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018 - How to use your ethics to beat the big brands

If you are a vegan business, how do you compete with the big brands launching products into the vegan marketplace at the moment? The Vegan Galaxy chocolate bar, the Greggs Sausage Roll – they have years of brand recognition, huge marketing budgets and agreements with retailers to get the best shelf-placement?

Trying to beat them using their rules isn’t going to work. You can’t just say you make a better product because they can use their marketing power to convince customers otherwise. But you have three advantages over these brands: your ethics, your knowledge of vegan customers and your mission. You have a burning desire to create a fairer, cruelty-free world. You can connect with your customers in a way they simply cannot: when you have a vegan business, lives are literally at stake.

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Full episode transcript

Hello and welcome to episode eighteen of The Vegan Business Tribe Podcast with myself David Pannell, co-founder of Vegan Business Tribe.  If you have a vegan business, or are thinking of starting one, then Vegan Business Tribe is here to support and inspire you not just to build a vegan business, but to build a SUCCESSFUL vegan business.
 
And if you want to go beyond the podcast and connect with our community of like-minded vegan entrepreneurs then head over to Vegan Business Tribe .com where you can get new free content, interviews and articles every week – or if you want more support, and at the same time support us, then you can also join our paid Vegan Business Tribe membership.  And this means you can attend our online networking events where you can meet other vegan business owners, get support from Lisa and myself in the forums or even study our vegan marketing course.  And we’re always really grateful to our paid members because they are the people who let us keep recording this podcast every week and putting out all our content and just generally doing everything we can to support vegan businesses.  So if you are on the same mission then go check out our membership site also.
 
The topics for most of these podcast episodes actually come from questions that our Vegan Business Tribe members ask us, and today is no different. Because one thing that is holding back many vegan business owners is not wanting to go up against some of the big brands that are now entering the plant-based marketplace.  Even if you are not on social media, it has been almost impossible to miss some of the big brands that have launched vegan products this last year or so.  The Vegan Galaxy chocolate bar.  The Greggs vegan sausage roll.  The highstreet clothing chain New Look bringing out their vegan line.  Even luxury car manufacturers are offering vegan alternatives to leather interiors. 
 
The vegan and plant-based marketplaces have exploded, and big brands are taking note.  It’s seen as a really hot sector that will keep on growing.  Even business magnate and star of The Apprentice in the UK,  Lord Allan Sugar, is backing and investing in vegan businesses. He was quoted as saying this: “From a business point of view one can’t blame companies, including our own, for jumping on the bandwagon and starting to produce vegan products. That’s exactly why we are doing this. That’s how you remain in business.  If there is a demand for a new kind of product like a vegan item then of course you need to cater for it, and those that haven’t will fall behind, it’s as simple as that.”
 
Now, that was Lord Allan Sugar, one of the biggest names in business in the UK backing plant-based, but did you hear what was missing from his reasons for getting into plant-based? He actually talks about jumping on the bandwagon.  He talks about catering for a demand so you don’t fall behind.  Did you hear him talk about him backing vegan to not kill animals?  No, of course not.  That’s not why he’s interested.  Did you even hear him say we need to move to plant-based for health reasons or for the environment?  Again, no.  Now compare that with YOUR reason for having a vegan business. Did you do it just to jump on the bandwagon, or are you doing it to make a difference in the world? To align how you make a living with your own personal ethics?  And if you and Lord Sugar were to sit down next to each other and tell a group of vegans why you got involved in the vegan sector – which do you think your customers would connect with?
 
Most large food manufacturers now have a ‘head of plant-based’ – and take notice, that’s not ‘head of vegan’, but ‘head of plant-based’.  And the reason behind that is simple: these companies are looking at people like Beyond Meat, Oatley and Meatless Farms disrupt the market.  They are seeing the huge customer bases they have built and how they are taking spend away from animal-based products.  Remember: 93% of Beyond Meat’s customers are meat-eaters, just, now, they are eating less. So of course, in this situation the companies are going to try and bring out their own plant-based product to win some of these customers back, right?  The biggest milk producer in the UK, ARLA recently launched their own oat-drink brand Jord, to win back the customers they are losing to plant-milks.  But you won’t see any mention of Arla on the packaging or the Jord website.  Alpro – again their plant-milks and yoghurts are loved by vegans – but Alpro is owned by Danone, France’s biggest dairy producer.
 
And in conversations I’ve had with brand managers of the big multi-national food manufacturers, they have openly said that ‘vegan attracts a premium’ – what do they mean by that?  Well, it means they will happily charge more for their plant-based products, not because they cost more to make, or the ingredients are more expensive, or because they are putting money back into changing the industry, but simply because they believe consumers will pay more for plant-based.  And if you are at the start of your vegan or plant-based journey, then you probably will.  If you have just turned vegan and you are missing your favourite food, then you will pay £3 for a bar of Vegan Galaxy Chocolate. But how long will that last?  How long will you keep paying a premium for items in your weekly shop?
 
The reason companies have been getting away with charging more for their plant-based alternatives, so far, is because we have all grown up with these brands.  They have HUGE brand recognition, we have developed relationships with them and they have hooks in our subconsciousness from a lifetime of advertising.  And as consumers, we WANT these brands to transition with us.  In the UK, the majority of vegans are recent converts, and by recent, I mean in the last five years, and many want to continue their relationships with the brands they know and trust. And these brands bringing out plant-based versions of their products, it allows them to do that.  But, again, usually at a premium. Now, I am actually an advocate of big brands bringing out plant-based options and versions – everyone’s vegan journey starts in its own place. And if trying a dairy company’s oat-drink is someone’s first positive exposure to a plant-based alternative, then that is just another potential future vegan convert.  Few people transition overnight, I took nearly 10 years myself of going from meat-reduction to diary avoidance to a plant-based diet to eventually becoming consciously vegan.  And it was things like the fast-food chain veg-alternatives that helped me on that journey.  However…  that route took me ten years.  Why?  Because I didn’t engage with the ethics of what was on my plate.  The brands didn’t encourage me to.  The dairy companies didn’t want me to ditch their products entirely and certainly were not going to educate me on what really happens behind closed doors in their dairies.  The fast-food chains didn’t want me to stop visiting them entirely and find other more ethical places to spend my money, they wanted to give me just enough to stay a customer while catering for my changing diet.  And the word that we keep coming back to here IS ethics.  And I am not saying that all large companies are unethical, but if you are going to go toe to toe with them, you know it’s one place you have a good chance of beating them. YOU share the ethics of the people you are selling to.  The big brands, when they are selling to vegans, don’t.  They might have run focus groups and surveys so they know what vegan’s ethics are, but I’m yet to see a big brand launch a vegan product and donate a percentage of their sales to animal shelters.  They think they know what vegans care about, which is why Colgate launched their vegan toothpaste in a specially-developed compostable packaging, because vegans care about the environment, right?  But that’s also why it cost £5 a tube.  Because ‘vegan’ also ‘attracts a premium’, remember?
 
If you are vegan yourself, and you’re selling to vegan consumers (or people who are somewhere on their plant-based journey) then you are always going to be able to connect with your customers through your ethics where the big brands can’t. 
 
Now, I know this IS a daunting concept.  If you’re a local vegan bakery in the UK for example, how do you compete with the likes of Greggs and their vegan sausage roll who are on every street corner?  And it always pains me a little when I see a vegan business close down and in their farewell post they say that they have achieved their mission – that when they opened 5 years ago they were the only place you could get vegan brownies for example, and now you can buy them in Marks and Spencers and all the high street chains, so they can’t compete any more.  And I know that this is the company looking for a silver lining to going out of business, and huge respect to you if you’ve gone through that journey yourself, but high street chains all selling vegan options isn’t mission complete.  Yes, getting plant-based food onto the menu in the biggest of stores is a huge win.  Removing any animal products from the supply chain, and be that in food, or fashion, or even services that companies run – all that is everything we’re here to do.  But just because the biggest brands are doing this, it doesn’t mean the mission is complete for vegan companies. And it doesn’t mean that you can’t, or shouldn’t, go into fierce direct competition with bigger brands.
 
Remember, as a vegan business, you have a burning desire to make the world a fairer, cruelty-free place.  For you, lives are at stake.  That really gives you a reason to succeed.  But how can you go up against companies that have years of brand recognition, huge marketing budgets and agreements with supermarkets to get the best shelf-placement?  Well, you can because you have three advantages over these brands:  your ethics, your knowledge of vegan customers and your mission.  YOU can build up a really loyal follower base of people who are not motivated by money but are motivated to follow you because they believe in your mission and the change you are trying to make in the world.  And if you haven’t listened to episode 6 of the podcast, you might want to jump back and listen to it because that’s where I talk all about how to build a ‘tribe’ of core customers who believe in your mission.
 
So, back to the question – how do you use your ethics to compete against these big brands?  How can you be what they call a ‘challenger brand’ and actually convince a plant-based or vegan customer to buy your product over a vegan product from a big brand that they already know and recognise?  Well, let’s take a look at an example.  I’ve already mentioned the launch of the Vegan Galaxy chocolate bar – it SOLD out across the country, people were buying whole boxes – even at £3 a bar – and posting photos of themselves on social media much to the annoyance of other vegans who had only found an empty shelf.  If you’re a vegan chocolate manufacturer, how can you compete with someone like Galaxy launching a vegan bar?
 
Well, let’s compare the Vegan Galaxy with a UK company called MooFree.  Now, you might or might not have heard about MooFree before.  But they ALSO make amazing vegan chocolate.  You will ALSO find them in the supermarkets, but probably not in the main chocolate section – they don’t have the relationships with the supermarkets to negotiate that kind of product placement, but you will find them in the ‘free from’ section.  Now, if you were a recent vegan convert, and you had to choose between buying the Vegan Galaxy, that you recognise, and a MooFree bar, that you don’t – then 9 times out of 10 you will pick the Galaxy bar.  Even at £3 a bar. They have brand recognition.  They have spent a lot of money on packaging design and fancy graphics.  What Galaxy don’t have, however, are the same ethics of their customers.  And they are banking on you not noticing that.  Galaxy is owned by Mars Inc.  What about the hundreds of thousands of litres of milk that they use in their main products?  Or does the compostable packaging and swish graphics distract us enough away from thinking about that?  Now let’s just take a look at MooFree as a company instead.
 
MooFree have a mission to show that acting in an inclusive, human way is easy.  They say that only by looking at the world DIFFERENTLY, at challenging what is normal, that is the only way to bring about change.  They only have vegan factories that send zero waste to landfill. All their ingredients are ethically and sustainably sourced. And they also work with a charity that helps people with disabilities get into work.  The last time I spoke with them about 20% of their employees were people with autism. They hold two festivals a year, MooFest and MooMass, just for their employees and their families.  And if you want more, just go take a look at their ethics section on their website, it runs over several pages.  Now, once you know all this, as an ethical vegan going out to buy chocolate, where are you more likely to put your money?  When you know that you can get amazing chocolate – and MooFree do make amazing chocolate, trust me – and at the same time support a company that is on a real mission, that is doing all this great work, then you’re going to buy that product over the big brand. 
 
The reality is though, this is a longer game to play.  As I said, you will make that decision ONCE YOU KNOW about a company’s ethics, and getting that over to customers takes time. Remember, the big companies have brand recognition that has been built up sometimes over decades, they connected with us in our childhood, and trying to beat them using their rules isn’t going to work.  You can’t just say you make a better product than them because they can use their marketing power to convince customers otherwise.  However, you can have a better story to tell, but this means it’s going to take more time to get that story out there.  There’s a reason that YOU didn’t hear about Oatly until the company was 20 years old.  Yes, if you didn’t know, Oatly started out in the 90s. They spent years only being sold in health food shops until they made a conscious break into supermarkets.  The same with MooFree, the more people who learned about and aligned with their mission, the more the word spread and the more they built their tribe until they had the customer base to get stocked in the supermarkets too.  They haven’t built a business, so much as a movement.  And this is why it’s so important that you educate your customers about why you are doing what you do, to talk with them about your ethics and your campaigning.  It might be through your social media, or your email marketing, or even by having open days and getting people to your premises to learn all about your business and what you stand for. Because once a consumer connects with your ethics, and once they know that you share the same ethics that they do, this is where you can and will win against the large brands coming into the marketplace. 
 
Look at MooFree – unless you are vegan or have a reason to buy chocolate made without dairy you won’t have heard from them.  But their story spreads even in the face of the money that bigger brands put into their marketing because they connect with their customer’s ethics in a way Galaxy chocolate never will.  And if you sell a service rather than a product, then this message is just as important.  In fact, I could argue it’s more important.  If someone is buying an intangible product, so something they can’t actually get their hands on, then knowing that their money is supporting a company that aligns with their ethics is what will keep them buying.  That’s why we’re seeing vegan accountants, vegan virtual assistants, even vegan plumbers all finding plenty of work in what are all very crowded marketplaces.  They are connecting with their customers in a way that means those customers will keep coming back, because they can demonstrate that they are ethically aligned to them.
 
Another great company that you can learn from is Viva La Vegan Clothing, who again I’ve mentioned before on other podcasts. You can buy vegan clothes from many high street clothes shops now, but none have the ethical credibility of Viva La Vegan. Their founder Jay Charlton created a clothing brand that embraces fashion as activism which allows them to compete against much bigger, less ethical brands.  Follow them on social media and you will see Jay delivering a truckload of spoiled vegetables collected from food banks to the local animal sanctuary. Their clothes have ethical vegan slogans that start conversations, not just a picture of an avocado that you might find on a ‘vegan’ t-shirt in a supermarket who are just jumping on a bandwagon, not ethically connecting with their vegan audience.
 
And you can build that connection away from where you’re in competition with big brands.  You might first meet a new customer at a vegan fair, or on one of our Vegan Business Tribe online networking events, and because of the way we now shop, you can deal direct with your customer in your own buying environment.   If you do sell a physical product, it’s easy to send that product direct to your customers without always having to go through retailers.  In the last podcast I talked about One Planet Pizza and their ‘direct-to-consumer’ model.  They send out FROZEN vegan pizza direct to the consumer, and it arrives still frozen, skipping the supermarkets.  I order a number of vegan products direct from the companies themselves rather than browsing at a retailer and they turn up on my doorstep the next day.  If I order direct they don’t have to fight with the big brands to be put into my basket.  They are companies I believe in, that I have got to know and, I KNOW, are helping to create the vegan world I want to see.  I follow them on social, I recommend them in Facebook groups when people ask for recommendations, and I’ve even mentioned a couple of them in my podcasts meaning I’m spreading the word about them with other people who I know will also align with their ethics.
 
Right now, especially, is a really good time to start highlighting your ethics as a vegan business.  Following the first pandemic lockdown, when Lisa and I were able to return to our local vegan cafe the owner told us about how many new faces she’s had walking through her door.  They were all people who were not vegan, but the pandemic had made them look closer at our relationship with animals and they were changing their buying behaviours as a result.  So take a look at your business, and I suspect that if you ARE a vegan company, then one of the reasons you started a vegan business was to aligning your personal ethics with how you make a living.  So how can you bring the ethics of what you do front-and-centre in your business?  How can you communicate them with the people you want to sell to?  And if this actually makes you stop and think, ‘actually, I’m not sure how I CAN share my ethics, because I’m not sure what ethics my company has’ then this is actually a really worthwhile conversation for you to have with yourself or your team.  If your company ISN’T connected with the vegan cause in any way, then how can you change it so it is?  If your company ISN’T looking to make the world a better place, then what can you do with that to connect with the ethics of the people you are looking to sell to?  How can your business actively move the vegan cause forwards so that you can prove to your customers that you are on the same mission as them?  Because this is what will separate you from the big brands who are not.
 
OK, so let’s wrap up with a quick bullet point list reminder of what we’ve covered in this episode:
 
  1. A lot of big brands and companies see ‘vegan’ as a hot sector they need to be involved in, without really understanding it – and this is going to just keep growing.
  2. Most of these brands, however, are launching plant-based products not to change the world, but to make money from a new consumer trend.  Remember that comment about ‘vegan attracting a premium’, that’s how they think. THIS is where you can differentiate yourself, and this is where you can win.
  3. These large brands have huge brand recognition, huge marketing budgets, and influence over where their products are seen.  You can’t beat them if you try to play their game.
  4. Remember, trading on your ethics instead of your marketing budget takes time to educate customers and build that following.  Oatly are a 20-year-old overnight success.  It took MooFree 10 years to get into all the major supermarkets and you STILL might not have even noticed them yet.
  5. Once you connect with a customer ethically, they are much likely to stay a customer.  Even if that means they order from your website direct instead of buying your product from a store.
  6. You don’t need to make a physical product to win on ethics.  If you are vegan and you need a plumber, wouldn’t you rather give your money to a plumbing company that shares your same ethics and are working towards bringing about a vegan world just like you are?
  7. And if this episode is making you scratch your head, because you’re not sure if you have any ethics to shout about – then what are you going to do about that?!  Can your company start using some of its resources to support a vegan cause? Can you launch a side-gig that is campaign-led or actively creates more vegans?  Can you and your team just head out onto the streets once a month leafleting or chalking vegan messages on the pavement?  How can you make your company ethically align and connect with your customers in a way that the big brands and those just jumping on the vegan bandwagon simply can’t?
 
As always, I hope this episode has made you think.  Because companies grow all the time even when they are in a marketplace with HUGE competitors. You CAN stand against big brands.  Sometimes you will carve out your own loyal customer base that will give you everything you need, and other times you might completely disrupt the marketplace or create an entirely new sector.  Just 5 years ago you might have struggled to buy plant-milk in the supermarket and it’s only now that the dairy companies are trying to respond to the change in demand by launching their own.  But remember that you have something they don’t have, that burning desire to create a fairer, cruelty-free world. When you have a vegan business, lives are literally at stake.
 
So thank you so much for listening, as always I really appreciate you giving me your time.  And don’t forget to check out the website also at veganbusinesstribe.com because this is where you can get involved with our full vegan business community.  And I would love for you to be part of it so that I can introduce you to other people who share your vision.  Because together we are working towards a vegan world by changing the business landscape. 
 
And, as a final favour just before you go, don’t forget to tap the subscribe button, or to leave us a five-star review if your platform lets you do that, or even share a link to this episode with others, because that’s how you can help us reach more people and get to that vegan world just that little bit quicker.  Thank you for listening, and I will see you on the next one.

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