Dusseldorf Last year, Germans bought more soy milk, pea burgers and vegan ready meals. The market for herbal alternatives grew by eleven percent to 1.91 billion euros. This is shown by an analysis by market researcher Nielsen IQ for the non-profit Good Food Institute (GFI).
On average, every German spent 23 euros per year on veggie products. Out of the 13 European countries surveyed, only the Dutch invested more, at EUR 23.50 per capita. “Thanks to stable prices and an increasing variety of products, the German market for alternative products continues to grow at double-digit rates,” analyzes Ivo Rzegotta from GFI Europe.
Because while cost increases and inflation have pushed up the prices of animal products, plant-based meat, milk and cheese have remained almost stable in price. At the same time, Rzegotta makes it clear: “Measured in the total market for meat and dairy products, plant-based options have so far only made up a fraction.”
Germany is Europe’s largest market for herbal substitutes. European sales reached 5.7 billion euros, an increase of six percent compared to 2021. A look at the individual sub-segments of the market shows that the sales figures for plant-based alternatives have developed better in almost all categories in this country than their animal counterparts.
However, the rapid growth of the veggie market has slowed significantly. In 2021, retail sales had increased by 29 percent. In some areas such as plant-based cheese and yoghurt, the first signs of saturation can be seen in the market. In addition, the veggie pioneers are facing increasing competition – in times of inflation, cheaper private labels are becoming increasingly popular.
Veggie meat: highly competitive market
Meat substitutes are the largest segment in the German veggie market. Retail sales rose by seven percent to 643 million euros in 2022. In the previous year there had been an increase of 31 percent. “Inflation and the resulting saving behavior of consumers mean that vegetarian and vegan meat alternatives are no longer growing so strongly,” explains Michael Hähnel, head of Rügenwalder Mühle.
With around 40 percent, the family business is the German market leader for plant-based meat substitutes. According to Hähnel, inflation and reluctance to buy are also dampening demand for branded products in favor of private labels.
Hähnel expects a clear consolidation in the German market for meat substitutes: “Many smaller brands will probably not survive the crisis.” However, Rügenwalder’s veggie division grew faster than the market even in times of inflation.
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In principle, however, the following applies: more and more Germans are giving up meat and resorting to plant-based alternatives. The number of meat substitutes sold increased by 41 percent between 2020 and 2022, according to GFI. In contrast, sales of pre-packaged classic meats fell by 13 percent.
Trade brands are increasingly competing with brand manufacturers.
(Photo: imago images/Joerg Boethling)
The Thünen Institute determined that every German ate an average of 62.8 kilos of meat in 2011, but by 2021 it was only 55 kilos. Nevertheless, meat substitutes remain a small niche: in 2021 meat products were manufactured in Germany for 35.6 billion euros – around 80 times the value of the substitute products.
“In the future, meat will be significantly more expensive than substitute products”
Despite inflation, the prices for veggie meat rose by an average of just one percent. In contrast, packaged meat rose by an average of 15 percent. “However, vegan and vegetarian products are still often more expensive than their meat counterparts,” admits Rügenwalder boss Hähnel. This is due to the growing global demand for plant-based proteins. Availability, quality and origin of the raw materials presented a major challenge.
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In addition, the product development and production of veggie products is much more complex than that of meat. “Getting consistency, flavor and color is challenging. A lot has to be invested here,” says Hähnel. That is reflected in the prices. However, the Rügenwalder boss expects meat to be the much more expensive product in the future.
The longtime market leader in plant milk Alpro (Danone) has now been overtaken by cheaper private labels.
(Photo: IMAGO/photothek)
Plant milk is firmly established
With a market share of 13 percent, milk made from oats, soya, nuts or peas has firmly established itself alongside classic cow’s milk. Sales increased from 490 to 552 million euros in 2022. The sales figures in Germany increased by 14 percent, while they shrank by six percent for cow’s milk. In the meantime private labels have replaced the long-time market leader Alpro (Danone). Consumers are increasingly paying attention to price.
The average price of plant-based milk fell 1.5 percent, while conventional milk prices rose 19 percent. What annoys many customers: The German tax authorities levy the full VAT rate of 19 percent on plant-based milk. Cow’s milk, on the other hand, is subject to a reduced tax rate of seven percent. The GFI is therefore calling on the federal government to finally end tax discrimination against plant milk.
The market leader for plant-based cheese is struggling against growing competition and a general reluctance on the part of consumers to buy.
(Photo: Highland)
Plant-based cheese hardly grows anymore
Sales of cheese alternatives had almost doubled in 2021. In 2022 the boom was over. The division only grew by six percent to 79 million euros. The market already seems to be relatively saturated – although just one percent of the entire cheese market is plant-based.
Long-standing market leader Simply V, which belongs to the Hochland dairy, is also feeling the reluctance to buy. At the same time, the competition has grown enormously: “There are 135 cheese alternatives in the range, the market cannot accommodate that many,” said Caroline Zimmer, Managing Director of Simply-V producer Eva, recently to the “Lebensmittelzeitung”. Consumers would prefer private labels. The average price of plant-based cheese fell by five percent. Cheese made from cow’s milk was 15 percent more expensive.
Plant-based ice cream and desserts also increased. Only in the case of yoghurt alternatives did sales fall – by four percent to 153 million euros. The market for plant-based alternatives to fish and seafood is still in its infancy. Sales therefore rose sharply in 2022 by 52 percent to 39 million euros.
More and more people are giving up animal products
In Germany, the number of people who at least occasionally do without animal products is growing. In addition to 1.67 million vegans, there are 3.71 million vegetarians and 1.29 million pescetarians. They do without meat, but not fish. There are also 16.71 million flexitarians, also known as “part-time vegetarians”. This is shown by a study commissioned by the manufacturer Veganz.
Consumers turn to plant-based alternatives because they want to do something for animal welfare, climate and environmental protection. Because the production of plant-based products produces significantly fewer climate-damaging greenhouse gases.
Ivo Rzegotta from the Good Food Institute says: “In order to exploit the potential of sustainable plant-based alternatives, the innovative strength of the sector also needs political support.” The federal and state governments should invest significantly more in research and capacity building in this area. Countries like Denmark have demonstrated this with enormous public investments.
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