As consumers feel the pinch, could the cost of living crisis put a halt to the vegan drinks movement? Rachel Badham reports
Following years of veganism and socially-conscious drinks being the next big thing, the force of inflation could be about to tip the scales. As the ever-increasing cost of living puts a strain on Brits, affordability is becoming a deciding factor for concerned consumers.
In April 2022, FMCG data analyst Levercliff found the majority of consumers (71%) are prioritising value for money over sustainability when shopping for food and drink. As energy prices rise and interest rates increase, 36% of consumers said their shopping choices were driven by the need to budget, rather than a desire to choose environmentally-conscious and ethically-produced items.
With Adrian Hirst, chief executive of Skinny Brands’ vegan lager, saying it is “inevitable” that the cost of living crisis will affect shopping behaviour as consumers seek out more affordable options, should producers of vegan drinks and the retailers that sell them be concerned?
Paul Crawford, founder and chief executive of Panther M*lk, a vegan-friendly alcoholic RTD made with oat milk, is sure that those with a fully plant-based diet will continue to commit to vegan drinks for their environmental benefits, saying: “Vegans won’t compromise their integrity as the current climate emergency is not going to go away.”
However, he voiced concerns over the cost of living crisis and its implications for both the vegan drinks industry and the environment as consumers who may otherwise be tempted to venture into veganism begin to tighten their purse strings.
“If people start choosing less sustainable products because they can’t afford to do otherwise, we really are in a scary downward spiral.”
THE PRICE POINT DEBATE
Skinny Brands’ Hirst says: “When consumers transition to veganism due to a number of factors, they are often willing to pay more for products that align with their beliefs.”
While it seems that vegan consumers aren’t willing to compromise regardless of price point, the rise in value-focused consumers raises the question: is it true that vegan drinks are more likely to put shoppers out of pocket? And if so, will this deter vegan-curious consumers?
When it comes to why vegan drinks might be more expensive, Hirst notes that making them sometimes requires a more intensive production process.
“If vegan drinks do sport a higher price tag, it is often due to the extra measures taken to ensure the process of creating the drink involves more inclusive dietary requirements and sustainable practices,” he says. And going beyond production, a lack of government support may contribute to the expense of vegan drinks, with producers having to undergo a certification process to be able to classify their products as vegan-certified.
“It’s important to remember that many animal by-products are subsidised, and vegan products don’t benefit from the same financial support, which is why you may see a general price rise across the market for vegan products,” says Hirst.
However, James Halliday, BWS buyer at South Downs Cellars in Sussex, points out that vegan drinks are only likely to sport a higher price tag if they are substitutes for traditionally non-vegan products.
“Most vegan products on the market produced as substitutes for non-vegan products do tend to be more expensive,” he says. “However, with wine it’s just part of the production process, so the product being vegan doesn’t tend to affect the price.”
While gaining vegan certification can be a time-consuming process for producers, vegan drinks can still be labelled as veganfriendly. And as production methods develop, it might be easier than ever to create vegan-friendly drinks without the added expense.
Labid Al Ameri, president and co-founder of Argentinian winery Domaine Bousquet, highlights the advancements in wine production that have eliminated the need for animal products such as egg whites.
“Our products are vegan because we don’t need to use any animal residue or any animal content in the filtering process. It isn’t necessary anymore.”
He also notes that, while added expense may be the case with some vegan products, the category is becoming more accessible for consumers across the board as more brands are able to produce drinks without the need for non-vegan additives.
“Maybe about 20 years ago, a lot of people had a bad perception of vegan and organic products. But this perception has changed over the years because there are a lot of great producers who now have the ability to produce wines that are just as good as what non-vegan drinkers are used to without additional cost,” says Al Ameri.
After Spar became the first UK grocer to launch an own-brand vegan wine range earlier this year, Spar UK trading manager Matthew Fowkes has found that vegan doesn’t always equate to a more expensive drink.
“From our perspective, price is still extremely important, and we have not seen an increase in costs relating to moving to vegan-friendly.”
And for Spar, Fowkes says that it’s all about balancing “sustainability in our wine range” along with “great value” to appeal to a wider consumer audience.
“The purpose of making our wine range vegan was not just a focus on vegans, our aim was to make that wine range as inclusive as possible for all legal age drinking adults,” he adds.
MARKETING VEGAN DRINKS
As the middleman between the producers of vegan drinks and consumers questioning whether or not vegan drinks are out of their price range, retailers are left to consider how to promote these drinks without ringing alarm bells among concerned shoppers.
When value-led consumers have negative connotations of vegan products, South Downs Cellars’ Halliday says integrating them into an existing range may encourage non-vegan shoppers to experiment in their choices without feeling as if they are straying from their comfort zone.
“We want customers to be able to browse the full range without feeling they have to buy products from a dedicated vegan zone in the shop,” he says. However, the importance of educating shoppers on vegan drinks still stands.
Halliday recommends retailers get creative with how they distinguish between vegan and non-vegan drinks so that vegan drinks remain visible without being separated from the general range.
“Not all producers highlight if their wine is vegan so we do the hard work for our customers. If it’s vegan the price tag gets a yellow sticker, if organic it’s a green sticker etc. It’s simple but effective.”
Domaine Bousquet’s Al Ameri emphasises that the education process involves engaging consumers outside of the retailing environment: “We always try to collaborate with publications and participate in as many challenges and competitions as possible – those ratings help to give us credibility for people who are not used to organic vegan wines.”
Fowkes says Spar made sure to maximise its promotional activity for its new range, while highlighting the affordability of the wines on offer.
“We supported the launch with digital communications, in-store and online POS, consumer PR including advertorials, influencer activity, media and celebrity outreach to drive customers to Spar stores. We had a selection of wines available on promotion for the first four weeks of launch, including wines that were £4.99.”
While it is still unclear how the cost of living crisis will affect the vegan drinks industry, Halliday says South Downs Cellars has continued to see a “huge increase in the demand for vegan products”.
And despite speculation that value for money may become the final decision-maker for shoppers who are feeling the financial crunch, Skinny Brands’ Hirst thin
ks that vegan drinks are here to stay.
“It is inevitable that the cost of living will alter the way people shop as concerns around finances increase,” he says. “However, with almost 600,000 vegans in the UK as of 2019 according to the Vegan Society, it is clear that veganism is more than just a habitual shopping choice – it is a lifestyle that people are committing to.”