Kroger goes beyond meat and looks for impossible growth with private brand

Discussion
Sources: Kroger, Getty Images
Jan 09, 2020
George Anderson

Look out Beyond Meat, Impossible Foods and all the other brands with plant-based meat alternatives. Kroger is rolling out its own private label meatless brand, one that can compete on taste and at a lower price than national brand alternatives.

Yesterday, the grocery giant announced the national launch of Simple Truth Emerge: Plant Based Fresh Meats.

Gil Phipps, Kroger’s vice president of Our Brands, said the grocer is positioning itself “at the intersection of plant-based curiosity and culinary innovation” with the goal of helping the millions of customers it serves “explore and embrace a flexitarian lifestyle.”

The introduction of Simple Truth Emerge, which will be displayed in the meat cases of Kroger-owned stores, is just the start of plant-based product introductions from the company. The grocer announced plans to roll out 50 additional plant-based foods in 2020.

The rollout of the first two meat alternatives from Kroger comes about a month after it began a 16-week test of meat alternatives. The pilot, which involves 60 stores in two markets, is being conducted in cooperation with the Plant Based Foods Association. The grocer and trade group are looking to quantify customer interest and purchasing behavior of a wide variety of meat alternatives using various ingredients and coming in various forms including deli slices and roasts in addition to grinds, links and patties.

“Kroger is driving the growth of the plant-based category through our Simple Truth brand, valued supplier partnerships and industry-leading fresh merchandising strategies,” said Joe Grieshaber, Kroger’s senior vice president of merchandising. 

Mr. Grieshaber said the company expects plant-based products to be “one of the key drivers of our natural and organic sales” this year.

Kroger’s Simple Truth brand generated more than $2.3 billion in sales last year. The grocer is kicking off the launch of the new Emerge plant-based meats with a coupon for 75 cents off the patties and $1.50 off the grinds.

Earlier this week, Impossible Foods maker of the Impossible Burger, introduced plant-based pork and sausage at the CES Show in Las Vegas. The company’s founder and CEO Pat Brown said it is also working on alternatives to bacon and fish.

 “Our mission is to completely replace animals in the global food system. We’ve been serious about that from day one,” Mr. Brown told USA Today.

UBS forecast last year that the plant-based meat market would grow from $4.5 billion to $85 billion over the next 10 years. 

DISCUSSION QUESTIONS: What will Kroger’s private label entry into the plant-based meat market mean for the future prospects of the category and the grocery chain operator’s business? Do you see other large food retailers developing their own plant-based meat private label lines?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Watch for Trader Joe's, Whole Foods, etc. to also jump into the category. "
"It means someone had excess manufacturing capacity they needed to sell."
"Kroger has the formula for private label success: Great quality at a lower price than national brands. I expect this plant-based meat alternative to be a success."

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16 Comments on "Kroger goes beyond meat and looks for impossible growth with private brand"


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Neil Saunders
BrainTrust

There is no denying that the plant-based meat market is growing rapidly. As such, it makes good sense for retailers to develop their own assortments to capitalize on the demand. All that said, I think the idea that plant-based meat will entirely replace meat – as expressed by Impossible Foods – is far-fetched! A lot of consumers don’t want that. Moreover, plant-based meat has issues: it is not always healthier than meat and it contains a lot of highly processed ingredients. I am sure the category will continue to grow, but there will be pockets of resistance and some backlash.

Dave Bruno
BrainTrust

As a 25-year pescatarian who hasn’t eaten a burger since 1994, I feel I am somewhat of an authority on plant-based substitutes. I am genuinely excited by the investment in new alternatives. Our bodies and our planet can both benefit from less factory-farmed animal products, and while I have grown to love black-bean burgers and the like, I know they have limited appeal to most meat lovers. The new products from Impossible and Beyond really do mimic beef in many ways, and I have many carnivore friends who enjoy them. If Kroger is able to produce similar quality at a lower price, and that increases adoption by more meat lovers, that would be a win-win for us and the planet.

Paula Rosenblum
BrainTrust

That’s the issue, Dave. Is the market mature enough to ensure similar quality in private label? I don’t think so. And like you, meat is not my thing but plant based alternatives are.

Carol Spieckerman
BrainTrust

It’s hard to say how this will play out. Since Beyond Meat’s initial meteoric stock rise (then fall), the stock been somewhat immune to good news (earnings and placement in major outlets) and announcements from rivals like Impossible have resulted in upticks for BYND. The big takeaway is that, with so many new entrants, quality and price will matter more. If Kroger offers a superior product, it will do well in the long haul. Us plant-based people have never had this many terrific options so former go-to brands will have to keep up. Right now, my fridge/freezer’s packed with Gardein, Beyond, Morningstar, Just Egg, Follow Your Heart, Uncreamery, Miyoko’s, Herbivorous Butcher…oh my!

Brandon Rael
BrainTrust

Considering all the momentum building in the meatless meat categories, it was inevitable for a grocer the size and scale of Kroger to step up to the plate with a private label offering. The one consideration is that both quality and price will matter in this emerging market. Impossible Foods and Beyond Meat have built up significant brand equity, however they are premium priced, and in some cases more expensive than actual meat.

Kroger could ultimately make an impact in this space if they are able to come up with a viable product that offers both quality and an affordable option to the branded competitors. Very interested to see how this plays out. It’s only a matter of time before the Whole Foods and Targets of the world come up with their own meatless meat private brand.

Art Suriano
Guest
There is no doubt that interest in meatless products is growing. Kroger has an opportunity to capitalize on that with its own brand. How big the market becomes and how strong sales will be for Kroger is yet to be determined. Only time will tell, but I think Kroger is wise to give this a shot, and I expect it to be successful. I also see other grocery chains following their lead, especially if Kroger starts showing success with the venture. In time, I believe meatless products will become more popular. Many people today, especially the younger generations, have become very conscious of what we eat, what is healthy, and what is not. For years, there has always been debate about red meat, sausage, and pork as to whether it is good for you or not. Now with more and more meatless products being introduced, there has become an alternative. As the industry grows, it will attract more customers, and in time we may find that eating any meat will be a thing of the… Read more »
Richard Hernandez
BrainTrust

Gil has always been a great visionary when it comes to product innovation and I believe this category will continue to grow in the coming years, but is it necessarily right for all grocery chains? I think to have a representation of product is more acceptable to smaller or independent chains. The sell for acceptance will need to be done through a lot of sampling and digital support. I will tell you that where I am in Texas, it is an uphill sell for customers to say these products taste and look just like red meat… 🙂

Michael Terpkosh
BrainTrust

Kroger is well positioned to jump into the plant-based meat trend with private label. Kroger is recognized, national retailer with a very good customer reputation and consumers really like their private label. This is a natural expansion of private label into a new category for Kroger. I believe if a retailer has a very good to great perception with the consumer the retailer can pull this off, so watch for Trader Joe’s, Whole Foods, etc. to also jump into the category. I will also be watching to see if retailer price points start to come down as more companies jump in the category.

Carol Spieckerman
BrainTrust

Whole Foods has already jumped in with meatless chicken patties, nuggets and more. Trader Joe’s (a go-to for plant-based shoppers for some time) has also attacked plant-based/meatless/dairy-less with its private brands. If anything, Kroger is following their lead (though Kroger’s meatless packaging and approach more directly takes on Beyond and Impossible).

Ben Ball
BrainTrust

It means someone had excess manufacturing capacity they needed to sell.

Seriously, there’s at least a 50/50 chance that plant-based meat will go the way of margarine and the South Beach diet. Kroger is taking a bold chance by dedicating resources, space and inventory to Emerge. On the other hand, this move fits well with the socioeconomic positioning Kroger is targeting with Simple Truth in general. Most importantly, it’s a 60 store test. Maybe Kroger is adopting the fast-fail strategy of testing aggressive ideas that other successful retailers and manufacturers use.

Gene Detroyer
BrainTrust

If the trend continues, all retailers will follow it with private label. If it snuffs out, they will stop.

So why not?

Peter Charness
BrainTrust

A well respected private label brand is the ultimate competitive weapon. Demand will tell how much and how long.

Brent Biddulph
BrainTrust

Brilliant. This will mean that Kroger, now with its own brand, will be driven to carving out space, signage, and actively promoting the entire category both on/offline. This is a category commitment (with broader category expansion branding and merchandising opportunities — akin to organic, and natural) as much as it is about private label, which is the real headline here, IMHO.

Craig Sundstrom
Guest

The prospects for the category as well as for Kroger of course, depend on how well this sells (which of course also determines how likely other retailers will be to imitate it) At this admittedly early point though, I think it’s an important step.

It will also be interesting to see, as the category grows, how the anti-PBM backlash develops.

John Karolefski
BrainTrust

Kroger has the formula for private label success: Great quality at a lower price than national brands. I expect this plant-based meat alternative to be a success. I also predict that other grocery chains with strong store brand programs will follow with their own plant-based alternatives to animal protein products. The only question is when.

April Sabral
Guest

As a consumer and someone that has worked with customers for two decades in retail, I find it interesting that more and more non-meat alternatives are popping up. I was educated by my 22-year-old daughter who recently visited for the Holidays who is meat-free. She is happy that it’s becoming easier to buy meat-free options in the supermarkets. The younger generation is demanding more plant-based and they need more affordable options so happy to see this continue to grow in more private label brands.

wpDiscuz
Braintrust
"Watch for Trader Joe's, Whole Foods, etc. to also jump into the category. "
"It means someone had excess manufacturing capacity they needed to sell."
"Kroger has the formula for private label success: Great quality at a lower price than national brands. I expect this plant-based meat alternative to be a success."

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