Why veganism poses a challenge to food retailers

Why veganism poses a challenge to food retailers
Naturalia Vegan

Are vegans a growing group of consumers that need to be considered? Do supermarkets need vegan store formulas or sections? In any case, some careful attempts are made towards this trendy market.

Coming on strong

A small overview of the media revelations in the past few weeks: “Vegan ice cream on the rise”, “McDonalds launches vegan burger”, “Naturalia turns to vegan”, “Delhaize sells an additional 20 % of 100 % vegan products”, … Indeed, for an increasing number of (mainly younger) consumers, vegetarianism does not suffice. Vegan, although a small niche, is coming on strong. Not only health, but also animal cruelty and the ecological footprint are important reasons for the rise in vegan.


This poses a challenge to food retailers, because vegans do not eat anything animal-based, which includes eggs, dairy or honey for instance. Those are usually still found in vegetarian meals: Quorn contains chicken protein, many vegetable burgers contain cheese. Veganism also impacts non-food purchases, like cosmetics (animal testing), wool or leather.


Strict vegans have to read the fine print on labels or they have to go to specialty stores. There is a Vegan label, but not every manufacturer uses it. However, an increasing number of European retailers are developing vegan store formulas or in-store formulas to entice this small, but interesting and rapidly-growing group of consumers. Not everyone is as successful though.


Paris and London

Naturalia Vegan, a vegan spin-off belonging to the successful French organic store chain Naturalia is one such example of a new store formula. Naturalia itself belongs to the Casino group and has some 160 organic stores. Naturalia Vegan opened its first three stores in Paris and Vincennes (near the capital) this past summer and only sells 100 % vegan products, with about 2,000 products on sale. Each and every one of those is strictly organic, a first for France.


The retailer emphasizes this is a pilot, but it is remarkable when one knows that the board did not perform any market research prior to the pilot. Instead, it listened to feedback from its stores’ employees, which indicated the growing demand for 100 % organic products. A vegan store formula will ease a vegan’s life and the limited target audience will be motivated enough to head for a specialty store, is how Naturalia (Vegan) defends its decision to open these stores.


The very first London-based vegan supermarket and web shop also opened in May. Greenbay opened its doors in the rather affluent district West Kensington, near two vegan restaurants and a vegan pizzeria. Customers can buy more than 1,000 organic products there in an ever-expansive product range. Its online orders are even shipped all across the world. The founders plan to open more stores in London in the next few years.


Safe haven

A bit further, customers can visit The Cruelty Free Shop’s stores in Australia, in cities like Sydney, Melbourne, Brisbane and Canberra. The chain has more than 3,500 vegan products and its Melbourne location even claims to be the world’s largest vegan shop.


In Tel Aviv (Israel), the first vegan supermarket (called Gal Hayarok – green wave) opened earlier this year. It has 4,000 organic products for sale, despite it only has 100 sqm. Products include fruit and vegetables, dairy alternatives, meals, pastry, ice cream, snacks, …. Founders Refael Avraham and Eylon Zakzer call it a “safe haven” for vegans, as they can now be sure that the products are 100 % organic. They intend to open another five stores by the end of next year. Their inspiration? The german pioneer, Veganz.


Low threshold

That in itself is quite an ambiguous statement, considering Veganz has not turned out to be a 100  % success story. The very first vegan supermarket in the world was launched in 2011. Founder  and entrepreneur Jan Bredack wanted to bring the vegan lifestyle within reach of every consumer. It has about 4,500 products, including many organic ones. The retailers aims to have a low threshold, because 80 % of customers are not vegetarians or vegans, but consumers that want to limit their meat and dairy consumption, for health of ecological reasons.


The chain quickly expanded to nine stores and even targeted sixty, but only four remain: three in Berlin and one in Prague. A growing vegan product range in many supermarkets has torpedoed the formula’s sustainability according to the founder. He altered his strategy and introduced Veganz products to other supermarket chains, including Globus, Edeka, Spar, Marktkauf, Metro and Albert Heijn.


Nevertheless, it is a worldwide trend: the number of Belgian vegan restaurant is on the rise, but no vegan stores (yet, as far as we know). Albert Heijn has become a vegan’s prime destination right now, but Delhaize is following suit. The Dutch are a step ahead: student city Groningen has a Vegansuper, a project partially paid for by crowdfunding. There is also Veggie4u in The Hague and Vegabond in Amsterdam for instance.


Not cheap

Vegan stores have only surfaced in the largest cities and that seems to make sense. A complete vegan store formula seems far-fetched for such a small target audience. The Danish supermarket chain Irma (part of Coop Denmark) goes about it in another fashion: it has added an organic division in its stores, ‘Det Grønne Måltid’ (‘the green meal”) and consumers can find about 150 products in that division. The initiative will be transferred to its other eighty stores soon. Danish chain Meny also has a “meat-free” division in its stores while Finish Kesko has so-called “Vege” aisles filled with organic products. Green signs give customers a clear indication of those aisles. After it introduced this formula, organic protein sales grew 50 % over two years, the retailer claimed.

Is it a lucrative business? Motivated vegans are definitely willing to pay money. Most vegan products are not cheap: mayonnaise without eggs costs about twice as much and the same goes for vegan cheese. These products are not sold at a 50 % discount, which is good business. A vegan division could be a good idea. Maybe it is something to consider?