The plant-based meat industry has seen a surge of interest and investment in recent years, as consumers seek more sustainable and healthy alternatives to animal products. However, the category is also facing some challenges, such as slowing growth, rising competition, consumer retention, and environmental impact. In this article, we will explore the current state and future prospects of the plant-based meat sector, and how it can overcome the obstacles and thrive in the long term.
The rise and fall of plant-based meat
Plant-based meat is not a new concept, but it has gained more attention and popularity in the past decade, thanks to the innovation and marketing of companies like Beyond Meat and Impossible Foods. These companies have developed plant-based products that mimic the taste, texture, and appearance of animal meat, using ingredients such as soy, pea, wheat, and mung bean proteins, as well as fats, flavors, and colors derived from plants.
The plant-based meat category has attracted a lot of consumers who are concerned about the health, animal welfare, ethical, and environmental issues associated with animal meat consumption. According to Euromonitor, the global meat substitutes sector is worth $20.7 billion, and is set to grow to $23.2 billion by 2024. The US, Europe, and China are the largest markets for plant-based meat, with increasing demand from millennials, flexitarians, and vegetarians.
However, the plant-based meat sector is also facing some headwinds, especially after the Covid-19 pandemic, which disrupted the supply chains, distribution channels, and consumer behavior of the category. The pandemic also exposed some of the weaknesses and vulnerabilities of the plant-based meat industry, such as:
- Slowing growth: The plant-based meat category has seen a decline in its growth rate, from 27% in 2018 to 18% in 2020, according to Euromonitor. The category is expected to grow at a compound annual growth rate (CAGR) of 2.7% from 2020 to 2024, which is lower than the 4.6% CAGR of the overall packaged food industry. One of the reasons for the slowing growth is the saturation and commoditization of the market, as more players enter the category with similar products and compete for the same consumers.
- Low consumer retention: The plant-based meat category has a high trial rate, but a low repeat rate, meaning that many consumers try the products once, but do not buy them again. According to a study by the NPD Group, only 11% of US consumers who tried plant-based meat in 2019 purchased it again within six months. Some of the factors that affect consumer retention are the quality, taste, price, and ingredient list of the products, as well as the availability and convenience of the products in retail and foodservice outlets.
- Environmental impact: The plant-based meat category claims to have a lower environmental impact than animal meat, in terms of greenhouse gas emissions, water use, land use, and animal welfare. However, some studies have challenged these claims, and suggested that the plant-based meat industry may have some negative environmental consequences, such as deforestation, biodiversity loss, soil degradation, and pesticide use, due to the cultivation of the crops used to make the products. Moreover, the processing, packaging, and transportation of the plant-based meat products may also generate significant carbon footprint and waste.
The way forward for plant-based meat
Despite the challenges, the plant-based meat sector still has a lot of potential and opportunities to grow and improve in the future. Some of the strategies and trends that can help the sector achieve this are:
- Innovation and differentiation: The plant-based meat sector needs to invest more in research and development, and create more innovative and differentiated products that can appeal to a wider range of consumers and occasions. For example, some companies are developing plant-based meat products that have more nutritional benefits, such as added vitamins, minerals, and fiber, or that cater to specific dietary needs, such as gluten-free, organic, or kosher. Other companies are experimenting with new technologies, such as 3D printing, electrospinning, and cellular agriculture, to create plant-based meat products that have more complex and realistic structures, such as whole cuts, bones, and marbling.
- Education and communication: The plant-based meat sector needs to educate and communicate with consumers more effectively, and address some of the misconceptions and barriers that prevent them from buying and consuming the products. For example, some consumers may not be aware of the health, animal welfare, ethical, and environmental benefits of plant-based meat, or may have doubts about the safety, quality, and taste of the products. The sector can use various channels, such as social media, influencers, celebrities, and experts, to raise awareness and trust among consumers, and to showcase the variety and versatility of the products.
- Collaboration and regulation: The plant-based meat sector needs to collaborate and cooperate with other stakeholders, such as farmers, retailers, foodservice operators, regulators, and NGOs, to create a more sustainable and resilient supply chain and distribution network for the products. The sector also needs to comply with the regulations and standards of the markets where it operates, and to avoid any legal disputes or controversies with the animal meat industry over the labeling and naming of the products.
Conclusion
The plant-based meat sector is a dynamic and promising category that has the potential to transform the food system and the consumer behavior. However, the sector is also facing some challenges that need to be addressed and overcome, such as slowing growth, low consumer retention, and environmental impact. The sector can leverage its strengths and opportunities, and adopt some strategies and trends, such as innovation, education, collaboration, and regulation, to achieve more success and sustainability in the future.