager and willing to eat more plant-based, especially if we make these options easier to find,” Emmett said. 

The retailer sent mailers to 1.8 million shoppers to promote the plant-based products, created a website to share information and recipes, invested in overhead signage to highlight the plant-based meat display and followed up with interviews to learn more about who was buying the products and why.

Kroger also worked with the PBFA to create educational materials to train store employees to be able to answer customers’ questions about the products, including details on the ingredients and cooking tips.

The findings could be key as grocers find new ways to cater to the growing number of consumers who are seeking out plant-based foods.

U.S. retail sales of all plant-based alternatives grew 11.4% last year, according to SPINS data commissioned by the PBFA and the Good Food Institute. Sales of plant-based meats grew 18.4%, fueled in part by a surge in new products on the market. 

All the new plant-based meat, egg and dairy alternatives coming onto the market aren’t just aimed at the vegetarians and vegans who make up a small sliver of the overall population. Rather, they’re designed to appeal to mainstream consumers who eat animal products but are also looking for new options for reasons related to health, the environment and animal welfare.

They’re not necessarily going to look in the specialty refrigerated and freezer cases reserved for vegan alternatives. But their trips to more familiar parts of the store could lead to the discovery of new products.

The Kroger test and follow-up interviews with shoppers showed that discovery was happening, as many shoppers reported making their first plant-based meat purchases. 

The number of new plant-based meat buyers in the Illinois and Indiana stores grew 32% at the test stores compared to the control locations, the results show. Additionally, the displays spurred 33% of shoppers in those markets to buy a greater variety of plant-based meats and the number of purchasing occasions grew by 34%. 

The stats for the test in the Denver market showed smaller double-digit increases, largely because those stores started with a higher base of plant-based shoppers. 

A strategy that started with dairy

The trend of merchandising plant-based alternatives next to their animal-based counterparts started in the dairy case.

Not too many years ago, soy milk and almond milk were the only choices for non-dairy milks, and they were relegated to sometimes hard-to-find specialty sections. But vegans weren’t the only or even the main consumers looking for the products. About 65% of the world’s people are lactose intolerant, according to some studies, and awareness of the condition has fueled demand for dairy-free alternatives.

New types of plant-based options have been developed in response, including oat, hemp, coconut and cashew milks. And supermarkets started merchandising the products in the main dairy case, which in many stores has grown larger to include all the options. 

Now, plant-based milks make up the biggest share of the market, with U.S. sales of $2 billion last year. And other categories of plant-based dairy alternatives are on the rise, including plant-based cheese and yogurt which grew 18.3% and 31.3%, respectively, last year, according to the SPINS data. 

A new look for grocery meat cases?

“This test provides one more proof point that plant-based meats have moved from niche to mainstream,” Kroger merchandising director Sean Brislin said in a news release. “Kroger continues to experience double-digit growth in the plant-based category, and this test demonstrates the viability of shifting product placements to reach even more customers.”

Kroger was unusually open in agreeing to release so much data on the experiment, and it will likely contribute to the greater good for other retailers looking to grow sales of plant-based products, PBFA’s Emmett said.

“Optimal merchandising is one of the biggest challenges facing retailers. This is the first piece of research that supports this merchandising strategy so yes we expect other retailers to make this change. Kroger’s leadership in publishing the results allows the entire plant-based foods industry to benefit,” she said.