While consumers remain interested in the concept of plant-based meats, high prices and concerns over processing are pushing them to lower-cost and familiar proteins.
It’s no secret that plant-based meats hover at least several dollars per pound over equivalent meat and poultry products. Still, other factors, such as lingering perceptions surrounding taste, value, and versatility remain conflicts that this category will continue to battle, according to a new report from CoBank’s Knowledge Exchange.
The market for plant-based meats peaked in 2020, and in 2023, volume sales for meat alternatives dropped 20.9 percent for the first 52 weeks of the year. Dollar sales are also showing similar drops in consumption: Circana’s CPG Demand Index shows meat alternative sales in 2023 have sunk to just 80 percent of what they were in 2022.
Over the years, marketing for plant-based products has shifted from a message of “better for you” promises to more of an environmentally friendly status at retail and food service outlets. That messaging hasn’t been enough to prevent market softening — even among natural and organic grocers.
“Whatever their reason for purchase, plant-based offerings appear to have fallen short of consumers’ expectations in terms of either cost or performance,” said Billy Roberts, senior food and beverage economist for CoBank. “Market participants should be able to address the cost issues with greater economies of scale and minimized supply chain expenses. However, innovation around taste, texture, and mouthfeel will be essential to capture more mass-market consumers.”
CoBank’s report indicates that the key to a higher consumer conversion rate will be a greater diversity of formats for plant-based meats, an area where the category has made some progress over the past year.
Though still dominated by frozen and refrigerated options, category participants have invested considerably in shelf-stable varieties, which grew by 82 percent in 2022. Those products include plant-based versions of tuna, ham, and chicken that provide the benefit of convenience missing from some other options.
Due to the typically higher price point, plant-based consumers tend to be from higher-income households, limiting the category’s household penetration to the range of roughly 10 percent. Those income levels may attract certain supermarkets, but more significant growth will require new products and technologies that can add diversity to category offerings and scale up existing product lines.
Consumers still tend to equate natural with healthy.
Health has been cited as a top reason for purchasing plant-based offerings. However, shoppers who initially sought plant-based meats thinking these were healthier options, would later voice doubts about the healthfulness of the products, specifically as it relates to their typically complex ingredient legend. Innovation in plant-based proteins must focus on replacing highly processed varieties with healthier alternatives.
Plant-based alternatives’ environmental benefits are another primary driver of consumer interest, particularly among younger demographics. However, while the environmental and health benefits of plant-based solutions play a role in the products’ appeal, the key to plant-based success will be speed, convenience, cost, and familiarity.
“Lower price points and quality improvements in the category will resonate with a large portion of consumers interested in a more flexitarian approach to eating, whether due to environmental concerns or an interest in health,” said Roberts. “These consumers will not abandon animal-based meats entirely but augment their diets with plant-based options as occasions warrant and the products can meet their needs.”
Innovations replacing highly processed varieties may more effectively align plant-based meats in supermarkets while creating lower price points that resonate with consumer interests. Although the majority of consumers will not abandon animal-based meats entirely, simply supplementing their diet with plant-based options that can better meet their needs.
