What investors need to know about the plant-based food market
Plant-based foods are gaining ground and quick.
By 2030, the global plant-based food market is expected to reach $ 161.9 billion. It’s a 355% increase from 2021.
Interested in investing in this growing industry? This chart from The Very Good Food Company (VGFC) highlights what you need to know about the future of the plant-based food market.
1. Consumers are becoming more health conscious
As plant-based foods gain in popularity and more product options become available, consumers have started to become more selective about the types of products they are willing to buy.
For many consumers, health is a key factor when making purchasing decisions. A global survey found that out of 8,500 respondents, more than 50% were vegans for health reasons.
But just any herbal product will not cut it. Consumers are starting to force companies to meet stricter standards, expecting plant-based products to have high nutritional value, low salt, and good quality protein.
2. Consumers are becoming more socially aware
Consumers are also increasingly aware of environmental issues and how plant-based diets can help reduce greenhouse gas emissions. According to the same survey as above, almost two-thirds (64%) of respondents were vegans for environmental and sustainability reasons.
Some experts believe this figure will only increase as the impacts of climate change become more apparent across the world.
3. An influx of technological innovations based on plants
With growing consumer demand and changing expectations for the plant-based food industry, new technological advancements in this area are emerging rapidly.
For example, the cell culture meat market is rapidly gaining ground. Cell culture meat is meat that is grown in the laboratory from the cells of animals. It is biologically identical to traditional meat.
While cell culture meat has yet to reach the large-scale commercial market, several start-ups have gone public, such as MeaTech3D, Mosa meat, and Foods upside down. Recently, MeaTech announced its intention to start pre-production of cell culture chicken fat by 2022.
Over the next 20 years, the use of cell culture meat is expected to skyrocket. In fact, it could account for 35% of the global meat market by 2040, leading to a drastic drop in the market share of conventional meat.
4. Diversify the plant market
In addition to meat substitutes, other plant-based alternatives are also gaining popularity, especially egg substitutes and spreads. In 2020, sales of plant-based eggs in the United States reached $ 27 million, an increase of 167.8% from the previous year.
|Category||Sales 2020||Annual growth|
|Vegetable eggs||$ 27 million||167.80%|
|Vegetable milk||$ 2.5 billion||20.40%|
|Vegetable cheese||$ 270 million||42.50%|
|Spreads, dips, herbal sauces||$ 61 million||83.40%|
While egg substitutes and spreads are growing rapidly, plant-based milk remains the most popular product category in terms of overall sales, accounting for 35% of the total plant-based food market.
5. Retailers grow plants
Retailers are starting to take notice of the growing popularity of plant-based products and are incorporating plant-based foods into their offerings as a result.
For example, Tesco, the UK’s biggest grocery brand, expects sales of herbal products to grow 300% by 2025. And Unilever, one of the world’s largest food and beverage manufacturers, plans to generate $ 1.2 billion in sales of plant-based meat and dairy products over the next five to seven years, or approximately 5x more than their 2020 turnover for alternatives.
6. Plant-based businesses grow rapidly
As the market is booming, many plant based food companies are experiencing significant growth. For example, The Very Good Food Company, a Canadian plant-based food company, saw its sales increase by 680% from the first quarter of 2020 to the first quarter of 2021.
During the same period, sales of VGFC products increased by 77%, and its e-commerce sales grew by 1744%. More growth is on the horizon as the company recently closed a $ 70 million loan agreement with Waygar Capital and Ninepoint Partners to help develop operations.
7. More and more consumers are becoming flexitarians
Not everyone switches to an all-plant lifestyle.
As the benefits of plant-based diets become more evident, more and more people are starting to limit their meat intake or have become flexitarians– people who eat mainly a plant-based diet, but occasionally eat meat or fish.
In fact, nearly a third of Americans have cut back on meat and dairy and consider themselves flexitarians.
|Category||% of survey respondents|
Being flexitarian is getting easier than ever, as plant-based products become more accessible and the taste of meat alternatives improves.
8. Restaurants are adopting more plant-based options
Due to consumer demand, restaurants are adjusting and creating more inclusive menus with various vegan, vegetarian, and dairy-free options for their guests.
A&W, a popular Canadian fast food restaurant chain, launched its plant-based burger in 2018. Due to its popularity, the restaurant is expanding its plant-based menu options by adding Beyond Meat nuggets to the menu.
9. Younger generations prioritize plant-based diets
The plant movement was largely driven by the younger generations.
In a survey of more than 1,200 respondents, 22% of Millennials said they had adopted a vegetarian lifestyle at some point in their life, compared with just 13% generation X, and 11% baby boomers.
And many Millennials, even though not entirely plant-based, were trying to limit their meat intake.45% of Millennials surveyed said they are actively trying to reduce their meat consumption.
However, Gen Z is the driving force behind the herbal movement with 79% of them claim to eat herbal once or twice a week.
10. Governments support the herbal industry
Independent businesses aren’t the only players supporting the plant boom – governments are also stepping up to support this rapidly growing industry.
For example, the Canadian government recently announced its intention to invest $ 150 million in the plant-based food industry, signing an agreement with Protein Industries Canada. This funding will go to manufacturing plant-based foods, research and development, and technological innovation.
The future is green
There are many engines supporting the rapidly growing plant-based food industry, and for this reason, greater growth is expected in the near future.
Companies like VGFC are at the forefront of this movement, providing products that don’t sacrifice taste and aren’t highly processed.
Click here to learn more about VGFC and its wide range of products.