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Plant-Based Food Industry and Innovative Food Products

07 April 202214 min reading

The world begins to understand the importance of transforming the current agrifood systems to be more sustainable and environmentally conscious. In this regard, there is an increasing consumer demand for plant-based food products worldwide. As consumer diets are slowly shifting to include fewer animal-based food products, plant-based alternatives to animal-derived products (meat, dairy, eggs, and seafood) are gaining popularity. Therefore, the plant-based food market is expected to reach USD 162 billion by 2030, up from USD 29.4 billion in 2020.

With the global population set to reach 9.7 billion by 2050, the pressure on agrifood systems to nourish the world has never been higher, while at the same time staying within planetary boundaries. Today, consumer behaviours are shifting in response to a multitude of factors, such as climate change, a focus on improving health, especially amid the ongoing pandemic, concerns about the impact of food production on environmental sustainability, rising incomes, among many others. These shifts are driving changes in the food purchasing and consumption habits of consumers. New food sources and food production systems are increasingly being explored with the goal of achieving improved environmental sustainability and nutritional benefits. The word ‘new’ here applies to recently discovered techniques and materials as well as to food that has been historically consumed in specific regions of the world but has recently materialized in the global retail space.

Food purchasing habits and consumption patterns of consumers are changing across the world in response to their shifting preferences and lifestyles. Increased concerns about healthier diet choices and environmental sustainability are driving a growing interest in plant based foods, a sector that is rapidly expanding to include plant-based alternatives for meat, dairy products, eggs and seafood.

With the global population set to reach 9.7 billion by 2050, the pressure on agrifood systems to nourish the world has never been higher, while at the same time staying within planetary boundaries. Today, consumer behaviours are shifting in response to a multitude of factors, such as climate change, a focus on improving health, especially amid the ongoing pandemic, concerns about the impact of food production on environmental sustainability, rising incomes, among many others. These shifts are driving changes in the food purchasing and consumption habits of consumers. New food sources and food production systems are increasingly being explored with the goal of achieving improved environmental sustainability and nutritional benefits. The word ‘new’ here applies to recently discovered techniques and materials as well as to food that has been historically consumed in specific regions of the world but has recently materialized in the global retail space.

Food purchasing habits and consumption patterns of consumers are changing across the world in response to their shifting preferences and lifestyles. Increased concerns about healthier diet choices and environmental sustainability are driving a growing interest in plant based foods, a sector that is rapidly expanding to include plant-based alternatives for meat, dairy products, eggs and seafood.

Currently, there is an uptick in the adoption of plant-based diets, as correlated by the rising trends of vegetarianism, veganism and flexitarianism. A variety of reasons – health, environmental concerns, animal welfare issues and religious beliefs – are mentioned in connection with the adoption and practice of plant-based diets.

A plant-based diet, generally, focuses on the primary consumption of foods derived from plants (fruits, vegetables, nuts, seeds, legumes and whole grains). But it can also include small amounts of foods of animal origin – dairy, eggs, meat and fish. Therefore, the term “plant-based diet” is quite broad in its connotation.

The growing trend in adopting plant-based diets is propelling advancements in the plant-based alternatives industry. While consumers are reducing their consumption of animal-based products due to various reasons, many still desire the specific flavour, texture, mouthfeel and feeling of satiety associated with various animal-derived products.

This has led to the development of various plant-based alternatives that mimic the taste and consuming experience of animal-based products. Plant-based dairy alternatives and meat alternatives are quite popular and widespread in various regions globally, with plant-based alternatives for eggs and seafood trailing only somewhat behind in development and market penetration. The global retail sales for plant-based foods (primarily those of plant-based meat alternatives and beverages) are expected to reach USD 162 billion by 2030, up from USD 29.4 billion in 2020. According to Plant-Based Foods Poised for Explosive Growth report by Bloomberg Intelligence, population growth causing a strain on resources will contribute to plant-based food growth. The Asia-Pacific region is particularly vulnerable to the limited food supply, with an expected population of 4.6 billion by 2030. “As a result, the region is likely to dominate the plant-based protein market reaching $64.8 billion by 2030, up from $13.5 billion in 2020. The majority share of that market in Asia-Pacific will be comprised of alternative dairy products, at 57% by 2030. Comparatively, Europe and North America will see roughly $40 billion in sales, with Africa, the Middle East and Latin America all seeing between $8-9 billion each,” the report says.

Bloomberg Intelligence also projects the alternative meat market to excel in size from $4.2 billion to $74 billion in the next ten years. “Major drivers of plant-based meat growth include increased awareness of health and sustainability benefits, as well as continued declines in product price. Plant-based meat sales could exceed $74 billion to reach as much as $118 billion by 2030 in a more aggressive but still realistic scenario.”

“Food-related consumer habits often come and go as fads, but plant-based alternatives are here to stay – and grow. The expanding set of product options in the plant-based industry is contributing to plant alternatives becoming a long-term option for consumers around the world. If sales and penetration for meat and dairy alternatives continue to grow, our scenario analysis suggests that the plant-based food industry has the potential to become ingrained as a viable option in supermarkets and restaurants alike. Meat and dairy alternatives could even obtain 5% and 10% of their respective global market shares in the next decade” says Jennifer Bartashus, senior consumer staples analyst at Bloomberg Intelligence.


Among the various factors that are driving the growth of the plant-based alternatives sector, environmental and nutritional aspects are two of the major reasons behind the trend. Some of the opportunities and challenges associated with the two factors are discussed below:

Environmental aspects: Livestock production is often critiqued for various negative environmental impacts – greenhouse gas emissions, landscape degradation, overuse of water supplies, eutrophication potential, among others. The environmental impacts of plant-based alternatives are perceived as potentially less resource-intensive than livestock production. A 2018 study by Poore and Nemecek suggested that producing a glass of dairy milk requires almost nine times more land and produces three times more greenhouse gases than growing any of the plants needed for dairy alternatives. Many popular plant based alternatives are derived from legumes, which in addition to being nutritious also enrich soil fertility through nitrogen fixation.

Nutritional aspects: According to published literature, plant-based diets tend to be associated with higher dietary quality and reduced risk for chronic metabolic diseases that are commonly linked to the consumption of animal-based foods. 

What are the typical constituents of plant-based alternatives?

The protein sources typically used in plant-based alternatives range from legumes to nuts, seeds, cereals and tubers. Another growing segment within the plant-based protein industry is mycoproteins, which are derived from filamentous fungi like Fusarium venenatum. The dietary fats in plant-based alternative products are usually derived from a variety of plant products (such as canola oils, cocoa butter, coconut oil and sunflower oil) often used in mixtures to achieve desired physicochemical and nutritional parameters. In plant-based meat alternatives, the plant proteins are bound together by methylcellulose.

One of the major advantages of plant-based alternatives is the opportunity to use a larger variety of ingredients to adjust the composition of the product to meet the technological, nutritional, functional needs and consumer preferences alike. Therefore, in addition to bulk ingredients and additives used to impart colour, form and texture, a number of these products also tend to be fortified with vitamins and minerals to enhance nutritional content and in some cases to account for nutritional differences between the plant-based ingredients and the animalderived products they are intended to replace.

What are the food safety implications to be considered?

Food safety implications for food derived from plants depend on the soil, the agricultural inputs used where the source plants are grown, how the plants are harvested, stored, transported, and processed to obtain the protein isolates, handling of products post-processing and at the retail level as well as implementation of appropriate food safety management practices. Certain plant-based food products tend to have a higher diversity of ingredients in them than animalbased products, potentially providing a variety of sources from where hazards may arise. Therefore, food safety can be a varied challenge for plant-based alternatives with multiple entry points for different contaminants – biological and chemical.

The food safety considerations for plant-based alternatives to animal-derived products can be quite different from the ones necessary to produce animal-based products, and hence any transition will require a careful retooling for food safety management processes. Some companies are trying to incorporate predictive modelling approaches in early product design stages. This process involves carrying out initial microbial risk assessments in silico based on processing conditions, intrinsic properties of the product, and intended storage and consumption conditions.

The presence of mycotoxins and other chemical hazards necessitates putting in place proper controls to reduce exposure to chemical contaminants through this new food source. As plant-based diets expand, more awareness about introducing allergens from foods not commonly consumed before is needed prior to entering our diets. While most plant-based alternatives contain ingredients that have been previously approved for human consumption, ambiguities around the nomenclature of plant-based alternatives can create obstacles in developing guidelines relevant for the labelling of plant-based foods.

Apart from food safety, price-point and cultural appeal of plant-based alternatives are other challenges to consider. The cost of plant-based alternatives is expected to reduce as consumer demand increases. Currently, plant-based meat alternatives are tailored for a more Western-type diet (burgers, nuggets, sausages), with insufficient foray into more traditional foods in different regions, thereby limiting consumer base and acceptance.

There are some potential trends on the horizon in the plant-based alternatives space, for instance, hybrid milk (combination of animal dairy and plant-based beverages), mixture of animal-based products and plant-based ingredients (such as animal-based meat combined with mushrooms). Progress in this area will depend on taking an integrated multidisciplinary approach to consider and overcome the various challenges.

The Plant Based Foods Association Senior Director of Marketplace Development Julie Emmett: “The sustained rise in the market share of plant-based foods is remarkable, and makes it clear that this shift is here to stay. More and more consumers are turning to plant-based options that align with their values and desire to have a positive impact on personal and planetary health. The data shows that, despite the challenges of the past two years, retailers and foodservice providers are meeting consumers where they are by partnering with brands across the entire store to expand space, increase assortment, and make it easier than ever to find and purchase plant-based foods. The potential impact of these initiatives extends far beyond the store shelf: By taking consumer concerns to heart, the industry is actively embracing its role as a key driver of change that moves us closer to a secure and sustainable food system.”

“Product innovation is critical for plant-based categories to continue to earn a larger share of the market. Getting more consumers to eat plant-based foods more often requires improved taste and texture to compete with animal products, more product diversity, and greater affordability and accessibility. As businesses recognize the staying power of plant-based foods, the food industry must seize these opportunities to maximize the vast potential of plant-based alternatives to compete with animal products,” says the Good Food Institute Research and Analysis Manager Karen Formanski.

U.S. plant-based food retail sales hit $7.4 billion

A new report shows U.S. retail sales of plant-based foods grew 6.2% in 2021 over a record year of growth in 2020, bringing the total plant-based market value to an all-time high of $7.4 billion.

Amidst turbulent economic conditions amplified by the pandemic, supply chain issues, and inflation, new data released on 24 March by the Plant Based Foods Association (PBFA), The Good Food Institute (GFI), and SPINS, shows U.S. retail sales of plant-based foods grew 6.2% in 2021 over a record year of growth in 2020, bringing the total plant-based market value to an all-time high of $7.4 billion. Overall, plant-based food retail sales grew three times faster than total food retail sales, with most plant-based categories outpacing their conventional counterparts. Meanwhile, the conventional protein market has been rocked by supply chain disruptions and escalating inflation. Conventional meat dollar sales grew three times faster than its unit sales over the past three years, indicating that the apparent growth is driven solely by price hikes. 

Plant-based milk dollar sales grew 4% and 33% in the past three years to reach $2.6 billion —while animal-based milk sales declined 2% in 2021. Plant-based milk, which now accounts for 16% of all retail milk dollar sales, is the growth engine of the milk category, contributing $105 million in growth, while animal-based milk’s decline equated to a loss of $264 million. 

As the largest category in the plant-based market, plant-based milk continues to benefit from product innovation and expanded merchandising space and assortment. Almond milk is the category leader, accounting for 59% of the total category, and oat milk growth is the second-largest segment, growing  more than 44 times in the past three years, now making up 17% of category sales, up from only 0.5% in 2018. Plant-based milk now serves as the innovation leader in the milk category, supported by key advancements in ingredient diversification and product development to improve taste, functionality, and nutrition. 

PLANT-BASED MEAT LAPS A RECORD YEAR

After record growth in years prior, 2021 plant-based meat dollar sales remain strong, delivering a repeat year of $1.4 billion in sales, and growing 74% in the past three years, outpacing conventional meat by almost three times. The unit comparison is even more striking—while conventional meat unit sales have grown 8% in the past three years, plant-based meat unit sales have outpaced that by more than six times, growing 51% during the same period. In 2021, plant-based meat’s dollar share was 2.7% of retail packaged meat sales, or 1.4% of the total meat category (including random weight meat). 

Plant-based burgers continue to lead the plant-based meat category as the top-selling product type. At the same time, the industry is responding to consumer desire for more variety within the meat category. The fastest-growing plant-based meat product types in 2021 were plant-based meatballs, chicken nuggets, tenders, and cutlets, and deli slices. In fact, plant-based chicken was a growth leader in 2021 as more products that match the taste, texture, and appearance of animal-based chicken hit retail shelves. 

HIGH DEMAND FROM CONSUMERS WITH INCREASING PURCHASING POWER

Sixty-two percent or 79 million U.S. households are now buying plant-based products. This is an increase from 61% (77 million in 2020). Increased repeat rates in plant-based foods across numerous record-breaking years illustrate strong consumer commitment and interest—the percentage of consumers purchasing multiple times within the plant-based category grew from 78% in 2020 to 79% in 2021. Millennials and Gen Z, which compose 47% of the population and will continue to grow in their spending power, have particularly high demand for plant-based foods. Consumers, particularly Millennials and Gen Z, are motivated by an interest in foods that are better for their health and deliver on positive environmental impact and social responsibility. Plant-based foods are uniquely positioned to meet these consumer needs, and brands and retailers are swiftly responding to these trends and offering innovative new products and solutions. 

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