Retail sales of plant-based foods have grown 11 percent in the past year, bringing the total market value to $4.5 billion, according to the Plant Based Foods Association. The total U.S. retail food market has grown just 2 percent in dollar sales during the same period, according to the report, suggesting that plant-based foods are a major driver of growth for retailers nationwide.
“Whether it’s marketing a plant-based burger that reproduces the meat-eating experience or a dairy alternative that has the taste and texture of milk, consumers now have substitution without sacrifice,” said Darren Seifer, a food and beverage industry analyst for market research firm NPD Group.
Businesses want a bite of the vegan food market, estimated to reach a whopping $24.3 billion by 2026, as more and more alternatives to dairy, meat and fish sprout up at grocery stores and on restaurant menus.
|BYND||BEYOND MEAT, INC.||112.88||-0.90||-0.79%|
|QSR||RESTAURANT BRANDS INTERNATIONAL, INC.||62.90||+0.08||+0.13%|
Beyond Meat and Impossible Foods, the makers of plant-based burgers on sale at grocery stores and fast-food chains like Burger King, White Castle and KFC, target consumers looking to eat less meat and diversify their protein intake. Their products are marketed as environmentally friendly alternatives.
And they seem to be resonating with a younger audience in particular. Millennials, born between 1981 and 1996, are the top consumers of plant-based meat alternatives due to health goals and concerns about animal treatment and welfare, according to NPD group’s plant-based foods trend report published Monday.
Gen Xers, born 1965 to 1980, are also major consumers of plant-based options instead of meat.
A slew of fast-casual restaurants and bakeshops have started ramping up their vegan offerings, too. International fast-casual chain By Chloe, which has been called the vegan Shake Shack for menu items such as a tempeh-lentil burger and a portobello mushroom take on meatballs, received a $31 million investment to expand globally last year in London and Dubai.
And New York City-based bite-sized cupcake chain Baked By Melissa rolled out its first-ever batch of vegan cupcakes in September with inventive fixings like beet icing and an acai cake base after customers asked for vegan alternatives.
But jumping on the plant-based, vegan wagon for the sake of breaking into the market space isn't enough. Seifer said taste is still what determines whether vegan products will keep attracting mainstream consumers.
“Health and convenience go far to drive consumption, but if the flavor profile falls below consumers’ expectations, then the product will likely have a short run,” Seifer said.