Running head: MARKET RESEARCH: MEATLESS PRODUCTS

Market Research: Meatless Products Jennifer Giannosa Marketing Research BUS666 Dr. Laura Pogue

Disclaimer: This study is a student research project designed to be a learning experience for students in the Master of Business Administration Program at the Center for Graduate Studies of Baker College. The study was not performed by Baker College, the Center for Graduate Studies, or its faculty. Accordingly, neither the College, the Center, nor its faculty endorses the study's methodology or conclusions. The College does not authorize the use of its name or the names of the Center for Graduate Studies or members of its faculty in connection with any publication or dissemination of this study or the results of this study.

Market Research: Meatless Products

Table of Contents Executive summary ......................................................................................................... 4 Introduction ...................................................................................................................... 5 Research Objective ......................................................................................................... 5 Research Design and Methodology................................................................................. 6 Questionnaire Design ................................................................................................... 6 Sampling Plan .............................................................................................................. 7 Data Collection and Entry............................................................................................. 8 Data Analysis and Findings ............................................................................................. 8 Primary survey results .................................................................................................. 8 Hypothesis 1 ................................................................................................................ 9 Hypothesis 2. ............................................................................................................... 9 Hypothesis 3 .............................................................................................................. 11 Recommendations......................................................................................................... 13 Limitations ..................................................................................................................... 14 Sampling Errors ......................................................................................................... 15 Nonsampling Errors.................................................................................................... 15 Appendix A .................................................................................................................... 17 Appendix B .................................................................................................................... 21 Graph 1 ...................................................................................................................... 21

Market Research: Meatless Products

Graph 2 ...................................................................................................................... 21 Graph 3 ...................................................................................................................... 22 Graph 4 ...................................................................................................................... 22

Market Research: Meatless Products

Executive summary It was the research objective of this market research study to evaluate consumer interest in meatless food products. Secondary research was collected from various sources including Forbes and the Vegetarian Resource Group, a special interest group. Primary target markets explored include vegetarians, vegetarian-inclined consumers, and average US consumers. Initial, yet limited secondary research indicates a growing trend in vegetarian and vegetarian-inclined life styles. Findings suggest additional research be conducted. Survey design improvements and the use of focus groups for additional consumer insight are discussed. A revised quantitative survey distributed to a representative sample is highly recommended. The designation of three major target markets is suggested. Overall extensive limitations significantly reduced the scope of the research and its final conclusions.

Market Research: Meatless Products

Introduction This study analyzes the level of interest in meatless food products. The purpose of this report is to present the findings of both secondary and primary research including a self-administered online survey. Secondary research data has been compiled and analyzed prior to collection of primary data. Results analyzed whether the US market would support increased marketing efforts of these products. The primary target market explored includes average US consumers as well as vegetarian and vegetarian inclined consumers. Offering an alternative ingredient list, Quorn brand uses mycoprotein as opposed to tofu, a common main ingredient in meatless products. A high-protein food made from a type of cultivated fungi, this meatless ingredient was introduced in the US in 2002 (Environmental Nutrition, 2002), receiving positive consumer adoption within the vegetarian community. New products recently offered include Meatless Meatballs, Garlic n Herb Chickn Nuggets, and Turky Roast. Research Objective The research question can be described as, Is the amount of US consumers interested in meatless food products increasing? Answering the research question will provide Quorn executives with insight into future marketing efforts. Understanding the future of the meat substitute food product market is critical to the success of this firm. Knowledge of future product demand and consumption levels of meatless products will better prepare the company for market opportunities and provide competitive advantage. The amount of competitors offering meatless products has increased over

Market Research: Meatless Products

the past 10 years. Gaining insight into the future interest in meatless products may offer new opportunities such as expanded product lines, increased product distribution, and a modified marketing plan. Research will also provide insight into newly emerging target consumer groups. Meatless product users can be categorized into two basic groups, vegetarian and nonvegetarian. Both groups were considered in this research study. Information taken from secondary sources attempted to uncover the degree to which meatless products are gaining in popularity. This research was also used to evaluate self defined vegetarian consumers and their preferences towards meatless food products. Sources included popular business news magazine Forbes, University research studies as well as primary research studies conducted by special interest groups. The following hypotheses were tested. Hypothesis 1: US consumers interested in improving their eating habits are likely to purchase meatless food products. Hypothesis 2: The number of US vegetarian or vegetarian inclined consumers is increasing. Hypothesis 3: The amount of consumers interested in improving their eating habits by reducing the amount of meat consumed is increasing. Research Design and Methodology Questionnaire Design Using descriptive research, primary research collection attempted to create data structures which described the attitudes, intentions, preferences, and purchase

Market Research: Meatless Products

behaviors of average US consumers regarding their interest in meatless products. The survey focused on quantitative research acquisition in order to make predictions and gain insight into the relationship between average consumers and their propensity to purchase meatless products. Appendix A shows the survey distributed to respondents. In order to most effectively capture state-of-mind and state-of-intention data, a free choice scale with a neutral response choice was used. In addition, in order to maintain objectivity and capture both positive and negative raw responses, scale development criterion was balanced. This means that the questions were designed to capture positive as well as negative raw responses and maintain objectivity. Only individuals were solicited to take the survey. Using a predictive type questionnaire, an attempt to collect a wide range of stateof-intention data regarding the purchase of meatless food products was studied (Hair et al., 2006). The information research objective can be described as: To collect data that will enable the researcher to predict the potential interest of average US consumers in purchasing meatless food products. A behavior intention scale was used to evaluate the degree to which consumers are interested in purchasing meatless food products. This type of scale is especially good at predicting consumer intent in purchasing frequently purchased as well as durable consumer products (Siciliano, 1993). Sampling Plan The type of sampling method used was convenience sampling. As defined by Hair et al., this sampling method is a nonprobability sampling technique where samples are drawn at the convenience of the researcher (2006). Commonly used in the beginning stages of research, this type of research allows for pretesting of

Market Research: Meatless Products

questionnaires as well as construct and scale measurement development. This method of sampling suffers from the fact that the data collected cannot be generalized to the defined target population. Additional information is provided in the limitations section of this paper. Data Collection and Entry In order to gain deeper insight into the interest in meatless products of average US consumers, a survey was given to 34 US consumers. Data was distributed via an online questionnaire website to individual consumers. Emails and web postings contained a short message which prompted users to click a link and complete a survey. Although web postings were exposed to a high amount of individuals, overall response rate was low. The pool of potentials respondents was over 300 individuals, yet less than 40 responded. Conversely, email response was 100%. The original sampling plan goal was 50 individuals, yet due to time constraints once 34 responses were obtained the survey was closed. Data Analysis and Findings Primary survey results Via the primary research survey, it is clear that respondents show an interest in meatless products. Conversely, it was out of the scope of the primary research study to conclude whether or not the level of consumers interested in meatless products is increasing. The age distribution was primarily in the 26-34 year old range with 20 respondents. Respondents were evenly distributed by gender. While only one respondent was vegetarian, all others ate some type of meat, with lamb being the least

Market Research: Meatless Products

popular meat type. When asked, How satisfied are you with your current eating habits, most respondents were either satisfied or neutral. Only about 18 % of respondents were unsatisfied or very unsatisfied with their current eating habits (see graph 1). Hypothesis 1 US consumers interested in improving their eating habits are likely to purchase meatless food products. In order to answer the question of whether people interested in improving their eating habits are likely to purchase meatless products, results of those respondents who indicated an interest in improving their eating habits were analyzed. Of the total 34 respondents, 28 indicated an interest in improving their eating habits. Of these 28, 8 indicated they were likely to try meatless products, however, 15 indicated they had already tried them (see graph 3). It is clear that with an overwhelming 82% of respondents interested in improving their eating habits also interested in purchasing, or already having purchased meatless products, the hypothesis can be confirmed. However, because of the small sample size, this hypothesis cannot be applied to the target population. Hypothesis 2. The number of US vegetarian or vegetarian inclined consumers is increasing. Initial secondary research has uncovered a growth trend in vegetarian and vegetarian inclined life styles. This would support the initial hypotheses number two and three. According to a Mintel Consumer Intelligence report regarding non-

Market Research: Meatless Products

10

vegetarians, around 38.6 to 48.2 million adults, or 20-25% of the US population is vegetarian inclined (2001). These consumers still eat meat, yet make a point to increase their amount of meatless meals. However, is this number of consumers growing? Will an increasing customer base support further marketing and production of meatless products? As an article in Forbes explains, America is slowly turning vegetarian. (Tatge, 2004) Up to one-third of Americans are trying to reduce the amount of meat consumed in their diet (Tatge, 2004). Further, Market research shows that the number of consumers who lean toward some sort of vegetarianism is increasing across all age groups. (Tatge, 2004) New packaging and product offerings of meatless food products, a steady flow of medical studies, and changing government labeling requirements have all contributed to increased consumption, decreased prices, and overall increasing acceptance of vegetarian meatless products. A poll conducted by Harris Interactive, a well known custom market research provider, was completed for The Vegetarian Resource Group (2011). The survey was created in order to estimate the number of US vegetarians. Interestingly, the poll classified pork, lamb, beef and other meat products as meat, with lamb and seafood being separate. Of the 2,397 US adults polled, 3% were classified as vegetarians while 8% were classified as those not eating meat. It is important to include in the study those who may not be classified as vegetarians yet make a choice to cut down on their meat intake. These consumers may represent a large portion of future sales of meatless products.

Market Research: Meatless Products

11

Although it is clear that secondary research confirms a growing trend in vegetarianism, confirming this hypothesis via primary research is out of the scope of this research project. However, via the primary research survey it is clear that consumers are interested in meatless products. In fact, over 50% have already tried them. When asked if they have every tried a veggie burger from a fast food restaurant, the results were surprising. Almost 40% of respondents have ordered veggie burgers from fast food restaurants. Hypothesis 3 The amount of consumers interested in improving their eating habits by reducing the amount of meat consumed is increasing. In the primary research survey, when asked how interested respondents were in improving their eating habits, an overwhelming 83% were either interested or very interested. The mean value for this question was 3.77 indicating that more respondents were interested rather than neutral in regards to improving their eating habits. This difference could indicate that respondents may not make special sacrifices in order to improve their eating habits. However, they may be susceptible to trends or highly effective marketing. The next question was more specific and asked, How interested are you in improving your eating habits by reducing the amount of meat in your diet. Graph 2 illustrates that the results were rather spread out, with a slightly higher amount of respondents uninterested. This indicates that although most respondents were interested in improving their eating habits, they may not be interested in doing so by

Market Research: Meatless Products

12

reducing the amount of meat in their diet. This could indicate a problem in marketing meatless products to nonvegetarians. Respondents were also questioned on the amount of meatless products they currently purchase (see graph 4). Seven respondents or around 20 % indicated that they have never purchased meatless products. Another 20 % purchase such products less than once per month but at least once per year, yet thirty-five percent indicated they purchase meatless products 1 to 5 times per month. This amount indicates a strong potential customer base. It also indicates that a large amount of consumers are already regularly making purchases of meatless products. Strategic and targeted marketing efforts may be able to increase the amount of meatless products purchased by the target group. Surprisingly, when asked if they have ever ordered a veggie burger from a fast food store, almost 40% answered yes. This high amount indicates consumer curiosity in meatless products. However, other respondents indicated they had no intent on reducing the amount of meat in their diet, or trying meatless food products. This indicates a clear divide in target groups where some consumers are interested, and others have no interest at all. When considering whether increased marketing efforts will be supported by a strong market base, one must consider the demographics of the target markets. Does the target market have substantial purchasing power? The information offers interesting insights and potential marketing techniques which, when used properly, may increase product adoption. The largest group of vegetarians and those who dont eat meat are females between the ages of 18-34 (The Vegetarian Resource Group, 2011). It is also

Market Research: Meatless Products

13

explained that these females are generally from lower income households. Yet, not only are self-designated vegetarians a source of sales for meatless products. Sales from the growing amount of baby boomers interested in health products could help fuel sales of meatless products (Forbes, 2004). Responsible for around 50% of the discretionary income, this should also be a targeted consumer group. Overall, the answer to hypothesis 3 is inconclusive. Additional studies are required in order to effectively answer the research question. Focus groups which introduce consumers to Quorn products and evaluate their acceptance of these products will help to uncover the answer to this research question. Conducting research on consumers who have never been introduced to meatless products will effectively evaluate their response to marketing efforts. Recommendations It is the recommendation of this marketing research study that additional in depth research is conducted to uncover exact market growth predictions. The results of the initial primary research survey has concluded that a second survey be constructed and distributed to a larger, more representative sample size. Although the primary research survey conducted used the population title, average US consumer, it is recommended that subsequent surveys target a population of self-defined health conscious consumers. The survey should be broken down and directed towards three different target markets which include vegetarian, vegetarian inclined, and health conscious. It is clear that the level of interest in meatless products gradually decreases in these three groups, respectively.

Market Research: Meatless Products

14

In depth focus groups are highly recommended for this type of product. Taste is an important aspect of any food product. Focus groups will allow taste testing and subsequent rating of product interest for customers who have never before tried meatless products. This will also help determine level of future interest and consumer acceptance of this product. Focus groups should also be broken down into the three different target groups previously designated. Conducting quantitative surveys on a representative sample of the US population would allow for greater insight into the current and potential increased consumption of meatless products. Improvements in survey design are suggested. Subsequent surveys should question respondents on their past and current purchase history of meatless products. Respondents should also be directly questioned regarding their estimated future purchase level of meatless food products. Including questions regarding overall taste satisfaction of meatless products will offer additional insight. Further study of the target group women aged 18 to 34 is highly recommended as is focused research on the designated baby-boomer target group. Consideration of target group purchasing power and a study of price points and demand curve estimation are suggested. Limitations Lack of resources including budget and time caused extensive limitations. The geographical scope of the research project was limited mainly to the state of Michigan; it is therefore not generalizable to the entire US population. The convenience sample was not representative of the target population.

Market Research: Meatless Products

15

Sampling Errors Some limitations exist because of the type of sampling method used. The sample obtained via convenience sampling may not accurately represent the population (Hair et al. 2006). Unfortunately, sample size formulas which help make estimates about the target population cannot be used with nonprobability samples. The primary research survey sample used was highly limited due to lack of resources. The sampling results cannot be used in order to make statistical conclusions about the true population parameters. It is clear that the data is highly outweighed by the amount of 26 to 35 year olds who took the survey, which stands at almost 60 %. Therefore, the data obtained via this sample cannot be generalized for the target population. Conversely, this method is often used in the early stages of marketing research and is therefore appropriate in this initial study. Nonsampling Errors The use of self-administered surveys resulted in potential survey errors including response errors and high nonresponse rates. Potential confusion in the survey may have resulted, as respondents may have confused the phrase meatless products in some questions. The planned sample was at least 50 respondents, yet due to nonresponse error, less than this amount was realized. Therefore, nonresponse error occurred. Lack of access to internal data significantly limited the scope of the research. Internal data would have provided important information such as key marketing activity reports, customer knowledge, and inside financial data (Hair et al. 2006).

Market Research: Meatless Products

16

References Environmental Nutrition. (2002). Meatless Quorn comes to American amid

considerable controversy. Retrieved from the Gale Online Database. Hair, J., Bush, R., Ortinau, D. (2006). Marketing Research; within a changing environment. McGraw-Hill/Irwin. New York, NY. Siciliano, T. (1993). Purchase intent: Facts from fiction. Marketing Research. 21, p 56. Tatge, M. (2004). Vegetarian sales get meaty. Forbes. Retrieved June 2nd, 2011 from www.forbes.com The Vegetarian Resource Group. (2011). How many vegetarians are there? Retrieved June 14, 2011 from: www.vrg.org. US Census Bureau. (2010). US and world population clocks. Retrieved June 15, 2011 from www.census.gov.

Market Research: Meatless Products

17

Appendix A

1. Please choose your age range. Under 18 18-25 26-35 36-45 46-55 56-65 Over 65 2. Please choose your gender. Male Female 3. What kinds of meat do you NEVER eat (check all that apply)? I sometimes Poultry Beef Pork Fish / seafood Lamb eat all of these types of meat.

Market Research: Meatless Products

18

4. On average, how many times per day do you eat meat as a part of a meal? more than 5 4-5 3-4 2-3 1-2 0-1 0 5. How satisfied or unsatisfied are you with your current eating habits? very satisfied satisfied neutral unsatisfied very unsatisfied 6. How interested or uninterested are you in improving your eating habits? very interested interested neutral uninterested very uninterested 7. How interested or uninterested are you in improving your eating habits by reducing the amount of meat in your diet? very interested interested neutral uninterested

Market Research: Meatless Products

19

very uninterested

8. How strongly do you agree or disagree with the following statement: "The amount of high fat meats consumed is contributing to the obesity problem in America." strongly agree agree neutral do not agree strongly do not agree 9. How likely are you to try meatless food products? (These products are made from ingredients such as soy or vegetables and are made to taste, appear, or have a similar texture to meat.) already have tried definitely would try (90-100% chance) probably would try (50-89% chance) not sure probably would not try (10 - 49% chance) definitely would not try (0-10% chance) 10. How often do you purchase meatless food products? never have purchased less than 1 time per month (but at least once per year) 0 to 1 times per month 1 to 5 times per month 5 to 10 times per month

Market Research: Meatless Products

20

more than 10 times per month

11. Have you ever ordered a veggie (meatless) burger from any fast food restaurant? yes no i'm not sure

Market Research: Meatless Products

21

Appendix B Graph 1

Graph 2

Market Research: Meatless Products

22

Graph 3

Graph 4