Healthy Profits : Vegetarian Foods Find Success in the Mainstream
When Wholesome & Hearty Foods owner Paul Wenner became a vegetarian 30 years ago, counterculture hippies were among the few who made a habit of eating meatless meals. Just how much things have changed was demonstrated recently when the company he founded 10 years ago sold its 100-millionth vegetarian burger.
The symbolic Gardenburger was sold not at a commune or a college town co-op but at the family eatery T.G.I. Friday’s, one of the 31,000 restaurants and food service outlets that now serve the vegetable-and-grain-based patty.
Wholesome & Hearty Foods isn’t alone in its newfound success. The mainstreaming of vegetarian products is sprouting new profits for small natural foods companies--and greater product opportunities for the increasing number of traditional supermarkets and restaurants they supply.
“Our time has come,” said Larry Tsai, director of marketing for Fantastic Foods Inc., a Petaluma, Calif.-based vegetarian foods company that now sells its Nature’s Burger patty to Disneyland as well as some Ralphs, Hughes and Lucky’s supermarkets.
“We’ve been around for almost 20 years, but we only started hitting the map two or three years ago,” he said.
Indeed, the times are changing. Many large supermarket chains now stock vegetarian products--everything from burgers, hot dogs, tostadas and pizzas without cheese to soy cheese and meat, egg and dairy alternatives. Many of these products formerly could only be found in obscure health food stores.
“Before, you would walk into a supermarket and there would be one line of vegetarian products in the freezer section, if you were lucky,” said Ziona Swigart, spokeswoman for the Vegetarian Research Group. “Today there are a lot more choices. Every store seems to have their own line of vegetarian food out now.”
Although major food manufacturers are developing meatless products, most vegetarian companies are still small operations. In the past, that alone kept them off the shelves of mainstream supermarkets. Only a few grocery store chains were willing to devote valuable shelf space for what they considered risky items. Those that did generally charged high slotting allowances--fees paid to get items on the shelves.
But all that is changing, says Ken Becker, vice president of Imagine Foods Inc., a Palo Alto company that makes meatless burgers and rice-based desserts.
“Supermarkets have been coming to us instead of us going to them,” he said.
Many Southland supermarket chains have even made the items easier to find by creating vegetarian sections in their stores. Ralphs Grocery Co., for instance, has created separate departments in about 30 of its stores to showcase its growing line of vegetarian and organic products. The Natural Choices Nutrition Centers, as they are called, offer more than 1,500 products, from frozen, meatless dinners to holistic remedies.
Although no one knows for sure the size of the vegetarian foods industry--in part because there is no clear consensus on what constitutes a vegetarian product--meatless items are generally classified as a portion of the burgeoning, $7-billion natural foods industry that encompasses both vegetarian and organically grown products. And while sales of “natural” products still account for only 1.5% of the nation’s grocery bill, they have more than doubled from a decade ago, according to Natural Foods Merchandiser magazine. Few other segments of the industry have grown at such a rapid clip.
The driving force behind this growing interest in meatless foods has been a steady rise in health consciousness, predominantly among the baby boomers, said Marianne Harkness, publisher of Vegetarian Times magazine.
More than 12 million Americans now consider themselves vegetarians, compared to half that number in 1985, according to a survey conducted by Vegetarian Times.
But although several food manufacturers still make products for the strict vegetarian, or vegan (someone who doesn’t eat eggs or dairy products), many are now catering to a broader, more mainstream set: traditional meat lovers who want to cut back on fat and cholesterol.
Attesting to this are the countless brands of meat analog products that look, smell, taste and chew like meat but aren’t. Apart from the ubiquitous bacon-flavored bits that top salads, there are now meatless sausages, hot dogs and deli slices, including the aptly dubbed “Foney Baloney” and “Fakin’ Bacon” by Lightlife Foods Inc.
“Few people are willing to change their eating habits overnight,” said Michael Cohen, chief executive of Lightlife. “But they’re now concerned enough to substitute healthier alternatives for familiar foods they know and love, like burgers and cold cuts.”
Amy’s Kitchen in Petaluma has seen its revenue grow 50% annually over the past three years by introducing products such as frozen, meatless Salisbury steak, a new-age TV dinner for the busy vegetarian who doesn’t have time to peel vegetables. And Lightlife Foods even offers a meatless alternative to ground beef.
Soy-and-tofu-based “not dogs,” which rather accurately imitate the taste and texture of real hot dogs, have become almost commonplace nowadays, so much so that the vegetarian baseball fan can even chomp on a tofu dog between innings at San Francisco’s Candlestick Park.
But the pervasive popularity of the veggie burger is by far the greatest testimony to the successful mainstreaming of meatless meats.
Even Pillsbury has cashed in on the veggie burger craze. The food industry giant now markets Archer Daniels Midland’s Harvest Burger under its Green Giant label in virtually all major supermarket chains.
And as supermarkets are becoming more accepting of meatless meals, so too are restaurants.
With a survey by the National Restaurant Assn. showing that 36% of U.S. adults would order non-meat dishes when eating out if they were available, a wide range of traditional diners, as well as several upscale and trendy eateries, now feature vegetarian entrees on their menus.
The International House of Pancakes, the Hard Rock Cafe, Red Robin, Hamburger Hamlet and even Carrows, which touts “good old-fashioned family” food in its commercials, all offer veggie burgers.
Fast-food restaurants, though, have not been as quick to follow suit.
Although some burger chains, including Wendy’s and Carl’s Jr., have built salad bars and added baked potatoes to their menus, others are reluctant to market vegetarian alternatives at the expense of their burgers and fries, said Jennie Collura, vice president of the North American Vegetarian Society.
McDonald’s, for instance, offers packaged salads but has no plans to expand further into vegetarian fare.
And even Der Weinerschnitzel, which previously snubbed non-meat-eaters with billboards claiming, “Vegetarians can eat the bun,” tested a meatless wiener recently. But the hot dog chain soon abandoned its efforts because of the cost and inconvenience of maintaining extra grills needed to cook the veggie dogs separately.
But with the vegetarian movement gaining momentum, fast-food restaurants are sure to change their tune, Collura said.
“Fast-food places are prone to the ‘veto effect,’ ” Collura said. “If a family’s looking for a place to stop for lunch and there’s a vegetarian in the car, they’ll end up skipping those places that don’t have a meatless option.”
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Beef Begone
Retail sales of meat substitutes--products such as vegetarian hamburgers designed to look and taste like meat--have tripled over the past three years, according to Information Resources Inc. Retail sales of meat substitutes, by four-week periods, in millions of dollars:
1995: $6.67
Meatless Meals
People who are shunning meat for health reasons make up the largest segment of the vegetarian population, according to Vegetarian Times.
Health concerns: 53%
Animal rights: 17%
Environmental: 14%
Social, religious: 9%
Other: 7%
Source: Information Resources, Vegetarian Times
