Unilever’s Plant-Based Meat Business: Struggling to Attract Buyers Amidst Consumer Shifts
Unilever, the Anglo-Dutch consumer goods giant, is facing challenges in selling its plant-based meat business, potentially complicating the company’s efforts to reduce its exposure to declining product categories, industry experts have pointed out. The plant-based meat market, once touted as a growth area, has seen a recent slowdown in growth due to various factors.
Slowing Market Growth
According to a report by MarketsandMarkets, the global plant-based meat market was valued at USD 12.6 billion in 2020 and was projected to reach USD 74.2 billion by 2027, growing at a CAGR of 27.6% during the forecast period. However, recent data suggests that the growth rate may not be as robust as initially anticipated.
One of the reasons for the slowdown is the saturation of the market with new entrants. The plant-based meat market has seen a surge in new players, leading to increased competition and making it difficult for companies to differentiate themselves, according to a report by Grand View Research.
Consumer Preferences Shifting Away
Another factor contributing to the challenges Unilever is facing is the shifting consumer preferences. While the plant-based meat market was initially driven by demand from vegetarians and vegans, a growing number of flexitarians and consumers looking to reduce their meat intake for health reasons have entered the market. However, recent data suggests that consumers are increasingly returning to traditional meat products.
According to a report by Nielsen, sales of plant-based meat alternatives in the US declined by 11% in the 52 weeks ending February 27, 2021, compared to the previous year. In contrast, sales of traditional meat products increased by 2% during the same period.
Impact on Unilever
Unilever’s plant-based meat business, The Vegetarian Butcher, was a significant part of the company’s strategy to reduce its exposure to declining product categories. The business, which was acquired in 2018, was expected to contribute to Unilever’s growth in the plant-based meat market. However, the challenges in selling the business may result in Unilever holding onto the business longer than planned.
The delay in selling The Vegetarian Butcher could impact Unilever’s financial performance. The business reportedly generated revenue of around EUR 100 million in 2019, but it is unclear how much Unilever paid for the business. Selling the business would have provided Unilever with a significant cash injection.
Impact on the World
The challenges Unilever is facing in selling its plant-based meat business could have broader implications for the industry as a whole. The slowdown in the plant-based meat market growth rate could lead to consolidation, as smaller players struggle to compete in a crowded market. It could also result in increased investment in research and development to create differentiated products.
Moreover, the shift back to traditional meat products could have environmental implications. Plant-based meat alternatives are generally considered to be more sustainable than traditional meat products, as they require fewer resources to produce. However, if consumers return to traditional meat products in large numbers, this could result in increased demand for animal agriculture, which is a significant contributor to greenhouse gas emissions.
Conclusion
Unilever’s struggles to sell its plant-based meat business highlight the challenges facing the industry as a whole. The slowdown in market growth, increased competition, and shifting consumer preferences are all factors that could impact the future of the plant-based meat market. As consumers’ preferences continue to evolve, companies will need to adapt and innovate to stay competitive.
- Unilever is facing challenges in selling its plant-based meat business, The Vegetarian Butcher.
- The plant-based meat market has seen a recent slowdown in growth due to increased competition and shifting consumer preferences.
- The challenges Unilever is facing could impact the company’s financial performance.
- The slowdown in the plant-based meat market growth rate could lead to consolidation and increased investment in research and development.
- The shift back to traditional meat products could have environmental implications.
