Plant-based proteins continue to thrive in a stressed economy

Sloan Levett • March 14, 2024

A few short years ago, a consumer could only find plant-based alternative products at the local health store or an obscure corner of a grocery aisle. As far as a vegetarian option at a steakhouse or burger house, you would be out of luck.

At one time many considered plant-based alternative foods to be the realm of vegans and vegetarians. All that has changed in a world of more health conscious and informed consumers. In their quest for more sustainable lifestyles, mainstream consumers are fuelling the demand for plant-based alternatives in all aspects of their diet – from meat to beverages to baked goods.

In 2020, we published an article about the rise of the plant-based protein trend and, over the past three years, the plant-based proteins market has shown remarkable resilience, where other food and beverage categories have struggled. Despite a myriad of economic, geopolitical, supply chain, and demand challenges facing the food and beverage industry in general, the plant-based protein market has managed to withstand those pressures, growing at a healthy pace across all categories.

Several factors led to the continued positive trend. Throughout that period, the availability of options expanded exponentially. Today there is no shortage of plant-based offerings taking up more shelf space in stores and on restaurant menus, from quick service to fine dining establishments. We have reached a point where shoppers and diners can choose from a wide array of plant-based dairy or meat options, without sacrificing quality or taste.

When the US-based Plant Based Foods Association (PBFA) began reporting on retail sales in the plant-based foods market five years ago, the industry was primarily composed of six product categories. Today it reports on 20 plant-based categories, all of which demonstrate the rise in consumer needs across a broad spectrum of tastes and dietary preferences.

There is also a groundswell of non-vegetarian and non-vegan consumers who are increasingly concerned about healthy/clean eating, environmental sustainability, animal welfare, and integrating plant-based alternatives into their diet.

Growing interest is also reflected in the rise in popularity and rapid expansion of vegan restaurant chains, such as Fresh, PLANTA, and Copper Branch, not to mention the host of independent vegan restaurants popping up in local neighborhoods.

The current picture

Globally the market for plant-based proteins is increasing with shifting consumer preferences and a rising global population, according to the Protein Industries Canada Global Market Forecast and Competitive Study for Canadian Plant-abased Proteins.

It reports that the plant-based meat segment continues to show strong growth potential to 2035. The strongest long-term growth is in the plant-based meat sector at 16.5% CAGR, while plant-based dairy will continue its trajectory at a rate of 9.5 per cent. The plant-based fortification category is expected to increase by 4.1 per cent annually.

The PBFA states that the industry has experienced unprecedented double-digit growth in 2020 in the U.S. and continues to outpace the growth of both animal-based foods and total food and beverage categories. By comparison, animal-based foods and total food and beverage unit sales have remained flat at 1% since 2019, while plant-based foods unit growth is up 23%.

The changing consumer

Much of the continued growth can be attributed to the rise of the flexitarian segment. A recent Dalhousie University Agri-Food Analytics Lab (AAL) found that Canadian demand for plant-based alternatives is strongest in the flexitarian category, an eating style that emphasizes the addition of plant or plant-based foods and encourages meat to be consumed less frequently, which ranks higher than vegetarians. Flexitarians have now become the second-largest dietary group in Canada after those with no preferences, opening the doors to many more product development opportunities for the food and beverage industry.

Circana (formerly The NPD Group) has stated that consumer demand is driven by the two largest population segments – Millennials and Gen Zs.

As product selection improves, today’s consumers are ready and willing to try alternatives for both in-home and dining out. The Dalhousie report also notes that over 40% have consumed a vegan dairy substitute such as soy, oat, and almond, while one-third have tried plant-based meat alternatives.

Restaurants

Today you would be hard-pressed to find a restaurant that is not offering a plant-based option on their menus, from fast food and cafeteria operations to hotels and fine dining establishments. Operators see plant-based alternatives as a revenue-generating opportunity in response to consumer demand for healthier choices and more inclusivity.

Today’s diners are seeking out more inclusive restaurants that offer a range of meat- and plant-based options to suit the diverse needs of their dining companions. According to Circana data, more than 43 per cent of consumers agree that the availability of plant-based food and beverages improves the restaurant experience always or at least some of the time.

Outlook

Growth for plant-based foods will continue for the foreseeable future. Consumer demand remains strong, and engagement is increasing as the industry introduces more product innovation to satisfy their demands.

Experts are predicting that the plant-based protein industry will outlast the economic uncertainty and disruption plaguing the food and beverage industry.

Future Market Insights Plant-Based Food Market Outlook (2023 to 2033) predicts that the global plant-based food market will expand by three times, from US$11.2 billion in 2023 to &S$35.9 billion by 2033.

Not only has the range and quality of product offerings improved immensely, but there are also many opportunities to be found in emerging markets as the world is seeking more sustainable food sources for the rising population.

As the world’s leading exporter of pulses, peas, and lentils, which account for over 70% of Canada’s total crop exports, this country is uniquely positioned to take a leadership role. Protein Industries Canada’s Global Market Forecast reports that not only does the country offer a large and diversified market with access to talent and financial markets, but it also has streamlined access to western and emerging markets, as well as substantial government infrastructure support.

While these growth predictions are promising, there continue to be ongoing hurdles around pricing. The Protein Industries Canada report says inflation has led to higher price sensitivity among consumers, hindering adoption.

Even though price parity has a considerable way to go, the underlying factors that are fuelling consumption remain, signaling robust growth for the next decade and beyond.

About the author

Sloan Levett CPA, CA, CFP, TEP, FEA is a Partner and Practice Lead in our Family Office practice and a member of the Food and Beverage group. He can be reached at 416-645-6581 or slevett@fullerllp.com

Services

  • Industry

  • Authors

Fuller Landau LLP logo



Close X
Skip to content