• by Cara Rasch
  • October 3 2022
  • food
  • meat

Plant-Based Meat Industry Growth: Key Drivers and Challenges

Plant-Based Meat Industry Growth: Key Drivers and Challenges

Plant-based meat products are alternatives to conventional meat that attempt to replicate the flavors, functions, and/or textures of meats with plant proteins. These products often use terms such as:

  • plant-based meat
  • vegetarian/vegan meat
  • meatless meat
  • descriptors that are slightly altered names of the meats being imitated (e.g., chick’n, saus’ge)

According to Packaged Facts’ new report Meat, Poultry, & Seafood Alternatives: Plant-Based and Cell-Cultured Types, 2nd Edition, some consumers are abstaining from animal products by going vegan or vegetarian, but many more are simply reducing consumption of animal products with a flexitarian or semi-vegetarian diet, which may involve consumption of plant-based meat alternatives.

The Reasons More Consumers Are Turning to Plant-Based Meat Alternatives

For many years, increasing concerns about health, animal welfare, and the environment have caused more consumers to question their diet and make changes to what they eat that reflect their values.

As with the clean label movement, distrust of “industrial food” has led some consumers to seek out new avenues. Some have come to believe that animal agriculture altogether is harmful to the environment and/or that using animals for food is unethical, leading to adoption of vegetarian and vegan diets.

Health concerns are also among the biggest factors in convincing consumers to switch their diets. While some cease eating meat, few consumers are willing to be so strict. Instead, a large and growing group identify as flexitarian, meaning that they are reducing – but not eliminating – their consumption of meat or other animal products in favor of plant-based foods.

More consumers than ever also want to eat more plant-based foods because:

  • they think that products made from plants are healthier
  • ongoing publication of news stories about animal abuse and poor conditions at industrial farms is causing people to think more about where their food comes from and what impact it has on the world
  • concerns about climate change are leading consumers to question whether meat can be part of a sustainable diet

Eating plant-based meat, poultry, and seafood alternatives is an easy way to switch diets toward plant-based foods without needing to rethink meal structures. Plant-based meat alternatives are more environmentally friendly and better for animal welfare than conventional meat. Many consumers also think that plant-based meat is healthier than conventional meat and may turn to these alternatives for reasons of health.

Packaged Facts’ August 2022 National Online Consumer Survey indicates that 24% of consumers report eating plant-based meat, poultry, or seafood products. 40% of these consumers say that a factor affecting their decision to eat plant-based meat alternatives is that they like the way plant-based meat tastes, while 35% are trying to eliminate or reduce meat consumption for health reasons. Concerns about animal welfare issues and the environmental impact of animal farming are also common reasons for consuming plant-based meat products (31% and 30% of plant-based meat eaters, respectively).

Sales Trends During the COVID-19 Pandemic: Where to Go from Here?

In 2020, double-digit growth in the plant-based meat market accelerated because of rapid expansion in consumer adoption and an overall favorable environment for grocery purchases as consumers spent more time at home during the pandemic.

However, according to Packaged Facts’ report, 2021 and 2022 have been challenging years for plant-based meat products. Supply chain hurdles and high inflation have led to some consumers reducing their plant-based meat consumption in favor of other foods, such as lower priced conventional meat products, plant-based foods that are less expensive (e.g., beans and rice), or different plant-based meat brands (e.g., a shift from a brand name to a private label brand). Additionally, some consumers who tried plant-based meat products in 2020 have not become repeat buyers, meaning dimmer growth prospects after the rapid expansion that led to 2020’s larger sales base.

Much of the commentary surrounding plant-based meat alternatives has been negative in 2022. Beyond Meat, a plant-based meat market leader, has been especially hammered in the press amidst falling stock prices and declining retail sales. CNN recently published an article entitled “Is Beyond Meat Beyond Saving?” Many researchers have pondered whether interest in plant-based foods has peaked; are stagnating sales here to stay?

Analysis from Packaged Facts indicates that current sales trends are not permanent. Packaged Facts’ report forecasts that healthy sales growth will return, with sales accelerating by 2024 as supply chain issues and inflation ease. Gains in the plant-based meat market are expected to continue due to:

  • new product introductions and increasing availability
  • rising consumer adoption
  • product improvements that give them better taste and texture
  • upward momentum of consumption of these products among those who already eat plant-based meat

Growth is expected to be especially robust for less mature product categories including plant-based chicken and plant-based seafood, which have plenty of opportunities for higher penetration among consumers.

Cell-Cultured Meat: The Next Disruptor in the Meat Market

Cell-cultured meat, poultry, and seafood products may go by many names in corporate and consumer culture, including “cultivated,” “lab-created,” “lab-grown,” “cell-based,” “slaughter-free,” “cruelty-free,” “clean,” “in vitro” and “synthetic” meat.

Unlike plant-based meat products, cultured meat products are not yet available on the U.S. market; these products represent the cutting edge of meat alternatives. Many startups around the world have received funding and are developing products, some of which have already gone to market. In 2020, Singapore became the first (and currently still the only) country to grant regulatory approval to a cultured meat product. Some cultivated meat companies are aiming for U.S. approval in 2023, but thus far, there have been regulatory challenges preventing a commercial release.

In late 2018, the USDA and FDA announced that they would share regulatory oversight in the cultivated meat space, but it is still unclear how these products will be labeled, regulated, and inspected once they are ready for market.

On September 12 this year, President Joe Biden signed an executive order directing the USDA to submit a report about cultured meat and how it can be produced using biotechnology and biomanufacturing. The order also instructs the USDA to examine how biotechnology can improve sustainability, land conservation, food quality, and agricultural yields while protecting against plant and animal diseases and pests. The executive order reveals that the Biden administration is supportive of cultured meats, and this directive may eventually lead to clearer guidance for companies to get their products to market in the U.S.

Besides navigating regulations, cell-cultured meat is also currently facing other challenges, such as achieving economies of scale to make commercial production feasible and overcoming a consumer perception of disgust or skepticism. However, once cultivated meat hits the market, it will be the next disruptor in the meat market.

Some consumers who have rejected plant-based meat may give cultivated meat a more positive reception. Plant-based meat can contain ingredients (such as preservatives and additives) that are perceived as unhealthy or unnatural, while cultivated meat contains only animal cells.

Additionally, some consumers who like to eat conventional meat could find themselves more swayed to try cultivated meat products than plant-based alternatives that do not have quite the same flavors or textures as conventional meat. Cultivated meat will be a more direct substitute for conventional meat since it is made of the same material. In this way, some cultivated meat startups are emphasizing the “realness” of their products to begin influencing the perceptions of future potential customers.

Although skeptical consumers may not be ready for cultivated meat, open-minded consumers may accept these products more readily. Consumers who are concerned about animal welfare and the environment but still eat conventional meat are the most likely to be among this group, as removing animal agriculture and slaughter from the equation will undoubtedly make cultivated meat products more environmentally and animal-friendly.

Packaged Facts forecasts a large prospective market for cell-cultured meat products, with fast sales growth expected over the next two decades after commercialization becomes a reality.

Additional analysis of the plant-based meat market and projections for the future cell-cultured meat market can be found in the September 2022 Packaged Facts report

Meat, Poultry, & Seafood Alternatives: Plant-Based and Cell-Cultured Types, 2nd Edition.

About the blogger:

Cara Rasch is a food and beverage analyst for Packaged Facts. She studies consumer and industry trends in this space and has a B.A. in economics from Allegheny College.