Plant-based food sales reached $7.4 billion this year, up 54 percent from previous year and well exceeding overall food sales, which climbed only 2% in the prior three years. This information was published in a recent research by the nonprofit Good Food Institute (GFI), which also said that the plant-based food business has grown by 6% in unit sales since 2018, while total food sales have remained unchanged.
In 2021, monetary sales of plant-based milk, meat, and eggs outstripped those of the animal goods they are intended to replace. Plant-based eggs, creamer, and ready-to-drink drinks had the most rise, with dollar sales increasing by 42 percent, 33 percent, and 22 percent, respectively. Meanwhile, sales of animal-derived eggs have slowed by 4%, dairy-based creamer has stayed unchanged, and non-plant-based RTD drinks have grown by just 3%.
“Product innovation is critical for plant-based categories to continue to earn a larger share of the market. Getting more consumers to eat plant-based foods more often requires improved taste and texture to compete with animal products, more product diversity, and greater affordability and accessibility… As businesses recognize the staying power of plant-based foods, the food industry must seize these opportunities to maximize the vast potential of plant-based alternatives to compete with animal products,” said Karen Formanski, Research and Analysis Manager at GFI.
Winning The Race
These options have a lot of potential. According to GFI’s data, a whopping 98 percent of Americans who buy plant-based meat also buy animal meat, implying that the entire addressable market for these goods reaches far beyond vegans and vegetarians. Six out of ten American homes bought plant-based foods in 2021, up marginally from 2020, when the COVID-19 outbreak prompted a surge in supermarket sales.
Plant-based alternatives to dairy, meat, and eggs are gaining ground on their animal-based equivalents in terms of market share, with plant-based milk currently accounting for 16% of the overall milk market, up from 12% in 2018. GFI discovered that plant-based milk, which has a 72 percent home penetration rate, acts as a Trojan horse for exposing families to plant-based alternatives. In 2021, 79 percent of buyers made numerous plant-based food purchases, with plant-based milk leading the way with a 76 percent repeat rate, followed by plant-based meat with a 64 percent repeat rate.
“As more product development and category innovations appeal to consumers on the key drivers of taste, price, and convenience, we expect plant-based categories to follow plant-based milk’s trajectory and earn greater shares of their respective categories,” GFI stated.
While some have assumed that interest in plant-based meat is waning, GFI’s analysis shows that this is not the case. Plant-based meat and fish-free seafood sales have increased by 74% since 2018, reaching $1.4 billion in 2021, exceeding the rise of animal meat by three times.
“In the past few years, the food industry has seen multiple supply chain disruptions and broad volatility. After an overstimulated 2020, 2021 unit sales of plant-based meat decreased modestly, although not to the same extent as those of animal-based meat. Both plant-based and animal-based meat dollar sales remained flat from 2020 to 2021… On a longer timescale, the animal-based protein market is experiencing inflation. In the past three years, conventional meat dollar sales increased three times faster than its unit sales did, indicating that apparent growth is driven solely by higher unit prices,” GFI’s report states.
GFI predicts that plant-based meat will follow a similar path as plant-based milk, and that, given the industry’s success, meat substitutes will soon be cheaper than the animal versions they want to replace. While the worldwide alternative protein market collected a record $5 billion in venture money in 2021, according to GFI, the industry’s success is not “inevitable” and requires more assistance.
“To meet and further stimulate consumer demand and enable plant-based proteins to compete with conventional products on the table stakes of consumer choice—taste, price, and accessibility—greater investments from both the private and public sectors will be needed… Such investments can ensure we realize the potential of plant-based meat to help sustainably and efficiently feed billions of people, protect public health and lessen the risk of future pandemics, and mitigate the global climate impact of our meat production,” GFI states.
Source: “PLANT-BASED FOOD SALES UP 54 PERCENT TO $7.4 BILLION SINCE 2018” by VegNews
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