Everyone wants a bite of the plant-based market
In 2018, total US retail sales of plant-based meat grew over 23% to exceed $760 million. Retailers, restaurants, and manufacturers alike are taking note of the growing appetite for plant-based options.
Carl’s Junior is partnering with Beyond Meat to offer the Beyond Famous Star in over 1,000 locations across the US. This plant-based take on the fast-food staple is made with Beyond Meat’s latest and greatest innovation—the Beyond Burger 2.0. As Beyond Meat’s largest US restaurant partner to date, Carl’s Junior is a landmark platform for introducing the Beyond Burger 2.0 to a hungry US market.
Meanwhile, Nestlé has announced plans to launch a plant-based “Incredible Burger” under its UK-based brand Garden Gourmet in the spring of 2019. Unilever has acquired The Vegetarian Butcher to build out its plant-based portfolio. And not to be left out of the fun, McDonald’s is now offering a plant-based happy meal and a plant-based wrap in the UK. McDonald’s has also introduced the plant-based McVegan burger in Finland and Sweden, and a plant-based McAloo Tikki burger at its Chicago headquarters location.
Plant-based brands are making moves too
After introducing consumers to the Impossible Burger through almost 5,000 restaurant locations, Impossible Foods plans to debut its signature burger—version 2.0—in grocery stores in 2019. Beyond Meat is increasing its production capacity threefold to keep up with demand, having outsold conventional beef patties in some retail locations. To serve the under-developed plant-based seafood category, Good Catch will launch its signature line of plant-based tuna (along with other plant-based seafood products) in grocery stores in 2019.
But this is just the beginning. Certainly, veggie burgers have been staples of the frozen aisle for decades. In recent years, however, plant-based meats—that taste like meat—have emerged as a category all their own. And we are swiftly climbing toward a tipping point in the plant-based meat revolution.
All meat starts with plants, anyway
What’s driving the new plant-enthusiasm? Companies are realizing that the market for plant-based meat isn’t just vegans or vegetarians: it’s meat-eaters and flexitarians. And, news flash: that’s a big, big market. Flexitarians alone account for about one-third of the US market. This next generation of plant-based foods is being designed for meat-eaters, not just for those who already adhere to a plant-based diet.
Companies are rethinking what “meat” is in order to provide meat-eaters the same sensory experience they know and love, just produced in a better way. Essentially, meat is a combination of amino acids, lipids, minerals, and water. Instead of cycling plants through animals to transform them into meat, why not make meat directly from plants? That’s exactly what innovative companies are now doing—recreating each component of meat from plant sources. This realization has expanded the modern concept of meat, which can now be considered to comprise both animal meat and plant-based meat.
Yet today, few of the world’s plants have been explored for their use as plant-proteins. Traditionally, most plant-based products have been made with wheat or soy proteins—plants grown for other purposes or byproducts of existing industries. The past year, however, saw a significant increase in the use of pea protein. Other plant-protein sources, such as lupin, oat, potato, and rice are also coming into the spotlight, and opportunities for further innovation abound.
What this means for the market
If plant-based meats maintain their current growth rate, retails sales will be approaching $1 billion by the end of 2019. Given the indicators we’re seeing, we believe the growth rate is likely to accelerate in 2019. More and more CPG companies—including major players—are showing interest in launching plant-based meat products or investing in plant-based meat companies.
Even many companies in the meat industry are moving into the plant-based meat space, some rebranding as “protein companies.” Tyson Foods, the largest meat producer in the United States, has invested twice in Beyond Meat. Canada’s largest meat producer, Maple Leaf Foods, has purchased both Lightlife and Field Roast, which now reside under their new plant-based holding company Greenleaf.
Tracking the plant-based growth spurt
Between 2017 and 2018, there was a 30% increase in the number of plant-based food investment deals. And many exciting and innovative plant-based startups will be coming to market over the next year.
Savvy retailers are also changing the way they merchandise plant-based meats, shelving them adjacent to conventional meat instead of in a separate “vegetarian section,” thereby opening up the category to many more shoppers. Plant-based milk sales took off after retailers started shelving plant-based milk in the refrigerated section next to cow’s milk, which introduced the product to a whole new set of consumers. Plant-based milk now accounts for 13% of the total milk market and the category is still growing. Plant-based meat is poised to follow a similar trajectory.
In short, plant-based proteins are macro trending
Currently, plant-based meat makes up just less than 1% of the total US retail meat market and will almost certainly reach 1% market share in 2019. The dollar opportunity to reach share-of-market parity with that of plant-based milk in retail is worth over $10 billion. As former Pinnacle CEO Robert Gamgort stated, “plant-based meats are in the early stages of a macro-trend, similar to the way plant-based milks changed the dairy category.” Anticipating the quick acceleration of plant-based protein consumption, Lux Research predicts that alternative proteins will grow to almost one-third of the protein market in the United States by 2054.
But it will be much more than one-third before GFI is through.