Greggs has upgraded its profit expectations for the third consecutive month on the back of strong vegan sausage roll sales, in a move that heralds a change in UK eating habits.
UK bakery chain recently announced growth in sales of 9.6% in established stores during the first seven weeks of 2019.
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According to the company, strong trading is “likely to have a material impact on the first-half result for 2019”. The share price rose to its highest ever rate of £17.80, following the trading announcement of 19 February.
Veganuary creates growth opportunities
Greggs introduced the vegan sausage roll in 950 stores across the UK on 3 January to coincide with ‘Veganuary’, which encourages people to adopt vegan diets throughout January.
Increased interest in veganism and the rising popularity of Veganuary has opened up opportunities for brands such as Greggs to diversify its offerings and launch meat-free options.
As a chain not previously considered to be vegan-friendly, Greggs recognised the market potential and gained significant publicity following the launch.
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By GlobalDataUK eating and buying habits
Eating habits are changing in the UK as consumers become increasingly health conscious and ethical in their buying habits.
The number of vegans in the UK quadrupled between 2014 and 2018 from 150,000 to 600,000, according to the Vegan Society. The trend has enabled brands to differentiate their products.
Veganuary has launched five years ago and has seen participant numbers more than double each year. In January 2019, more than 190,000 people around the world registered to participate in the UK-originated movement.
Veganuary has boosted profits but demand will slow
In January, Greggs reported that it was struggling to keep up with demand for its vegan rolls, with many stores selling out quickly.
However, the company admits sales have slowed so far in February as Veganuary has come to an end. Yet this product is likely to remain a permanent fixture on the menu as veganism continues to grow in popularity.
January’s healthy sales growth has prompted the company to upgrade its profit expectations. Also, the vegan roll, while seeing a fall in popularity, is likely to continue to appeal to the growing number of people following a vegan diet in the UK.
The trend towards veganism is unlikely to slow for the time being, and a number of companies are increasingly gearing products towards this part of the market. M&S recently launched its vegan range, Plant Kitchen. Others are expected to follow.
