The Perceived Fall...

Why is the Vegan Market Wobbling Despite Predictions of Growth?

The drop in consumer appetite for meat-free products is worrying for many food and ingredients organisations including those all-important VC and PE investors. This comes as a shock, especially when forecasts predicted exponential growth in the plant-based sector.

We will shed light on the current state of the vegan market, from the perspective of producers and consumers alike. So, let’s take a look at broader industry trends, and see where the meat-substitute market is really heading. 

Perspective… 

In a move that surprised both veggie fans and carnivores, UK-based sausage, and burger firm Heck decided to scale back their plant-based offerings. Co-founder Jamie Keeble pointed the finger at lagging consumer appetites for the brand's vegan options. Keeble shared his candid views on the conundrum, stating that shoppers were "not there yet" when it came to buying Heck's vegan products. 

Trimming Down…

So, what's the game plan? Heck is shelving most of its vegan production. The lineup, once boasting 10 unique plant-based varieties, will now focus solely on two crowd-pleasers: vegan chipolatas and burgers. Despite the shift, Heck is far from throwing in the towel. They plan to continue churning out 90,000 vegan sausages per day. 

Observations and Trends…

It seems Heck isn't the only one feeling a little underwhelmed in the plant-based market. The big players are noticing a saturation point. Take Beyond Meat, for instance. After riding high on the wave of plant-based enthusiasm, they hit a snag. 

Sales slumped last year, and they pointed their finger at a trio of customer hurdles: taste, perceived health benefits, and price. So it seems even the plant-based pioneers have to grapple with the age-old conundrum: how to make the good stuff taste great without breaking the bank.

And then there's Nestle, the giant of the food industry. They introduced their Garden Gourmet plant-based vegan brand in retailers with a bang, only to pull it off the shelves less than two years later. Apparently, even the mighty can misjudge the market.

NielsenIQ's Depressing Report…

The industry-wide trend isn't just anecdotal. According to the number crunchers at NielsenIQ, supermarket customers have been tightening their belts on meat-replacement products. Their research reported a ￡37.3m drop in sales in the year to September 2022. It seems the stake in the plant-based market isn't as high as we thought.

Meat Consumption…

To understand the full context, we must also examine meat consumption patterns across different regions. Globally, meat consumption is still on an upward trajectory and is anticipated to maintain this trend. If we take a look at the American dining table over the past 40 years, you'll see a pattern. The classic beef dishes have been quietly shuffled to the side, while pork has managed to maintain its spot, holding its own in the face of changing tastes. Meanwhile, poultry has been strutting its stuff, gaining popularity and securing a significant place in the American diet.

The United Kingdom presents a similar scenario. From 2008 to 2019, overall meat consumption declined, but poultry and fish consumption increased. Future projections for the European Union suggest a decrease in beef and pork consumption over the next ten years, with poultry and lamb consumption expected to see slight growth.

Expectations…

Despite the growing interest in plant-based diets, there is still some reluctance among consumers to fully commit to these alternatives. 

• Taste & Texture: Even with the leaps and bounds in plant-based innovation, some consumers argue these products are still playing catch-up to the taste and texture of traditional meat.
• Cost Concerns: The higher price tag of plant-based alternatives often causes budget-conscious consumers to pause, especially in our current economy.
• Nutritional Naysayers: Despite scientific backing, there's a persistent myth that plant-based equals nutrient-deficient, indicating a need for ongoing education about the nutritional merits of a plant-based diet.

Consumer Sentiment…

There's an interesting shift brewing in consumer sentiment towards plant-based products. According to recent data, nearly half (46%) of UK adults are planning to reduce their intake of animal products. This indicates a growing awareness and consideration for plant-based alternatives among the UK population.

However, not everyone is jumping aboard the plant-based bandwagon just yet. Around 22% of UK adults are still on the fence about reducing their intake of animal products. This group represents a significant portion of the population and an opportunity for plant-based producers. 

Interestingly, only 20% of UK adults stated they were unlikely to cut their animal product intake. It predicts that while the trend is leaning towards plant-based, there will always be a segment of the population who prefer traditional animal-based products.

As we navigate the choppy waters of the vegan market, it's clear that both producers and consumers are on a shared journey of discovery. With changing consumer tastes, the hurdles of price and perception, and an industry in flux, the road to plant-based prominence is not without its challenges. 

While the local market may currently exhibit signs of slowing down, the worldwide picture tells a different story. Sales of plant-based meat alternatives (PBMA) globally surpassed $10 billion in 2018. Moreover, predictions indicate that this figure could soar to over $30 billion by 2026. Thus, despite some regional turbulence, the global PBMA sector is poised for considerable growth.

Yet, the potential for growth and innovation remains robust. As we continue to better understand consumer expectations and work towards addressing them, there's every reason to believe that the future of the plant-based market is as promising as ever. 

So, don’t give up just yet!

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