We are witnessing the evolution of gastronomy. Surprisingly, veganism is one of the main catalysts of this culinary transformation. Beginning as a whole-grain diet for radicals, vegan food culture has become a Michelin-star-worthy mega-trend for aspiring chefs and culinary experts.
These days, vegan food is becoming common in restaurants and fast food outlets. Future Market Insights reports that global plant-based burgers revenue will exceed US$2.7 billion with an impressive CAGR of 22% in 2022. With increasing promotions in restaurant magazines, food blogs and social media platforms, more people are expected to join this mega-trend.
People are also increasingly aware of the positive impact of the vegan lifestyle on their own health and their environment. With the vegan lifestyle becoming the new norm, top restaurateurs are incorporating plant-based dishes into their menus. An increase in the number of vegan restaurants is seen as the younger population, especially women, prefer vegan diet over traditional fine dining options.
In this blog, we will discuss what is the market scope of the vegan catering industry, what are the main challenges faced by vegan restaurateurs and what is their approach to solving these issues?
Being vegan is no longer gourmet
The restaurant industry is about to change. Age-old traditions of wine pairings and exotic meals are replaced by bite-sized and shared meals. Surprisingly, restaurants are also replacing everything from meat, fish, eggs and dairy to vegan alternatives. They do this by reinventing vegetables and other plant-based options.
Plant-based eating was previously restricted to certain casual restaurants and cafes. However, restaurants have started experimenting with vegan menus, elevating what was once a niche diet option into a real culinary trend.
Besides the growing vegetarian and vegan population, ordinary people who eat meat are also paying attention to the relationship between animal products and their health and the health of the planet. This has accelerated the demand for plant-based meat and dairy products, especially in the Western Hemisphere.
Now, there is no denying that there is money in this segment. Plant-based proteins accounted for $11.3 billion in sales in 2021, while the meat substitutes market grew 5.2% annually in 2021. Plant-based beef sales are expected to see exceptional growth by 22.7% CAGR between 2022 and 2032, and sales of plant-based milk will increase approximately 2 times by 2032, according to Future Market Insights.
Part of the increase in vegan adoption has undoubtedly been driven by environmental, health and ethical factors. Of course, people want to do what they think is good for them and for the planet.
Young chefs are experimenting with different vegetables and plant-based products to create countless amazing new cuisines and replicate the exact texture and taste of traditional animal meat. With this approach, modern restaurants seek to appeal to consumers who crave the texture and consistency of meat in a vegan dish.
The rise of veganism therefore clearly offers restaurateurs real opportunities. However, while the industry must adapt to new demands, it must also overcome serious and unprecedented obstacles to maintain the highest possible standards.
What are the main challenges faced by vegan restaurateurs?
In 2022, the restaurant industry or the food industry in general is planning to serve an omnivorous population that is trying to cut animal products from their diet. There are few hurdles these vegan restaurateurs need to overcome to be successful in the years to come.
- Limited Clean Label vegan ingredients on the market
Consumers are becoming more aware of the ingredients in their food and are starting to scrutinize the ingredients that go into it. In order to provide a truly authentic vegan experience, vegan restaurant owners must research and eliminate many ingredients that claim to be 100% vegan. In the current market scenario, even major regulatory and certification institutes are adding “may contain” labels on plant-based dairy products and meat alternatives needed to prepare a vegan meal.
True vegan and clean-labeled ingredients are scarce and expensive, ultimately increasing the cost of cooking. This prevents the consumer from entering the vegan restaurant, resulting in lower sales.
The imminent threat of allergic reactions to ingredients present in the claimed vegan product further compounds the problem. Vegan restaurant owners have no corners to cut if they’re looking to build customer loyalty and must go the extra mile to assure their customers that their menu is trustworthy.
- High cost of organic products and supply chain issues
In the wake of the ongoing pandemic, restaurateurs are facing supply chain challenges due to agricultural production and labor shortages, fluctuating demand, and transportation logistics issues. Vegan restaurants are hard hit because their raw material sourcing is very specific and relatively complex.
Restaurant owners must bear the overhead of preparing food and disposing of leftovers, as vegetables and plant-based products spoil quickly and require special storage. One of the licensing requirements for a vegan restaurant is the installation of a top quality water purification system. These systems are expensive and the restorer must bear the cost.
For the above-mentioned reasons, the cost of meals in a vegan restaurant is increasing, which reduces the attendance of customers in the restaurant to some extent.
How Vegan Restaurant Owners Are Addressing These Challenges
To take advantage of the developing vegan opportunity in the fine dining industry, restaurant owners are using whole foods instead of own brand vegan ingredients for food preparation. They are becoming increasingly cautious in selecting Clean Label products whenever necessary to better position themselves in the market and establish themselves as authentic vegan restaurants.
They also formulate and balance the combination of various in-house ingredients to develop a distinctive taste and to some extent eliminate the use of own brand ingredients. With this approach, they are also able to cater to their customers’ tastes while reducing the risk of using too much processed food.
As organic products cost more, restaurateurs are innovating and developing recipes and cooking techniques where the optimal use of products takes place. They focus on reducing waste and extracting the maximum flavor from the raw material.
Although the initial investment is more for vegan restaurants, it pays off in the long run. With the growing popularity of veganism among young people, they are willing to pay extra to ensure that the food they eat is organic and 100% authentic.
With rising per capita income and a stringent regulatory framework in place to ensure product is delivered as promised, vegan restaurant owners can expect an increase in vegan customers and subsequent sales in coming years.
What to expect in 2022
Becoming vegan as a way of life is still daunting and difficult for many, mainly due to financial or geographic constraints. Research indicates a further decline in the consumption of animal products in the coming years, as consumers turn to meat only twice a week.
Advances in technology are filling the market with new vegan meat products and clean ingredients, while the growing number of vegans and vegetarians will drive demand for these products.
The vegan restaurant industry has a bright future as fast food giants like McDonalds, KFC, Subway and Burger King are entering the vegan food industry. The low prices of fast food chains will help attract customers, including those who usually order meat dishes.
Most fast food chains have started offering a vegan alternative to their signature dishes while others are leading by offering new vegan dishes that are not on their regular menu.
These factors are supposed to create a loop. As more and more plant-based foods are in demand, the market becomes more profitable for restaurants – as a result, they offer more vegan options at lower prices. We can expect vegan restaurants to become less expensive and see more and more vegan dishes appear on mainstream restaurant menus in the coming years.