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A few years ago, plant-based meat seemed poised to take over the center of the American plate.
Sales growth for cow–free burger patties and meatless sausages soared 18 percent in 2019, and 45 percent in 2020. Investors poured billions of dollars into hundreds of startups’ coffers to help them create the next best imitation. Some of the world’s largest meat companies, like Tyson Foods and Smithfield Foods, hitched their star to the meat-free wagon too, launching their own products. In 2019, Beyond Meat had the most successful stock market debut of any company since the 2008 financial crisis, and later that year, the Impossible Whopper landed on every Burger King menu in the country.
But the hype set up unrealistic expectations for just how big a bite animal-free meat could take out of the real meat market. The meteoric growth couldn’t last forever.
Recently published sales data found that meatless meat sales in grocery stores declined by 1 percent in 2022, after zero growth in 2021, putting a yearslong ascent into question.
The sales analysis, which was commissioned by the Plant Based Foods Association and the Good Food Institute — the two leading organizations that advocate for plant-based meat and dairy — also found that unit sales of plant-based meat, or the number of products sold (as opposed to total sales in dollars), declined by 8 percent.
Conventional meat had a better year, with sales up 8 percent and a 4 percent dip in units sold, according to another analysis.
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The slowdown can be explained in part as a correction to the rapid growth the sector experienced during the pandemic, as consumers panic-bought groceries and tried out novel products.
The plant-based stagnation isn’t a surprise to anyone who has been following the industry. Over the last two years, some traditional meat companies, like JBS and Maple Leaf Foods, have cut back on their US plant-based meat production. A number of regional tests of new menu items at fast food restaurants never got a national rollout, like McDonald’s McPlant burger or KFC’s Beyond Fried Chicken. The trend reversal caused Bloomberg to recently call plant-based meat “just another fad.”
While the sector is falling short of investor expectations, I think it’s far too soon to write its obituary. Beyond and Impossible burgers only became widely accessible a few years ago. Taking a longer view, it’s notable that the industry managed to nearly double US sales from mid-2017 to 2020 (it grew even faster globally).
The reality of where the industry is headed is probably somewhere between imminent demise and world takeover: Jennifer Bartashus, a food industry analyst with Bloomberg Intelligence, predicts plant-based meat sales will grow by a modest 1-2 percent in the second half of 2023.
The uptake of plant-based meat matters beyond the ups and downs of Wall Street because it appears to be, for now, one of the best bets to chip away at industrialized animal agriculture, which subjects billions of animals to terrible conditions and is a leading driver of climate change and biodiversity loss.
Much of the plant-based sector’s trouble boils down to two basic problems: It’s still much more expensive than animal meat, and most of it doesn’t taste close to the real thing. At a minimum, it’ll have to address those problems, but that alone may not be enough. The plant-based industry and its boosters also need to help usher in a cultural shift around the centrality of meat from animals in American diets.
What put plant-based meat’s meteoric rise on pause?
Let’s start with alternative meat’s sticker price.
Year-over-year inflation has hit grocery bills harder than almost any other part of the economy, reaching 8.5 percent in March (compared to 5 percent for the broader economy). That’s caused shoppers to trade pricier meats, like seafood and steak, for chicken and cheaper cuts of beef. This could also explain part of the plant meat slump, as it costs around three times as much per pound as chicken, almost twice as much as pork, and is comparable to or costlier than beef.
The typical path for an industry to bring down price is to scale up, enabling companies to source ingredients in higher volumes and at lower cost. Scaling up seemed inevitable when plant-based sales were on the upswing, but it’s hard to do when demand is static.
A crucial point here, though, is that this hasn’t been the case for all producers: Impossible Foods reported more than 50 percent growth in dollar sales in 2022 (it likely got a boost from launching several new retail products in late 2021 and early 2022).
“It might be that there are just a few players that win out because they’re able to scale and others are not,” said Neeru Ravi, a principal at Boston Consulting Group (BCG), which consults for both plant- and animal-based food companies. In other words, the current slump may be part of a process of the market weeding out struggling producers.
In the absence of rapid growth, there are still ways plant-based companies can lower prices, such as using lower-cost by-product protein sources, like leftover grains from the brewing industry, Priera Panescu of the Good Food Institute told me in an email.
If the price of animal-free meat suddenly plummeted, it might be enough to influence some consumers to incorporate more of it into their diets. But for many, it just doesn’t taste good enough. I should know — plant-based food companies frequently mail me new products, and a lot of them either fail to decently imitate the animal product they’re designed to replicate, or just don’t taste good. The boom in bad and mediocre products could be dragging down the whole sector’s reputation.
As it stands today, the best plant-based meat is only as good as the worst animal meat, and it costs much more. It’s better than where the industry was a decade ago, but it’s not enough for a bloodless food revolution.
Plant-based food hasn’t failed, but unrealistic expectations make it hard to see its successes
Beyond the headline sales figures around alternative meats, some corners of the plant-based industry thrived in 2022.
Sales of plant-based eggs in the US shot up 14 percent as consumers reached for something new while egg prices soared due to bird flu outbreaks. Plant-based milk was up 9 percent amid a 50-year reduction in cow’s milk consumption, which is expected to further decline due in part to Gen Z’s strong preference for milk from oats and almonds.
In Europe, animal-free meat sales grew 3 percent, and global sales went up 5 percent by weight. Conventional meat companies’ enthusiasm for plant-based meat may have waned in recent years in the US, but it’s growing in Europe and elsewhere.
These are impressive gains for a relatively young industry. According to a recent Substack post by Lewis Bollard of Open Philanthropy, a foundation that funds animal welfare initiatives and has previously invested in Impossible Foods, if the industry now looks like a flop, it’s probably because expectations were too high.
In the late 2010s, Bollard writes, Beyond Meat and Impossible Foods “woke up a sluggish industry,” which generated a flurry of media coverage, investment, and consumer curiosity. Investors put $703 million into plant-based startups in 2019, which tripled to $2.2 billion in 2020.
The sector got a Covid sales bump, but the products weren’t good enough to keep most consumers coming back for more, and then inflation spiked food prices, and now here we are.
It also hasn’t helped that a steady drumbeat of journalists, meat industry trade groups, and environmental organizations have raised some dubious concerns about the climate and health benefits of plant-based meat.
The climate benefits are undisputed: Plant-based meat generally has a much lower carbon footprint than animal meat. But the health question is more complicated. Plant-based meat doesn’t contain cholesterol, and it usually contains less saturated fat than animal meat, but it’s not necessarily a health food (nor are the foods it’s meant to replace: burgers and sausages from animals).
Meatless meat often has a long list of ingredients, which critics say is proof it’s an ultra-processed food, but many animal-based foods are highly processed, too.
As Vox’s Kelsey Piper put it in a story on the health and aesthetic backlash to plant-based meat, “If we had to list the ingredients of beef the way we list the ingredients of beef alternatives, it wouldn’t look so good. The takeaway isn’t that beef is bad for you (scientists are still fighting over that one) but that counting ingredients isn’t a way to find an answer.”
Simultaneous critiques that plant-based meat doesn’t taste good enough and is too processed put the sector in a double bind. If companies shorten ingredient lists and reduce salt and fat content, they’ll taste worse, but if they jack those up, health-based criticisms will intensify. Threading that needle will be a persistent challenge.
Level-setting expectations for plant-based meat
Given what the animal-free meat upstarts are up against, we shouldn’t expect them to single-handedly slash America’s meat consumption. The politically powerful, $350 billion meat industry has benefited from over a century of government support to deliver cheap meat to consumers, but at a high cost to animals, workers, and the environment. It’s not a level playing field.
A more realistic outlook might be that every year, a couple new plant-based products modestly up the ante on taste, leading to consistent single-digit growth for the industry. Rather than replacing animal meat by 2035, which Impossible Foods founder Pat Brown has said is “doable,” it could aim to account for around 5 percent of meat sales by then (right now it makes up 1.3 percent of US sales). It won’t be enough to replace factory farming any time soon, if ever, but it could begin to chip away at its market dominance.
We’ve seen this happen over the last two years with Oatly’s oat milk, Just Egg’s liquid plant-based egg, and Gardein’s new chicken products, all of which have raised the bar for taste. Juicy Marbles, a startup from Slovenia, could do it for steak; they make a pricey plant-based filet mignon that is eerily good and slowly entering European and US markets.
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There are other promising products on the horizon. A slate of dairy-free startups promises that melty, stretchy vegan cheese is on the way. “Bakon” from a tiny startup in Portland called Thrilling Foods doesn’t perfectly replicate bacon, but it’s remarkably delicious. Burgers and sausages from Future Farm, a Brazilian company, are quite good too, as is vegan fried chicken from the buzzy startup Atlas Monroe.
A key bar for producers to clear will be developing better plant-based fats. Most plant meats use coconut or vegetable oil, which leaks out while cooking, affecting flavor and “mouthfeel.” A number of companies are working on new fat sources, said Audrey Gyr of the Good Food Institute, which “will help with mouthfeel and flavor, as fat carries flavor and aroma and contributes to perceptions of juiciness and richness.” Companies are also working to better mimic the fibrous texture of animal meat.
Another low-hanging way to boost sales, Ravi said, is simply better marketing. A recent BCG analysis found that plant-based brands that implement two to four of what it considers best marketing practices — limiting “vegan” language, naming the product’s protein source (like soy or peas), and highlighting the product’s sensory appeal and health benefits — grew six times faster than competitors that didn’t.
Badly needed federal and state government investment in R&D could also help spur innovation in the field. European governments have invested more than $150 million in developing better plant-based foods, but the US Congress has only allocated nearly $6 million to the USDA.
The wildcard that is lab-grown or “cultivated” meat — real meat made from animal cells — will shake up the alternative protein space in the years ahead. Once cultivated meat companies get full government approval, they’ll start small by selling at high-end restaurants, and there’s skepticism as to whether they’ll ever be able to scale up and compete with meat from animals, given the host of technical challenges they face.
“Hybrid” meat — essentially plant meat mixed with small amounts of cultivated meat — could have a better shot at reaching scale and overcoming the taste challenges of fully plant-based products.
Beyond taste and price, there are also matters of the mind and heart at play when people decide what’s for dinner, like culture, tradition, and a perception of meat as natural. Meat is also coded along political and gender lines, with women and liberals more likely to eschew meat than men and conservatives. This might explain why some plant-meat companies have run commercials starring Snoop Dogg and Kevin Hart, and taken investments from celebrities and world-class athletes — efforts to shed the industry’s kumbaya image.
Alternative meat’s success requires broader societal change: a decoupling of meat from political ideology and gender, as well as outdated notions of “naturalness.” And, hard as it may be, adapting our traditions to a changing climate.
