May, 2024

Product Innovation, Affordability, Accessibility are Needed to Grow in Plant-Based Industry, Report Says

In 2023, the plant-based products sector was stable on the whole, with a slight growth in sales in some categories and a slight decline in others. In the US, sales dropped due to inflation and an overall dissatisfaction with plant-based products, which are still regarded as too expensive and not as tasty as animal-based products. This is confirmed by the latest report by the Good Food Institute “2023 State of Industry Report – Plant-based: meat, seafood, eggs, and dairy”, which shows that taste and convenience are still the main factors stopping the plant-based food sector from expanding. In particular, the price gap between plant-based products and their animal counterparts is still something that dissuades consumers, who are facing an increasingly high cost of living.

Flexitarians remain the most interesting category for plant-based products

In the US, about 35% of consumers said they eat plant-based meat, and about 95% say they eat both meat substitutes and real meat, which again confirms the category of “flexitarian” consumers as the most interesting for the growth of the plant-based sector. In spite of the high marketing potential, there are various reasons why many consumers do not buy plant-based meat: the lack of taste, the difference in texture, price, availability, the lack of familiarity, or simply due to lack of interest. Nonetheless, the report shows that those Americans who have not yet tried plant-based meat (51%) would be willing to try it if the taste and texture made it more similar to real meat.

Consumers who purchase plant-based meat do so to reduce their meat intake, mainly for health reasons (57%). This is because they believe it can have a beneficial effect on their own health (reduction of cholesterol and the risk of heart disease), for public health (by not contributing to the resistance to antibiotics), and at the same time benefits for the environment.

Despite this, there is still only a handful of consumers who regularly buy plant-based meat, although they tend to be ‘loyal’ to this choice, with a repurchase rate of around 62%. According to the report by the Good Food Institute, besides the price, taste, and texture of such products, the main problem preventing the category from expanding is also down to scarce knowledge on the part of consumers. Around 41% of US consumers say they have heard about plant-based meat ‘a bit’ in the media, on Internet, and in the local papers, while only 10% say they have heard a lot on the subject. This opens up to several opportunities for the plant-based product brands, which can adopt various strategies to reach all those consumers who are not aware that such products exist, through marketing activities or various other channels. The foodservice, for example, is becoming a channel of interest for introducing new products, as consumers are increasingly inclined to eat out, and thus to try out new options outside the home.

Plant-based milk sales keep growing, while plant-based meat sales decline

Although 2023 was a relatively stable year for most categories of plant-based products, retail sales of meat, fish, milk, yoghurt, ice cream, and plant-based cheeses totalled about USD 29 billion. In global sales, the vegetable milk category remains the strongest, reaching USD 18.7 billion, the largest area being the APAC region, followed by North America. Also worth highlighting is the creamer sector, which reached USD 771 million, with a 14% growth in terms of units sold from 2021 to 2023. The other segments such as yoghurt, ice cream, and plant-based cheeses remained stable, but did not show significant growth.

The situation is different for plant-based meat and seafoods, for which sales are estimated at $6.4 billion, mainly in Europe and North America, with a 26% drop in terms of units sold from 2021 to 2023. A new emerging segment, especially in the APAC region, is that of blended meat, in other words, a product made up partly of plant-based and/or cultivated meat, and partly of real meat or animal components. Consumers in South-East Asia, in fact, regard the consumption of plant-based meat as a way of diversifying their protein sources. For this reason, their attitude toward hybrid meat is mostly positive. While still an emerging sector, hybrid meat could be a way to bring consumers who are dissatisfied with the current taste and texture of plant-based meat closer by enriching it with animal components, such as fat or collagen, which can improve the overall palatability of the product.

What’s coming next

Research in the area of plant-based products continues to grow, with many stakeholders and leaders in the consumer packaged goods (CPG) and animal meat production sectors also involved, through investments, acquisitions, and partnerships. Many of these players are investing in research, development, and production related to alternative proteins, i.e. cultured meat, fermentation, and plant-based products.

The industry is progressing mainly towards raw material optimisation in the field of plant proteins, i.e. improved farming practices (indoor cultivation, vertical farming, and aquaculture), the selection of crops with improved characteristics (high yield, high nutrient density, resistance to pests, and drought) as well as making use of industrial by-products (from the processing of potatoes, cabbage or broccoli). Among the ‘new’ proteins, the report highlights amaranth as an alternative to soy and pea proteins, and also mentions mung beans, duckweed, and algae.

In addition to this, research is also focusing heavily on all plant-based product components, such as fats, emulsifiers, and innovative stabilisers. This area is especially important in the category of meat alternatives, where consumers want improved products in terms of taste and texture.