Why Restaurants are Losing Out on the $13 Billion Vegan Food Industry
Restaurants are missing out by not adding vegan options.

Over the past few years, mainstream restaurants have embraced the next generation of realistic plant-based meat. According to the Plant Based Foods Association — a trade organization representing 52 leading plant-based brands — the vegan food industry contributes $13.7 billion to the U.S. economy each year.

Some companies have openly resisted adding options — think Arby’s meat-based carrot. The conceptual carrot-shaped lump of ground turkey was seemingly announced as a trollish gimmick — so the “marrot” won’t appear on Arby’s menus anytime soon. The carnivorous restaurant said earlier this year that the chances of adding vegan options are “impossible.” But, do Arby’s and other restaurants risk losing money by not adding vegan options?

NYC-based vegan chain Beyond Sushi netted $1.5 million on ABC’s “Shark Tank.” | Beyond Sushi

A Top Dining Trend

Last year, global food and restaurant consultant firm Baum+Whiteman identified plant-based dining as the top trend of 2018. With this, it made a number of predictions that have since come true. For example, the report predicted that casual dining chains would introduce more vegetarian (if not vegan) options in a bid to save the struggling industry. Denny’s, Applebee’s, Dave & Busters, TGI Fridays, Wahlburgers, and Zizzi are among those that have added meat-free options.

The firm also predicted the rise of vegan and plant-forward chains. Vegan restaurant chains such as Veggie Grill, Copper Branch, Cinnaholic, by CHLOE., and Lord of the Fries are on the rise. In October 2018, New York City-based sushi chain Beyond Sushi received $1.5 million on “Shark Tank” — the ABC reality show where entrepreneurs pitch their vision to a board of five investors — in order to expand to the west coast.

Ontario-based vegan fast-food chain Globally Local opened up to franchising in June 2018. Zach Vouga, co-founder of San Diego’s Plant Power Fast Food told Thrillist in June 2018 that they plan to open more locations, fueled by “intense demand.”

Mainstream chains like Burger King, White Castle, Dunkin’, and Carl’s Jr. have added plant-based options to the menu. KFC, McDonald’s Canada, Wendy’s, and Domino’s have launched trials featuring plant-based meat over the past year. In KFC’s case — which served Beyond Meat vegan fried chicken at an Atlanta location — wares sold out in five hours.

Vegan restaurant chains are on the rise. | Lord of the Fries

‘A Smart Business Move’

Katrina Fox, founder of Vegan Business Media, tells LIVEKINDLY in an email that as plant-based food continues to enter mainstream spaces, “it’s a smart business move for any restaurant to ensure that it caters to these flexitarians as well as the growing number of vegans.

Vegans still represent a small fraction of the world. However, “flexitarian” diets are becoming increasingly popular for a multitude of reasons. According to Nielsen data, 98 percent of U.S. households that purchased plant-based meat last year also bought animal-based meat. But, only 5 percent of households are vegan or vegetarian, indicating that omnivorous Americans are occasionally skipping meat and dairy.

“People tend to go out to eat in small or large groups. Nowadays that means there’s a greater chance of one or more in the party not wanting to eat meat or animal products,” Fox continues. It’s not only vegans that are opting out of ordering animal products. A 2016 Harris Group poll found that 37 percent of diners prefer to skip meat when eating out at restaurants.

“Restaurants also need to be aware that the days of offering bell peppers stuffed with rice and veggies, or a lentil patty topped with wilted lettuce are long gone,” Fox adds.

Burger King reported its best quarter in nearly four years after launching the Impossible Whopper.

Adapt and ‘Reap the Rewards’

“With the development of next-generation burgers, sausages, and other plant-based meats, chefs need to up their game and get more creative. Those that do will reap the rewards and position themselves as progressive and responsive to consumer demand,” Fox explains.

Indeed, they will. Foodable Labs data shows that restaurants that started offering vegan options saw a 13 percent increase in traffic. This is despite the fact that overall restaurant industry traffic is down. According to the study, which was released in 2018, 51 percent of U.S. restaurants now offer vegan options. And the numbers show that in some cases, these options may be to thank for boosting sales.

Burger King launched the Impossible Whopper, which features a vegan Impossible Foods patty, last August. The fast-food chain reported its best quarter in nearly four years — a 5 percent increase — fueled by Impossible Whopper sales. CEO Jose Cil said in a conference call last October that the Impossible Whopper is “one of the most successful product launches in Burger King’s history.” Thanks to its success, the chain is trialing three new Impossible Burgers across cities in Wisconsin.

Do Mainstream Launches Hurt Vegan Restaurants?

An ongoing discussion within vegan circles asks whether mainstream restaurants adding plant-based options hurts or helps vegan businesses. Fox believes there are two issues.

“One is that there are a lot more all-vegan restaurants than ever before, so there’s a lot more ‘competition’ than previously, so they’re no longer the only vegan eatery in town,” she explained. According to statistics from Happy Cow, a resource for vegan and vegan-friendly restaurants, 535 plant-based restaurants were added in 2007. So far this year, 2,235 vegan restaurants were listed.

Fox continued: “Now that good vegan options are available in mainstream restaurants, that may mean some customers will start to experiment by eating in those places.”

So, how can vegan restaurants stake a claim in an increasingly competitive market?

“The challenge for vegan restaurants will be to remain a step ahead in their offerings, implement strategies to gain brand loyalty, and communicate the ethical nature and sustainability aspects of their businesses,” Fox added.

Some restaurants have already adopted such strategies. Los Angeles-based vegan fast-food chain Monty’s Good Burger is one example, which echoes popular chains like In-N-Out Burger. The restaurant highlights not only food that’s more sustainable than its traditional counterpart, but also locally-sourced ingredients and eco-friendly packaging. The all-vegan fast-food chain has seen minor success so far: it went from a pop-up launched in 2018 to having three brick-and-mortar locations.