DENVER, COLORADO, US — While US consumers are still interested in plant-based meat alternatives, the market likely has reached a tipping point with the initial period of exceptional sales growth likely over, according to a report from CoBank’s Knowledge Exchange.
Higher prices as well as lingering negative perceptions surrounding taste, value and versatility are all obstacles that plant-based meat has yet to overcome, according to the report.
“Whatever their reason for purchase, plant-based offerings appear to have fallen short of consumers’ expectations in terms of either cost or performance,” said Billy Roberts, senior food and beverage economist for CoBank. “Market participants should be able to address the cost issues with greater economies of scale and minimized supply chain expenses. However, innovation around taste, texture and mouthfeel will be essential to capture more mass-market consumers.”
Plant-based meat sales peaked in 2020 when consumers had more discretionary income and were curious about alternatives in the wake of pandemic-era food shortages. But less than half of Americans who tried the products repeated the purchase, according to data from consumer research firm Mintel.
Sales of meat alternatives have fallen steadily since 2021 and more sharply over the last year. Volume sales dropped 21% for the 52-week period ended July 2, 2023, according to consumer behavior research firm Circana.
Greater format diversity is needed to achieve a higher consumer conversion rate, CoBank said. Shelf-stable varieties grew by 82% in 2022 but the category still is dominated by frozen and refrigerated options.
Due to the typically higher price point, plant-based consumers tend to be from higher-income households, limiting the category's household penetration to the range of roughly 10%.
Health is a top reason consumers cite for purchasing plant-based meat alternatives. Shoppers have voiced concerns about the healthfulness of the products, particularly as it relates to the complex ingredient lists.
Innovation in plant-based proteins will need to focus on replacing highly processed varieties with healthier alternatives, CoBank said.
The environmental benefit of plant-based alternatives is another primary driver of consumer interest. However, the key to plant-based success will be speed, convenience, cost and familiarity, CoBank said.
“Lower price points and quality improvements in the category will resonate with a large portion of consumers interested in a more flexitarian approach to eating, whether due to environmental concerns or an interest in health,” Roberts said. “These consumers will not abandon animal-based meats entirely but augment their diets with plant-based options as occasions warrant and the products can meet their needs.”
