Nestlé launches vegan KitKat in 15 European countries

Dive Brief:

• Nestlé is launching KitKat V, a vegan version of the candy, in 15 European countries. The rollout follows a test in the United Kingdom and some other countries in 2021.
• The milk in the original KitKat is replaced in KitKat V with a rice-based alternative, the CPG giant said in a statement. The new candy is certified vegan and made from sustainably sourced cocoa.
• The plant-based chocolate category is currently small but has attracted attention from major candy makers eager to cash in on growing consumer interest in avoiding animal-derived foods and minimizing their environmental footprint.   

Dive Insight:

As consumers keep a closer watch on what they eat, a shift that has accelerated during the COVID-19 pandemic, food companies have taken notice — and chocolate is no exception.

“We are seeing a strong trend in food with more people looking for plant-based options, including for treats,” Corinne Gabler, head of confectionery for Nestlé in Europe, said in a statement. “This is one of the biggest launches ever of a vegan alternative of a major confectionery brand and it shows our confidence in this trend.”

While Nestlé owns the Kit Kat brand, Hershey has a license to make and distribute it in the U.S. So far, the Pennsylvania-based company has not announced plans for its own vegan Kit Kat.

Six out of 10 U.S. households regularly purchase plant-based foods, according to data from SPINS, the Plant-Based Foods Association and the Good Food Institute, and 79% of consumers bought products in the category at least twice in 2021.

One factor that could be driving purchases is plant-based’s better sustainability profile. Nestlé said during its full lifecycle from farm to consumer, KitKat V has an 18% lower carbon footprint compared to the company’s standard milk chocolate product due to its fully plant-based ingredients.

In most cases, plant-based offerings are still working to reach price parity with their animal-based counterparts. The vegan Kit Kat, which took two years to develop, is likely to cost more than the regular version because it’s more expensive to produce, has pricier ingredients and requires stringent cleaning measures on production lines, Nestlé told Fortune. 

Nestlé, the world’s largest food company, has gradually expanded its portfolio to include other plant-based alternatives like meat, ice cream and coffee creamers.

While vegan chocolates are a small fraction of the market compared to their animal-based counterparts, the market is large enough that food makers need to have a presence. The global vegan chocolate market is already estimated at $533 million, according to Transparency Market Research. The data firm forecast it to more than double to $1.4 billion by the end of 2032.

Swiss chocolatier maker Lindt & Sprungli in May announced its new oat milk-based chocolate bars were available nationwide in the U.S.

Hershey tested Oat Made chocolate bars in some U.S. markets through June of this year as part of a test and learn process the company calls “micro battles.” A company spokesperson told Food Dive “the product did well … and we’re learning from its performance.” 

Mondelēz International has a Cadbury Plant Bar, a plant-based vegan alternative, on the market in the U.K. A spokesperson said the offering is “performing in line with our expectations and our distribution has been building since launch.” 

But debuting a different kind of chocolate bar can come with risks. 

Three of the U.K.’s major supermarkets stopped carrying Mars’ vegan chocolate bars earlier this year amid a labeling dispute. In 2020, Nestlé discontinued its Milkybar Wowsomes lower-sugar chocolate bar that launched in the U.K. and Ireland two years earlier. The world’s largest food company didn’t give a reason for discontinuing the brand, but the chocolate bar reportedly saw disappointing sales and struggled to sustain distribution.