Plant-based food sales can rise again, but the barriers are big

Plant-based food sales are in a funk. Compounded by market oversaturation, the cost-of-living crisis and, some have even claimed, rising right-leaning rhetoric, the category’s sluggish performance pales in comparison to its glory days of the early 2020s and before. 

On price, plant-based was edging towards parity with its animal-based cousins in 2022​, but the post-pandemic cost-of-living hike threw any gains out of whack. This meant, when it came to cutting spend, most consumers culled plant-based – especially meat alternatives​ – from their shopping lists and diets.

Politically, plant-based is being viewed as a weapon, no less than in the US’s currently highly polarised political landscape. ‘Fake meat’, for example, has been used by the far-right as an example of the left’s threat to citizens’ rights to real meat, with some US politicians claiming plant-based companies are part of a “soy globalist” conspiracy bent on making meat illegal​.

These, among other factors, threw the market into a deeper state of flux when in 2023 a series of high-profile meat alternative brands, including Meatless Farm and Beyond Meat, either fell or faced collapse. Add to this consumers’ increasing sensitivity around ultra-processed foods, and it’s the perfect plant-based storm.

Plant-based ‘meat’ sales have bombed by at least 13% over the last two years, recent Good Food Institute (GFI) stats show. Other data outlets show similar declines across western markets where the category had previously been in growth, such as +21% between 2020 and 2022 to €5.8bn, according to the GFI.

Is the plant-based market still relevant?

So, how can plant-based regain its strength? What areas of innovation should plant-based manufacturers be focusing on? And should the cost of plant-based to consumers be lowered?

The good news is the plant-based market remains relevant, especially for meat alternatives. The data varies, but between a third and half of consumers are trying to eat less meat in 2024, HarrisX figures show. While environmental organisations like Madre Brava are pushing retailers to work harder too, urging European supermarkets to adopt 60% plant-based protein targets.

Despite challenging times brands also remain optimistic, such as Redefine Meat, whose co-founder Eschar Ben-Shitrit told FoodNavigator the business was gearing up to be the world’s largest ‘meat’ company​.

There are other pockets of hope too. In the UK, under the Plant Futures banner, retailers and manufacturers have joined forces with a view to kickstart the category into strong growth through a combined effort. The lost growth can be regained, says the organisation’s founder Indy Kaur.

“Brands are shifting their [sales] focus onto open omnivores rather than flexitarians and vegans as it’s a bigger dietary group,” she explains. “Open omnivores are meat eaters open to trying more plant-based food while reducing their meat consumption.” However, to build longevity, the category must appeal to meat eaters and “start to think about them more than ever”, she advises.

Plant-based taste can be an issue

According to Kaur, two factors let the plant-based category down – taste and apathy. “During Covid there was a natural uplift in sales, people were trailing plant-based more, but it was impossible to keep hold of all those new consumers. They lapsed because their needs weren’t met,” she argues.

In fact, according to the GFI, 51% of consumers who tried plant-based meat were not interested in eating it again because of the taste.

“People have had poor taste experiences and don’t want to come back to the category, but worse is they often can’t remember what product they’ve tried and by which brand, so there’s a need to build brands retention.”

There’s also an argument that many plant-based meat alternatives are ultra-processed, which Kaur acknowledges, nodding to “some nutritional issues”. Yet, another sector trailblazer bringing the industry together is Plant-Based Food Alliance founder Marisa Heath, who dismisses this as a big issue.

While Heath acknowledges the category does contain processed products, “there are positive ingredients like soya, which has decades of health nutrition and science behind it and we should be making the benefits clear around this”.

The health virtues of plant-based

Soya was the category’s conversational mainstay for years, but has been somewhat relegated as food tech delivered many alternatives. “I think there’s an element of being a little too smart,” says Heath when asked if the category should go back to the basics of bean burgers and nut roasts. “But being smart comes with benefits like fortification for health, which plant-based is not expressing enough.”

When it comes to cost, Heath argues the inputs for plant-based manufacturers are higher than their non-vegan counterparts as the markets usually aren’t as established. However, Kaur believes cost is not a barrier to sales success.

“Vegans or flexitarians will talk about cost as an excuse [not to buy], but for omnivores it’s more about being satisfied; the barriers go well beyond price for these people,” she says, and highlights the success of the dairy milk alternative category, which costs more than cows milk, as a working example of price not being a barrier.

But both Kaur and Heath agree plant-based food manufacturers must focus more on taste to reverse the decline in sales. “We have to focus on getting the products right for meat eaters, because they are the ones who need convincing and retaining in the category,” says Kaur.

Yes, the category’s struggles have been universally acknowledged and the barriers to growth defined. However, those with a vested interest in the sector are focusing on the solutions and developing the plant-based category’s future.