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Plant-based meat gets a reality check

Plant-based alternative meat (PBA meat)

After years of growth, plant-based meat sales in the United States are stagnating; we look at possible reasons behind the slowing demand.

Plant-based food is hot.1 Plant-based alternative meat (PBA meat)… not so much—at least right now. After years of double-digit growth, sales are now flat. What’s happening?

There are many contributing factors, including supply chain problems and a tough comparison point from an impressive prior year.However, data from Deloitte’s Future of Fresh survey suggests three consumer-driven reasons for the current stagnation

To return to growth, PBA meat producers should explore ways to expand the addressable market, bring down relative costs, and create formulations that provide health benefits while maintaining taste. No easy task, but until then, a return to sustained double-digit growth could be hard to realize.

Plant-based food is hot.1 Plant-based alternative meat (PBA meat)2 … not so much—at least right now. After years of double-digit growth, sales are now flat.3 What’s happening?

There are many contributing factors, including supply chain problems and a tough comparison point from an impressive prior year.4 However, data from Deloitte’s Future of Fresh survey5 suggests three consumer-driven reasons for the current stagnation:

The addressable market may be more limited than many thought. Dramatically improved taste in recent years (vouched for by seven in 10 consumers) unlocked new interest in PBA meat.6 But the portion of the US population open to trying (and repeat buying) it may already have reached a saturation point. The number of consumers who sometimes buy PBA meat for themselves or a household member did not grow in 2022 (figure 1). The half (53%) who aren’t buying it may not be easily reachable, partly due to cultural resistance to a product some view as “woke.”7 Others, many of whom say they want to reduce their red meat consumption, still aren’t interested in PBA meat.8

 

After years of growth, plant-based meat sales in the United States are stagnating; we look at possible reasons behind the slowing demand

Deloitte Future of Fresh Survey

Each year, Deloitte surveys 2,000 US consumers for their views and shopping behaviors regarding fresh and other food. For more details, read our latest report, Fresh food as medicine for the heartburn of high prices.

Each year, Deloitte surveys 2,000 US consumers for their views and shopping behaviors regarding fresh and other food. For more details, read our latest report, Fresh food as medicine for the heartburn of high prices.

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With inflation, fewer people are willing to pay a price premium. Paying more is a tough ask amid high food-price inflation. Willingness to pay a premium for PBA meat dropped 9 percentage points from last year and remained well below the number of people who say they would pay a premium for the best traditional fresh food.9 PBA meat producers believe they are on the path to achieving cost parity with animal meat, partly because animal meat prices are rising. But until they get there, price will likely continue to be a PBA headwind—especially for consumers who are less passionate about the product.

Some assumed benefits are being questioned by consumers. Even buyers of PBA meat are changing their views on some of its attributes. The biggest change is in health perceptions. Many early adopters believed that the health benefits of plants would apply to all food products made from plants. Last year, almost seven in 10 consumers (68%) who had purchased PBA meat believed it was healthier than animal meat. But some of these consumers are changing their minds, as this year, the number dropped by 8 percentage points. A similar but smaller drop occurred with environmental sustainability, down 5 percentage points.10

To return to growth, PBA meat producers should explore ways to expand the addressable market, bring down relative costs, and create formulations that provide health benefits while maintaining taste. No easy task, but until then, a return to sustained double-digit growth could be hard to realize.

One thing that did grow rapidly over the past year is investments in plant-based protein from global venture capital and major consumer brands.11 Perhaps resulting innovations can help ease the way forward and bring the market to the next level.

Consulting Services for Consumer Products

The consumer products industry today faces virtually unprecedented challenges and opportunities. Eroding brand loyalty, increased merger and acquisition activity, enduring recessionary consumer attitudes and the rising influence of digital technologies on shopping behavior all threaten traditional business models–but also give rise to new and exciting ones. In the face of changing consumer needs and behaviors, Deloitte’s Consumer Products team is working with clients to strengthen analytics, improve internal operations and develop new market-facing capabilities and channels. With experience across a wide range of sectors–including food and beverage, personal and household goods, agribusiness, apparel and footwear, and household durables–we position our clients to lead in the face of change.

 

  1. Emma Ignaszewski, “A deeper dive into plant-based meat sales in 2021,” Good Food Institute, March 24, 2022.View in Article

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  2. Plant-based products meant to mimic the taste, texture, and properties of animal-derived meat products as closely as possible.View in Article

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  3. Ignaszewski, “A deeper dive into plant-based meat sales in 2021.”View in Article

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  4. Ibid.View in Article

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  5. Danny Edsall et al., Fresh food as medicine for the heartburn of high prices: The advantage of connecting consumers to healthy choices, Deloitte Insights, September 29, 2022.

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  6. Barb Renner et al., Fresh versus frozen: The future of fresh in a changing competitive landscape, Deloitte Insights, September 28, 2021.View in Article

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  7. Tim Carman, “Cracker Barrel faces blowback after adding Impossible sausage to menu,” the Washington Post, August 3, 2022.

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  8. Brian Kateman, “Plant-based meat is running out of steam, but it’s still the future,” Fortune, April 12, 2022; Emiko Terazono and Judith Evans, “Has the appetite for plant-based meat already peaked?,” Financial Times, January 27, 2022; Changing Tastes, “Plant forward,” 2021.

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  9. Based on Deloitte’s analysis of data from the Future of Fresh survey of US consumers, 2022.View in Article

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  10. Ibid.View in Article

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  11. Terazono and Evans, “Has the appetite for plant-based meat already peaked?.”View in Article

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The authors would like to thank the following people for their contributions to this article:

• Barb Renner, partner, Deloitte Tax

• Adam Almond, principal, Deloitte Consulting

• Kelly Alonzo, manager, Deloitte Consulting

• Sanjay Vadrevu, senior analyst, Deloitte Support Services

Cover image by: Sylvia Chang

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