It wasn’t so long ago that simple vegetarian food options were few and far between at grocery stores and restaurants. Now plant-based food sales have more than doubled in the past year, outpacing dollar sales of all retail foods 10 times over.
The Plant Based Foods Association (PBFA) has not only been watching this trend, it has been actively gathering this data through a commission with Nielsen Media Research. In its recent report, it found the plant-based foods industry dollar sales grew 20% topping $3.3 billion (USD), doubling 2017’s numbers. Sales of all foods grew a mere 2%. This includes everything from refrigerated, deli, grocery, dairy, meat, produce, bakery and frozen foods.
Looking deeper, the data found shifting tastes in meats and dairy. As plant-based milk product sales rose 9% in 2018 compared to 3% the year before, representing around half the total dollar volume, at $1.6 billion. Sales in cow’s milk fell by 6% over this time. Plant-based meat sales jumped 24% last year from 6% in 2017 and topped $670 million in sales. Meanwhile, animal meat sales only saw a 2% increase.
The Association’s Executive Director, Michele Simon said in a release on these numbers that plant-based foods have finally matured from a niche market to become fully-mainstream.
“Plant-based meat and dairy alternatives are not just for vegetarians or vegans anymore; now even mainstream consumers are enjoying these delicious and innovative options in the market today.”
Graphs via the Plant Based Foods Association. Click to enlarge or view here.
PBFA’s custom data set compiled information from plant-based food categories that were designed to replace animal products. Nielsen scanned all outlets, including grocery stores, drug stores, mass merchandisers, club stores, dollar stores and military stores.
What constitutes “plant-based” food? Basically, anything that replaces a similar animal product that can fit into one of these six categories:
- Tofu and tempeh
- Meat alternatives
- Milk alternatives
- Other dairy alternatives
- Egg substitutes and mayo
- Meals
As Michele Simon pointed out, going vegan has reached the mainstream. Late last year, Forbes turned to its vegan and plant-based business writer Katrina Fox to detail “Why You Should Turn Your Business Vegan in 2018”. Highlighting two highly popular private companies – Impossible Foods and Beyond Meat.
California-based Beyond Meat grabbed immediate attention with celebrity investments from the likes of Bill Gates, Leonardo DiCaprio and Twitter co-founders Biz Stone and Evan Williams, even meat company Tyson Foods (NYSE: TSN). Its main products, Beyond Burgers and Beyond Sausages, use beet, coconut oil and potato starch to offer protein and mimic the taste of real, juicy, bloody meat simply and are available in more than five thousand grocery stores in the United States.
Beyond Meat crossed the edible Rubicon when it partnered with A&W Food Services Canada (T.AW.UN) to sell the meatless Beyond Meat hamburger to the fast-food crowd. Could a meatless, more expensive ($7+ CAD), relatively unknown product succeed with an audience that desires fast eats and either don’t care about health or specifically want something that won’t be doing their blood pressure any favours?
It sure did.
The Beyond Burger sold out at A&W restaurants across Canada and even outsold the Teen Burger. Chains such as Fatburger and Umami Burger in the U.S. also added the Impossible Burger to its menu and Umami reported that it had sold more than 200,000 Impossible Burgers since collaborating last year.
It is a large market right under the nose of a massive industry. A recent poll from Dalhousie University found that roughly 7% of Canadians identify as vegetarian and 2.3% call themselves vegan. That makes about one in 10 people out at a restaurant or grocery store. Food and restaurant consultant firm Baum+Whiteman told CTV Newsin an August 2018 interview that plant-based food will be the biggest restaurant dining trend in 2018.
Maple Leaf Foods (T.MFI) vice-president of marketing Michael Lenahan added that the category is “exploding” and gave his company a pat on the back for its acquisitions of plant-based food producers Lightlife Foods and Field Roast GrainMeat Co.
What is driving meatless meat’s popularity? The Dalhousie Report pointed to shifting demographics and changing taste buds. More than half of those Canadians who said they were vegetarian and vegan in their survey were under the age of 35. Animal welfare is one growing concern among younger consumers, as is health, which is something millennial consumers share with the baby boomer generation. Those who were born near the end of the Second World War are now finding themselves needing to constantly think about healthier food alternatives, but some habits are hard to shake, especially a nice, fat, juicy burger. Clearly consumers have found both, if the sales of the most popular brands are any indication.
Gone are the days of Wendy’s (Nasdaq: WEN)”Where’s the Beef?” campaign with it’s “bigger patties are better patties” message. Now it seems that rising beef prices might be turning consumers toward cheaper alternatives, even if that alternative is an alternative to meat itself.
It still wasn’t a cheap move to overthrow the market. Impossible Foods gathered $389 million in overseas financing to make it happen. The faux meat producer is working to expand its product to Asia and have it available in more than 1,000 U.S. restaurants.
Despite the popularity of plant-based foods masquerading as meaty meals, it probably won’t be enough to overthrow the market any time soon. Canada set a record amount of beef export sales in 2017of more than $2.4 billion. More than half ($1.7 billion) went to the U.S., but that could change depending on the course of NAFTA negotiations. The U.S. Department of Agriculture estimates that Americans will eat a record 100.8 kg (222.2 lb) of red meat and poultry in 2018. The North American Meat Institute estimated that the U.S. meat industry made up roughly 5.6% of the country’s GDP in 2016, accounting for $1.02 trillion in total economic output.
Either way, the plant-based food industry is rapidly gaining popularity and is showing signs that it is more than just a retail fad, but a solid market with an established, dedicated consumer base looking for new products that coming to store shelves and restaurant tables.