Which growth for plant-based food?

The plant-based food industry continues as an area in constant growth, due to consumer interest in new, sustainable, and healthy products. While 2022 was a year marked by inflation and difficulties in supply networks, the plant-based food sector remained stable, with some product categories recording growth figures that were even higher than the previous year.

From the study conducted by the non-profit association the Good Food Institute, let us take a look at some of the main trends in 2022 that will set the stage for the sector’s advancement in the years to come.

1. Plant-based products are on the rise, but still account for a small fraction of the market.

In 2022, global retail sales of alternatives to meat, fish, milk, yoghurt and cheese reached USD 28 billion. According to the Plant Based Food Association, the US market accounted for about USD 8 billion, a 6.6% growth over the previous year. This market remains a small fraction compared to that of conventional products, showing that there is still great potential for growth. In other words, we are far from a red ocean scenario.

2. Diversification of channels: retail, catering, and e-commerce.

In terms of retail, 2022 was the year in which products of major brands – such as Philadelphia by Kraft Heinz or Babybel by the Bel Group, for example – were introduced to the market in an all-vegetable version.  The popularity – albeit modest – of plant-based products in the catering sector also increased in the past year, as a strategy for plant-based brands to make their products more accessible and familiar to consumers. A typical example is the availability of several vegetable alternatives in the most famous fast food chains (such as Burger King, Mc Donald, and KFC). The use of channels such as e-commerce is also spreading for the sale of vegetable products, with the aim of attracting especially younger consumers who want to reduce their meat consumption or are simply intrigued by innovative products.

3. Large (meat) companies are breaking into the plant-based sector.

The involvement of large conventional food companies – through investments, acquisitions, partnerships, product development and production – is a clear sign of growth in the sector. What is more, this also represents an opportunity for animal product companies, with the introduction of plant proteins into meat products, introducing a new category of so-called ‘hybrid’ products. There have already been pioneers in this field, such as “The Raised & Rooted Blend“ by Tyson and Perdue’s Chicken Plus.

4. Vegetable milk remains the leading category, followed by creams and vegetable butter

With 40.6% of US households purchasing vegetable milk – and an astonishing 75.7% repurchase rate – vegetable milk remains the consumer favourite among plant-based products. The category grew by 9% in 2022, reaching USD 2.8 billion. In addition to vegetable milk, creamers also grew by 24% to USD 645 million. The sector grew significantly due to increased product differentiation in flavours, consistency, and shape. Similarly, plant-based butter, ready-to-drink beverages, snack bars, and egg alternatives also recorded an average growth of 14.6%. The meat alternatives sector, on the other hand, remained stable at USD 1.4 billion, registering a drop in sales of -1.2%.

The figures therefore indicate a growing trend in the sector, in line with those of previous years. Forecasts suggest that the sector will continue to expand in the future, albeit at a slower pace, due to the consumption trend of plant-based products driven by the younger generation. Of particular note is the specific vegetable protein segment, which now accounts for 34% of the European protein market, with the vegetable drinks sector growing by 68% and the vegetable meat sector – such as meatballs or burgers – growing by 88%.

Nevertheless, there are still some limiting factors for the increasingly widespread diffusion of these products. Taste and texture still prevent them from being accepted by consumers who are driven by curiosity to try new products, but if not satisfied, do not buy them a second time. At the same time, the premium price of certain plant-based products is also a barrier that prevents them from becoming more widespread, as they are only accessible to a segment of potential consumers. This still leaves plenty of scope for improving existing products in terms of taste, texture, and price and for developing new products, with a view to greater diversification of the sector in terms of taste and shape.