Big Vegan Brands Snag Loyal Customers in Undergrad

(Bloomberg) -- It was lunchtime in New Haven, Connecticut, and Yale senior Charles Kenney was eating sausage braised in beer, onions and apples—a seemingly unusual choice for the vegan math major.

The brats, however, weren’t your standard pork kielbasa. It was a pea-based vegan sausage from Beyond Meat Inc., whose plant-based burger is also available every day at the school’s 14 residential dining halls alongside more traditional college fare like roast turkey and macaroni and cheese. Kenney, who first tasted the brand on campus, says he plans to buy the meatless burgers and sausages at the supermarket himself once he starts graduate school at Rutgers in New Jersey next fall. “If I can afford it,” he adds. 

That’s exactly what Beyond Meat was going for. The maker of plant-based protein products, which just went public this week, brought its meatless burger to Yale University two years ago in a bid to build loyal Generation Z customers before they even collect a paycheck. The goal is that if a brand resonates when a student is on a meal plan, it will still resonate when he’s 22 and buying his own groceries, and, hopefully, when he’s 32 and shopping for a family. Loyalties forged early run deep, and that’s important when a Beyond Burger can cost more than twice standard ground beef at a grocery store.

Big Vegan Brands Snag Loyal Customers in Undergrad

“When you’re in college, you’re developing your brand preferences and buying habits,” says Adam Grant, head of the marketing agency Campus Commandos. Seeing these brands in the lunch line means they’re already familiar for students when they enter the real world—or as Grant says: “That’s one more impression closer to them choosing you versus someone else.” 

Beyond Meat isn’t alone. Just Inc., a startup making egg-free eggs and mayo, brought its plant-based mayonnaise to Cornell and UC Berkeley in 2015, while Impossible Burger arrived at the University of Chicago in the fall of 2017. By serving their products on campuses across the country, these mission-driven, young food companies are actively trying to avoid the same fate their Big Food forebears suffered with millennials.

As Kraft Heinz Co.’s recent $15.4 billion writedown on its major brands made painfully clear, there was a steep learning curve when it came to those young-adult consumers. Suddenly iconic products were being rejected as too processed, too unhealthy, too inhumane. The center of the store—the aisles where food giants hawk their shelf-stable cake mixes and canned soups—became marginalized. Fresh, healthy, organic and natural became the buzzwords that a new generation of socially conscious shoppers wanted to see—a trend that’s only been exacerbated as the even more health-conscious and environmentally-focused Gen Zers come into their own.

“We really want to be where they’re at, like college campuses,” says Beyond Meat’s chief growth officer Chuck Muth, adding that its products are served on more than 100 campuses nationwide, in addition to the fast food chains it’s now entering. “It has been a target for us.”

For Gen Z Americans, now roughly between the ages of 7 and 22, terms like “factory farming” and “raised without antibiotics” don’t require explanation. They want authentic, transparent food brands that are slowing climate change, not contributing to it.

Big Vegan Brands Snag Loyal Customers in Undergrad

They’re more than twice as likely to classify themselves as vegetarians, vegans or pescatarians than their Gen X or Boomer parents, according to a survey by Bloomberg News and Morning Consult. Even the less restrictive are cutting back: Twenty-six percent said last year they’re trying to eat less animal protein, more than both millennials (22 percent) and the nationwide average (19 percent), according to market research company Mintel. 

Colleges and universities have been making significant efforts to upgrade their dining offerings, a response not only to a more demanding student body but also in a push to remain competitive with rival schools. The higher education food-service industry is now as big as $18.3 billion in the U.S., Technomic estimates. 

Big Vegan Brands Snag Loyal Customers in Undergrad

Nationwide, case shipments of plant-based foods from food-service distributors to college and universities were up 14 percent last year, following a 10 percent bump the year before, according to NPD Group. Humane Society of the United States has been training food-service professionals to work with tofu, lentils and branded plant-based foods, including at more than 80 colleges and universities in 2018 alone. 

Specialty foods like Impossible Burgers are bought the same way as standard items, through distributors. As with anything else on their menus, if the kids buying the meal plans weren't picking up these new vegan products, the schools would stop serving them.

“Years ago it was, ‘do you have vegetarian options?,’” says Chef Kurt A. Kwiatkowski, corporate executive chef at Michigan State University, which serves Beyond Meat’s burgers in multiple locations on campus and Just mayonnaise as a condiment at all of them. “Now it’s ‘vegan, vegan, vegan, plant-based diet.’”

Like Beyond, Just’s marketing on campus often includes some branding in the dining halls, as well as sampling stations and the free publicity of enthusiastic students who, naturally, post on social media. Just currently allocates 25 percent of its staffing, resources and budget to colleges and universities, and its products are served at more than 60 schools, a figure it expects to double in the fall. “We are aggressively pursuing the college and university channel,” says Matt Riley, Just’s senior vice president of global sales.

Big Vegan Brands Snag Loyal Customers in Undergrad

Impossible Foods, maker of the famously bleeding Impossible Burger, is on at least a hundred campuses, a spokesperson said, including University of Chicago and Vanderbilt University in Nashville. It has a college and university team within the company, spanning sales, communications, human resources and sustainability. At launch events featuring Chief Executive Officer Pat Brown, someone from recruiting is often available to take resumes for internships and entry-level positions. 

Of course, the big brands have long been at college, too. Products from Kellogg Co. are on more than 60 percent of the country’s campuses, and its Morningstar Farms and Gardenburger brands have been served for more than 20 years and have a 43 percent market share at colleges and universities, the company says. Conagra Brands Inc. products are also common in dining halls, and it says its plant-based Gardein brand is particularly popular with students. At Yale, a recent student cooking competition counted Coca-Cola Co. and Barilla pasta among its sponsors.

Not all students want vegan food, though, and some progressive real meat brands have taken a similar tack. Niman Ranch, best known for its high-welfare pork, has focused on colleges for the last seven years, and its parent company, Perdue Farms Inc., says it sees the long-term upside of getting to these young consumers with a lifetime of purchasing ahead of them. John Ghingo, president of Applegate—the natural and organic deli meat brand owned by Hormel Foods Corp.—says that getting on campuses “is a big strategic priority.” The brand sends speakers to panels and offers plenty of free samples.

Commodity meat products are often served side by side with these newer offerings, but usually, if a product is lucky enough to get branded on a menu, it’s because the name itself, like Beyond Meat, tells a story that will resonate with an increasingly animal-welfare minded, environmentally conscious student body. Michigan State’s Kwiatkowski says the school serves big-name meat companies’ products, too, but their names aren't on the menus. “Our guests only have a short time that they’re in front of us,” he said, and “sometimes less is more.”

©2019 Bloomberg L.P.