How Retailers Can Boost Plant-Based Food Sales

When it comes to increasing sales of plant-based alternatives, retailers have three main tools at their disposal: what they stock, how they price it, and what promotions they run. But which of these strategies actually works? And does it matter whether you’re shopping in a city or a rural town?

This study examined four years of grocery sales data from Italy to understand how retail marketing decisions influence consumer choices between plant-based and conventional animal products. It turns out that where you live significantly shapes which retail strategies are most effective at encouraging plant-based purchases.

Researchers analyzed sales data from over 20,000 Italian grocery stores between 2020 and 2023. They examined five product categories: meat alternatives, frozen meat alternatives, cured meat alternatives, würstel (sausage) alternatives, and plant-based milk. For each category, the researchers compared sales of plant-based options against their conventional counterparts.

The study measured three key retail marketing factors:

1. Assortment: The variety of plant-based products available per store compared to conventional options;
2. Relative price: How plant-based product prices compared to their conventional equivalents; and
3. Price-based promotions: The percentage of plant-based sales made with at least a 5% discount.

The researchers divided Italian provinces into three categories based on where people live: predominantly urban areas (where less than 20% of the population lives in rural settings), intermediate areas (where 20 to 50% of the population lives in rural settings), and predominantly rural areas (where more than 50% of the population lives in rural settings).

The strongest finding across all locations was that having more plant-based options on the shelf consistently increased their market share. This was true for almost all product categories, with würstel alternatives being the exception. The positive effect of assortment was significantly stronger in rural areas compared to urban ones. The researchers note that inadequate variety has long been a major barrier for people interested in plant-based eating. When shoppers face limited choices, they’re more likely to stick with familiar conventional products.

While assortment helped everywhere, price-based promotional activities proved most effective in urban and intermediate areas. Urban shoppers showed the strongest response to discounted plant-based products, while rural consumers were largely unaffected by promotional pricing. Urban areas typically have more stores competing for customers, and shoppers may be more accustomed to comparing prices and seeking deals. In rural areas with fewer shopping options, promotions may be less common and therefore less influential in purchasing decisions. For most product categories, promotional effectiveness actually decreased as areas became less urban. The one exception was plant-based milk, where promotions showed some positive effect even in rural settings.

The relative price between plant-based and conventional products generally didn’t significantly influence market share. This held true even though plant-based products consistently cost more than meat products. The researchers suggest that this reflects how plant-based consumers make purchasing decisions. Similar to buyers of specialty foods like gluten-free products, people choosing plant-based options often do so based on health, ethical, or environmental values rather than price alone. This doesn’t mean price is irrelevant, but it may be less important than advocates sometimes assume. For plant-based meat and frozen meat alternatives, higher relative prices did show a negative correlation with market share. And this price sensitivity was somewhat stronger in rural areas, where consumers may be more price conscious or have less discretionary income.

These findings offer concrete guidance for animal advocates working to increase plant-based food availability and consumption. Focus on assortment expansion, especially in rural and underserved areas. Working with retailers to stock more plant-based varieties could significantly boost sales. In urban markets, partnering with retailers on targeted price promotions and discounts could effectively drive plant-based purchases.

For advocates, the takeaway message is not to rely solely on price parity. While affordability matters, simply matching conventional product prices may not automatically drive significant increases in plant-based market share. Other factors like taste, convenience, and variety may be equally or more important. The study found variations across product types. Plant-based milk, for instance, showed strong positive responses to promotional activities, while other alternatives behaved quite differently. Understanding these nuances can help target advocacy efforts more effectively.

This study focused exclusively on the Italian market, and consumer behavior may differ in other countries and cultures. The data also doesn’t capture all types of promotional activities, only price-based discounts of at least 5%. Other promotional strategies like in-store displays, free samples, or advertising campaigns weren’t measured but could also influence purchasing decisions. Future research could explore how product attributes beyond price and availability, such as taste, packaging, or shelf placement, influence consumer choices across different geographic contexts.