Schnitzels, currywurst, bratwurst, and cold cuts — traditional German cuisine has a lot of meaty staples. But nowadays, consumers are shifting to more diverse diets, many of which include vegan and vegetarian foods.
Berlin-born Veganz has over 470 products in its portfolio and sales operations in 26 countries across some 22,000 salespoints - winning over the veggie-loving crowd, one mouthful of vegan pizza at a time. In the first half of 2020, the company’s revenues swelled by 35% (to €13.1 million), despite a global pandemic.
Such staunch numbers for a very young and niche brand made us wonder about the vegan market in Europe. What’s fueling Veganz regional success? How can other vegan-friendly or vegan-curious FMCG brands connect with new target audiences? Here’s our strategic brief.
The State of the Vegan Market in Europe: Key Trends
Despite being compact, Europe has historically been responsible for 16% of the world’s total meat consumption. Yet, for health, eco, or socially conscious reasons, many consumers are saying “no, I’m good” to another serving of knackwurst.
Source: European Veg Union
While meat consumption and sales decline, the appetite for vegan products is getting hard to contain. Over the past two years, the European vegan market grew by 49%, reaching a sales volume of €3.6 billion.
The market growth is only to reach its peak as EU consumers want even more veggie/vegan product alternatives for:
45.5% — cold cuts and cheese
38.6% — baked goods
36.4% — milk and dairy products
32.9% — sweets and snacks
22.2% — beverages
The German vegan market, in particular, has accelerated. Last year, German food producers increased their production of vegetarian and vegan meat substitutes by 39% to 83.7 million kilograms, worth €374.9 million in total. Whereas conventional meat production in the country declined by 4%.
As of 2018, Germany and the UK lead the way in global vegan product launches to contain consumers growing appetite:
Source: European Data Journalism
Three Target Audiences for Vegetarian Brands
The demand is clearly there. But who are the primary brand audiences behind the insatiable appetite?
Vegans. Between 2% and 10% of European adults are vegan and don’t consume any products of animal origin.
Vegetarians. About 5% of German consumers follow a variation of a vegetarian diet. As do 6% of Britons, 6% of Italians, 5% of Dutch, Polish, Spanish, and French folk.
Flexitarians. These are people who chose to reduce meat consumption and dine on it only occasionally. Around 22% of Europeansare flexitarians as of 2020.
Brands like Veganz have learned to connect with these target groups as evident from their revenue growth numbers. What’s more, the innovative food producer also engages well with secondary audiences such as customer personas with an interest in sustainability or healthy eating.
Using our brand tracker, we analyzed how the Veganz brand performs among consumers in German’s two popular retail chains — dm and REWE — from October 2020 to April 2021. So that we could learn what’s driving Veganz success in the region.
Here’s some actionable intel showing how being present in these shops can help brands like Veganz grow and scale.
Offline Campaigns Still Drive a Brand Awareness Lift
Lately, there was much discussion about whether offline marketing still makes sense, given the mass adoption of digital channels. The opposing camp says that tracking offline ad impact is hard (but not impossible with the right tools!). Brands like Veganz clearly saw a strong impact from a series of TV commercials they did last year.
Let’s take a look at the brand analytics numbers first.
In October 2020, 26% of the general German population were aware of Veganz. Among them, 15.44% were considering the brand. And almost 11% used it.
However, by April 2021 brand awareness increased to 29.28% — a sizable spike. Numbers lower in the sales funnel climbed up too. 18% of aware consumers are considering Veganz goodies, whereas 11.4% among them are using the brand.
So what’s behind the lift? In 2020, the company underwent a rebranding and chose 5 new brand value criteria as the strategic axis for their marketing:
Impact on consumer behavior
Based on the above, Vegan launched a TV media campaign, called “Iss Mal Was Furs Klima!” (“Eat something for the climate!”). In a series of under 10-second videos, the campaign educated the general public in DACH about sustainable lifestyle.
The key message of the campaign was simple — be mindful of what you eat because your food choices affect the climate. Then Veganz explained what they do to offset the impact. Straightforward, catchy, and credible, the TV campaign resonated well with the audiences as the lift in general brand awareness denotes. Moreover, it landed Veganz the prestigious “Marketing for Future Award” and further positive media buzz.
Secondary Audiences Help Accelerate Brand Growth
When you market meat and dairy substitutes, it's easy to assume that vegans and vegetarians are the people you should target. But there’s also a lot of veggie-interested consumers and flexitarians — the secondary audience, crucial for securing higher brand equity.
According to a Vegan Nutrition Study 2020, 29% of German consumers are flexitarian, whereas only 3.2% are vegan. However, 57.1% of European flexitarians say they may switch to a vegetarian or vegan diet in the future. Reaching out to them today means securing their brand consideration and usage in the future.
Flexitarian and veggie-curios don’t frequent vegan shops such as Veganz’s own chain. But they frequent popular national chains such as dm, Lidl, and REWE, amongst others. Interestingly, 30% of German flexitarians and even 35.5% of vegans regularly shop for groceries in drug store chains such as dm versus 25% of general populations. So being present across different sales points, definitely makes sense for vegetarian-oriented brands.
Based on our data, Veganz connects with different audiences well at retailer locations.
In October 2020, 27.5% of dm shoppers were aware of Veganz. By April 2021, the number increased to almost 32% — that’s 3 percentage points higher than among general populations.
The growth numbers are similar for REWE shoppers. The brand awareness numbers increased from 27% in October 2020 to 30.3% in April 2021.
TV commercial campaigns, aired during this period, obviously had an impact on the numbers. Moreover, Veganz remained very active with online advertising, targeting consumers with announcements about limited-time product arrivals in the chains:
Co-branding campaigns could further lift Veganz’s brand performance across chains. For example, we noticed that Lidl Deutschland often curates vegan recipes on social media, which are popular among its audience. Veganz also shares recipes on their accounts. Creating co-branded content — food prep videos, meal how-tos, etc. — with partnering distributors could help vegan brands reach and engage new audiences too.
Educate to Win Over Consumers at Later Stages of the Funnel
Veganz may not have to convince the prime audience that much about the benefits of eating sustainable foods and curtailing meat consumption. However, educating eco-mindful and sustainably-oriented shoppers in mass retail chains could really help more vegan brands slip into consumers’ baskets.
Veganz expertly uses packaging to spread its “eco” philosophy. The company forged ahead with its own nutrition label, featuring an eco-balance score, while other brands hesitate to adopt Nutriscore grade. In fact, Veganz launched the world’s first pizza with a sustainability score.
This push for brand transparency seems to work well, given the brand consideration data we collected:
Between October 2020 and April 2021, brand consideration among dm shoppers increased by almost 5% — from 16.60% to 20.25%. The lift in brand usage is more moderate, yet still staunch — from 11.60% to 13.08%.
Among REWE shoppers brand consideration increased to 18.91% from 15.94% in October 2020. Whereas, brand usage improved from 11.35% to 12.02%.
Veganz opted for eye-catchy packaging to stand among other “green” products on the shelves. But they also use the wrappers to educate the casual browsers and potential brand adopters. This approach is similar to another eco-conscious brand we analyzed — Tony's Chocolonely.
However, unlike Chocolonely whose bold campaigning is very blunt, activist, and sometimes controversial, Veganz chose a “soft power” approach of gently planting their ideas of good nutrition into shoppers’ heads.
The timing for healthy eating brands such as Veganz can’t be any better. As more and more Europeans are discovering new cuisines and healthy eating practices, sales volumes for alternative and vegan foods skyrocket.
The best part? It’s no longer an animal rights activist or healthy eating enthusiasts who are eager to discover new munches. Regular shoppers in retail chains are intrigued to try sustainable produce and explore emerging meat substitutes to diversify their weekly meal prep.