'Hybrid meat succeeds where vegetarian failed'

In the past, Van Loon Group has invested heavily in the meat substitute sector. With a separate factory, the company invested in the market for plant-based alternatives, including the brand The Blue Butcher. However, this turned out not to be a success in the long term, says CEO Robert van Ballegooijen. "Sales lagged behind expectations. Vegetarians ignored the products and flexitarians were also not queuing."

Due to disappointing sales, Van Loon Group was unable to make the production of meat substitutes profitable. "This was not only an issue for us, but also for other players. Because there was no prospect of significant improvements, we stopped producing and selling meat substitutes."

New strategy
Van Loon Group changed course and decided to switch to the production of hybrid meat products: meat in which vegetable products have been processed. This uses the technology that the company has developed for the production of meat substitutes. In a large number of meat products, part of the meat is now replaced by vegetable ingredients, which ensures a lower CO2 footprint while, according to Van Ballegooijen, retaining the taste. Van Ballegooijen speaks proudly about the new line: "Real meat lovers also like the products, the CO2 footprint is lower and we contribute to the protein transition. Together with our customers, we keep tasty and sustainable meat products accessible and affordable for everyone."

Consumers respond surprisingly positively. Meat lovers sometimes even experience the products as tastier than whole meat, as Van Loon Group knows based on its own research and experience. "Because the protein fiber we add is neutral in taste and color, no compromises are necessary in terms of taste experience or presentation. This is the key to success. We now process more vegetable proteins in our hybrid products than we have ever processed in meat substitutes. At the same time, we see that the market share of vegetable meat substitutes is decreasing, while that of our hybrid products is growing."

Why did you choose to exit the meat substitute market?
"About five years ago, like many other meat processors, we started producing meat substitutes. We saw the trend and got on board, but after a few years the strategy turned out to be unsustainable. In retrospect, it turned out to be the wrong path, in which we had to pay our tuition. The products were often not tasty enough for meat lovers. People thought they were too highly processed, full of additives and too expensive. Vegetarians have no reference for meat and therefore have no need for meat substitutes. The products also did not catch on sufficiently among flexitarians. For example, we see that when people do not eat meat for a day, they often choose other dishes such as a bean dish or a curry. They therefore do not buy vegetable meat substitutes. This resulted in disappointing volumes and structural losses for us. There was insufficient prospect of improvement and so we stopped. The location has since been closed."

Most hybrid products do not communicate to the consumer that they are partly plant-based. Why is that?
"We make private label products. Labeling is the responsibility of the customer. The customer determines the design of the label and the communication on the packaging. There are roughly two approaches. There are customers who explicitly state on the front that it concerns hybrid products (Lidl and Aldi ed.). Other retailers opt for a neutral approach, without conspicuous marketing: they only state on the back of the label that vegetable ingredients have been processed. The data shows that the neutral approach leads to higher sales figures and I think that is what it is all about. Personally, I also see no need to actively communicate on the front of the packaging. The label of a bottle of Coke Zero or a Mars bar does not state what is in it. So why should this be necessary for meat products? Research has shown us that actively communicating about vegetable products evokes negative perceptions among large groups of consumers, particularly in terms of taste. Many people still associate vegetable products with not being tasty."

Isn't the protein transition happening automatically due to rising meat prices on the shelves?
"Yes and no. If meat becomes more expensive, people may eat less. We are not seeing this yet. We are seeing that many retailers are reporting that they will not achieve their protein transition goals. With our hybrid products, we make it easier for consumers to eat less animal protein, we help our retail customers achieve their goals in the area of ​​CO2 reduction and protein transition, and we keep products affordable for the consumer. In addition, there is currently a hype that is actually working against the protein transition, such as high protein. Animal proteins are currently being added to all kinds of products. That is counterproductive. In my opinion, it shows once again that there is no point in trying to forcefully change consumer behavior."

Changes in consumer behavior should happen naturally and not be pushed too much, the CEO believes. He points to sugar-free cola: "This has been on the market for 40 years, but it is still not a standard choice. We believe in a gradual step-by-step approach. A matter of the long haul. You have to think in generations rather than years."

Van Loon Group is fully committed to private label with hybrid meat. Previously, you focused on brands such as The Blue Butcher. Why this switch?
"Dutch supermarkets have traditionally focused strongly on private label for fresh products. Retailers want to manage their own assortment. There is limited space for A-brands in fresh products. This also applies to the meat section. By now focusing on private label, we have scale, relevance and strong partnerships in the chain. The result of this approach is that with our hybrid products we have already contributed more to the protein transition than all plant-based meat substitutes combined."