CHANGING CUSTOMER BEHAVIOUR IN FOOD CONSUMPTION
Peter Rezk and Nilesh Raut wrote this case under the supervision of Chris Laszlo and Katherine Gullett solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.
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It was mid-2014, and as the founder and chief executive officer (CEO) of Beyond Meat, Ethan Brown, scrolled through the company’s Twitter feed, he was pleased to see the stream of photos featuring Beyond Meat in a variety of foods. Beyond Meat could now be found in dishes from chicken noodle soup to creamy pasta. It made him think back to the 2009 dinner that had started it all: Brown had then been working at the fuel cell company Ballard Power Systems Inc. (Ballard), and he had been puzzled to note that colleagues at a conference dinner chose a steak entrée—an energy-intensive food that seemed to be at odds with Ballard’s efforts to convert energy more efficiently. Seeing this contrast between mission and behaviour, Brown had asked himself, “How difficult can it be to change what you eat for dinner?” Motivated by this question, he founded Beyond Meat in 2009 with the mission “to create mass-market solutions that perfectly replace animal protein with plant protein.”
The company had faced all the typical challenges of a start-up, and Brown and his colleagues knew that, in addition to these, their greatest challenge would be to change customer behaviour. Meat held a central role in US culture and society—from summer barbeques and holiday meals to on-the-go foods like hot dogs at baseball games and chicken nuggets at drive-throughs. The name and “impossible fork” logo of Beyond Meat were symbols of Brown’s intention to challenge this by evolving “meat” to a new level and producing a high- quality meat alternative (see Exhibit 1).
Assuming that a meat alternative could be produced and marketed cost-effectively, Beyond Meat would also need to make its plant-based “meat” socially and culturally palatable. This would involve changing US dinner habits—an exercise that would require Beyond Meat to consider how its product compared to animal meat in terms of its look, taste, feel, appearance, and nutritional content. It would also involve considering target markets and customer segments, as well as deciding whether to use ecological and/or ethical arguments in marketing.
Brown wanted Beyond Meat to be the game changer in the meat industry, just as soy- and almond-based Silk had changed the milk industry. Packaging its soy milk in a standard gable-top carton had allowed Silk to overcome customer reticence by aligning the product with traditional dairy products. Silk had been able to grow its market share considerably by using packaging and product placement that appealed to consumers looking for a highly similar alternative to regular dairy milk. Now, Silk was the leading soy milk, with $12.5 million in sales for 2014, compared to $4.7 million for its closest competitor. Brown was looking to replicate this success by targeting consumers who were looking for a healthier meat alternative that mimicked the taste
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and texture of meat in much the same way that Silk soy milk mimicked its dairy counterpart. However, even if Beyond Meat could offer the healthiest and most economical “meat” available, Brown and his colleagues were well aware of the difficulty of changing customer perceptions and behaviours. How could Beyond Meat make its way onto the shopping lists and dinner tables of more US consumers?
HUMANS AND MEAT
In order to understand the dependency of humans on meat, one must consider both the history and the science of humans and meat consumption. Some scientists believed that there were fundamental links between meat eating and the evolution of human biology and society; for example, humans possessed the enzymes needed to digest meat, and human socialization could be connected to the domestication of animals and co-operative hunting.1 Humans had historically relied on meat to provide essential amino acids and micronutrients, using plant foods as supplemental sources of energy. Increasingly, consumers were drawing necessary nutrients from a variety of sources, so dependency on meat was decreasing. At the same time, the rise of genetically modified meat, along with ethically controversial means of raising livestock and poultry, were shaking consumers’ trust in meat and its origin and makeup.2
CUSTOMER BEHAVIOUR AND ATTITUDES TOWARD MEAT
In 2010, the world’s population was projected to increase over the next decade by 11 per cent, or about 766 million people. Moreover, at least 800 million consumers were expected to join the middle class by 2020, driven mainly by emerging market economies such as China and India. Historically, as incomes had risen, people had shifted from grain-based diets to high-value diets that included more meat and fish.3 This meant not only that more people would be consuming food in general but also that people would be consuming more meat.
According to a survey conducted for National Public Radio by Thomson Reuters Corporation and released in 2010, 61 per cent of US consumers were concerned about contamination of the food supply, while 51 per cent worried most about meat safety.4 Another report, by Mintel Group Ltd. in 2013, showed that the majority of meat eaters (58 per cent) were concerned about the food safety of red meat and pork.5 Many customers were looking for food sources that were both ethical and responsible as well as for foods with high nutritional value—and these qualities were especially relevant when it came to the meat they consumed. Therefore, many customers were evaluating a range of factors before deciding on the types of meats they would eat. Some chose to increase their consumption of chicken in lieu of red meat. More customers (51 per cent) showed a preference and willingness to pay extra for brands that supported animal welfare by buying products such as organic, free-range, and grass-fed meats. Additionally, there was a growing commitment among US customers to be more health conscious and therefore to eat less red meat altogether.6
A survey of customers conducted in 2013 showed that only 7 per cent identified as vegetarian, while some 36 per cent indicated that they used meat alternatives. Of the 36 per cent who consumed meat alternatives, less than half were using them in place of real meat, and 16 per cent were using the products alongside meat offerings. While many believed that alternative products were healthier than real meat, some said meat alternatives were
1 Vaclav Smil, “Should Humans Eat Meat? [Excerpt],” Scientific American, July 19, 2013, accessed December 30, 2014, www.scientificamerican.com/article/should-humans-eat-meat-excerpt. 2 Craig B. Stanford, “The Indelible Stamp,” chapter 1 in The Hunting Apes: Meat Eating and the Origins of Human Behavior (Princeton, NJ: Princeton University Press, 1999). 3 Deloitte Touche Tohmatsu Limited, Consumer 2020: Reading the Signs (London: Deloitte Global Services Limited, 2011), accessed January 15, 2017, www2.deloitte.com/content/dam/Deloitte/ru/Documents/consumer-business/consumer_2020.pdf. 4 April Fulton, “Most Americans Worry about Safety of Food Supply,” National Public Radio (NPR), July 27, 2010, accessed December 30, 2014, www.npr.org/blogs/health/2011/06/07/128794927/most-americans-worry-about-safety-of-food-supply. 5 Sarah Day Levesque, Red Meat—U.S.—September 2013 (London: Mintel Group Ltd., 2013). 6 Ibid.
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too processed. Therefore, developing products that boasted whole ingredients and were promoted based on what they were, rather than on the products they mimicked, would be key to attracting the attention of consumers.7
Demographic changes were also affecting the meat alternative industry. A 2013 Mintel report showed that 45 per cent of meat-alternative consumers aged 18–24 used meat alternatives because they enjoyed the taste compared to only 31 per cent of consumers overall. This suggested that younger consumers who were likely to have eaten meat alternatives from a young age were less likely to be concerned about a product with a taste and texture like those of real meat.8
Consumer attention was also focused on research showing that meat consumption was bad for both human health and the environment. The Double Food and Environmental Pyramid showed the ecological footprints of food categories alongside their nutritional value and, unsurprisingly, concluded that fruits and vegetables had the lowest footprint and that red meat had the highest.9 This study concluded that there was a strong correlation between nutrition and environmental impact: the foods that were most environmentally friendly were often the healthiest, and vice versa (see Exhibit 2).10
THE IMPACT OF LIVESTOCK ON THE ENVIRONMENT
Many studies investigated the negative impact of meat production on the environment, using the life cycle assessment method, an environmental accounting framework standardized by the International Organization for Standardization (ISO). This method involved quantifying the material inputs, energy inputs, and emissions associated with each stage of the product life cycle—from resource extraction through processing, use, and disposal—based on their contributions to various environmental impact categories.11
The largest contributor to environmentally detrimental factors was the production of animal feed, which made up 70–80 per cent of the total negative factors. For example, in 2005, the US broiler poultry industry used an estimated 240 billion millijoules (mJ) of energy—the equivalent of 6.7 billion litres of crude oil—to produce 16 million live-weight tonnes of broiler poultry. The broiler sector also generated 22.3 million tonnes of carbon dioxide equivalent (CO2e) greenhouse gas emissions, more than half a tonne of ozone- depleting emissions, 254,000 tonnes of acidifying emissions, and 62,300 tonnes of eutrophying12 emissions.13
The processing times for plant-based proteins and animal meats were also quite different. It took several minutes to process plant extracts and manufacture the protein end product; conversely, it took up to five months to harvest meat protein end products from a chicken and up to 15 months from a calf. In addition,
7 Beth Bloom, Meat Alternatives—U.S.—June 2013 (London: Mintel Group Ltd., 2013). 8 Mintel Press Office, “More than One-Third of Americans Consume Meat Alternatives, but Only a Fraction are Actually Vegetarians,” Mintel, August 12, 2013, accessed October 25, 2019, https://www.mintel.com/press-centre/food-and- drink/meat-alternatives-market-trend. 9 Guido Barilla, Dacian Cioloș, Danielle Nierenberg, Gabriele Riccardi, Riccardo Valentini, BCFN Yes!, Alex Renton, and Enrico Crippa, Food and the Environment: Diets that are Healthy for People and the Planet (Parma, Italy: Barilla Center for Food & Nutrition, 2013), accessed December 30, 2014, www.barillacfn.com/m/publications/food-and-the-environment-diets- that-are-healthy-for-people-and-for-the-planet.pdf. 10 Katherine Martinko, “Do You Eat for Health or Environmental Sustainability? The Double Pyramid Says You Can Do Both,” Treehugger, December 1, 2014, accessed December 30, 2014, www.treehugger.com/green-food/do-you-eat-health-or- environmental-sustainability-double-pyramid-says-you-can-do-both.html. 11 Nathan Pelletier, “Environmental Performance in the U.S. Broiler Poultry Sector: Life Cycle Energy Use and Greenhouse Gas, Ozone Depleting, Acidifying and Eutrophying Emissions,” Agricultural Systems 98, no. 2 (2008): 67–73. 12 Eutrophication referred to a process of land runoff that resulted in overly enriched bodies of water. The overabundance of nutrients resulted in dense growth of plant life in the water, limiting the oxygen needed to support animal life. Use of fertilizers and concentrated animal feeding operations were known sources of eutrophication. Ibid. 13 Pelletier, op. cit.
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converting grain to animal meat was an inefficient process (see Exhibit 3). In beef production, 20 kilograms (kg) of grain intake were needed for only one kg of edible meat—a 4 per cent efficiency rate. Plant-based protein required less time and fewer resources to yield an edible product (see Exhibit 2).
