Trend Watch: Everything You Should Know About the Plant-Based Craze

October 29, 2019

Plant-based food and drinks are trending. Several plant-based eating-related headlines have splashed news publications recently.

Not long after Burger King announced that it was testing a plant-based version of its Whopper, over 160,000 people signed a petition to bring a “mainstream meatless option” at McDonalds. Chick-fil-A is currently exploring adding vegan options and possibly meat substitutes to its menu. IKEA is rolling out a vegan version of its famous meatballs this fall.

New studies released this year prove health benefits associated with adopting plant-based diets, like the one that showed plant-based diets reduce heart failure risks by 41%.

The Food and Drug Administration solicited consumer feedback about allowing plant-based products to use dairy terms. The FDA is considering preventing plant-based beverage producers from using “milk” on its product package labeling.

All these news stories fanning this trend piqued our interest as well. That’s why we’re digging into the plant-based food/beverage topic in this article. We explore consumer interest and sales growth in the general plant-based category, examine meat substitutes, unpack dairy alternatives and discuss why consumers are so interested in this trend.

Plant Power

The plant-based category is hot, hot, hot. Sales for plant-based food surpassed $3.3 billion over the past year, which a 20% increase from 2017 to 2018. To put this into perspective, consider that growth for all foods was just 2% in the same year.

More people are eating plant-based foods. 63% of U.S. consumers are increasing their use of plant-based foods and 17% of U.S. consumers eat a predominately plant-based diet. A total of 34% of U.S. consumers eat plant-based protein at least once per day and 24% of U.S. consumers eat more plant-based protein than they did 12 months ago.

Perhaps in recognition of the growing interest in plant-based food and beverage products, Whole Foods launched a digital product catalog in 2019 that helps customers shop according to their dietary needs. There are 13 dietary preference filter options on the Whole Foods website, which include options like vegetarian, vegan, dairy-free and specific diets like Engine 2 (a plant-based diet).

Walmart’s ecommerce company Jet has added the ability to offer product recommendations to customers with dietary restrictions. More than 1 in 3 shoppers follow a particular diet or eating pattern.

By comparison, there are 7 specialty food type filters on Amazon. Target has a dietary needs filter and Kroger has a nutrition filter but to get these filter options on both sites, an online shopper has to select a specific category and then a sub-category like meat and seafood, then select packaged meat to get the filter. Target and Kroger’s specialty food filters feel clunky compared to Whole Foods and Amazon. We were unable to locate any dietary needs filters on Jewel Osco’s websites.

The Meat(less) Marvel

Like its parent category, plant-based protein is on an upward trend. The global plant-based protein market is expected to reach $5 billion by 2020. Plant-based protein could represent one-third of total protein consumption by 2054.

In the U.S., plant-based meat sales grew by 23% from August 2017 to August 2018. The U.S. plant-based meat market is worth $684 million.

As a sign of how big this category is getting, one of the larger alternative meat producers in the U.S. recently went public with its IPO (initial public offering). Beyond Meat’s 2018 sales were $88 million, which is a 17% increase from 2017. Its top product, the Beyond Burger, is sold in almost 28,000 stores across the U.S.   

#MeatlessMonday continues to trend on social media, especially on Twitter and Instagram-31% of consumers participated in a meat-free day once per week.  A total of 14.7 million U.S. households, or 36% of consumers buy plant-based meats and 6 in 10 Americans said they are reducing their consumption of meat-based products.

Much of the demand comes from Millennials. Six in 10 Millennials eat plant-based meats. Customers are willing to pay 5 to 10% more for meat alternatives.

Why buy meat alternatives?

  • 96% Health (heart health, prevent illness, longer life and strong bones)
  • 89% Cost
  • 81% Animal Welfare
  • 72% Variety
  • 72% Sustainable Environment

The Delight of Dairy Alternatives

Dairy sales are down while dairy alternative product sales are up.

There was a 7% decrease in dairy milk net sales from 2017 to 2018. Net sales totaled $13.6 billion in 2018, compared to $14.7 billion in 2017. Dairy Farmers of America attribute the decrease to lower milk prices—their press release announcing the 2018 financial results did not mention alternative milk as a factor.

Plant-based milk is sold at 89% of U.S. retailers. Non-dairy milk sales increased 9% from 2017 to 2018. Sales for plant-based creamers increased 131%, dairy-free cheeses increased 43% and yogurts grew 55%. Globally, the dairy alternatives market is expected to be worth $19.5 billion by 2020.

Which lactose-free milks are the most popular? Almond had 64% market share, soy had 13% and coconut had 12%. Demand for oat milk was so strong in 2018 that it led to a shortage. Cases of oat milk sold for $200 or more in an online marketplace during the shortage.

48% of U.S. consumers bought plant-based milk, the most popular of which was almond milk. Soy and coconut milk tied for the second most popular dairy alternative. Rice and pea milk were the least frequently purchased plant-based milks. This consumer survey from Dairy Management Inc. excluded oatmeal milk as an option for lactose-free options.

About half of U.S. consumers have considered almond-based dairy alternatives. 51% of Americans said they wanted to try a product made from almond milk. More than 44% of Americans said the idea of almond milk-based yogurt or cream cheese appealing.

Why do shoppers buy plant-based milk products? They associate it with health benefits, consider it a good source of protein and say it tastes good. One in 2 favor lactose-free options for the digestive benefits.

Rebranding vegan cheese as a “cultured nut product” would induce 43% of plant-based alternative beverage buyers and 35% of consumers who buy both dairy and plant-based milk to purchase it.

Why They Buy

Why are consumers so interested in plant-based food and beverages?

There is a clear top reason.96% of consumers said they ate non-animal-based proteins for the health benefits. Those include heart health, illness prevention and a longer lifespan.

About 7 in 10 consumers consider companies that avoid the “inhumane treatment of animals” when making purchase decisions.

A growing number of U.S. consumers are on a diet. 37% of Americans reported that they were following a specific diet in 2018, which is up from 35% in 2017 and 29% in 2016.

Why adopt a specific eating pattern? Weight loss, having more energy and protecting future health are the top 3 reasons consumers cited. Younger consumers ages 18-34 are more likely than other age groups to follow a diet.

The younger Gen Z is also the most likely  to be flexitarian. This consists of eating a mostly vegetarian diet with occasional meat consumption. 13% of Gen Z are flexitarian while 6% of Boomers are. Women are also 9% more likely to be flexitarian than men.

A small portion of the population are vegetarian or vegan. The number of U.S. consumers who are vegan and vegetarians hasn’t changed much in the past 20 years.

Just 5% were vegetarian in 2018, 5% in 2012 and 6% were vegetarian in 1999. Only 3% were vegan in 2018 and 2% were vegan in 2012.

Is a vegan by any other name still a vegan? Most consumers said they identified with the term “plant-based” over “vegan” in a 2018 Mattson survey. “Vegan” is perceived as a serious lifestyle choice that requires a serious commitment whereas “plant-based” is considered a positive dietary choice.

Of course, a consumer does not need to identify as a vegan/vegetarian to eat their dishes. 34% of consumers eat dishes that are classified as vegetarian or vegan at least once per week.

And some consumers are not a strictly vegan diet but are on a mashup of vegan and Paleo, called pegan. The pegan diet involves eating 75% plants, avoid gluten, avoid dairy except the occasional goat or sheep-based dairy product and only eat grass-fed and sustainably-sourced meat. Meat on the pegan diet is not the main course but served as a small side dish or in a sauce.

Searches for pegan eating increased 337% on Pinterest from 2017 to 2018.

About 7% follow the Paleo diet exclusively. 57% of people on the Paleo diet say they are on it to get healthier while 10% said it was to lose weight.

Plant-based protein may be a dietary necessity rather than a preference. 11% of adults have a food allergy, which is over 26 million people. The most prevalent food allergies include shellfish, milk, peanuts, tree nuts, fin fish, eggs, wheat, soy and sesame.

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