Analyzing plant-based meat & seafood sales

In recent years, much of the dollar and unit growth in the plant-based meat and seafood category could be attributed to distribution gains. New products and brands were hitting the shelves for the first time, and early success led to expanded distribution into major retailers nationwide. This, however, shifted in 2023.

• Distribution declined in 2023 after multiple years of expansion, which had been a major contributor to category growth. After peaking in 2022, distribution points fell 7% in 2023. The frozen segment was the primary driver of distribution losses in 2023.
• Store sets must do more with less. Distribution declines mean that fewer products are responsible for the sales volume of the entire category. Just as distribution growth can be a boon to an industry, distribution losses and assortment shrinkages can hinder growth. That said, shelf consolidation can also be an opportunity for brands that can maintain shelf space—if their products are good enough to earn repeat purchases.
• Innovation continues to influence what’s on the shelf. Despite overall distribution losses in 2023, the category continued to see new brands, flavors, and product formats (such as steaks, filets, and cutlets) come to market. While reducing category assortment in retail stores surely contributes to sales declines in the short term, optimizing assortments such that only the best products remain on the shelf could help direct consumers to products that best meet their needs. This could help build a more solid foundation for repeat purchases in the long term.

Velocity—dollar or unit sales per point of distribution—is a metric for how effectively products are turning at shelf. Unit velocity can reveal how consumers are changing their rate of purchase.

• Velocity declines drove overall volume declines in the plant-based meat and seafood category. Unit velocity declined 14% in 2023. Dollar velocity declined 6%—that relatively lower rate of decline was driven by price increases in the category.
• The refrigerated aisle drove the greatest decline in velocity. This is distinct from the frozen segment, where declines were driven by distribution declines. One hypothesis here is that consumers shifted their purchases away from refrigerated products for the longer shelf life and sometimes better price point of frozen products.

It’s clear that declines in the plant-based meat and seafood category were influenced by all three of the primary sales drivers—changes in price, distribution, and velocity. While dollar sales were somewhat buffered by price increases, unit sales were pushed down, with inflation, distribution declines, and velocity declines leading to overall volume losses. We know (see consumer insights section below) that the main drivers lapsed consumers report for not trying plant-based meat again are taste, texture, and a preference for animal meat. 

Despite these challenging sales trends, there are clear opportunities that remain for this category to rebound and grow into the future, particularly by focusing on improving taste and price.

A significant number of households that had previously purchased in the category did not do so in 2023, which indicates that consumer needs and expectations are not being met. As covered in other sections, the core product benefits that consumers say would re-engage them in the category are tasting more similar to conventional meat and affordability to match conventional meat. 

Notably, households that decreased their purchasing from 2022 to 2023 (but are still purchasing in the category) showed relatively high engagement in 2022 before seeing that engagement fall in 2023. Increaser households tend to be heavily engaged shoppers—increasing off of more modest engagement in 2022. 

It’s clear there is a significant amount of variance in household engagement in the category. The engagement opportunities here are significant. New buyers represent a quarter of all buyers in 2023, indicating a large amount of experimentation. Purchase volume is not very consistent among households, indicating continued opportunities to build habits and loyalty. Far more buyers increased or decreased their purchases in the category compared to holding them relatively steady, demonstrating that patterns are not set in stone, and thus positioned to be influenced.

A meaningful group of households—five million—joined in 2023 and a third of those already purchasing—another five million—increased their rate of purchase. Retaining and growing engagement with these shoppers is a large opportunity for the category.

In 2023, 15 percent of U.S. households purchased in the plant-based meat and seafood category. While this is not an insignificant amount of engagement, it is significantly less than the plant-based milk category, which boasted 44 percent household penetration, and of course is much less than the conventional meat category, which boasted 97 percent household penetration. A December 2023 survey of U.S. adults conducted by Morning Consult on behalf of GFI shows that significant opportunities remain to reach more consumers:

• 53% of U.S. consumers are either not familiar or not too familiar with plant-based meat.
• Half (51%) of U.S. adults report having never tried plant-based meat and another 18% say they eat it infrequently, a few times a year or less.
• This means that approximately 7 in 10 U.S. adults have either never tried plant-based meat or have eaten it no more than a few times.

The opportunity to drive greater awareness, trial, and uptake is clear—to make the most of those future opportunities, it will be critical for products to deliver on meeting consumer needs in those initial experiences.

For U.S. adults who have tried plant-based meat just once, the top reasons they reported not consuming again included dissatisfaction regarding taste and texture.

Similarly, for respondents who had never tried plant-based meat, the primary reasons they reported not doing so were a preference for animal meat and a perception that the products would not taste good.

From a more recent December survey conducted by Morning Consult on behalf of GFI, lapsed plant-based meat alternative users are significantly less likely than frequent users to describe plant-based meat as very tasty. 

These findings demonstrate the challenges the plant-based meat market faces in meeting the needs of consumers who are open to trying the products. It’s clear that there’s an opportunity for the category to better deliver on taste and texture parity with conventional meat, as well as more strongly establish the value proposition of swapping out a conventional meat product with a plant-based meat product. To the extent that that switching proposition is health, it’s also clear that there are some health perceptions (processedness, number of ingredients, protein content) that can be addressed with certain consumer groups.

To bring in new consumers and new households while improving repeat purchase rates for current shoppers, meeting consumer needs on taste, price, and other product characteristics will be crucial.

Continuing to invest in innovation activity, product development, and product renovation can ensure that more and better products reach consumers who are looking for options that match the taste, texture, and experience of conventional meat. Some examples of focus areas include:

• Reformulating products to achieve better flavor intensities and authentic meat flavor profiles.
• Ensuring products have a low background flavor that does not distort subtler conventional meat, poultry, and seafood flavors.
• Accurately representing textures and ensuring they have the right balance of softness vs. hardness, mouthfeel, and authentic bite-down.
• Base protein ingredient research and experimentation. Currently, the vast majority of plant-based meat and seafood products leverage just a handful of plant protein bases such as soy, pea, and wheat. Additional research into other plant-protein bases could lead to better-optimized ingredients and improved product performance. 
• Alternative fats. Innovative plant-based fat ingredients or cultivated or fermentation-enabled fats could help to advance the aroma, juiciness, tenderness, and overall mouthfeel of plant-based meat and seafood products.
• Health benefits. Some consumers may be interested in product renovations that—without sacrificing taste—deliver cleaner ingredient labels and improved health and nutrition benefits.

Increasingly, hybrid products are coming to market that combine ingredients from across alternative protein production platforms. An example of this is the Impossible Burger. Impossible Foods incorporates soy leghemoglobin produced via precision fermentation into their plant-based burger to give the finished product a meaty taste and appearance. Another example is Nurishh cream cheese, which contains plant-based ingredients as well as animal-free whey protein produced via precision fermentation from Perfect Day.

Hybrid products have the potential to leverage the best components of plant-based, fermentation, and cultivated technologies to improve taste, texture, and/or cost. The relative affordability of plant-based products makes them particularly suitable to combine with the functionality of fermentation-derived or cultivated ingredients.

One example on the horizon is using cultivated fat as an ingredient in otherwise plant-based products. Mission Barns, for example, mixes plant proteins with cultivated pork fat to produce meatballs, bacon, and sausages. While such products are not yet for sale in the U.S., given recent FDA green lights and the potential submissions in the pipeline, there could be such products on the way.

Finally, some companies, such as Perdue and Tyson, have launched blended animal-based and plant-based products. One clear value proposition for this product type is supporting parents who want to incorporate more vegetables into their children’s meals while still providing a familiar product (like nuggets) that children find appealing. GFI’s State of the Industry Report on plant-based meat, eggs, seafood, and dairy has further coverage of the development of products in this category.

In the current economic environment, affordability looms large for consumers. At the start of 2023, 67 percent of U.S. consumers were very concerned about grocery inflation, according to Morning Consult. To compete with conventional products and lower the barriers to entry and adoption, alternative proteins must achieve levels of affordability that unlock the largest market of consumers—meat-eaters. Today, plant-based meat and seafood is sold at a significant price premium compared to conventional meat:

Overcoming these premiums will require public and private investments to scale up plant-based meat and seafood production, reduce the costs of goods and services, and, ultimately, reach consumers who cannot afford to sacrifice on value. Indeed, among consumers who have eaten plant-based meat previously but not in the past year, 43 percent say they would repurchase if it cost less than conventional meat (survey conducted by Morning Consult on behalf of GFI, December 2023).

While plant-based meat continues to appeal to a loyal core of users, plant-based milk serves as a powerful example of the mass-market appeal that plant-based foods can achieve through product innovation and effective marketing:

• According to SPINS data analyzed by GFI and the Plant-Based Foods Association, plant-based milk had 15% market share of the total U.S. milk market in 2023. 
• Almost half of American households now purchase plant-based milk: an estimated 44 purchased in 2023.
• In many grocery stores, plant-based milk options make up a third of all the doors in the milk aisle.

Plant-based milk has likely succeeded for a variety of reasons, many of which are applicable to the plant-based meat category:

• The right benefits: A 2023 survey by Morning Consult shared by The Food Institute found that 55% of plant-based milk consumers choose it because of taste, and 52% because of health, suggesting that plant-based milks are delivering on core reasons that consumers seek out plant-based foods; these are also core perceived benefits of plant-based meat, and ones that many consumers do not yet associate as strongly with plant-based meat as they do with plant-based milk.
• Labeling and positioning: Plant-based milk can be made with and marketed on a wide variety of ingredients (almond, oat, soy, hemp, etc.), to be sold in a variety of formats (shelf-stable, single-serving, etc.), and positioned for specific benefits and use cases (e.g., Muscle Milk’s plant-protein shakes, Oatly’s Barista Blend). While many plant-based meats have also pushed the envelope on innovation—with new health-focused offerings, bulk packs, and summer grilling packs on the shelf— these products tend to have been recently released, and many brands have room to diversify and explore new benefits and occasions associated with meat consumption.

For plant-based meat and seafood to capture a similar share, products need to deliver on the many animal types, formats, and use cases offered by conventional meat products to ensure substitutability.  Implementing marketing strategies—like those outlined in a 2023 BCG report—to appeal to meat-eating consumers, not just vegans and vegetarians, can increase household penetration and drive sales of plant-based products across categories.

To do so, companies need to:

• Understand consumer attitudes and usage.
• Identify and understand their target consumers.
• Emphasize taste, texture, and other important plant-based food attributes.
• Market and deliver on the value propositions that will generate consumer interest and trial in the category.
• Leverage the benefits of plant-forward category language versus terms like “vegan” and “vegetarian.”
• Deploy best practices in shopper marketing.