The Plant-Based Market Could Get Way More Competitive

Analysts expect the plant-based foods industry to get a lot more competitive in the next few years as technological advances and increased demand for healthy products drive new companies and products into the market.

Grand View Research published an industry analysis showing the plant-based food market could grow at a combined annual growth rate (CAGR) of 19.4% through 2027, as “growing consumer interest in plant-based diets, coupled with the rising awareness about animal rights, is expected to drive the market growth.”

Similarly, a study by The Good Food Institute (GFI) found grocery store sales of plant-based products grew 29% between 2017 and 2019, which amounted to over $5 billion in sales. Growth was primarily driven by plant-based milk, which brought in $2 billion. However, plant-based sauces saw 135% sales growth while plant-based meats accounted for 38% of the growth

That’s what makes Modern Meat’s announcement that it partnered with California-based Real Vision Foods to distribute its award-winning product line in the US provides a prime example of how competitive the plant-based industry will get.

Modern Meat carries industry staple products like burger patties, the company also sells a Greek-style meatball made with sundried tomatoes, eggplant crumble, and a slurry of plant-based sauces. These products align with some of the fastest-growing sectors in the industry

Even though Real Vision will only produce $25 million worth of Modern Meat’s products, the company has over 100 years of manufacturing experience working with companies like Yum Brands and General Mills. For Vancouver-based Modern Meat, that is enough to introduce their product to the market as the company scales up to match increased demand.

Sales growth is just one way to measure competitiveness. To understand just how competitive the industry could become, we also need to look at emerging technologies and trends that could guide growth for years to come.

Cultivation could soon be a hot commodity

While soy, peas, and legumes are still the most popular bases, companies are perfecting techniques to culture meat for mass-scale production.

On December 15, the world’s first cultured chicken appeared in a Singapore restaurant. The San Francisco-based company who developed the meat, Eat Just, wanted to partner with a restaurant like 1880 because they want consumers to not only enjoy a “superior culinary experience, but [one that] would also engage and enlighten with a philosophy of feeding the body and the mind,” the company said in a statement.

Cultured meat is created when living cells are harvested from a host animal and are nurtured by scientists to ensure the cells replicate. The meat created by this process is biologically the same as meat that comes from a slaughtered animal. This process could have massive impacts on climate change by reducing the levels of methane produced by mass-scale farming.

Public support for cultured meat has grown in recent years as well. A survey by Kadence International found 30% of consumers would purchase cultured meat, even though 66% would try it if they were offered.

“This is a powerful sign of our progress on the journey to a new future for meat,” said Bruce Friedrich, GFI’s director, said in a statement. “The world-first sale and serving of cultivated meat demonstrates the feasibility of this technology.”

Flexitarian options abound

One way companies are standing out in the sea of plant-based foods is by offering consumers Flexitarian options. Even though it is a niche market at the moment, its popularity among younger generations is a sign of the growth the sector could see in the near future.

Flexitarianism is a style of eating popularized by millennials that allow eaters to add plant-based foods to their diet without eliminating meat. And while it may be easy to dismiss Flexitarianism as a generational trend, there is evidence the diet is currying favor with younger generations, too. A poll by Innova Market Insights found 38% of dieters in the US could be described as Flexitarian. Similarly, 53% of dieters in the UK; 67% of the Dutch; 69% of the Germans.

A survey by the Food Industry Association found millennials and Gen-X average 10% each for eating Flexitarian diets. Meanwhile, 13% of Gen-Z are Flexitarian compared to just 6% of Boomers.

This trend has already made an impact on the plant-based industry as well. In June 2019, Purdue Farms released a “one-of-its-kind” Perdue Chicken Plus, a line of nuggets, strips, and patties that Flexitarians can use as substitutes. The products are made from a mix of plant-based protein and chicken meat. The following month, Beyond Meat added a steak option to its product list.

Restaurants are purchasing the lion’s share of plant-based meats

Restaurants are poised to be at the forefront of the plant-based industry’s growth. That’s why restaurant owners should be vigilant in ensuring their menu remains intact after adding plant-based options in 2021. The prevalence of plant-based foods in restaurants promised to significantly disrupt the hospitality industry.

Research clearly shows that customers want to see healthy food options on restaurant menus without sacrificing experiences they’ve grown accustomed to.

In 2019, restaurants accounted for 57% of the global sales revenue from plant-based meats, according to Grand View Research. This was primarily driven by restaurants adding “meat-free” sections to their menus to accommodate vegetarian, vegan, and flexitarian diets.

Grand View’s analysis found products such as burger patties, nuggets, and chicken strips, are gaining traction in fast food chains. Meanwhile, restauranteurs are creating more vegan-friendly concepts to serve the growing demographic.

One example is Amy’s Kitchen, a vegan foods manufacturer, which opened its third location—dubbed “Amy’s Drive Thru”—in Walnut Creek, California. The restaurant serves vegan food but offers a classic American experience with options like burgers, fries, and milkshakes.

Finding ways to combine the prospect of a healthy meal with a memorable—if not nostalgic—experience will be crucial for restaurants in the near future.

  • Subscribe to our latest insights

Are you capital raise ready?