5 trends driving the meal replacement market

November 30, 2018

Meal replacement products like bars and shakes are seeing rapid growth thanks to the convenience and variety they offer consumers.

As consumers continue to adopt increasingly busy lifestyles, the meal replacement market is expected to see significant growth. One CB Insights report showed that a great variety of companies are gaining investor backing in multiple meal replacement niches1, with meal substitute startup Soylent taking the top spot among publicly funded companies at $72.4 million in total investor funding.2

Meal replacement products are also starting to mature and diversify, and new entries into the space are opening up opportunities for vegan, paleo, and keto meal replacement products. As busy consumer lifestyles drive adoption, expect the meal replacement market to grow even bigger in the future. Here are just five of the emerging trends in meal replacement.

Brands Place Emphasis on Nutrition, Flavor

Andrew Abraham, MD, is the founder and CEO of meal replacement brand Orgain (Irvine, CA). Abraham says that meal replacement products are catering to a specific set of consumer needs that are driving demand in the market.

“As ‘busy’ becomes the new status symbol, consumers want great-tasting and high-quality products that fit seamlessly into lives often spent on the go,” Abraham says. “They’re also looking to satisfy a specific set of needs like losing weight, or gaining more muscle mass, or supporting a special diet. They might even have a medical need that requires them to consume more calories and protein to facilitate the healing process or prevent malnutrition.”

Abraham experienced this need firsthand as a teenager when he was diagnosed with an aggressive type of tissue cancer. He started formulating his own meal replacement shakes at home in order to offset the weight loss his treatments caused. Later, after finishing medical school and starting his own medical practice, he used those homemade shakes as inspiration for a line of certified-organic meal replacement products.

Abraham says today’s meal replacement products shouldn’t compromise on flavor or ingredient quality in the name of nutrition. Instead, he says a successful meal replacement product should mimic the nutritional profile of real food as much as possible. “The right mixture of healthy fats, calories, protein, and carbs is what makes for a good meal replacement product. All of our organic shakes and powders have a well-rounded macronutrient profile, a high protein content, and a variety of vitamins and minerals to replace a well-balanced meal.”

Meal Replacements Go Clean Label

The clean label movement is affecting a number of sectors, and meal replacement is no exception. Consumers are readily embracing the clean label philosophy thanks to its common-sense “don’t eat anything you can’t pronounce” approach to meal planning.

Orgain’s Abraham notes that meal replacement products are moving toward a “simple ingredient” format involving formulations with fewer, more recognizable ingredients. Consumers like to know what’s in their supplements and meal replacement products, he says, and the industry is changing formulations in response.

“Consumers, and Millennial consumers in particular, want products that are made with a handful of recognizable, simple ingredients,” he explains. “There’s an aspirational quality to it. They prefer the packaged option for convenience, but they like to know that they could make the product themselves if they really wanted to.”

Consumer Needs Shift Toward Convenience, Functionality

The meal replacement market’s target audience has started to change in recent years. Matt Fuller, president of Probar (Salt Lake City, UT), says that the company’s primary audience has expanded because meal replacements are no longer a niche product.

“When Probar first started 16 years ago, our audience was primarily athletes and outdoors enthusiasts looking to fuel their active lifestyles,” Fuller says. “Now, modern consumers are looking for the convenience of a meal replacement bar simply because our lives are so busy.”

Fuller says convenience is the driving need that has fuelled mainstream adoption of meal replacement products. Consumers are becoming more health-conscious, he says, and they’re looking for a more nutritious alternative to fast food that is better tailored to address specific functional concerns.

“Different consumers have different needs, which is why we’ve created different products with different macronutrients,” Fuller notes. “For example, our Base bar has 20 g of protein and is designed for weightlifters and CrossFitters, whereas the new bars we just rolled out this summer have 1 billion CFU of probiotics to support gut health.”

Plant-Based and Non-Dairy Markets Expand

Fuller says that in addition to emerging functional trends like digestive health or fitness support, meal replacement products are increasingly adopting plant-based and non-dairy formulations. Plant-based and non-dairy are here to stay, he says, and are emerging as permanent fixtures in consumers’ lives.

“The plant-based lifestyle is becoming more than just a trend,” Probar’s Fuller says. “It’s the way consumer preferences are shifting. One might argue that plant-based foods have an established place in consumer lifestyles.”

Sales of plant-based food products in the United States grew 20% from June 2017 to June 2018, according to a Plant Based Foods Association press release.3 Meal replacement products are no exception to the rule.

The plant-based/non-dairy meal replacement market is also growing rapidly, thanks to an influx of new startups flush with investor capital. Plant-based meal replacement company Soylent (Los Angeles, CA) raised $50 million during its most recent funding round, with GV/Google Ventures (Mountain View, CA) taking the lead investor position.4

“We believe in the power of plant-based foods,” says Fuller, “and all our bars are made with plant-based ingredients in order to give consumers nutritionally balanced foods they can feel good about eating.”

Educated Consumers Are Reaching for Healthy Options

James McMaster, CEO of Huel (Los Angeles, CA), says that the meal replacement niche is trending toward healthier, more functional options that offer consumers more than just empty calories.

“We focus on providing the right macro mix and making sure consumers can get all 27 essential vitamins and minerals,” McMaster says. “People are increasingly becoming more educated when it comes to their health, and consumers have more access to research and studies than ever.”

McMaster says meal replacements offer consumers a nutritionally complete product that can help reduce personal eco-footprints, without requiring consumers to spend a lot of money. “By 2050, we’ll be growing more crops to feed animals than ourselves. That’s crazy. Food waste is also an important issue. We’re currently producing 1.5 times the amount of food we need to feed every person on the planet, and yet over 800 million people don’t have enough food to eat. In the U.S., 30% of all food is thrown away.”

Meal replacement products like Huel, McMaster notes, have a long (often 12-month) shelf life and minimal packaging, which makes it easy for consumers to make healthy, socially conscious choices.

Busy Lifestyles Will Drive Future Growth

Meal replacement products are quickly gaining ground in the market, and as consumer lifestyles become increasingly hectic, industry experts say the meal replacement market will continue to grow. Meal replacement products that consumers can use “on the go” will be particularly popular, especially among athletes.

“The adventure doesn’t have to stop when hunger strikes,” says Fuller. “Meal replacement bars fit perfectly into a bag to enjoy wherever consumers go.”

References:

  1. CB Insights. “Food replacement market map: 39 startups offering alternatives to meat, dairy, gluten, & more.” Published online August 1, 2016.
  2. “Soylent Corporation.” Crunchbase. Accessed online September 13, 2018.
  3. Robbins M. “Plant-based food sales grow 20 percent.” Plant Based Food Association. Published online July 30, 2018.
  4. Troitino C. “Soylent’s green $50 million in funding and thirsty expansion.” Forbes. Published online May 8, 2017.