Gourmet Evolution is an alternative protein innovator that makes plant-based deli slices using organic pea protein. The company is on a mission to change the future of meat alternatives, but first they knew that they needed to understand the optimal price point for their products. This is especially true during a time of rising costs for food and other consumer goods.
In this case study, we’ll discuss how Gourmet Evolution partnered with Moonshot Collaborative to understand the effect that different price points would have on their demand and revenue.
The Challenge
In an ideal world, food products would reflect the true cost of producing them, which would make most plant-based proteins inherently less expensive than the products they are replacing. But that is not the world we live in. And as Moonshot Collaborative has found again and again through our research, price is a major barrier to the adoption and frequency of purchase of plant-based foods. In fact, “They are more expensive” is cited by 53% of non-buyers as a barrier to buying and eating plant-based foods, and by 66% of recent buyers as a barrier to buying and eating more plant-based foods.
That has major implications for a brand’s success or failure in the market and necessitates that pricing decisions be based both on securing a healthy margin and on evaluation of consumer feedback and price sensitivity. Products simply won’t move off the shelf otherwise.
And that was exactly the question for Gourmet Evolution and their line of premium and organic plant-based deli meats: what was a reasonable price point that would work for their consumers and for their bottom line? So they went straight to the source to answer it.
“Having access to a vetted audience of plant based consumers was key for us to validate our assumptions, plus Moonshot’s question bundles had an option fitted for our emerging startup company” – Johann Van Heel, Gourmet Evolution
The Solution
We began by having an in-depth conversation with the Gourmet Evolution team to understand their goals and discuss the research options available to them, including the benefits of each. We aligned fully and selected a modified “Gabor Granger” pricing study.
Relative to other possible approaches, the Gabor Granger method puts less of a burden on respondents to think too hard about pricing. Once you define an acceptable range of prices and a reasonable number of increments between minimum and maximum, respondents are then randomly shown a price and asked if they would buy the described product or service at that price. If they say yes, they’re asked about the next highest increment. If they say no, they’re asked about the next lowest increment. And so on. (You can read more about pricing research methods in our blog post on the topic here.)
Moonshot Collaborative fielded the Gabor Granger survey with more than 500 members of our panel, which includes anyone who has purchased a plant-based product in the three months prior to signing up – primarily flexitarians and meat reducers, as well as a small percentage of vegan and vegetarian consumers. The panel provided Gourmet Evolution with an accessible audience that is pre-selected to be interested in products like theirs, but still represents about 40% of all U.S. adults.
The Results
The results from the pricing study provided Gourmet Evolution with a clear sense of consumers’ willingness to pay for their deli slices at different price points within a specified range. The results were then used to build out models showing the real-life implications of the data.
First, the survey revealed the percentage of respondents who would be willing to purchase the product at any given price point. We used these data points to create a simulated demand curve, which shows the relationship between demand and price and can be used to determine the optimal price point from a demand-maximization perspective. This curve also allows us to estimate the price elasticity of demand – so we can show, for example, what effect a 10% increase in price is likely to have on consumer demand for the product.
It was essential for Gourmet Evolution to understand the price points that consumers were willing to pay for their deli slices, but the research took it a step further. By applying the findings to create an implied revenue curve, we were able to understand the data from a revenue-maximization perspective. This model takes into account the percentage of respondents willing to purchase the product at each price point, and multiplies it out to capture the approximated revenue that could be achieved at any given price (for X number of units).
As Gourmet Evolution examined its pricing strategy in the context of rising consumer prices, the company leveraged these survey findings to set its pricing with confidence. The research gave them the context and consumer insight to make a pricing decision that would support their revenue goals while also keeping their customers happy. Those are two things that every company strives to achieve, and consumer research leads the way.
“Moonshot Collaborative was key to assess the pricing strategy for our new line of plant based deli slices. Their focused panel of consumers as well as their deep statistical knowledge provided all the information we needed to make an informed decision.” – Diana Cruz, Gourmet Evolution
Our sincere thanks to Gourmet Evolution, Johann Van Heel, and Diana Cruz for participating in this case study.
Learn More
Get to know Gourmet Evolution and their organic deli slices.
Check out Moonshot Collaborative, our consumer panel, and our services for alt protein and sustainable companies.
