Plant-Based a Small But Growing Category: Report

While many are wondering whether interest in plant-based foods is a fad or a long-term trend, recent research from The NPD Group has found that plant-based is a small but growing category, and that as more innovations and items come on the market, consumer interest broadens. The market information firm noted that about 25 million consumers currently eat plant-based beverages and foods occasionally or regularly as part of a meal or as an ingredient, with about one in five consumers saying that they want more plant-based foods in their diet.

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NPD also found that consumers have specific types of plant-based beverages and foods that they want to eat at home and which ones they want to purchase from a restaurant or foodservice outlet. Although drinking dairy milk at home is still a more prevalent behavior, about 93% of meals or snacks including milk alternatives are consumed at home, while 7% are at/from a restaurant or foodservice outlet. Consumers eat more plant-based meat, poultry and seafood alternatives from restaurants, because these foods are prepared in the same way that animal protein menu items are, meaning that the consumer isn’t sacrificing taste for what they perceive as a healthier option.

At retail, the total volume sales of milk alternatives declined 3% in the 52 weeks ending Jan. 1 versus last year, according to IRI, which recently merged with NPD. Almond and coconut milk were among the top-declining products, but oat milk offset steeper declines for the total category, with volume sales up 22% compared with a year ago. Frozen-meat alternative volume sales were down 3% from last year, with lunchmeat, meatball and breakfast sausage alternatives the biggest decliners. Meanwhile, the frozen-meat alternative formats that showed growth were wings, ingredient cuts and nuggets. Fresh-meat alternatives were down 15% versus the prior year, with breakfast sausage, meatball and patty alternatives the top-declining categories, while the growth formats in the fresh retail case during the period were wings, ingredient cuts and nugget alternatives. 

“Retail is likely in a transition period, following fast expansion before and during the pandemic,” observed Chris Dubois, EVP, Americas produce practice leader at Chicago-based IRI. “As consumers are returning to their pre-pandemic habits and living with high inflationary prices, we are seeing slower velocity rates and a higher number of lost buyers than new buyers. As long as the big plant-based companies continue to deliver taste, texture and innovations while working toward price parity with other protein options, the category can thrive, especially in the frozen case, where the strength and base are consistent.”

In foodservice, plant-based foods account for less than 1% of all foods shipped via broadline foodservice distribution to commercial and non-commercial foodservice outlets, with many categories on the rise. Plant-based meat analogues have expanded from mainly beef alternatives to poultry, seafood and pork. Pound sales of chicken and fish analogues shipped from broadline foodservice distributors grew by 38% and 5%, respectively, in the 12 months ending December versus the prior year. Grain-alternative pizza crusts such as cauliflower crust grew broadline foodservice pound sales by 35% in 2022 compared with a year ago.

“Chefs and foodservice operators see the plant-based protein category as a versatile option to serve a greater diversity of guests,” said NPD Food and Beverage Industry Analyst Darren Seifer. “Plant-based provides the options to create center-of-plate recipes that delight guests and bring them back for more.”

NPD predicts that dairy and meat alternatives will grow through 2024, driven almost entirely by Millennials and Gen Zs. The deep-rooted values of these demographics with regard to sustainability, animal welfare and better health have enabled the category to experience growth throughout the pandemic. Additionally, these plant-based consumers are seeking various meat, poultry or seafood analogues, flavor profiles and formats.

“Plant-based beverages and foods are growing and gaining loyalty,” added Seifer. “These products still represent a small share in the categories in which they compete but give consumers and foodservice operators more options to consider.”