Challenging times for vegan restaurants

Enjoying a very enjoyable dinner at the recently opened vegan restaurant Studio Gauthier in central London, you would think all was hunky-dory in the world of plant-based dining. But this is far from the case – there is trouble in the undergrowth.

For Alexis Gauthier, this is the latest addition to his animal-free establishments and sits alongside his Michelin-star flagship Gauthier Soho and 123V restaurant within Fenwick’s department store in New Bond Street. Since becoming vegan in 2015 and gradually adding plant-based dishes on to the Soho menu, he made the switch to a fully vegan proposition in 2021 and arguably now runs the most acclaimed animal-free restaurant in the UK.

Within his airy new place in Fitzrovia, he has brought in dishes from his high-end Soho venue and more affordable 123V outlet, which represent many years of cooking expertise. He’s basically applied his classical French training to vegetables, and it has worked. He’s created food that is attractive and tasty to all diners. What he says is different about cooking vegan food is that there is no playbook to call on. There is no Escoffier manual to build on in quite the same way as with protein-based dishes. Building from first principles is more of a requirement with plant-based cuisine.

This complication, combined with rising ingredient costs, is undoubtedly contributing to the difficulties of the vegan category. Diners are a lot less forgiving on the quality perspective during a cost-of-living crisis, and also want to feel they have some value on the plate. It is not as easy to quantify as it is with a piece of meat or fish.

Among the casualties has been Stem & Glory, which has recently been bought by its founder in a pre-pack administration for a mere ￡15,000. The deal involves one site continuing to operate in Cambridge, while its two London outlets have been closed, and the administrators reported net assets of minus ￡381,000 after two crowdfunding rounds raised a combined ￡1m.?

This follows burger chain Vurger Co, which was also bought out of administration by its founders following the closure of one of its restaurants, while the three remaining sites continue to trade. Maybe the experience of Honest Burgers should be telling because its vegan-only restaurant, V Honest, closed shortly after its opening last year, with management preferring to incorporate decent meat-free options on to its regular restaurant’s offerings.

Looking to upend this thinking is Neat Burger, which recently raised $14.5m to fund its expansion of outlets selling burgers made from its own pea-based protein meat substitute, which has apparently gone down well with consumers. But like Gauthier, Zack Bishti, founder of Neat Burger, puts the failures in the market, and waning interest in plant-based foods, down to poor quality products.

“Every big company in the game had some sort of board meeting and they were like ‘okay, right, we need to go big on plant-based’. They just launched 1,001 products, and I think consumers saw fatigue,” says Bishti.?

If there is insufficient skill and differentiation being used, then there will inevitably be victims in today’s increasingly tough marketplace. One investor in the sector cuttingly suggested many companies had “sort of reinvented the bean burger, and there’s no economic moat behind bean burger making”.?

While all this uncertainty about the viability of purely vegan restaurants and plant-based creations sitting on the supermarket shelves reverberates around the sector, there is the other killer fact to be considered. Although veganism is growing – especially among the younger generation – with growth of 40%, according to research from Finder, this still equates to a paltry 3% of the population. In contrast, around 95% of the population eats poultry, according to the British Poultry Council, and tend to do so at least twice a week.

As it stands right now, the tough economic situation, combined with these hard statistics, suggests mainstream vegan restaurants will continue to have a challenging time, whereas destination-type venues with more unique, stand-out offerings will find it easier to carve out a place appealing to both the (currently niche) group of vegans, as well as the rest of the country’s dining population.

Glynn Davis, editor of Retail Insider?

This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Retail Insider would like to thank Propel for allowing the reproduction of this column.