Commercial Gains: The unassailable truth of consumer adoption

Academic entrepreneurship programs, as well as those offered through incubators and accelerators, use a generally agreed-upon methodology for starting any business. It’s typically based on ‘The Lean Startup’ or some variation of that approach, regardless of sector or platform. It entails forming hypotheses and rigorously testing them. Depending on the outcome of testing, entrepreneurs punt, pivot, or proceed. The initial phase focuses on validation of product-market fit. Will there be demand for the product or service? Put even more simply, will there be paying customers? If so, who will they be?

The reason this approach has reigned supreme for many years is because it works. The most promising early-stage companies spend enormous amounts of time, money, and effort on consumer research. They create detailed customer archetypes to zero in on the motivations, daily habits, and preferences of potential early adopters and brand champions. They then use this information to guide research and development and shape go-to-market strategy.

Yet the alternative proteins sector has often overlooked this critical component of launching and scaling a business. Too frequently, the rush to be first or early pushes startups to make products available before those products have been optimized for taste and texture. Many investors in the industry have also turned a blind eye to consumer appeal in recent years. As technologies that once lived in the realm of science fiction began to emerge as feasible near-term solutions, entrepreneurs and investors jumped at the chance to unlock their potential. There has been somewhat of an ‘if we build it, they will come’ ethos to the new era of food production. Far too often, the consumer has been an afterthought.

Consumer adoption, however, is critical for the success of the alternative proteins sector. Numerous studies show that taste, health, and price are the top motivators for most consumers around the world. According to a Euromonitor survey that asked consumers their reasons for consuming plant-based meat alternatives, 37% cited ‘to feel healthier’ and 25% said ‘to avoid long-term health risks’. Across consumer surveys, health and taste are typically cited as greater motivations than sustainability and animal welfare for eating plant-based products. That said, the number of people opting to eat alternative proteins due to reasons related to the environment and animal welfare is slowly growing while health has remained relatively constant.

It is incumbent upon companies in the sector to put aside competitive concerns and work together to determine how best to position alternative protein products and communicate their benefits as a category

Importantly, consumers might try alternative protein products for any number of reasons, including perceived health benefits or environmental impact, but only a narrow percentage will become repeat purchasers if the sensory experience associated with the products falls short. The Good Food Institute’s recently released 2022 State of the Industry Reports (free to download from gfi.org), are excellent resources for understanding consumer behavior and preferences.

To summarize the reports’ findings, prioritizing sensory characteristics such as taste and texture, ensuring that consumer needs are met, improving access and variety, and incentivizing innovation and partnerships will be key to driving not only interest and trial but also sustained growth for years to come.

Recent macroeconomic volatility has slowed the once frenzied pace of investment in the sector. Although this slowdown may seem a bit disappointing for startups, it will likely be beneficial for the industry as a whole. A newly challenging fundraising environment will push startups to plan and execute independent and unbiased research until they have highly defensible products. The strongest startups and manufacturers will A/B test every possible aspect of a new product before going out for investment and certainly before commercializing. Meanwhile, investors will prioritize de-risking. As a result, startups and manufacturers will have more incentive to conduct life-cycle analyses or technical economic assessments that will help differentiate their value propositions.

The change in the market also highlights the need for manufacturers to carefully consider how to position products that require significant consumer education. If customers don’t understand what they or their family members are eating, they will opt for something they do understand. The creation of cohesive and compelling messaging around alternative protein technologies has a long way to go. Now is the time to determine what resonates with consumers. It is incumbent upon companies in the sector to put aside competitive concerns and work together to determine how best to position alternative protein products and communicate their benefits as a category.

The alternative proteins industry is made possible by cutting-edge advances in science and technology. Meeting our objectives, however, will hinge on whether we make food that is delicious, affordable, and accessible. In this regard, the consumer is the essential key to our success. Everyone with an interest in the sector will benefit from understanding that unassailable truth.

Laine Clark is the Innovation & Entrepreneurship Manager at The Good Food Institute, the international nonprofit working to shift the global food system to options that are better for the planet, people, and animals. This article was republished from the April/May 2023 edition of Protein Production Technology International, the industry's leading resource for alternative proteins. To subscribe to read future editions hot off the digital press, please click here