The Kroger Co. (KR - Free Report) unveiled the launch of its version of vegan meat namely Simple Truth Emerge, which is an expansion of its in-house Simple Truth brand. The new product line will offer fresh burger patties and grinds at better prices and will be available exclusively at Kroger Family of Stores. Keeping in mind consumers’ growing preference for meatless substitutes, these products come with 20 grams of pea-based protein per serving and are free of GMOs, dairy, gluten and soy.
This move comes after Beyond Meat (BYND - Free Report) and Impossible Foods came up with plant-based burgers and sausages, which hiked demand for imitation meat, according to sources. In response to this, major retailers like Kroger and Walmart (WMT - Free Report) as well as food companies like Hormel Foods and Kellogg (K - Free Report) have jumped on the bandwagon by following the trend.
Coming back to the news, Kroger started testing plant-based meats in December, at 60 stores across two markets to evaluate the impact on customers and sales. The 16-week test includes products such as jackfruit, seitan and deli slices.
Simple Truth Emerge forms part of Simple Truth plant-based collection, which was launched in September 2019 and included vegan chocolate chip cookie dough, oat milk, sour cream, deli slices, sausage and other products. Further, Kroger intends to add 50 plant-based products to the Simple Truth brand, which recorded sales of more than $2.3 billion last year.
Going forward, management is optimistic about plant-based products growth in 2020, as it is touted to be one of the key drivers of natural and organic sales. Per media reports, grocery retailers across the United States are anticipated to sell $7.2 billion of meat alternatives by 2025, which suggests a significant jump from $750 million in 2018.
All said, we hope that Kroger’s efforts to expand its grocery offerings are likely to drive sales in the near term. In fact, management envisions identical sales growth of 2-2.25% and more than 2.25% for fiscal 2019 and 2020, respectively. Also, such efforts have helped shares of this Zacks Rank #3 (Hold) company to gain 19.2% in the past three months, against the industry’s decline of 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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