Don't be chicken: Plant-based poultry is the menu trend to watch

McKinsey & Company, the global management consulting firm, has developed a proprietary Electric Vehicle Index (EVI) to track the dynamics of the electronic vehicle market in 15 key countries worldwide. Not surprisingly, EVI results for 2019 and 2020 extended the pattern of EV share expansion evident since 2015. That being said, McKinsey estimates that EVs currently represent just over 2% of light vehicle sales in key markets.

So why all the hype around electric vehicles? It has everything to do with the potential of the opportunity. The global light vehicle market for 2021 is estimated to be worth around $700 billion. At this valuation, each point of market share that EVs gain, represents $7 billion.

The power of big categories

For more than fifteen years, I worked for an organization that curated a database of commercial and non-commercial foodservice operator purchases. The database, like Nielsen CPG tracking but solely for foodservice, followed every food and non-food SKU, shipped from broadline distributors to chain and independent foodservice outlets. The SKUs were classified by the 34 category definitions developed by IFDA. The top category by value every year was meat (processed and unprocessed). The second most dominant category was poultry (not including eggs). Combined, meat and poultry accounted for more than one-quarter of the total purchases of foodservice operators. And this data didn’t even include protein purchased through specialty meat and poultry purveyors, or via proprietary direct distribution.

The initial wave of protein replacement alternatives, not surprisingly, targeted meat offerings in foodservice. Unicorn start-ups, like Beyond Meat and Impossible Foods, have become market makers. According to NPD (U.S.) SupplyTrack for Q1-2021, Beyond Meat is the top selling plant-based meat brand and Beyond Burger is the top selling plant-based burger patty in foodservice. Earlier in 2021, Burger King Canada introduced the Impossible Whopper, becoming the first quick-service restaurant in Canada to put the award-winning plant-based Impossible Foods patty on its menu nationwide. 

Plant-based protein alternative carving out a share of the foodservice burger market is big news. McDonald’s in 2021 launched a McPlant burger in the U.K. to try to staunch the bleeding. But burgers are just the beginning. Market strategist Bill Aulet describes the model being used by plant-based disrupters, a “Beachhead Strategy,” whereby an entry point into a market is found “from which to launch (an) invasion of the market, because it’s where the paying customers are found.” Foodservice is key, because it facilitates a low risk opportunity for consumer trial. If consumer satisfaction is high, then the trial will naturally drive retail purchases of plant-based proteins.

The year of the chicken

The next logical step for plant-based suppliers is to consolidate and continue their advance in foodservice. The target for 2022 and beyond is likely to be chicken. Plant-based chicken may not be everywhere yet, but there are indications of increased competition in this space, and market penetration.

• In August 2021, A&W Canada expanded its partnership with Beyond Meat, with the introduction of Beyond Meat Nuggets for a limited time.
• KFC added a plant-based KFC sandwich and KFC Popcorn made by LightLife in the summer of 2020.
• 7-Eleven Australia started offering No Chicken + Lettuce with Vegan Mayo, and No Egg + Lettuce with Vegan Mayo sandwiches last year.
• U.S. c-store chain Wawa partnered with Beyond Meat to add two plant-based breakfast sandwiches to its system menus last year. The Sizzli breakfast sandwich is made with Beyond Breakfast Sausage, egg and cheese on a bagel, or the protein can be added to breakfast bowls, bagel sandwiches and breakfast burritos.

There’s no reason to doubt that plant-based chicken will follow a similar pattern of diffusion in foodservice that we’ve seen with veggie meat/burger introductions. Let’s not forget, 7-Eleven Canada introduced Beyond Meat to its pizza offering in 2019. 

Count your chickens

Tastewise, an AI-powered food intelligence source, offers real-time industry insights. Founded by a former Google executive, Tastewise predicts changing consumer needs based on analysis of restaurants and delivery menus, and billions of daily social network interactions.

Crunching the data on U.S. menu mentions, Tastewise has documented a significant rise in vegan meat interest—a 1,320% increase since before the pandemic. Penetration of plant-based meat at restaurant menus overall is growing, with 13% of restaurant chains now serving vegan meat. 

Tastewise has additional data showing plant-based chicken is taking flight—menu incidence is tracking 133% growth year-over-year. On social media, chatter around plant-based chicken is also up. Chicken sandwiches are currently the most popular application for plant-based chicken (18% discussion share), but burgers, salads, and pizza are popular applications, with pizza growing at 24% YoY. According to Tastewise, the combination of perceived healthy eating and protein content are driving consumer interest in plant-based chicken.

The time is nigh

For decades, Norway’s economy has been tied to the exploration and sale of crude oil, representing more than 40% of Norway’s the country’s exports. Yet, recognizing the shift in the market towards greener alternatives, Norway’s government backstopped a wide range of financial incentives to encourage Norwegian consumers to convert to battery electric vehicles (BEV). In 2020, the share of new BEV cars sold in Norway rose to 54% of total new vehicle sales, compared to vehicles powered by petrol, diesel and hybrid engines. Sales of diesel-only engines have plummeted to less than 10% of overall market share, compared to almost 80% share in 2011.

Norway is on track to meet its commitment to become the first country to end the sale of petrol and diesel cars by 2025. China, the world’s largest car market, is already positioned to follow in kind.

Peak oil likely already happened 10 to 15 years ago. This reminds us of the importance of always asking the key strategic question: If not now, when? Tastewise compared plant-based dairy, plant-based meat, and plant-based seafood in terms of interest, growth, and penetration to advise clients whether the time is right to jump in. Plant-based dairy was classified “too late” (declining), and seafood “too soon” (emerging). Meat alternatives were deemed to be the “Goldilocks of the plant-based alternatives landscape—just right.

Competition heats up