Plant Protein Ingredients Are Overcoming Supply, Formulating Challenges as Demand Grows

May 31, 2018

One of the most valuable skills to have in the health-and-wellness biz is knowing how to separate the novelties from the “new normal”—the passing fads from the real-live future. So as we approach a future wherein the Food and Agriculture Organization of the United Nations predicts1 we’ll need 70% more food to feed every human on the planet within 30 years, it’s a safe bet that whatever that real-live future has in store, it’ll have a place for plant proteins.

And yet we needn’t gaze that far into the out years to appreciate plant proteins’ impact. These phenomenally popular ingredients are already so ever-present that they no longer qualify as just au courant; they’re a bona fide movement.

But while the public may be ready for plant proteins, are plant proteins ready for the public? And are supply lines sufficiently stocked with options fit for commercial formulation? After all, any novel ingredient goes through “growing pains” as it transitions from trendy to trusted—and some plant proteins have experienced pretty rocky adjustments already.

Regardless, says Samantha Ford, business development director, AIDP (City of Industry, CA), “Whether manufacturers are ready or not, the demand for plant proteins is there and rising. If anything, that market push will drive manufacturers to innovate and ramp up their development work to keep up with consumers’ needs.” And with their wants—for consumers want more protein in their lives, and they want it to come from plants.

Voting with Their Dollars

The Good Food Institute (GFI; Washington, DC) and the Plant-Based Foods Association (PBFA; San Francisco) worked with market research firm Nielsen (New York City) to define the total retail audience for plant-based foods within Nielsen’s Expanded All Outlets Combined Channel, which scans outlets including grocery, drug, mass merchandise, club, dollar, and military stores, as well as Whole Foods Market.

They found that total U.S. retail sales of plant-based meals as well as meat, dairy, and egg substitutes topped $3.1 billion last year alone, with 8.1% growth for the sector year over year—even as sales of all food in the same channel declined 0.2%. Notes Zak Weston, corporate engagement specialist at GFI, “Many of the larger plant-based companies—Boca, Beyond Meat, Impossible Foods—report double-digit growth in sales since last year.”

Similarly, when Innova Market Insights (Arnhem, Netherlands) reported2 on plant protein trends last year, it found not only that consumers are leaning toward diets with less meat and more plants—fully 44.1% of U.S. shoppers surveyed told Innova that they increased their meat substitute/alternative consumption over the prior year—but that industry is listening. To wit, the indexed number of global new food and beverage launches bearing plant-based claims saw a CAGR of 67.6% from 2013 through 2017.

To Your Health

It’s easy to see why the plant-based category is enjoying such growth. “Plant-sourced proteins appeal to so many consumer desires,” says Pam Stauffer, global marketing programs manager, Cargill (Minneapolis). “You name it: non-GMO, organic, sustainable, vegan, non-big-8 allergen, label friendly. Consumers understand what an ingredient like pea protein is, and they feel very confident feeding products like that to their families.”

Concerns about animal welfare, antibiotics in meat, and the general sense that plant-centered agriculture is gentler on the earth than raising livestock also play to plant proteins’ benefit. But “above all,” says Shaheen Majeed, president worldwide, Sabinsa Corp. (East Windsor, NJ), “health benefits established through research are making people turn to plant sources for their protein requirements.”

He cites new Mintel research3 showing that 76% of Americans believe proteins from plant sources are healthy, with around 28% turning to protein alternatives for weight-management benefits. In addition to that Majeed adds, “People are consuming plant-based proteins for satiety and to build muscle mass and strength.”

Blame Millennials

According to a HealthFocus International survey4, plant-based foods’ health halo factors especially strongly into younger consumers’ interest in the category. But Millennials, the survey found, were actually “more apt to cite environmental, sustainability, and social issues among their key drivers,” notes Matthew Jacobs, global product line leader for plant proteins at Cargill.

Whatever their reasoning, Millennials are a “driving force” in the growing popularity of plant-based foods, says Alison Rabschnuk, GFI’s director of corporate engagement. Mintel5 found 30% of Millennials eat meat alternatives every day, with 50% choosing such options a few times per week—underscoring a “flexitarian” streak that’s yet another “growth center” for the category, Rabschnuk adds.

Revolution in the Dairy Case

“Given that Millennials account for 25% of the U.S. population and are estimated to spend over $1 trillion annually,” Rabschnuk continues, “their tastes are already redefining the marketplace and giving the food industry a glimpse of the mainstream foods of tomorrow”—plant proteins included.

Witness the revolution in the dairy case. Plant-based milks were a “miniscule” fraction of the total domestic dairy market until Dean Foods bought WhiteWave and moved its plant-based items to grocery dairy cases, GFI’s Weston says. “Sales exploded, and now plant-based dairy is 10% of the U.S. dairy market and growing as fast as the overall dairy category is shrinking.” And if more mature protein sources like soy, almond, and coconut still dominate milk alternatives, they’re making room for the pea protein, macadamia, pistachio, and even spent barely milks—thank you, beer industry—fast gaining share.

All this has the smart money sizing up potential investment targets. “[Data firm] Crunchbase6 reported that $250 million in publicly disclosed investments in the ‘alternative protein’ startup space has been made in the last two years,” Rabschnuk says—which doesn’t even account for privately made investments. “Some companies are taking stakes in plant-based innovators—Tyson and Cargill both invested in Beyond Meat—while others are buying plant-based companies outright,” including not only Dean Foods’ investment in WhiteWave, but Nestlé’s purchase of Sweet Earth, Maple Leaf Foods’ purchase of both Lightlife Foods and the Field Roast Grain Meat Co., and Pinnacle Foods’ purchase of Gardein.

  1. “2050: A Third More Mouths to Feed.” Food and Agriculture Organization of the United Nations.
  2. “Plant Protein Trends.” Innova Market Insights presentation. July 2017
  3. “Taste Is the Top Reason U.S. Consumers Eat Plant-Based Proteins.” Mintel International. February 15, 2018
  4. “International Plant Study.” HealthFocus International. August 2017
  5. “The Protein Report–Meat Alternatives.” Mintel International. 2017
  6. “Can Protein Startups and Their Investors Take on Big Cow?” Crunchbase website.
  7. “Plant-Based Proteins–U.S.” Mintel International. January 2018