From a Niche Segment to Mainstream Integration- Evolution of the Plant-Based Food Industry
How much growth did the Plant Based Industry achieve in Recent Years?
The plant-based industry has been exponentially growing since 2019, thanks to consumers’ changing food consuming choices. Millennials and Generation Z are becoming conscious of the impact their food consumption choices have on the environment. Thus, they have shown a rising inclination towards investing in plant-based foods that are environmentally friendly in more ways than one.
Sentient Media states that This, in turn, is changing the landscape of the plant-based industry across the globe. A Future Market Insights study on the plant-based revolution states that between 2020 and 2021, the number of vegans worldwide doubled from 0.5% of the global population to 3%. The COVID-19 pandemic played a key role in altering the food-consuming choices of people as more people focused on boosting immunity through organic food.
Moreover, more people exhibited an interest in becoming flexitarians owing to the benefits offered by plant-based foods. Protein-rich qualities of plant-based food, especially fast food is making plant-based fast food popular. For instance, Future Market Insights states that the plant-based burger market is expected to register a staggering double-digit CAGR of 22% by the end of 2030.
What kind of Plant Based Food Markets can see a boom in the
Prospects for plant based food alternatives are surging massively. From protein to beef, plant
based markets for various products are projected to see a boom in the future.
Valued at US$ 5.6 Billion in FY 2021, the global market for the plant-based
meat industry is likely to surpass US$ 34 Billion by 2030, experiencing an
incline of over 22% in terms of value CAGR. With immense investment
opportunities presenting themselves with each passing day, these figures are
Followed by plant based meat is the global plant-based beef industry, accounting for over 2/5th of the global market share, and is expected to sustain its dominance, with its share increasing over the next 10 years. In the years to come, product development, leading to innovative offerings, will play an important role in the growth of the industry.
Who are the leading Market Players of the Plant Based Industry?
Major market disruptors are undoubtedly organizations like Beyond Meat, and Impossible Foods. Several others are quickly catching up notably include Planterra foods, Amy’s Kitchen, Memphis Meat, Ojah, Finless Foods, Sunfed Meats, ChickP, Quorn Foods, Before the Butcher, v2food, Aspire Food Group, and Aleph Farms among others. These players are attempting to gain a competitive advantage by expanding their plant-based product distribution and launching advertising efforts that highlight their diversity of possibilities.
For instance, in January 2022, Beyond Meat and PepsiCo entered into a joint venture with the plan to launch a plant-based Beyond Meat® Jerky as its first product. Beyond and Pepsi announced the joint venture, called The PLANeT Partnership, with the goal of creating plant-based snacks and drinks together. Beyond Meat Jerky offers a full-flavored, on-the-go snack experience that furthers Beyond Meat and PepsiCo's shared passion for creating products that are better for both people and the planet.
The partnership gives Beyond, a relative newcomer to the food world, a chance to leverage Pepsi’s production and marketing expertise for new products. For its part, Pepsi can deepen its investment in plant-based categories — which are growing increasingly crowded — while working with one of the top creators of meat substitutes. It also helps Pepsi work toward its sustainability and health goals for its portfolio.
What are the Growth Opportunities in the Indian Plant-Based Food Market?
In recent years, Indian consumers have shown a preference for investing in sustainable diets. The Pew Research Center states that This has made it easier for Indian consumers to adapt to a vegan lifestyle as they do not have to undergo drastic diet changes. The combination of different plant-based ingredients is helping the protein-deficit consumers to get ample nutrition.
Plant-based food manufacturers are researching, studying and observing consumer behavior to understand the taste pallets of consumers. This, in turn, has opened doors of opportunities for manufacturers to experiment with newer recipes. Plant-based food is not only limited to solid food but also has extended to liquid food. For example, plant-based milk prepared from nuts, oats and coconuts is gaining huge traction. The use of plant-based milk has given vegan restaurant owners to offer delicious plant-based desserts. Thus, plant-based foods have an alternative for nearly everything.
Consuming plant-based food is no more restricted to following a diet but has become a lifestyle. Restaurants and quick service restaurants too have jumped on the bandwagon of plant-based food and are offering vegan fast food. For instance, in May 2021, Urban Platter announced that it will be listing Beyond Meat’s burgers and sausages on its online platform for Indian consumers to buy. In another instance, Burgrill launched a plant-based chicken burger named Green Meat Pounder. The burger will be launched in 24 outlets across 15 major cities.
Indian consumers are investing in plant-based food owing to its protein-rich content. Manufacturers of plant-based food are focusing on replicating the taste and texture of meat to attract a larger consumer base from the country. This strategy is expected to benefit both, manufacturers and consumers. The non-dairy industry in the country is taking center stage and helping the lactose intolerant population to have their favourite drinks. Thus, from nut-based coffee to plant-based desserts made of vegan butter, the landscape of plant-based food in India is changing.
What is the Retail sales data of the Plant-Based Food market?
Retail and grocery stores are quite profitable for plant-based food market companies because of the shelf visibility and market exposure the products may obtain through optimal shelf placement. Though it is not the most popular distribution route due to limited shelf space, several worldwide retailers are demonstrating their commitment to plant-based by restructuring their shelf formats to allow plant-based, or by partnering with food processors to develop their private labels. Retail sales data in recent years have been fairly promising for both key players and upcoming start-ups in the plant-based food market.
Prospects for plant-based meat are likely to skyrocket globally. As of 2021, the category accounted for more than two-fifths of the global market share, and its dominance is likely to continue, with its share increase over the next ten years. Plant-based products are a major driver of sales growth at grocery stores across the United States, growing nearly twice as fast as total food sales. Retail sales of plant-based foods that directly replace animal goods reached $7 billion on April 6, 2021, a 27 percent increase over the previous year.
Various plant-based products have shown a significant rise in their retail sales in the last few years. With $2.5 billion in 2020 dollar sales, plant-based milk is the most developed of all plant-based categories. Plant-based meat is a rapidly expanding industry, with $1.4 billion in 2020 sales. Plant-based eggs are the least developed but fastest expanding category in the global plant-based food market. Plant-based milk now accounts for 15.2 percent of all retail milk dollar sales. If the plant-based meat category achieves market share parity with plant-based milk, that signifies a 14-point increase in plant-based meat's proportion of the total meat market. This opportunity is valued at $14 billion.
As demand for various plant-based meat forms and formats grows, the category expands and diversifies. Consumers are looking for plant-based chicken, pork, and seafood in addition to plant-based beef. The plant-based meat market is a substantial and fast-expanding category worth $1.4 billion. According to the Good Food Institute, the category's sales climbed by more than $430 million between 2019 and 2020. Plant-based meat sales in the retail sector increased 45 percent in the last year and 72 percent over the previous two years. With the growing opportunities in the global plant-based food market, the key companies are developing various new way-outs to enhance their sales in the retail sector.
What are the challenges faced in the Plant-Based Food Market?
Although there is substantial growth in the plant-based food market, there are some serious challenges that are impeding this progress. Some of the significant obstacles are product formulations, raw material procurement, increased operational or production expenses, and a lack of sufficient capital.
Vegan customers are unconcerned about the texture and appearance of the items, whereas flexitarians are. Plant-based products are evaluated by flexitarians based on appearance, taste, and texture, and this has set the level high for plant-based firms to make items that can mimic animal products. This necessitates a major effort on product creation strategies, enhancing ingredient functioning, and supplementing products with macro and micronutrients to deliver the same, if not more, nutritional value than animal products. As a result, the manufacturer faces numerous challenges during the plant-based product development process.
Plant-based firms are currently concerned about sourcing concerns, including how to obtain enough raw ingredients. Aside from farm production delays, labor shortages, fluctuating demand, and logistical problems with processing and delivery, many brand owners are dealing with pandemic-related sourcing challenges. This presents a significant hurdle for growing Plant-based food brands because ingredient acquisition is highly tailored and naturally more difficult.
Plant-based food is thought to be more expensive due to the expenditures associated with R&D and ingredient procurement, and most companies in this field have relied on venture capital to fund their operations, which raises their costs even further. These elements have a direct impact on the product's price. Due to their current scale, plant-based meat enterprises also have the insufficient infrastructure. They lack infrastructure, facility design, manufacturing capability, and advanced technology. As a result, until costs are decreased, plant-based meat will remain a luxury product, preventing businesses from obtaining cost advantages.
Due to the uniqueness of the plant-based food market, it requires significant investment, particularly in product development, R&D, and product sourcing. It would be impossible to develop products to compete with the animal market in terms of flavor, texture, quality, shelf life, or price parity without investment. Financing has proven to be a significant barrier, particularly for start-up enterprises in the plant-based food market. To prevent further losses, key players must first identify the core of these challenges and then design their strategies accordingly.