The Year Ahead for Plant-Based Meats
Recent Gallup data on Americans’ food habits confirm that consumer sentiment towards meat consumption and meat alternatives continues to shift. One Gallup poll indicated that 1 in 4 Americans have cut back on meat intake in the past year (though interestingly, very few reported fully removing meat from their diets). Among those eating less meat this year, the biggest factors for reducing intake were concerns for personal health followed by impact on the environment.
Americans aren’t just subbing out burgers for salads at the table, either. More than 3 in 10 reported incorporating plant-based meats as a method of replacing traditional proteins. Additionally, 4 in 10 Americans surveyed in a second Gallup poll have tried plant-based meat at least once, and 60 percent of those claim they that they are very or somewhat likely to try them again. The long-term success of the plant-based meat industry relies on repeat business among consumers as well as incorporating alternative meat products into a variety of occasions, and these data show encouraging signs for growth. A UBS report from 2019 projected an $85 billion plant based meat market by 2030, which would represent massive growth from just $4.5bn in 2018.
Putting these together, the industry is looking at a potential watershed moment in 2020. Social awareness of animal rights and sustainability continues to grow and is pushing consumers to make dietary changes. 2019 saw the largest corporate partnerships yet in the industry to put plant based meat in major national chains and retailers. And Americans report that the product is good enough to come back for a second helping. So what’s around the corner for the next 12 months, and will it help keep pace with lofty expectations?
I wondered last year when Burger King debuted the Impossible Whopper if we were witnessing a product launch or a very dedicated viral marketing campaign. The answer turned out to be both as sales started strong but have since flagged, and the trend continued as consumers can now get plant-based fast food at over 18 different chains. The launch also revealed a key issues for the mainstream success of plant-based meat products, namely cost and skepticism over how healthy these products are.
While early evangelists are hopping aboard the plant-based protein train already, mass consumption will require more price-sensitive consumers to see easy substitution for existing routines. According to Nielsen, that moment hasn’t arrived, as meat alternatives are currently 5 times as expensive as turkey chicken and pork at 10 cents per gram. Additionally, the same criticisms leveled against plant-based meats since they first appeared years ago are largely the same today: that they’re over-processed, unhealthy, and loaded with chemicals. For many consumers dedicated to a healthy lifestyle, learning about the processes required to create plant-based meats is akin to learning how actual sausage is made.
Given that the ingredients in plant-based meats boil down to different combinations of fats, proteins, binders, and flavorings it’s no surprise that these products are in a constant state of flux. While burgers made sense as an introduction to the vehicle, major players like Impossible Foods and Beyond Meat are in a constant R&D arms race to bring new proteins to the table. Just weeks ago Impossible Pork was announced as a pending launch, bringing us one step closer to sausages and (maybe) even the holy grail of breakfast meats — bacon.
Last year also marked the takeover of chicken as the dominant fast food protein. Chick-fil-a’s continued rise, the launch of the Popeye’s chicken sandwich, and continued social media buzz around Nashville hot chicken have made birds king. In order to capitalize, early-stage and established players are rushing to get plant-based poultry to market. Startup Nuggs raised $7 million last August led by Maven Ventures while Kellogg’s, Rebellious Foods, and Beyond Meat are all entering the plant-based fried chicken market. Major brands appear convinced these products are close to ready for prime time, as KFC launched plant-based chicken this week in Atlanta, Charlotte, and Nashville.
In the investment and M&A space, money continues to flow into new companies sourcing protein from novel locations while the industry consolidates further from incumbent meat companies looking to hedge against a potentially meatless future. Earlier this year Alpha Foods, a plant-based food manufacturer raised a $28 million round led by AccelFoods. 150 year old General Mills is a participant in a $30+ million round in Gathered Foods, a plant-based seafood manufacturer to expand their reach across North America as well as Europe and Asia.
There’s a lot left to prove for even the most mature producers in the plant-based protein space. While Gallup’s poll numbers are eye opening for a product that effectively didn’t exist a decade ago, sixty percent of Americans have yet to try their first bite of plant-based protein. The industry also faces significant pressures to scale and reduce costs while maintaining taste and texture standards that make plant-based products easy substitutes for traditional meat. Finally, new waves of protein sources will challenge for market share as advances in lab-grown protein continue and western cuisine becomes more comfortable with insects as a food source. Above all, it’s clear from both media trends and public perception that plant-based meat has made huge strides in both quality, diversity, and perception. Whereas a few years ago they were a bizarre fascination for some and a statement food for others, there are affordable and accessible products on the market today that match to the dining occasions of most Americans. While traditional meat isn’t going away any time soon, it’s not hard to imagine that plant-based products as part of everyday dining isn’t so far on the horizon.
