"There will be a shakedown of brands in UK meat-free"- Meatless Farm Co. looks for an edge
UK meat-free start-up The Meatless Farm Co. started business two years ago and has since hired ex-Kellogg executive Robert Woodall as CEO. Dean Best talks to Woodall about The Meatless Farm's bid to carve out a foothold in a competitive market at home and overseas.
"We want to create a household name in the UK."
There's no mistaking the ambitions of Robert Woodall, the former Kellogg executive who is now CEO at The Meatless Farm Co., a company not even two years old but one firmly focused on riding the meat-free wave in the UK.
Leeds-based The Meatless Farm was set up in October 2017 by Danish investor Morten Toft Bech, who, partly in response to his wife's vegetarian diet, set out to develop and launch alternatives to meat staples like burgers and mince.
By December last year, Toft Bech had hired Richard Harrison, a former senior executive at UK meat processor Cranswick, as The Meatless Farm's MD and then Woodall, who worked for Kellogg for more than a decade, as CEO.
The Meatless Farm has come to the end of an exclusive listing with Sainsbury – where Woodall says the company's products "exceeded expectations" – and has just launched into a second of the UK's Big Four supermarkets, Morrisons.
A broad appeal: restating the meatless category
The company has launched chilled, meat-free burgers and mince into a growing – and very active – category, with incumbent players like Quorn Foods and Hain Celestial's Linda McCartney continuing to invest in product development and with new entrants from the UK, Europe and North America launching at a rapid rate.
"We'd like to get all the UK retailers to support a UK start-up in this space as the branded choice," Woodall tells us on the sidelines of the IFE trade expo in London's Docklands. "Of course, they're going to have their own private-label business but as their branded choice – then we will help them to create the category and to be able to invest in marketing and the plant-based story."
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We should try somehow to restate the category. It's just about plant-based eating
Woodall acknowledges The Meatless Farm faces competition but, focusing on the larger players in UK meat-free, he argues the origins of brands like Quorn and Linda McCartney mean they are "seen more as typical vegetarian or vegan foods". He insists The Meatless Farm is trying to do something different, even if it is a message often heard from executives in the arena.
"What we're trying to do is not just appeal to vegans but appeal to flexitarians or just [the] everyday [consumer]," he says. "We should stop this polarisation of 'I'm a vegan' or 'I'm a meat lover.' We should try somehow to restate the category. It's just about plant-based eating. I still eat meat – but I probably ate seven days a week when I first joined; now I'm probably down to two or three. We're all starting to reduce because we know of the health and environmental concerns of red meat in particular."
The Meatless Farm, Woodall explains, is looking to price its products closer to their meat counterparts than some other meat-alternative brands present in the UK.
Getting primary shoppers to take a risk on plant-based
Any price comparison is problematic between different products and, especially so in this category, given the variations in the composition of foods, the contrasting locations and type of manufacture and – when weighing up the emerging meat-free brands hitting the market and own-label conventional meat products – the disparity in scale between supplier and retailer.
However, at the time of writing, The Meatless Farm's pack of two meat-free burgers is on sale on sainsburys.co.uk for £2 ($2.61), discounted from £2.50. A pack of two veggie burgers from Dutch firm Vivera are subject to the same offer, while Denmark's Naturli' Foods has its two-pack of plant-based patties listed at £2.50. The different varieties of Sainsbury's own-label, chilled burgers are priced from £2.50 to £3. On tesco.com, the chilled Beyond Burger, from US firm Beyond Meat and packed by Hilton Food Group in the UK, are available at £4.95 for a pack of two.
"Getting mum – who is still the primary shopper – to take the risk of buying plant-based meat, mince or burgers, rather than meat, is the key, rather than be so expensive that it becomes a big risk for her if no-one's going to like it," Woodall says.
The key data point is when the plant-based dairy companies were listed next to dairy milk, that's when the business really, really grew
The seasoned FMCG executive, whose career in the 1990s and 2000s included roles at United Biscuits, Snack Brands Australia and Trigon Snacks, also suggests the way meat-free products are merchandised in stores will be key to the growth of the category.
"The key data point is when the plant-based dairy companies were listed next to dairy milk, that's when the business really, really grew," Woodall says. "I think we need to bring it together. That's what's going to drive the category.
"Now, for vegans, that is appalling because you have had to go down an aisle full of carcasses, so you probably at some stage need to do dual location. But, given in the food industry this is probably the biggest trend we're seeing globally, if I was a pioneering and leading retailer, I would look to dual-locate and test it. There have been some experiments done."
Investing in brand building
The Meatless Farm is looking to put its money where its mouth is and Woodall says it is investing "£5m-10m" on advertising this year to try to build awareness of its brand.
"We need to be bullish," Woodall insists. "You talked about US competitors: they're tremendously well-funded. We don't think you need to be that funded. You don't need 45 scientists tripping over each other. What you need is a few, really focused people. You need some experience."
Woodall's experience, he says, comes in brands. "I've worked in food all my life, with global experience and also building brands," he reflects. "A lot of meat companies can't build brands. They're very good at trading meat. Here, you've got to build a brand and we've got to build a solution for those mums looking for something. That's the other race, if you like. How can we establish these brands? There will be a shakedown. I think there's room for lots of people to come but there will be a shakedown at some stage."
Toft Bech remains the majority shareholder in The Meatless Farm, with Woodall demonstrating his optimism in the future of the business by investing in the firm. Could the company look for more finance to give it the firepower to further invest?
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Profitability will come with scale, as long as we've got the fundamentals right
"We've done a Series A round, which we closed in November. We're looking at another series at the moment. We're looking at some of the VC companies who've supported plant-based out of the US and out of the UK. We've had a lot of people approach us.
"We are interested in doing some crowdfunding, as well. We believe it'd be great to get the general public involved in the movement. And then look at a bigger round, at the end of the year into next year, where maybe we bring on an institutional investor."
Asked where The Meatless Farm's annual sales stand, Woodall says that is "hard to predict. It's so dependent on the retail windows or when they're listing and how many stores they put us into". And, understandably given the age of The Meatless Farm and its investment so far, the business has yet to make a profit.
"It's not profitable, but within that structure, we need to make sure that against the cost of goods versus the price that we're selling, that we are profitable. But then, of course, we're investing heavily in marketing, we're investing ahead on overhead. I think that profitability will come with scale, as long as we've got the fundamentals right," Woodall explains.
Taking Meatless Farms international, in spite of scrutiny
That investment also includes taking the brand outside the UK. So far in 2019, The Meatless Farm has secured listings with Spinneys in the UAE and with Aeon in Hong Kong. When asked how many markets the business could be in by the end of 2019, Woodall says: "We haven't set ourselves a target but I'd like to think that we could be getting close to ten markets by the end of the year."
He adds: "We want to get a UK powerhouse, expand globally as well and then, at the same time, have a real focus on R&D, a relentless approach to getting a really improved food."
In the UK at least, there is increasing scrutiny from some campaign groups on the nutritional make-up of some meat-free products. In October, pressure group Action on Salt criticised meat-free suppliers for what it says is an "excessive" amount of salt in meat-alternative products.
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What people want is really clean decks. They want great claims. They don't want any E numbers
Woodall points to the positive credentials of The Meatless Farm's products but says the company could look to improve the recipe. "We've put the traffic lights on the front of the pack – everything is amber or green. We still do have opportunity on salt and sodium. There are different ways that you can look at that, whether it's using seaweed, using miso. We are trying to find ways to reduce our sodium," he says.
"The back of the pack is really natural as well. We don't have any numbers apart from methylcellulose, which is what emulsifies the product. Everything else is clean. We've got 14-day shelf life. We're not putting preservatives in to lengthen that. We could put glycerine to lengthen it. We don't want to do that. What people want is really clean decks. They want great claims. They don't want any E numbers."
The Meatless Farm uses a co-manufacturer, which Woodall says "does some meats but in a very, very different part of the business. We're completely segregated". The company is happy using a co-packer. "We see our specialism in food development and in marketing and sales," Woodall adds.
Retail customers’ changing demands provide growth opportunity
Would the company consider bringing a meat company on-board as an investor? A number of meat processors have invested in meat-free and are watching the development of the category closely.
"That's a good question. The opportunity to have a big multinational work with us or invest in us to give a greater scope to grow, more routes to market, more potential, I think we'd be open to that," Woodall says. "We're finding it is the meat distributors and meat companies who are interested in us because they are looking for solutions. As they talk to their customers, they're getting pressure on meat products, particularly red meat. I think we are a natural solution for them from a distributor's point of view. We have been approached by a few distributors and I don't think we're opposed to tying up with meat companies."
And it is the changing demands of retail customers – in part led by consumers – that Woodall sees as the opportunity for smaller brands like The Meatless Farm to grow further. But he again urges retailers in the UK to back branded start-ups.
You need a brand to come across the retailers to drive up the story. We want to fill that gap
"Retailers are seeing the trend for people wanting smaller brands and I think cynically there probably is a part of 'Okay, how do we stop being so reliant on a few, very big, global suppliers?'" Woodall reflects.
"Sainsbury's are very actively trying to incubate a number of small brands. They demanded a period of exclusivity but we invested close to £250,000 [in advertising and promotions with the retailer]. Give us a go and we'll support them. We'll put that quarter of a million behind a Morrisons, behind an Asda.
"Retailers will try to do so much of it with their own private label – M&S Plant Kitchen, lovely job – but that only gets you so far. You need a brand to come across the retailers to drive up the story. We want to fill that gap."
This article originally appeared on just-food