(Reuters) - Strong demand for Greggs’ new vegan sausage roll prompted Britain’s biggest baker to raise its 2019 profit expectations on Tuesday, boosting its shares to a record high.
Greggs launched the savoury snack, which sells for £1, last month to try to tap into the “Veganuary” movement that encouraged Britons to cut down on - or cut out entirely - meat products for health and environmental reasons.
The new snack, made with meat substitute Quorn and backed by a YouTube video that likened the launch to that of a new iPhone, helped Greggs’ sales to surge 14.1 percent in the first seven weeks of 2019, the company said.
A spokesman declined to comment on the number of rolls sold, but said it was one of Greggs’ “top-five performing products”.
One in eight Britons – or almost 13 percent of the population – is either vegetarian or vegan, with a further 21 percent cutting down on their meat consumption, according to the Waitrose Food & Drink Report for 2018 and 2019.
“It seems the publicity surrounding the launch of the vegan sausage roll ... succeeded in its aims of bringing more customers into the stores, resulting in a ramp-up in transactions,” said Edison Investment Research analyst Paul Hickman.
Greggs rounds off strong 2018: tmsnrt.rs/2BG9hXS
Greggs said 2019 profit before tax and one-off items was now likely to be ahead of its previous expectations, without giving any figures. Analysts’ mean forecast is currently £97.62 million, according to Refinitiv IBES.
The company’s shares jumped as much as 11 percent to a record high of 1,780 pence. At 1130 GMT, they were up 8 percent and topping the UK midcap index.
“The difficult question to answer is where trading levels settle to once the curiosity has died down ... However, it is clear that ‘vegan’ is entering the mainstream with alternative dietary trends on the rise,” Canaccord Genuity analysts said.
The upbeat forecast from Greggs, which opened 149 new shops last year to take its total to 1,953, comes less than two months after the company nudged up its 2018 underlying profit forecast to at least £88 million.
Greggs, best known for its meat snacks, launched a vegan Mexican Bean Wrap in June last year.
Reporting by Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru; Editing by Arun Koyyur and Mark Potter