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077 - Why VFC are giving their products away for free

Why Vegan Fried Chicken brand VFC decided to just give their products away. VFC made the headlines when they announced that they were giving their products away for free. Simply head to the supermarket, buy one of their products, upload a photo of your receipt and get your money refunded in full.

From the outside, this campaign seems like a fast track route to going bust with the consumer getting all the benefit and the company getting none. But dig a little deeper and you will find a clever strategy that overcomes a significant barrier for new customers, demonstrates to your retailer that the product is in demand, and might not be as expensive to run as you think!

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Episode transcript:

Hello and welcome to episode seventy-seven of The Vegan Business Tribe Podcast with myself David Pannell, co-founder of Vegan Business Tribe. And 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 I don’t know if you saw, but Vegan Fried Chicken brand VFC recently announced that they were giving their product away for free – yup, if you are in the UK you can currently go to your local supermarket, buy a box of their VFC bites, popcorn chicken or VFC fillets, then scan in your receipt and they will give you your money back. And so in today’s session, we’re going to be looking into why VFC are doing what seems to be a sure-fire way to make them go bust and why the idea isn’t so crazy as it seems.

But before we jump into that just a quick shout out to all our Vegan Business Tribe members – and if you are looking for help and support for growing your vegan business, or just if you want to get to hang out with other vegan business owners who are on the same mission as you are – then go check out veganbusinesstribe.com. Because that’s where you’re going to find loads lots more content, support and ideas to help you grow a successful vegan business. As a member you can join us on all our live online events and networking meet-ups with other vegan business owners, you get full access to our Vegan Business Tribe Academy with over 20 hours worth of video masterclasses, marketing courses, weekly articles and so much more to help you grow your vegan business. And it’s your membership that allows us to keep putting out this podcast every week, to keep offering our support and creating all our content as well the behind-the-scenes work that Lisa and I do championing the vegan business scene around the world. For many of us, having a vegan business is our form of activism, so if you are on the same mission as we are and you’re looking for support and to meet some of the most amazing, wonderful people you would ever want to meet – and I’m talking about our hundreds of Vegan Business Tribe members there – then I am formally inviting you to come and be part of this amazing vegan business community. Just head over to veganbusinesstribe.com, click the ‘join’ button on the homepage and you’ll see EVERYTHING you get as a VBT member.

So let’s get back to Vegan Fried Chicken brand VFC that I mentioned in the introduction, and take a look at why on earth have they decided to simply give away their products to free to anyone who wants them? Surely that’s just the quickest way to bankruptcy! Well, I hope you’ve eaten before we started today because there’s a good chance this session is going to make you hungry. And if you’re a regular listener then you will know that I’ve spoken about VFC a couple of times on this podcast before because they are one of my favourite vegan brands to have emerged over the last couple of years. Created by Veganuary and Veg Capital founder Matthew Glover and vegan chef Adam Lyons, VFC launched for Veganuary 2021 and in just a year and a half are now already stocked in more than 560 supermarkets across the UK as well as the online Vegan Kind Superstore as have just recently launched in the United States this year too. If you ever had a KFC in your pre-vegan days, then you will pretty much know what you’re getting with VFC. It’s pretty much the same taste but without the cruelty.

And, I get it, it’s harder to get excited about new vegan products than it used to be. All the supermarkets here in the UK now have their own plant-based in-house brands and if you head to the plant-based chiller you’ll get the choice of lots of different brands of sausages, burgers, meatballs and bacon and even more importantly they are all available at different price-points. From premium-priced independent products, mid-priced plant-based ‘alternatives’ from the large established food brands or budget supermarket own-label. And while this is great for people wanting to try vegan food, it also means that getting consumers excited about a new vegan product is hard.

The reason that I, as an ethical vegan, like VFC so much though is that a lot of the plant-based food you find in supermarkets now is just that, it’s ‘plant-based’. It’s been made by large food brands that consumers are already familiar with and presented as their plant-based ‘alternatives’. These companies are simply following a consumer trend, they have realised that more and more people are cutting down on eating animal products (for a whole wide range of reasons, from health to environment) and they don’t want to lose those customers. Even Lord Alan Sugar, the founder of Amstrad and host of the UK’s version of The Apprentice, said that companies who don’t respond to the rise of the vegan market will end up becoming like Kodak – the photography giant that failed to embrace digital photography. Lord Sugar, who has backed a number of vegan businesses himself, said that from a business point of view you can’t blame companies and businesses for jumping on the bandwagon and starting to produce vegan products, because catering to new consumer trends is how you remain in business.

But that means that the motivation of these companies to produce vegan products is very very different your’s and mine’s reasons for being vegan. Now, don’t get me wrong – it’s brilliant. The fact that in the UK, Burger King recently tried out a completely meat-free store in London for a month, and the fact that you can now buy vegan chocolate from the very same chocolate brands that you’ve grown up with, this is all great for normalising animal-free food. If we want more people to try vegan food then you need to let them do it without asking them to change their buying behaviour completely. But these companies are not looking to encourage customers to transition to an animal-free diet, on the contrary, they are looking to cater to the growing number of people who have already made the decision to eat less meat and dairy. In fact, I was at a food conference recently listening to a speaker from one of the big global food brands who have recently started producing a number of plant-based products. They spoke about the space that animal agriculture took up, about the resources needed, about how as the human population grows we need to find different ways to get protein because we’re running out of space. Not once did they talk about how their company was responsible for killing millions of animals and how that was wrong so they needed to do something about that. Never would they say that a consumer should stop eating animal products altogether, because even though they have produced some plant-based alternatives, animal products is where they make their real money. To them, they want to keep plant-based ‘alternatives’ as just that, alternatives in their own separate chiller cabinet away from their headline animal-based products.

And this is where companies like Vegan Fried Chicken, VFC, come in. VFC’s mission statement on their website reads: Ours is an act of positive rebellion against a system that has brought us climate change, environmental destruction, factory farming and slaughterhouses. We applaud those who fight serious injustice with placards and demonstrations, with letters to MPs. We salute those who take to the streets with megaphones or lock themselves to railings. OUR way to dismantle this destructive system is with great food. This is our sit-down protest.

Now, you might have been expecting something stronger. You might have been suspecting something along the lines of how killing chickens was bad. Well, as you go further along the VFC journey you’ll get all that. They have teamed up with vegan influencer Joey Carbstrong to go undercover and show exactly what happens in chicken farms, but we know as they do, that the biggest marketplace for vegan products are non-vegans. Beyond Meat even revealed that as many as 93% of the customers buying their vegan burgers were meat-eaters. In fact, you will have heard me say before that if you have a vegan business and you set out to just sell to vegans then you’ve kind of missed the point of having a vegan business in the first place. And VFC get this – unlike most of the supermarket’s own-label products and the large food brands bringing out vegan alternatives, VFC actively WANT consumers to ditch animal-based products and are ‘unapologetically vegan’ while doing it – in fact, VFC completely banned the use of the phrase ‘plant-based’ in their marketing.

So how do you get people to make that change? How do you get consumers to try a vegan product, especially when there are so many preconceptions about what vegan food is going to taste like? People who are not familiar with how plant-based food has evolved don’t realise how close vegan food can be to eating animal meat if that’s the experience you are looking for – but without an animal having to suffer and die. In fact, you’ll see posts in vegan Facebook groups from people who serve up vegan sausages and chicken nuggets to their meat-eating families without telling them and they don’t even notice the difference. So getting people simply to TRY your product is often one of the last barriers you have to overcome as a vegan business. We’ve got many Vegan Business Tribe members who KNOW that once they get their product into the hands of someone, that person becomes a customer for life, and so they hit the local vegan markets and fairs so they can give away free samples on their stands to get people to try it. We also saw the vegan charity VIVA! running their ‘Viva! La Burger’ tour around the south of England where they racked-up in a different city each day with their burger van, cooked-up Taste & Glory vegan burgers and gave them out for free to the public to show how tasty vegan food now is.

So VFC are basically doing the same as this but on a much bigger scale. If you go down to your local supermarket, buy any of their products and then upload the receipt to the dedicated Try VFC For Free website then they will refund the cost of that product directly back into your bank. Now, if you are listening to this on play-back then the offer is running for three months, from the start of May until the end of July 2022 and is limited to one product per household so don’t try to do this if you’re listening past that date. But doing this for three months is surely still going to be a huge cost to VFC – and remember, these guys have only been going for a year and a half so they don’t have the cash reserves of the big food companies behind them.

Well, is it really going to be that huge a cost, or is it a very clever business strategy? If you listened to last week’s session, so episode 76, we talked about how to convert customers. And part of that was identifying what ‘gates’ someone has to go through on their journey to becoming a customer so that your marketing can direct people through those gates quicker. And often, all the people need who are right at the bottom of your funnel, those ‘almost but not quite’ customers, is a little nudge to get them over the line. This is a perfect real world example of that.

VFC really believe in their product. In fact, VegNews rated it as the number one vegan chicken brand in the US. So when you have this confidence, you know that once people try it, they will like it – and that trying it is likely the very last gate someone needs to go through on their journey to become a paying customer. So a campaign like this, refunding the customer when they buy your product for the first time, means that someone has nothing to lose from trying it.

But it’s also a good strategy to show the retailer that your product is in demand also. If you can increase the sales of your product through a retailer, like a supermarket, then that puts you in a stronger position with that retailer. A lot of people think that getting a deal with a major supermarket means that you’ve made it, but usually supermarkets will put your products on sale for a trial period in a selected number of their outlets first to see how it sells. If you want them to keep stocking your product, then you need to make sure it sells during this probation period rather than just hoping that people will pick it up from the shelves themselves during their weekly shop. So running a promotion like this, where you refund the cost of that purchase, can give you a spike in sales and demonstrate to the retailer that your products are selling well – and if they ARE selling well then you are in a stronger place to negotiate for wider distribution and to get them to agree to take on other products in your range.

So that’s all well and good but it still leaves the question of if a promotion like this is financially viable? Surely it’s just a straight route to going bust? Because not only are you paying all the costs of making the product, paying for the packaging and all the shipping to the retailers, but you have to remember that the retailers are also making their own profit on the product, and often their profit margin is bigger than yours. So when you refund the customer direct, you are not just refunding your own costs of sale, you are actually refunding the retailer’s profit also. But, when you compare the cost of doing that to running a traditional above-the-line advertising campaign, like taking out a TV advert or advertising on the side of a bus, it’s probably actually going to be costing you the same or possibly a lot less. At least this way, you know you’re only paying when someone is actually buying and trying your product. Also, there are clever ways to offset the cost of offers like this. When companies run promotions like prize giveaways, they often insure that prize against someone winning it, meaning that the company only pays a premium to cover that insurance rather than the full prize cost. Promotional insurers can be used to cover cashback campaigns which means that the risk of a promotion being so wildly successful that the company can’t cover the costs can be mitigated.

When you put all the parts of a promotion like this together, it means that you have a fixed, known cost to run the campaign, no matter how many customers claim the refund; you are getting a spike in customers to show retailers that there is a demand for your product; the campaign will probably cost you less than running a traditional advertising campaign; it gives you great PR headlines – what, you mean VFC are just giving-away their product?! And it’s also got the potential to go viral like a traditional advertising campaign can’t. I actually first heard about the promotion because one of our Vegan Business Tribe members posted it in our VBT Community Hub. I’ve since seen it getting shared in Facebook groups and the great thing is, it’s also giving people who already LOVE the product a tool to get their friends to try it too at no cost. That friend who keeps telling you that vegan food tastes like cardboard, send them the link to tryforfree.vfcfoods.com and tell them to pop down to their local Tescos for some free popcorn chicken to prove them wrong. Do your parents always complain about not knowing what food to make when you drop round, send them a link and tell them to pick up some VFC fillets on their weekly shop and then claim the cost back online in a few clicks.

But do remember that limit of one VFC product per household to get the cashback, because there is a photo of me doing the rounds on social media at the moment having just cleared out the freezer section of our local Tescos of VFC products – and even though I couldn’t claim back for all of them I don’t regret it one bit!

The final reason why this is a great campaign is because when you come to put in your details to get your refund, the site also gives you the option to let the company know what you thought about the product which not only gives you the option for real customer feedback, but also lets you find out if trying WAS actually the last gate that someone had to go through to become a customer. Or is there something else still holding them back? The form also asks if you want to sign-up for news and offers from VFC. And again, this goes back to understanding your customer and helping them along their journey – because if someone ticks this box they are then self-declaring themselves as interested in your product and you then have the opportunity to keep nurturing them into a customer with what you send them next.

Collecting this kind of information and permission also gives you the opportunity to create advocates for your business too. VFC have worked out that someone consuming 1.5kg of their product is the equivalent to saving the life of one chicken. Their mission is based on simple maths, and they know how much product they need to sell to empty those factory farms for good. To do that, they haven’t started a business, they launched a mission and they know that others who believe in that mission will be attracted to them. But it also gives VFC a secret weapon that most businesses don’t have, they are not just in it to make money, they have a burning desire to make the world a fairer, cruelty-free place. So once they know that someone is interested in their product, and even more so if they have given permission to receive follow-up news and offers, they can use follow-on marketing to educate that person on their mission.

In my opinion, VFC is the very definition of a vegan business – they are creating vegan activists out of all of us simply by encouraging people to buy their fried chicken through VFC instead of non-vegan fried chicken from other fast-food chains that might have a very similar name.

OK – so I don’t know about you, but this session has already made me hungry and Lisa and I have a freezer full of VFC to crack open! So let’s have a bullet point round-up of what we can take away from VFC Vegan Fried Chicken giving away their products for free.

It’s harder to get excited about new vegan products than it used to be. The plant-based chiller is full of lots of different vegan options at lots of different price points, from premium-priced independent products to budget supermarket own-label.
Having all these options is great, but the motivation behind a lot of companies producing vegan products is very very different to your’s and mine. Most are non-vegan companies who are serving a consumer trend, whilst at the same time looking to protect their core animal-based ranges. They are not trying to convert people to a plant-based diet.
VFC, on the other hand, actively want consumers to ditch animal-based products and are ‘unapologetically vegan’ while doing it. And they know that an important part of that strategy is getting their product into people’s hands so that they can see how far vegan food has come. It can replicate that animal-meat eating experience if that’s what you are looking for, but without an animal having to suffer and die.
If you listened to last week’s episode on how to convert customers, you will recognise that this is a real-world example of understanding your customers’ journey and identifying what gates they need to go. VFC have identified that a non-vegan trying their product first is an important gate they need to pass through before they will buy, and with this promotion, they have created a tool to facilitate that.
Offering a product for free, or rather refunding the purchase, is also a good strategy to give your product a sales spike once you get into a retailer. If you have a product with strong sales that puts you in a far better place to negotiate wider distribution and for the retailer to take on more of your product range.
These kinds of promotions can be more cost-effective than you think. Not only can the cost of the refunded products be less than a traditional advertising campaign, but you can also mitigate the cost by using promotional insurers meaning you pay a set fee for the promotion, no matter how many customers claim the refund.
These kinds of campaigns also have a better chance of going viral because people want to share it. Who doesn’t love free food? Have a friend who always says vegan food tastes like cardboard, send them a link for some free VFC to prove them wrong!
These kinds of promotion, where the customer has to submit some data to claim it, is also a great way to get feedback and to understand where customers are on their journey. Was it just trying the product that was stopping them becoming a customer, or is there something else that you can learn from them about how to nudge them over the line?

And that is it! And again, honestly, I’m not being paid by VFC to promote them, I am just a really big fan of what they are doing as an unapologetically vegan company, and if you want to try their products then go visit tryforfree.vfcfoods.com and I guarantee you won’t be disappointed.

So to wrap us up, if this session has inspired you to go further then you can go beyond the podcast and come join us at veganbusinesstribe.com to get access to lots more really useful information like this but also to be part of our amazing Vegan Business Tribe community of vegan business owners around the world. Lisa and I, we don’t understand why our business needs to have a label on it to say it’s a ‘vegan’ business. Surely it should be the companies who do harm to animals that should have the label, or even better a health warning. But to get there, we need to normalise the idea of businesses being vegan, which is why I’m challenging YOU to skill-up and scale-up so that your business makes a bigger impact and helps us move the vegan scene forward.

And if you want to help us on that mission then there are a few different ways you can support us. The first and easiest is just to sign-up with us as a member over on the website. Even if that’s just on our free membership tier to get access to our weekly email. But you can also sign up as a full member to get full access to everything or even as a Patron if you are in a position to give a little bit extra every month.

But also, you can help our mission by just sharing this podcast with other vegan businesses you know, maybe you’re in a WhatsApp or Facebook group. Or you can simply just make that you’re subscribed, or that you have given us a thumbs up or a 5 start review. If you listen on Apple Podcasts or iTunes you can even write a short review for us to make sure that other people know that this is a podcast worth listening to. If you do any of those things then I will be eternally grateful for your support.

So thank you so much for joining me on this one, Lisa and I really appreciate you giving up your time to listen every week, and I will see you – on the next one!