Debuting next year, McPlant will include plant-based burgers, chicken substitutes and breakfast sandwiches.
The move is further proof of the value of vegan options in the food space, as people increasingly look to cut meat consumption for environmental and ethical reasons.
A growing market
According to ING Economics, the plant-based alternatives market in the EU and the UK will be worth €7.5bn (£6.6bn) by 2025, compared to €4.4bn (£3.9bn) last year.
The UK is the most developed market among its neighbours, with annual retail sales of €1bn (£890mln), but it is still lacking in terms of own product compared to the US.
On the other side of the pond, pure-play plant-based food producers are in demand and they also bounced back more strongly than the broader food producer category after the COVID-19 outbreak.
“Plant-based meat alternatives have managed to pass their first stress tests during the pandemic, with pure-play companies navigating the market volatility much more effectively than broader food producers,” noted Max Hayes, analyst at Edison Group.
“We see an increasing attractiveness in the sector on the back of growing consumer demand and reduced government support for traditional meat producers.”
Looking at the supply chain, the UK still doesn’t have a producer entirely focused on substitutes, such as Beyond Meat.
The closest one may be Hilton Food Group plc (LON:HFG), which holds a 50% stake in Dalco Food, a Dutch company focusing on meat substitutes – both vegetarian and vegan – alongside meat products.
Nonetheless, European retail sales of meat and dairy alternatives have risen by almost 10% per year between 2010 and 2020, although they only have 0.7% of market share for meat and 2.5% for dairy.
Consumers were helped in their decision making by the availability of new products such as plant-based burgers, drinks and ice cream, but they are still relatively expensive, their taste, texture and composition are not yet on par and availability is limited, but it is a growing industry.
For ING, these three weaknesses are set to be lowered substantially over the next five years considering the level of investment and innovation in the food industry and the supply chain.
As a result, the market share for meat alternatives is set to increase to 1.3% and for dairy alternatives to 4.1%.
Keeping up with the vegans
Companies in the food value chain are coming under more pressure than ever to deliver a vegan offering, especially the most popular brands: people want to continue eating their long-time favourites without having to compromise on lifestyle choices.
Elsewhere, chocolatier Hotel Chocolat Group plc (LON:HOTC) has a whole section for vegan options on its website, while nutrition company Science in Sport PLC (LON:SIS) launched a high-protein range of plant-based protein bars and powders a year ago.
While existing food companies are carving a space for vegan products in their offering, the UK market may now be ready for a pure-play producer to take the lead in the supply chain.