The Vegetarian Butcher is a Dutch meat-alternative-producing company which was acquired by Unilever in an effort to take advantage of the trend towards plant-based diets.
It was started by a 9th generation farmer, Jaap Korteweg, who in 2010 opened up the meat replacements business with the vision of competing with meat producers.
This is a really interesting and rapidly growing market, with many opportunities and challenges. Let’s take a look in more detail…
The Vegetarian Butcher is focussed on ethical approaches to developing their brand and marketplace. They are based mainly around political and environmental developments, which in turn create socio-cultural movements and changes.
Due to the nature of the product, and the low price, economic factors are likely to have a limited impact on the firm’s operation within the Dutch market.
Major factors include:
According to a major report by Neslen in 2018, Europe’s animal farming sector has exceeded safe bounds for greenhouse gas emissions, nutrient flows and biodiversity loss, and urgently needs to be scaled back. This is likely to create dynamic movements within the industry and thus space for TVB to grow.
The Single-Use Plastics Directive will ban products for which alternatives exist on the market, such as single-use plastic cutlery, plates, and items made of oxo-degradable plastics, by the year 2021. Although not currently 100% plastic-free, TVB have made movements in the past and strive towards this.
4 out of 10 Dutch people expect to be eating less meat over the next 5 years. 21% percent of the population indicated that they believe eating meat will eventually become the exception rather than the rule. This indicates growth of the market and potential for TVB to increase their sales volume.
A great amount of Soy, the main ingredient for most meat replacements, comes from South America. The farming of this ingredient has caused many problems in this part of the world, including forests being cut down, soil becoming exhausted, and water being increasingly polluted.
In more detail…
Due to the fairly recent nature of the industry, we are not yet near saturation. However there are increasingly new entries into this market and an already evenly balanced competitive landscape, meaning this young industry is more competitive than you'd expect.
Low product differentiation also factors in to this, as most brands are taking similar approaches. TVB does differentiate itself very effectively by creating a brand that positions itself as a Butcher, and a producer of meat, but not on the actual product contents itself.
In more detail…
Industry Rivalry: Low to Medium
Threat of New Entry: High
Threat of Substitutes: High
Power of Suppliers: Medium
Power of Buyers: High
Meat replacements currently make up 3% of the total market with a view from Korteweg that, when it reaches 20%, fake meat will be a competitor to cheap meat for meat eating consumers.
Considering the market analysis, the following objectives are appropriate:
Yum! Given the above, partnerships are going to be strategically important to TVB. Developing relationships with other businesses, such as Burger King, to reach other corners of the market will help TVB grow brand awareness and revenue.
Once this is established, they will have access to a section of the home delivery market and thus be able to increase sales and market share.
Partnerships shouldn’t be restricted just to companies. The “quick win” target market for TVB is the under 40 demographics, so TVB should exploit influencers on social media to reach new consumers. This links up the social media trend, their target market, and the need for brand awareness.
It’s going to be an interesting few years for meat replacement markets, with new entrants, consumer education and continued innovation around brand and product. The Vegetarian Butcher is well placed to take advantage of this market, with a strong brand and heritage, so with some strategic work they should continue to nicely grow.
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