Meatless Goes Mainstream

The demand for vegetarian and vegan meat and dairy substitutes in Germany is growing exponentially – in the same way it did for organic products a decade ago. Connoisseurs of the food trade can dig into this exciting market.

December 2021

Swiss meatless food start-up Planted produces mouthwatering kebab, pulled pork and chicken dishes from peas, rapeseed oil, water and B12, a key vitamin people conventionally get from animal-based foods. In May 2020, the company opened an office for communication and marketing in the southwestern German town of Konstanz, a mere 72 kilometers from its headquarters in Zurich. Three months later, Planted moved that office a further 802 kilometers to Berlin, increasing its Germany-based workforce from four to ten.

Later in the year, German supermarket chain EDEKA introduced planted.chicken products to its outlets in the southwest of the country. As a direct result, the Swiss start-up began looking seriously at the feasibility of setting up a production facility on German soil. “The German market for plant-based food is very competitive due to its sheer size, but if you succeed in Germany, you will succeed anywhere,” says Planted cofounder Pascal Bieri. “Also, Switzerland and Germany have a shared appreciation for quality and there’s an abundance of talent in Berlin.”

A German production facility, Bieri explains, would be able to source its main ingredients, pea protein and pea fiber, tariff-free from within the EU. That’s not the case with their existing plant in Zurich, which, when sourcing from the EU, must pay Swiss import tariffs.

FDI Perspective

Rønneberg Group

The Norwegian food company is investing in a new factory in Anklam in northeastern Germany which will make plant-based milk and dairy substitutes and desserts. Its founder tells us why.

In June 2021, Norway’s Rønneberg Group and other investors broke ground in the northeastern German city of Anklam to build a factory making vegan yoghurt, desserts and drinks. It will have a daily output of 20 tons, which will mainly be supplied to supermarket chains selling the products under their own labels. Rønneberg Group expects the creation of 20 highly qualified jobs in the factory.

“We picked Anklam because GTAI helped us tap into the EU’s funding programs for Germany’s northeastern region and because it has good transport links to Berlin, Hamburg, Scandinavia and Poland,” says Harry Rønneberg, the founder of Rønneberg Group. “And the Made in Germany label is like a certificate of quality that will be helpful for us when exporting to other countries.”

39%

Increase in the production of meat substitutes in Germany between 2019 and 2020

A tasty business

Planted is just one player in a sector full of dynamic start-ups with tasty alternatives to meat. Several large traditional German meat processing companies have also been quick to get on the bandwagon. Arguably the most prominent is Rügenwalder Mühle, which now often generates more revenue with vegan and vegetarian substitutes than with meat. Other international enterprises, such as Danone’s Alpro and Oatly of Sweden, are expanding their operations in Germany as well. To understand why, you only need to look at the numbers.

The Federal Statistical Office says that 83,000 tons of meat substitutes were produced in 2020, up nearly 39 percent year on year. The value of these products rose almost at the same pace (37 percent) to EUR 375 million. The entire German plant based food sector, which also includes plant-based milk, cheese, yoghurt and other food products, grew by 53 percent in 2020, reaching a sales value of around EUR 1 billion. And these numbers are only going up.

The Bottom Line

Traditionally, Germany may have been a meat-happy country, but eating habits are changing. Now, vegan and vegetarian substitutes for animal products are all the rage.

Something new on the menu

These mouthwatering growth rates come with the steady decline of meat consumption in Germany since the late 1970s. It fell to 57.3 kilograms per capita in 2020, down 750 grams from 2019, according to the German Institute for Economic Research.

“Plant-based meat and milk products have achieved footholds in supermarkets, discounters and the hospitality sector, and this translates into enormous sales potential both for domestic and foreign companies,” says GTAI’s food and nutrition expert Daniel Lindel. “Vegan food will very soon be leaving its niches and become mainstream, and we assume the dynamics will mirror those Germany witnessed with organic products a decade ago.”

So, what’s driving this trend in a traditionally meat-loving country? Surveys indicate many reasons for changing German consumer preferences, ranging from wariness of antibiotics used in animal husbandry to outrage over the plight of migrant workers toiling away in meat processing factories. The meat and feedstock industries’ poor CO2 track record is also a factor, as are animal welfare concerns.

Moreover, an EU-wide survey by ProVeg International, an NGO working in the field of food-system change, found that health benefits, brand trust, curiosity and, last but not least, taste are also leading people to cut back on or give up meat. When asked which veggie products they would like to see more of on supermarket shelves, respondents said, above all, plant-based cheese and also ready meals. There was a clear distinction between “reducers,” who would like to see more meat substitutes, and plant-based eaters, who want more plant-based baked goods and chocolate.

THE TOP 3 IN GERMAN SHOPPING CARTS

Annual sales value of plant-based foods in Germany, 2020

EUR 396M

Milk substitutes

EUR 357M

Meat substitutes

EUR 127M

Plain youghurt

Source: The Smart Protein Project: Plant-based Food Sector Report/Retail Scanning Data, Nielsen

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