“Where’s the beef?”
That tag line, for Wendy’s, was one of the most popular ad refrains of the 1980s. But to many of today’s consumers — people who are increasingly concerned about their health, the welfare of animals or the fate of the planet (or all three) — a more appropriate question is: “Where’s the beef alternative?”
When Burger King introduced its meatless Impossible Whopper — and more importantly, when it started selling well — a trend that had been gaining steam for some time burst into the mainstream: plant-based foods were a force to be reckoned with.
Since that watershed moment, other big-name restaurant chains have added their own meatless protein options. Not only that, retail grocery perimeter departments have added plant-based alternatives at a speedy clip. Hardly a day goes by without another news story chronicling the trend’s growth.
“The impact is profound,” says Neil Stern, a consultant with Chicago-based McMillan Doolittle. “And I think it will continue to grow significantly as the next generation of consumers is much more aware and interested about where their food is coming from.”
While the number of Americans who identify themselves as vegetarian/vegan isn't high (about 5% vegetarian and 2% vegan), Stern says that many more consumers identify as flexitarians and are starting to build plant-based options into their diets.
Another driving factor, Stern says, is growing awareness of the negative impact protein-based diets can have on the environment.
The overall size of the plant-based market is around $4.5 billion today, and it’s scheduled to grow to $6 billion or so by 2023, according to a 2019 plantbasedfoods.org market analysis.
“It’s just getting started,” Stern says. “Consumer trends and food technology are still evolving.”
As recently as two years ago, plant-based was a still a niche market, says Bill Bishop, chief architect and co-founder of Barrington, Illinois-based Brick Meets Click.
Now, concerns about health and environmental impact have catapulted plant-based into full-blown trend status — particularly at the high end of the food market.
“It’s come in and kind of occupied a significant part of the premium market for protein,” Bishop says.
The timing, he adds, is not the best for the traditional protein market. Tariffs and other forces beyond producers’ control has slowed international demand for meat. “It doesn’t take a huge amount of diversion of demand to have some downward pressure on price,” Bishop says.
One of the most interesting things about the plant-based phenomenon, is the simultaneous impact it seems to be having on both foodservice and retail.
“Very often, we don’t see a trend impacting both at same time,” he says. “Most of the time foodservice leads and grocery follows. The fact that you have both going at the same time is testimony to the strength of consumer interest.”
A much-needed industry boost
Jim Hertel, senior vice president of analytics at Winston-Salem, North Carolina-based Inmar, says that in an industry where growth is hard to come by, plant-based foods are standout performers.
“I believe we are just at the beginning of plant-based protein growth,” he says. “After all, plant-based hamburgers have served as the only major entrant at the retail level. As more entrants tackle other beef cuts to emulate the progress, then growth can continue with other animal-based proteins as well.”
The keys to continued consumer acceptance, Hertel adds, will be taste, cookability, eating experience and price. As processors narrow the gap between their product and animal-based proteins, the broader and more engaged the market will become.
“Early adopters most likely buy in for two reasons: stricter diets and sustainability as a social value,” Hertel says. “We think the next stages of growth will be among consumers who want ‘one more red meat meal’ each week but are concerned about overdoing it.”
Conventional wisdom would suggest that the most likely substitute would be pre-made hamburger patties sold in the meat-case, he adds. But it’s very likely that overall meat sales will expand based on how the consumer views eating plant-based proteins.
When it comes to the retail grocery perimeter, plant-based is leaving its mark on a department-by-department basis, Stern says.
“It begins, of course, with produce, where plant-based products are becoming more center of the plate. It went to dairy next — milk in particular —and of course then towards meat, where Beyond, Impossible and others are making advancements.”
Center-store is feeling the impact, too, Stern says, as many items are being repositioned or reformulated as plant-based. Energy bars and snack foods have been some of the “early adopters.”
Oat-based milk alternatives are also incredibly hot, he adds, as are milks made with cashews, almonds, soys and other non-dairy alternatives.
The ever-increasing popularity of plant-based, Stern says, will drive innovations and efficiencies that will, in turn, convert even more people.
“I think we will see huge strides, category by category, as trade-offs in taste and price point become smaller,” he says. “There are huge advancements being made — the closer the taste and texture can be to the original alternative, the easier it is for consumers to make a shift in diet.”
Categories like milk are and “easy switch,” Stern says, and meat is getting close. Things like cheese, where it’s harder to match texture and melting characteristics, will take longer.
Going forward, two primary concerns will determine how well plant-based is received, Stern says.
“The first is always taste — how close to the real thing is the product. The second one, and perhaps a bigger long-term issue, is how healthy is the product. A number of the plant-based meat alternatives are also highly processed and can be high in saturated fats. fats. There might be a little ‘fad’ element once consumers really understand what they are eating.”
A home for less-than-perfect produce
The surge in plant-based foods could dovetail nicely with a trend in the fresh produce industry, providing grower-shippers with a new marketing avenue, Bishop says.
Fruit and vegetable growers, he says, are increasingly trying to deliver product to their retail and foodservice customers that’s as close to perfect as it can be.
Being a living thing that’s mostly grown outdoors, however, means that there will always be produce that doesn’t meet these increasingly strict standards. That’s where plant-based comes in.
“When they move in that direction, and we would all like that, they can get a premium for it, but they need to have ways to dispose of the less than perfect product,” Bishop says. “It’s Mother Nature, so there’s going to be some of that. It opens the door to another market for product that doesn’t quite meet that perfect standard.”
Plant-based is hot right now, but Bishop stresses that it’s important to point out that it’s future isn’t easy to predict. As he puts it, there’s still “an element of fad” about it currently.
That said, Bishop says it does seem likely that as plant-based begins to migrate down from the premium end of the market — retailers creating their own private label plant-based products, for example — and becomes more commoditized, prices will come down and consumer acceptance will rise.
“The question then becomes, When does ‘fad’ become ‘habit,’” Bishop says. “My guess is, there are going be fairly big shifts mainly in the processed area. But I also suspect it will appear as a major ingredient because it adds a certain cache.”