Plant-Based Foods: $7.4 Billion – Meet The New Food Leaders In A Changing Market

Plant-based meat, dairy, and eggs do more than help our hearts; they contribute to a sustainable food system in a retail world shaken by supply chain and inflation challenges.
October 10, 2022

Not long ago, if someone decided to avoid animal products their options were limited. At a restaurant you could get the pasta without the chicken; you simply avoided the deli section of the grocery store; you skipped the ice cream. Times have changed. You can now choose from a wide selection of dairy free ice cream flavors and not feel like life’s a compromise. How sweet is that?

The last couple of years saw significant challenges for food suppliers and buyers. Nearly every food category was (and is) touched by pandemic implications, supply chain woes, and inflation. Even so, a surprising food category emerged seemingly untouched by market fluctuations and even motivated by consumer preferences. Today’s plant-based food offerings are dynamic and constantly changing, and they are not showing signs of slowing down anytime soon. 

Love (for meat and dairy alternatives) finds a way

So, what do we mean when we say ‘plant-based foods’? Why are these products surging in sales? Who is buying?

The Plant Based Foods Association (PBFA) defines plant-based as ‘foods made from plants that contain no animal derived ingredients’. The sustained growth in plant-based food sales this past year illustrates a strong consumer commitment to purchasing foods that taste great and align with their values and are better for personal health, the planet, workers in the supply network, and animals. 

In fact, plant-based food retail sales grew three times faster than total food retail sales while conventional protein sales struggled with supply chain disruptions and inflation. Despite a challenging economy, U.S. retail sales of plant-based foods grew 6.2% in 2021 over a record year of growth in 2020. The plant-based market now sits at an all-time high, valued at $7.4 billion. 

Plant-based milks are the largest category in this market. The growing assortment of beverages continues to benefit from product innovation combined with expanded merchandising space. Almond milk leads the pack, with oat milk following close behind. Key advancements in ingredient diversification and product development to improve taste, functionality, and nutrition keep sales steady.

The Good Food Institute (GFI) Research and Analysis Manager Karen Formanski confirms, “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.”

Not surprisingly the success of oat, almond, soy drinks, etc. has laid the foundation for rapid growth in other plant-based categories like ready-to-drink beverages, plant-based creamers, yogurts, cheese, ice cream, and frozen desserts. 

The numbers show that consumers are happy to step out of the box when it comes to the milk we drink. While animal-based milk sales dropped 2% in 2021, plant-based milk dollar sales climbed, contributing to $105 million in growth while animal-based milk’s decline equated to a loss of $264 million. Currently 42% of households buy plant-based milk, and 76% of buyers purchased it multiple times in 2021. 

Plant-based meat laps a record year … and don’t forget the eggs

Plant-based meat options are nothing new, but they have gotten significantly more delicious and practical for the average consumer, and the numbers back that up. After record growth in previous years, 2021 plant-based meat dollar sales remain strong. The unit comparison between plant-based and conventional meat is striking: while conventional meat unit sales have grown 8% in the past three years, plant-based meat unit sales have outpaced that more than six times, growing 50% during the same period. More households purchased plant-based meat in 2021 than in the previous year, and 64% percent of buyers purchased plant-based meat more than once throughout the year. 

Burgers led this savory category as the top-selling plant-based meat product. At the same time, the industry is responding to consumer desire for more variety. The fastest growing plant-based meat products in 2021 were meatballs, chicken nuggets, tenders and cutlets, and deli slices. In fact, plant-based chicken was a growth leader in 2021 as more products that match the taste, texture, and appearance of animal-based chicken hit retail shelves. 

While plant-based seafood options are on the rise, there is still significant opportunity in this category. Plant-based seafood accounts for just one percent of the plant-based meat market, compared to conventional seafood comprising a fifth of total meat and seafood sales. 

Like plant-based milks and meats, plant-based egg products also experienced rapid growth in 2021. In the past three years, plant-based egg dollar sales have grown more than 1000 percent. With conventional egg dollar sales on the decline, plant-based eggs are another clear winner.

Meet your customers

With the rapid scale-up of the plant-based industry, these products may soon be able to compete with their animal counterparts on price, further stimulating consumer demand. 

The data shows 62% or 79 million U.S. households are now buying plant-based products (up from 77 million in 2020). Millennials and Gen Z, which make up 47% of the population and will continue to grow their spending power, show a particularly high demand for plant-based foods. These generations are also increasing their ecommerce spending the most, and ecommerce sales of total plant-based foods are on the rise. These consumers are motivated by an interest in foods that are healthier as well as deliver on positive environmental impact and social responsibility. 

Jay Lovelace is the chief commercial officer of SPINS, a wellness-focused data company and advocate for the natural products industry. Lovelace says record inflation is now causing retailers to seek alternatives to better help consumers manage their shopping and wellness journeys. “SPINS data shows that plant-based products appear to be managing the economic issues in the U.S. better than many traditional retail products,” he says. “This is a trend we expect to continue throughout this year, and we encourage retailers to expand shelf space for all plant-based products.”  

Julie Emitt, senior director of marketplace development at PBFA, agrees: “The potential impact of these initiatives extends far beyond the store shelf: By taking consumer concerns to heart, the industry is actively embracing its role as a key driver of change that moves us closer to a secure and sustainable food system.”

The demand for plant-based food products is impossible to ignore. These are products uniquely positioned to meet today’s consumer needs. Brands and retailers who can respond to the trend and offer innovative products and solutions will be met with grateful customers purchasing — and eating — in the name of enjoyment, health, and sustainability.

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