An increasing number of retailers are calling out their plant-based offerings with prominent signage.
Plant-based proteins enjoyed tremendous growth in 2020, and the category saw a record level of investment activity, outpacing the rate of growth in the overall meat category.
After several years of securing distribution and generating trial through aggressive promotion and merchandising tactics, the plant-based meat category was in the right place at the right time during 2020. Shoppers stocked up on proteins at the outset of the pandemic, and plant-based products found their way into more shopping carts, and onto more dinner plates, when Americans were forced to eat more meals at home. Coupled with ongoing trends toward flexitarian diets, the result was that plant-based meat sales increased 45% to $1.4 billion during the 52-week period ended Dec. 27, 2020, according to a report from The Good Food Institute (GFI), The Plant-Based Foods Association (PBFA) and SPINS.
This growth was especially evident in the performance of market leader Beyond Meat. The El Segundo, Calif.-based company, whose products are sold at 28,000 U.S. retail outlets, saw sales in its U.S. retail segment increase 104.1% to $264 million, during its fiscal year ended Dec. 31, 2020. Those gains were offset by sales declines in foodservice, which caused total company sales to increase 36.6% to $406.8 million.
“Our ambition is to build Beyond Meat into a global plant-based protein company similar in scale to the largest animal protein companies today, and notwithstanding near-term headwinds precipitated by the pandemic,” the company’s CFO, Mark Nelson, told investors when the results were released.
There are plenty of other companies with similar aspirations, whether they’re pure-play plant-based companies such as Impossible Foods or major CPG companies with plant-based brands such as Kellogg (Morningstar Farms) Conagra Brands (Gardein), Kraft Heinz (Boca Burger) and Hormel Foods (Happy Little Plants). Major retailers have entered the fray, too, including The Kroger Co., which launched its Simple Truth Emerge brand of plant-based meats in January 2020.
The Power of Plant-Based
Meat consumption, whether animal- or plant-based, looked very different in 2020, driven by a combination of evolving attitudes toward eating meat and the massive volume of displaced demand from foodservice operators as a result of the pandemic.
For example, 19% of consumers are now self-described flexitarians, meaning that they eat mostly a plant-based diet with occasional meat and/or poultry, compared with 10% in 2019, according to the 16th annual “Power of Meat 2021” report, released in March. The major research initiative was conducted by San Antonio-based 210 Analytics on behalf of FMI — The Food Industry Association and the Meat Institute’s Foundation for Meat and Poultry Research and Education, and released during the American Meat Conference.
Meanwhile, the share of self-described meat eaters decreased from 85% in 2019 to 71% in 2021. The share of vegans/vegetarians remains relatively low, at 6%, according to “The Power of Meat 2021.” Roughly three-fourth of those surveyed agree that meat and poultry belong in a healthy, balanced diet, while 34% of shoppers want to reduce their meat/poultry consumption, citing concerns about the healthfulness of red meat and the presence of antibiotics/hormones as the top reasons.
The insights were obtained from a survey of 1,500 U.S. meat shoppers conducted Jan. 7-13.
The report, based on data from Chicago-based IRI, showed refrigerated plant-based meat alternatives remain a small but growing niche, with household penetration slightly less than 10%. IRI data shows that 2020 sales in the category increased 83.9% to $475.3 million. Due to differences in how IRI defines the category compared with the GFI and PBFA report based on SPINS data, IRI showed the category as smaller but growing faster.
Either way, plant-based meat remains a tiny segment of the larger meat department, which experienced tremendous growth in 2020. Sales increased 19.2% to reach $82.5 billion, and were driven by more shopping trips for meat and greater spending on meat per trip, according to “The Power of Meat 2021.”