Since 2018, PBFA has commissioned retail sales data detailing the state of the plant-based foods industry and the growing market share that plant-based foods occupy. In the past few years alone, the plant-based foods industry has expanded exponentially, driven by consumer demand for foods that align with their values and interest in lowering their impact on the planet. Our most recent data set, analyzed and categorized by PBFA and GFI, from SPINS data, shows that U.S. retail sales of plant-based foods continue to increase, growing 6.2% in 2021 over a record year of growth in 2020 and bringing the total plant-based market value to an all-time high of $7.4 billion.
The second-largest category, after plant-based milk which now represents a $2.6 billion market, plant-based meat has seen tremendous growth. In 2018, plant-based meat sales in the U.S. reached $804 million and in 2020 skyrocketed to $1.4 billion as the pandemic created a particular influx of interest in plant-based foods with people cooking more at home–in addition to growing interest in health-promoting foods.
Trends indicate growing consumer interest and commitment to plant-based meat
After a record year in 2020, the plant-based meat category matched $1.4 billion in sales in 2021. While the retail sales for plant-based meats were flat in 2021, consumer demand actually rose last year: 19% of households purchased plant-based meat in 2021—up from 15% in 2019 and 18% in 2020—and on top of that, an impressive 64% of those buyers purchased it multiple times throughout the year.
The unit comparison, or the number of plant-based meat products sold, is even more striking. While animal-based meat unit sales have grown 8% in the past three years, plant-based meat unit sales have outpaced that by more than six times, growing 51% during the same period.
In 2021, plant-based meat’s dollar share of packaged meat was 2.7% and has increased 19% over the last two years. Plant-based meat’s share of meat in the Natural Enhanced Channel is now 14%.
“The sustained rise in the market share of plant-based foods is remarkable, and makes it clear that this shift is here to stay,” said PBFA’s Senior Director of Marketplace Development Julie Emmett.
Contextualizing the impact of market volatility and inflation
Between supply network disruptions, pandemic challenges, and market volatility, the food industry has been greatly impacted and as a result, we’re seeing significant inflation for common food items. A recent survey from Dunnhumby’s Consumer Pulse that measured the impact of inflation on consumer behavior found 51% of respondents indicated their spending power at the grocery store has eroded as prices rise, and on a whole shoppers believe the rate of inflation is twice as high as the actual annual rate given the jump in cost. The impact of this inflation is being seen across categories as shoppers are opting for sale items and shopping less frequently.
You can see the impact of inflation clearly in animal-based meat dollar sales, which have increased three times faster than its unit sales over the past three years. Essentially, the growth in animal-based meat sales is driven by higher unit prices. And IRI’s inflation index shows that in March 2022, U.S. retail animal-based meat price per unit was up 13% compared to March 2021, while plant-based meat price per unit was down 2%. Cost remains one of the biggest considerations for consumers. With high inflation rates, unit sales of plant-based meat were also slightly down but to a lesser degree than animal-based meat sales.
The staying power of plant-based meats
In addition to steadily driving down prices over time, plant-based meats are uniquely positioned to meet the values-based priorities of today’s shoppers. The rise of plant-based meats tracks alongside the growth of Millennial and Gen Z buying power and the growing awareness of the environmental and social impacts of meat-heavy diets. This trend is particularly important for Millennial and Gen Z consumers, who now compose 47% of the population and will continue to grow in their spending power. According to a 2020 report from Mattson, while 30% of Boomers identify environmental benefits as a top-three reason to eat more plant-based foods, around 70% of Millennials and 100% of Gen Z indicate that this is a top motivation for their food choices.
Findings from the 2022 Power of Meat report from the Food Industry Association (FMI) indicate concerns over animal welfare and the impact on social responsibility–the treatment and compensation for farmers and workers–in the meat industry are growing. In 2019, around 26% of consumers registered social responsibility as a motivating factor in meat purchasing, with that number increasing to 29% in 2021 and jumping to 35% in 2022. As awareness around environmental health and social justice increases with younger generations, we can expect interest in plant-based meats that authentically deliver on values claims to rise.
“More and more consumers are turning to plant-based options that align with their values and desire to have a positive impact on personal and planetary health,” Julie expands.“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.”
It is also important to note that we have barely scratched the surface of potential innovation in the plant-based meat category. As illustrated by our 2021 sales data, the industry is responding to consumer desire for more variety within the meat category. Plant-based burgers are still a fan favorite, but the fastest-growing plant-based meat product types in 2021 were plant-based 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. The diversity of ingredients used to make plant-based meats is also expanding to include nutrient-packed foods like mung beans, chickpea, fava beans, umami-packed fungi, seaweed, and more. We’re also tracking the rise of whole cut plant-based meats, which is on par for the next big trend in the category.
Setting the stage for continued growth
Changing the food environment to make plant-based meats broadly available and accessible for all is still a hurdle that needs to be addressed to level the playing field. Consumer interest illustrates sustained commitment to plant-based meat options, the question is how can we make it easier for shoppers to find what they are looking for.
“The goal with our marketplace work here at PBFA is to change the retail environment in favor of more space and assortment of plant-based foods to fully meet consumer demand,” said Julie. “It all comes down to understanding consumers who may be interested in trying plant-based options and adjusting in-store strategies and ecommerce to align with the ways they shop.”
Some strategies to expand the impact of plant-based meat include:
- Integrated Merchandising: A pivotal PBFA pilot with Kroger grocery stores found that shoppers expect to find plant-based items alongside their animal-based counterparts. The study tracked consumer engagement as well as sales of all plant-based meats sold when integrated within the animal-based meat department across 60 Kroger stores in two markets and showed that plant-based meat sales increased by 23% in the test stores compared to the control stores. The project overall proved that it is important for retailers to place plant-based products near their animal-based alternatives where shoppers can easily find and purchase them.
- Ecommerce Strategies: These findings are also important to consider for e-commerce merchandising as we move into an omnichannel marketplace where shoppers are purchasing more foods online with sales increasing 47% in 2021. The industry is building out an ecommerce infrastructure at breakneck speed to meet consumer demand and making it easier to find plant-based foods online is a key focus area for PBFA.
- Increase availability: Plant-based meats are becoming easier to find in retail but also in foodservice with a majority of fast-food chains serving a plant-based meat option to meet growing demand from consumers. Per a recent Technomic report, one-third of Millennial and Gen Z restaurant diners are seeking out vegetarian/vegan entrées as the first choice on menus, and 27% of older adults are also doing so. A 2021 report from Tastewise showed 9.2% of restaurants in the U.S. are now featuring plant-based meats on their menus – a figure that has increased 1,320 percent since 2020. Further, a recent study from Kearny illustrated that as prices for plant-based meat drop, the potential market share grows. Analysis from agricultural economist Jayson Lusk indicates that every 1% drop in price for plant-based patties leads to a 3% increase in market share. There is work to be done in Increasing the availability and price accessibility of plant-based meats to ensure these options are viable for all who want them. It is also important to address and consider the true cost of animal-based meats is artificially low due to the $38.4 billion subsidies the industry benefits from every year. A 2020 study that weighed the environmental cost of animal-based meats found the true price tag would increase current pricing by over 146% if climate factors were included in the price tag. While price parity is a goal for many plant-based food companies to make their products more widely available to consumers, plant-based foods are uniquely positioned to lead the way with responsible, sustainable agricultural practices that consider biodiversity, soil health, and respect workers and stakeholders along the supply network as well.
Let’s not forget that the success of plant-based meat is so much more than just a dollar figure. As we’ve seen over the past many years, our food system is unsustainable and we cannot continue to rely on industrial animal agriculture as the primary driver of food. Plant-based meats are constantly innovating to meet consumers where they are. As we look toward building a food system that is more resilient, plant-based meat and plant-based food companies offer a better way of doing things and have the potential to improve and prioritize regenerative practices.
The question we should be asking is how can we truly create a system that supports the growth of plant-based foods and honors the need to truly diversify the food supply and fundamentally change the food environment so the burden to ensure that everyone has access to foods that align with their values and help to secure a better future for all.