If you are a vegan or a vegetarian, you have probably noticed that is becoming a lot easier to find plant-based meat and dairy alternatives than it was in the past. Even if you don't eat an exclusively vegetarian diet, chances are you have discovered these products in your supermarket, and maybe even tried one of the more popular items, like almond milk or veggie burgers.
While plant-based food used to occupy a special section of the supermarket aisle and was often considered less tasty than its animal product counterparts, it is now gaining a prominent spot in shopping carts. Although many companies are still facing opposition from the industry and regulators, such as Hampton Creek's battle to call its eggless product "mayo" or alternative milk producers' challenges from the dairy industry to label their products "milk," these plant-based products are beginning to move out of the "vegan" section of the store and on to shelves next to their traditional equivalents.
The total market for the plant-based sector topped $5 billion in sales over the past year, according to the Plant Based Foods Association and SPINS. Plant-based milk sales led the way, at over $4.2 billion, with 13.1% growth for refrigerated products in the natural channel. Cheese alternatives are the fastest growing category, with 31.4% growth in the natural channel and 18% growth in all channels. Total plant-based meat sales exceeded $606 million in 2016, with refrigerated meat alternatives 15.9% growth in the natural channel.
Data from Infiniti Research even shows that vegetable proteins are closing the market share gap on animal proteins. Animal proteins currently make up 55% of the market, but plant proteins are expected to account for almost 47% of the market by 2020. The global market for protein ingredients is expected to grow at a compound annual growth rate (CAGR) of 6%, but the plant protein market will grow at a CAGR of 7%.
Meat-free burgers are becoming especially popular, as companies aim to move beyond the traditional veggie burger and introduce a product that more closely resembles beef. Impossible Foods is focused on the foodservice sector for its Impossible Burger, while Beyond Meat has rolled out its products in the grocery aisle, reported Fortune (Mar. 1). The Impossible Burger was originally only found in high end restaurants in New York City and San Francisco, but it recently began a partnership with burger chain Bareburger to launch the product at its locations. It first launched at Bareburger's restaurant near New York University, but it will eventually roll-out to the chain's 43 locations, after the company opens a plant in Oakland, CA, to boost production.
Private equity firms are also starting to take notice of the trend, and large food manufacturers have even begun to start their own venture capital firms to invest in plant-based food companies. General Mills' food incubator 301 Inc. invested in healthy snacking startup D's Naturals, which makes plant-based No Cow Bars and a line of dairy-free nut butters, reported Fortune (Feb. 28). Meanwhile, Tyson Foods launched a $150 million investment fund called Tyson New Ventures that will focus on commercializing alternative proteins, and vegan cheese startup Miyoko's Kitchen received $6 million in funding to build a larger facility and keep up with demand, reported SF Gate (Feb. 16).
In addition, New Crop Capital formed a joint venture with BeyondBrands to accelerate product development and distribution of plant-based meat alternatives. The partnership will provide go-to-market funding and management support, and the companies' first collaborative brand will be unveiled in summer 2017.
Jennette has been with The Food Institute since 2013. As Marketing Director, she is responsible for promoting all Food Institute books, seminars and webinars, as well as writing and editing the Food Institute’s annual publications. Additionally, she writes for and edits the daily news update, Today in Food, and contributes to the weekly Food Institute Report. She has a background in non-profit and environmental marketing, programming and writing, and graduated from Rowan University in 2012 with a degree in Communication Studies.
There are no comments, yet. Why don't you add one?
10 Mountainview Road
Upper Saddle River, NJ 07458
Food Institute reps are available to answer your questions
BECOME A MEMBER
For close to 90 years, The Food Institute has been the best "single source" for food industry executives, delivering actionable information daily via email updates, weekly through The Food Institute Report and via a comprehensive web research library. Our information gathering method is not just a "keyword search."