Plant-based meat alternatives struggle to make the cut

September 11, 2023 44

(FarmWeekNow) — Offerings of plant-based meat alternatives expanded in recent years, but they haven’t captured consumers’ interest nearly as much as some economists expected.

According to a new report from CoBank’s Knowledge Exchange, the market for plant-based meats likely reached a tipping point as the initial period of exceptional sales growth appears over.

“Whatever their reason for purchase, plant-based offerings appear to have fallen short of consumers’ expectations in terms of either cost or performance,” said Billy Roberts, senior food and beverage economist for CoBank.

Plant-based meat alternatives peaked in 2020 and have declined since then

Sales of plant-based meat alternatives peaked in 2020 when consumers had more discretionary income and were curious about expanding their food selections amid pandemic-era shortages of some products, the report states.

But sales of meat alternatives plummeted since 2021 and took an even sharper dive in the past year. Volume sales dropped 20.9% for the 52-week period that ended July 2, according to the consumer behavior research firm Circana.

Consumers cited health reasons for buying plant-based offerings

Consumers consistently cited health as a top reason for their initial purchases of planted-based offerings. However, some shoppers who tried plant-based meat alternatives later voiced doubts about the healthfulness of the products, many of which include a long list of processed ingredients.

High prices of many plant-based meat alternatives, many of which are more expensive than purchasing the real thing, presents another major roadblock in the food category. Meanwhile, some of the products simply left a bad taste in consumers’ mouths.

“Market participants should be able to address the cost issues with greater economies of scale and minimized supply chain expenses,” Roberts said. “However, innovation around taste, texture, and mouthfeel will be essential to capture more mass-market consumers.”

Due to the typically higher price point, plant-based consumers tend to be from higher-income households, limiting the category’s household penetration to a range of around 10%.

If plant-based meat alternative producers are able to expand their offerings, lower costs and improve the overall eating experience, Roberts believes sales could rebound. But it likely won’t take much of a bite out of meat sales.“Lower price points and quality improvements in the category will resonate with a large portion of consumers interested in a more flexitarian approach to eating,” Roberts added. “These consumers will not abandon animal-based meats entirely, but augment their diets with plant-based options as occasions warrant and the products can meet their needs.”

Daniel Grant, FarmWeek

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Dan grew up on a family farm near Roseville, Warren County. He received a degree in journalism from Western Illinois University. He has been working as a journalist since 1991 and has been at FarmWeek since 2005. One way Dan discovers what is important to an Illinois farmer is by simply talking to them at events. He also keeps track of what’s trending on social media. Dan likes to let farmers tell their story and put a face to agriculture when he isn’t covering the markets.