If there’s one thing we’ve learned by now, it’s that people want to eat plants in all sorts of ways. An illustration of that key fact: For the 52 weeks ending December 2019, U.S. retail sales of plant-based foods rose 11.4%, bringing the total plant-based market value to $5 billion, according to a report released earlier this year by the Plant Based Foods Association (PBFA) and The Good Food Institute, featuring commissioned data from SPINS.
- Health and environmental concerns are driving more consumers to opt for plant-based food products.
- Innovation is occurring not only within the plant-based meat sector, but also in a range of items across the store, including plant-based seafood, eggs, beverages, soups and sauces.
- Grocers must be ready to evolve their assortments to meet shifting consumer demands regarding plant-based foods.
Responding to this solid trend, some grocers, among them Albertsons Cos. and The Kroger Co., have even introduced own-brand plant-based food lines, while many tout their plant-based offerings in sections called out with prominent signage.
“Growing environmental concerns around the impacts of animal agriculture and the need to feed 10 billion people by 2050 are shifting consumer preferences, thrusting plant proteins into the spotlight,” explains Thomas Hayes, an analyst at New York-based Lux Research. “Companies like Impossible Foods are looking to capitalize on this opportunity, pushing the envelope to create plant-based products with sensory profiles as similar as possible to their animal-derived counterparts.”
Speaking of Redwood City, Calif.-based Impossible Foods, the company recently raised $200 million in its latest funding round, led by new investor Coatue, for a highly impressive total of about $1.5 billion raised since its founding in 2011, and introduced pre-formed 4-ounce patties of its popular Impossible Burger product, available at retail in a 2-pack.
Impossible Foods is hardly the only game in town, however. One of its major rivals in foodservice, retail and now the direct-to-consumer channel, Los Angeles-based Beyond Meat, the No. 1 brand in the refrigerated plant-based meat category, according to SPINS data for the year ending July 12, has its own plan for success — and product development is a crucial part of it.
This approach is borne out by a study undertaken in late 2019 and early 2020 by PBFA and Kroger, in which plant-based meat sales increased by 23% when those items were sold in the meat department. The study, which placed all plant-based meat in a 3-foot set within the meat department, ran for 12 weeks at 60 stores in Colorado, Indiana and Illinois.
Ready to Crumble
In the realm of innovation, Austin, Minnesota-based Hormel Ingredient Solutions has been working hard, releasing a new line of plant-based ingredient solutions available to food manufacturers across the country.
“These new products are designed to help food manufacturers incorporate more plant-based foods into their offerings for the growing number of consumers interested in adding these items to their diets,” explains Paul Sheehan, director of sales for Hormel Ingredient Solutions, part of Hormel Foods Corp.
As Smith points out, “Environmental sustainability is a priority to U.S. soybean farmers, who have reduced energy usage by 42% since 1980 and follow sustainable farming practices.”
Sunny Side Up
While a lot of innovation is taking place in the alt-meat area, plant-based counterparts of other animal proteins exist across the store. New York-based Gathered Foods, whose Good Catch plant-based seafood, made from a proprietary six-legume blend of peas, chickpeas, lentils, soy, fava beans and navy beans, has captured the attention (and sales, distribution and logistics know-how) of traditional seafood purveyor Bumble Bee, in August opened a 42,500-square-foot dedicated production facility in Heath, Ohio, constructed specifically for high-tech production of Good Catch products.
“Eat Just Inc. continues to explore plant types from around the world to identify proteins and new functionality,” says Matt Riley SVP, global partnerships at the company. “As plant-based food continues to improve in quality, taste and price, I believe we will see more and more categories offering plant-based products.”
Explaining the success of Eat Just’s plant-based egg offerings, Riley notes:
This attention to quality is paying off: “While burgers get a lot of buzz, dollar sales of plant-based eggs have surged 192% in the last year, and we own about 99% of the category,” asserts Riley.
“Realizing this goal is the critical piece to further broaden the consumer appeal of plant-based products, and will be necessary to generate any interest from lifetime nonvegetarians and those not already interested in flexitarian diets. As the market grows, economies of scale will also help plant-based products move towards price parity with animal-based products.”
Price is indeed a major consideration for plant-based manufacturers across the board, along with health and sustainability.
“We know that to be successful long term, we have to win on taste, win on nutrition, and ultimately win on price,” acknowledges Beyond Meat’s Muth. “As we grow and achieve economies of scale, we’ll look to drop our pricing as quickly as possible and have set an internal goal to have at least one product in one meaingful category that achieves price parity with its animal protein equivalent by 2024.”