When franchise behemoths like McDonald’s spend three years developing a vegan burger, you know there is more to come from the meat-free industry. Now marks the early entry point to get into an exciting and growing space in the wider food and beverage sector that looks set for explosive growth.
Words by Raghav Patel, digital content writer at Global Franchise
There’s something especially appealing about a burger; it may not be the healthiest food item, but it’s found localized incarnations in every region of the world and you’d be hard-pressed to find a burger naysayer. In fact, the U.K. is so in love with burgers, the average person ordered 19 grams of burgers a week when ordering out, according to Statista.
Burgers have remained popular since Charlie Nagreen squashed a beef meatball between a pair of buns in 1885 at the Seymour Fair, Wisconsin. Though there are numerous claims of origin for the burger as a concept, it undoubtedly started with the hamburger.
“The burger is something that you can just grab and go. You don’t need any utensils, you don’t need anything. You just grab it, whether you’re walking around, in your car, or anywhere,” said James McInnes, CEO and founder of Odd Burger.
“I think there is something special about the burger as a concept, which is why the burger itself is such a successful food group.”
The patty has always been made from some kind of meat product, though this is now changing. With the demand for vegan, vegetarian and flexitarian products, manufacturers and food outlets have not only integrated non-meat burgers into their offering, but are significantly expanding the category.
Future generations are guaranteed to drive growth in this segment with more millennials and Gen Z’ers giving up or reducing their meat intake but haven’t given up on their love for burgers. With the likes of McDonald’s and celebrities like Sir Lewis Hamilton investing in this category, is now the best time to invest in a vegan burger franchise?
How has the vegan burger space progressed?
Non-meat-based burgers began with vegetable patties. They were the original option of choice for the small number of vegetarians for decades, often ambiguously named ‘veggie burger’ with no idea of what vegetables would be present.
As always, the commercial opportunity to serve this small but growing demographic has seen producers become more innovative with their ingredients and meat substitute fillings which has made mock meat burgers more enticing to the meat-free consumer.
“The customer base for plant-based food is growing with more millennials starting families and Gen Z’ers entering the workforce and voting with their wallets.”
It comes as no surprise that only 2.5 per cent of Americans over the age of 50 consider themselves vegetarian, whereas 7.5 per cent of millennials and Generation Z have already given up meat. The same is also true for veganism, according to Statista.
“If you look across the fast-food space, veganism is getting into the mainstream faster, you’re getting a lot more plant-based burgers. I think they’re recognizing that this is not a fad that’s here for a year and will go. There’s a permanent shift in consumers,” said McInnes.
With an increased consciousness around the effect of rearing and feeding livestock on climate change and the potential health issues that arise from high levels of meat consumption, many have begun to adopt a flexitarian approach to their diet. This means people will reduce their meat intake, or set a day aside during which they consume no meat products.
Vegan burgers are entering mainstream culture too and are positioned as the new, healthy entrants into a category that has seen little innovation. It pairs with the language of inclusiveness too – while not everyone could eat a hamburger, there is nothing in theory that stops even the most vociferous carnivore from enjoying a plant-based burger. Numerous celebrities and top athletes from the likes of Venus Williams and Kyrie Irving have adopted plant-based diets and have greatly popularized it.
McDonald’s are loving it, and Burger King has done the impossible
McDonald’s is arguably the most famous and iconic fast-food retailer in the world, with a gargantuan 39,198 locations worldwide, as of 2020. Therefore, when McDonald’s does something, it’s worth watching and learning from. McDonald’s UK and Ireland recently released its highly anticipated McPlant burger, made from pea protein to resemble beef.
The note of importance here is that McDonald’s spent three years in partnership with vegan food specialist, Beyond Meat, to perfect the patty and cheese slice, indicating that McDonald’s has spent extensive time and resources investigating popular vegan products, eschewing a hasty, ill-thought-out rollout of a new menu item. The brand is clearly taking this growing demand seriously.
“We’re seeing big names enter the space, and that brings lot of change in the food industry. Big brand companies and big box stores now have a huge range of vegan products that I couldn’t even imagine 10 years ago,” said Alexander Tan, CEO of VeganBurg, a vegan burger franchise with locations in Singapore and San Francisco.
In a tie up with Veganuary, KFC released its own vegan chicken-imitation burger last year in the U.K. It sold over one million burgers in the first month, 500 per cent more than average launches. The burger was well-received on social media and the popularity of the new product led to KFC selling it for a month longer than expected. The brand is even rumored to be working on vegan fries.
Burger King launched its signature Impossible Burger in August 2019 in the U.S. as a trial, to ascertain the popularity of the product and any issues it may have. The burger was rolled out with different timelines in different regions. Burger King developed its vegan, meat-free patty in collaboration with Impossible Foods, but decided not to create a wholly vegan product. Unlike McDonald’s more inclusive McPlant, the Impossible Burger is aimed at flexitarians, since the burger contains mayonnaise and shares a grill with meat products.
Smaller franchises are doing it too
Smaller players have the ability to make quick decisions and facilitate quicker rollouts than the larger chains, so it’s no surprise to see a plethora of vegan burger restaurants popping up. The demographic of vegans, vegetarians and flexitarians is only on the rise. Coupled with the personalized and exclusive feeling of eating in more small-scale restaurants, there can be no doubt that vegan burger eateries will be popular in the near future.
Odd Burger is a fast-food vegan concept, centered around its vegan burger offering. The brand was born in 2014 as a grassroots vegan organization by founder James McInnes, where it brought organic fruits and vegetables to customer’s doors. It diversified into a vegan fast-food offering in 2017, launching its inaugural location in Canada, and has been growing ever since. The vegan burger brand now has four locations to its name and even opened a manufacturing center in 2018 where it develops its own food and conducts its own research. Odd Burger also holds the honor of being the first vegan fast-food chain to go public on the TSX Venture Exchange.
“I think for us, it’s about accessibility, and I think there’s something that is very accessible about a burger and fast food,” said McInnes.
Many celebrities have endorsed vegan diets, shining a light on the trend for going meat-free. However, champion Formula 1 driver, Lewis Hamilton, put his money where his mouth is when he invested in Neat Burger in 2019, a franchise started by entrepreneur Ryan Bishti. The franchise currently boasts four locations across London with a fifth on the way soon, and is aimed at converting meat-eaters.
Flower Burger emerged in Milan in 2015, when entrepreneur Matteo Toto wanted to create a unique, vegan burger experience. With 17 locations to its name, this burger bar offers a distinct set of burgers, containing ingredients that range from chickpea to seitan. Interestingly, this franchise offers no meat-substitute products but offers a variety of plant-based patties.
It’s a no brainer
Vegan foods are a growing category. It’s not a small-time interest; corporate giants see plant-based as a significant part of their future. Unilever aims to hit $1bn in global plant-based sales by 2025 and Tesco, the British food retailer, has plans to hike sales of meat substitutes by 300 per cent by 2025.
The COVID-19 pandemic saw the Japanese meat producer, Itoham Yonekyu Holdings, release its soy-based steak and fried chicken with so much success, that it will become a permanent product on sale. Mos, Japan’s most popular domestic burger chain released its own vegan option and is expanding its offering across Asia. Credit Suisse’s report on sustainable foods predicted that the plant-based food industry will be a whopping 100 times larger than it currently is by 2025.
“Moving into this market early and establishing oneself as an early pioneer will pay dividends in the years to come.”
“Franchising is on the rise. There’s been a huge spike in interest by small business owners despite COVID-19 putting the world on hold. Although the global economy has suffered, people are still investing in their futures,” said Tan.
What’s more, plant-based foods are often praised for their low environmental impact. They have significantly less impact on the planet when compared with traditional fast-food restaurants that serve meat.
“We are seeing the idea of this green economy emerging from asking ‘Can we continue our abuse of the environment? Is that an economically profitable direction?’,” said McInnes.
“I would argue it’s not; I think that at some point we have to stop our ways and change how we do things. I think people are recognizing that in long term we need to be in businesses that are sustainable. I think it’s a great investment today.”
The customer base for plant-based food is growing with more millennials starting families and Gen Z’ers entering the workforce and voting with their wallets. Gen Z alone has a global spending power of around $140bn; an attractive segment of the market that is only growing.
It’s not just the spending power that matters as Gen Z expects their values to be expressed in the products and services they buy. Companies themselves must bake sustainability and ethics into their operations.
When all of these factors are combined, vegan burger restaurants sit in a comfortable spot where every requirement is met. Franchises themselves will sell a truly sustainable product and help wean people off eating copious amounts of meat every week while generating healthy profits.
Gain the early-mover advantage
Chicken and pizza franchises are popular today and likely will be, forever. But those are difficult markets to succeed in; a plethora of brands and products exist, therefore making it difficult to put forward a unique, valuable proposition.
There is still a lack of vegan fast-food burger brands today, and a paucity of restaurants in major cities around the world. The larger chains are capturing some of that demand with their plant-based, meat-substitute burgers, but there is still significant space for smaller chains.
“At least here in Canada and North America, I don’t think there’s that much competition in the vegan fast-food burger space,” said McInnes.
“There are lots of people creating vegan burgers and vegan restaurants, but fast food is a really different thing. It’s very technology-focused, process-driven and efficiency-driven.”
It’s also an area with a growing audience. The current attitude towards veganism is generally friendly, even without a very high uptake. That is guaranteed to change in the future as millennials instill their values into the next generation and Gen Z’s spending power truly comes to light.
Vegan burgers may take up a small section in a fast-food chain’s menu today, but there is no doubt that in time, it will take up as much space as meat burgers. Moving into this market early and establishing oneself as an early pioneer will pay dividends in the years to come.