Digging Deeper...

The latest global consumer and B2B market research reports on plant-based meat alternatives (PBMA) are dishing out some appetizing forecasts for the next few years. The global plant-based meat sector reached a value of US$ 8.5 Billion in 2021, according to India-based IMARC Group. Expectations call for the market to reach US$ 34 Billion by 2027, from a compound annual growth rate (CAGR) of 25.8% from 2022 to 2027 – this despite flat or negative growth in Q4 2021 for key players in the space like Beyond Meat and Maple Leaf Foods. But there is something else going on in American kitchens and dining rooms. Dennis McLaughlin, McLaughlin Writers LLC – Sources: Kentucky Economic Association, Journal of Applied Economics and Policy (formerly the Kentucky Journal of Economics and Business); NYU Stern School of Business, Sustainable Market Share Index™ 2021 Market Share; Information Resources, Inc., Power of Meat 2022;  Sosland Publishing,  Trends & Innovations Webinar Series.

PBMA Market More Nuanced Than You Think

So who’s eating plant-based meat alternatives? It’s not vegetarians, so much. A new report released in February 2022 by the University of Kentucky shows meat substitutes made from plants have doubled in total sales over the past two years. But that growth has not cut into the sales of beef and pork. Instead, the study, published in the Journal of Applied Economic Perspectives and Policy found that shoppers were more inclined to buy less chicken and fish when they bought PBMA products than beef or pork.  “We were surprised by the results,” said Shuoli Zhao, a professor of agricultural economics at the University of Kentucky and the lead author of the study. “Those products are usually marketed as a competitor of red meat.”

But that’s not entirely so. Lisa Simon, a registered dietician in the U.K., says meat alternatives can be a great choice for those wanting to consume what they think is a healthier diet, particularly for those who eat a lot of meat. She implies that eating meat or adhering to a strict vegan diet is not a zero-sum concept.  “For example, if you are looking to avoid too much saturated fat, you would probably prefer to avoid ground beef meats, and if salt is a concern, you may want to avoid brands with more than 1g per portion.” Simon states growing consumer health concerns about the high prevalence of obesity and diabetes “has augmented PBMA demand owing to its low calorie and high-protein content.”

Dr. Zhao points out that the study suggests PBMA complements rather than competes with beef and pork consumption and demand.  Instead (and ironically) plant-based “red” meat has become a substitute for chicken, turkey and fish. Although the current demand for PBMA lags real meat significantly, its sales growth has been significant.

Who’s Eating PBMA?

According to the study, most plant-based meat alternative purchases are impulse buys, rather than items place on a shopping list ahead of time – and that might be why they are in the same shopping carts with products that PBMA marketers and investors are hoping to replace. “Although most consumers are still traditional meat lovers, they may give plant-based meat alternatives a try. So at the end of the day, they buy both,” said Yuqing Zheng, also a professor of agricultural economics at the University of Kentucky and co-author of the study.

The study shows global sales of plant-based meat alternatives were $10 billion in 2018, more than $20 billion in 2020 and are expected to reach $30 billion in the next five years. While the findings contained in the University of Kentucky’s study are draped heavily with economic data, Chicago-based Information Resources, Inc., (IRi) recently drew a practical image of what the actual PBMA market looks like. It was presented earlier this month by Sosland Publishing’s Trends & Innovations Webinar Series. Succinctly put, households that buy meat alternatives are still buying meat. But they have become more adventurous, said Chris DuBois, senior vice president for Information Resources’ Protein Practice. “They’re decreasing beef and chicken spending year over year but increasing pork, veal, lamb and exotic spending.”

Meat Not In Freefall

In 2021, 6.5 million first time buyers of PBMA products also spent $150 million more on fresh meat. Oddly, while the alternative meat products sector is attracting new buyers faster than they are losing them, veteran consumers of PBMA are buying less. What’s more, according to IRI, inveterate PBMA eaters – or retained meat alternatives buyersas they are officially identified in research parlance – spent $3.4 billion on fresh meat in 2021, about a million more than in 2020.

The seeming disconnect between the promotional hype of PBMA and its current slow sales was explained recently in the Financial Times by Neil Rankin, founder of steak house and a BBQ restaurant in London, and a chef using plant-based meat.  “The ebbing of the sales surge is down to products which fail to meet taste expectations. There are a lot of people who have moved to plant-based because of sustainability issues, but yet they aren’t really satisfied with what’s out there. Price has also been an issue as plant-based meat makers have struggled to get repeat purchases from customers once the initial excitement has died down.”

Chris DuBois also noted consumers are exhibiting stronger “plant-forward” eating patterns that focus on fruits, vegetables, nuts, seeds, oils, whole grains, legumes and beans. A plant-forward diet, however, does not define one as a vegetarian or vegan.  And it doesn’t forebode a freefall for meat.  Almost three quarters (74%) of Americans consider themselves meat eaters, while 6% call themselves vegetarian and 4% say they are pescatarian. Interestingly, a sizeable 29% of the U.S. population indicated it will give cell-based or cultivated meat a taste, assuming it can be produced to scale and priced reasonably. Which remains to be seen.

Over a third (37%) of Americans want to reduce meat and poultry consumption, according to IRi’s Power of Meat 2022. Significantly, however, 54% of youngsters forming the Generation Z cohort (born 1997-2012 and the oldest of whom are just 25) insist that meat and poultry belong in a healthy, balanced diet – which bodes well for meat producers, processors and retailers going forward for the next 50-plus years.

Ed Note: The focus of this article spotlights just a tip of an iceberg of data available on the subject of PBMA that is presented in the University of Kentucky study and is available online here and from Sosland Publishing’s Trends & Innovations Webinar Series.