The report from CoBank, a national cooperative bank in the U.S. serving the rural market, says that the higher price of plant-based meat, among other concerns, has dampened consumer demand.
Has consumer interest in plant-based meat alternatives reached its apex in the U.S.? According to a report from CoBank (Greenwood Village, CO), a national cooperative bank in the U.S. serving the rural market, the higher price of plant-based meat, among other concerns, has dampened consumer demand.
The report says that plant-based meat sales peaked in 2020 and have been “slipping” ever since. It cites recent data from market researcher Circana (formerly IRI and NPD) showing that volume sales for meat alternatives declined 20.9% in the 52 weeks ending July 2, 2023. Dollar sales have also declined, with Circana’s CPG Demand Index reporting that meat-alternative sales in 2023 declined to just 80% of what they were in 2022.
The report also cites sales data from natural and organic grocers in the last year provided by market researcher SPINS to the Plant-Based Foods Association (PBFA). SPINS’s data reflected a flattening of dollar sales for plant-based meat in multioutlet retail supermarkets and natural food stores. “In 2022, sales settled at $1.35 billion for these two channels combined following 2020’s heights,” the report states. The report points out that, unlike the Circana data, the SPINS data includes information on natural and organic grocers, where sales of plant-based meats are generally higher.
Consumers seem bothered by the higher prices of plant-based meats compared to traditional proteins, the report says. Not only that, “Competition is growing for plant-based meats, both within its own category as well as from cell-cultivated and traditionally raised animal proteins. This competition is leading to below-target results for brands such as Beyond Meat, as well as some attrition among category participants,” the reports says.
Some consumers also have a negative perception of the flavor, mouthfeel, and versatility of plant-based meats. Some are also concerned about how highly processed these plant-based alternatives are.
Simply put, consumers, in times of economic uncertainty, might be turning away from innovative plant options and back to traditional meat sources instead. “Consumers generally gravitate toward familiar foods during times of economic uncertainty, presenting a sizable hurdle to trial,” the report states.
It continues: “Even though more-affluent consumers tend to be the core purchasers of these products, it is not enough to maintain sales growth. To regain their footing, plant-based brands need to expand and diversify and, indeed, solidify their consumer base.”
To assure success, the report urges companies to address the broader flexitarian market rather than just vegetarian or vegan customers. It’s also important to note that those who buy plant-based meat alternatives typically skew younger. Click here for more insights from the report.
The report concludes, “Competition and scaling up will reduce prices for plant-based meats, though not enough to achieve parity with animal-based proteins. Nevertheless, lower price points and quality improvements in the category will resonate with the considerable portion of consumers interested in a more flexitarian approach to eating.”