London, March 23, 2021 (GLOBE NEWSWIRE) -- According to a new market research report titled “Plant Based Food Market by Product Type (Dairy Alternatives, Meat Substitute, Plant-Based Eggs, Confectionery), Source (Soy Protein, Wheat Protein), and Distribution Channel (Business to Business and Business to Customers) - Global Forecast to 2027”, published by Meticulous Research®, the plant based food market is anticipated to grow at a CAGR of 11.9% from 2020 to 2027 to reach $74.22 billion by 2027.
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Plant based food sector have been growing rapidly on the back of key issues such as increased greenhouse gas emissions, increased pressure on land and water usage during the production of animal protein, and increasing incidence of intolerance for animal protein. This has opened a great opportunity for plant-based food products, such as meat substitute, dairy alternative, and plant-based eggs, which have the capability to satisfy food need with the high nutrition and environmental sustainability. As animal protein accounted for major contribution in overall food allergies, most of the meat & dairy consumers have started preferring meat substitutes and dairy alternatives made of vegan proteins, which, in turn, is expected to drive the demand for plant-based protein products.
Growing Investments in Plant Based Food Sector Supports the Growth of the Market
In recent years, the plant-based food industry has been witnessing investments from large operators looking to capitalize on the veganism trend and surging demand for sustainable foods. Alongside the growing risk profile of livestock production, well-established meat and dairy players are increasingly under attack. This protein diversification has the potential to transform a food company’s core business and value proposition due to its growth, profitability, risk exposure, and ability to compete and innovate.
The growing trend of millennials adopting flexitarian and meat-free diets signals a change in purchasing habits that is a significant shift from that of earlier generations. Companies across the food value chain, from producers to retailers, are already investing in these opportunities. Some companies are hedging against or preparing for the decline of demand for animal products by investing in other companies producing alternatives. The market has received investment or funding from several high-profile individuals, financial investors, and companies in the past few years. There was more investment in the alternative proteins market in the first quarter of 2020 than in all of 2019 (Source: Good Food Institute). In 2019, U.S. plantbased meat, egg, and dairy companies received more than $747 million in investments. This is the most capital raised in any single year in the industry’s history. The COVID-19 pandemic is reshaping the North American food market, where plant-based meat sales increased by 200% compared with the same period last year in the last week of April 2020.
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Some of these investments are as follows:
- In March 2020, Impossible Foods Inc. (U.S.) has raised $1.3 billion in venture capital from noteworthy investors, including Bill Gates.
- In February 2020, Alpha Foods (U.S.), a vegetarian prepared food manufacturer, raised $28 million in financing for its portfolio of vegetarian burritos, tamales, nuggets, pizzas, burgers, patties, and sausages.
- In September 2019, Strong Roots (U.K.), a vegetarian frozen food company, raised $18.3 million in funding to expand its presence in the US.
Thus, growing venture capital investments, which is supporting the growth of plant-based product companies and increasing focus of leading meat producers to build up a portfolio of investments in plant and lab-grown meat proteins is expected to drive the growth of the global plant-based food market.
Impact of COVID-19 on the Plant-Based Food Market
In the first quarter of 2020, the world was hit by COVID-19. The outbreak was declared as a global pandemic by WHO as it has spread in many countries. The coronavirus outbreak has led to massive disruptions in travel, manufacturing, services, healthcare, and supply chains that have caused havoc on global financial markets.
In the food and beverage sector, the coronavirus crisis is causing people to re-evaluate their diets because it has underlined the link between food and health. In the space of the plant-based product industry, COVID-19 is providing an unexpected boost. Medical studies show that coronavirus disease has an overwhelming impact on people with underlying health conditions like diabetes, hypertension, and heart disease. Plant-based food can help reduce the effects of the virus on at-risk people as there is the presence of an abundance of macronutrients, micronutrients, and antioxidants. From a manufacturing and distributing point of view, this industry has faced unprecedented demand from manufacturers as well as consumers, particularly for some products, such as meat analog and plant-based milk.
Further, several meat processing facilities are idled or running well below capacity due to COVID-19 spread among their employees, providing an astonishing lift to the alternative proteins sector. COVID-19's association with an animal source will result in a large population shifting from animal-based proteins to alternative proteins. Alternative proteins can be generated with less dependence on labor, making it less prone to staffing scarcity, as opposed to red meat, which is relatively laborintensive. Consumers across the globe are going to be enormously health-conscious and will take preventative measures and continue to try alternative sources of protein.
The changing structure of the plant-based food market
As the coronavirus pandemic has conveyed to the forefront the connection between public health and animal meat consumption, many companies in the space of alternative protein have already started changing their strategies. Some of these strategies are:
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- As of May 2020, Beyond Meat Inc. (U.S.), Impossible Foods Inc. (U.S.), and Tofukry Co. (U.S.) are ramping up their production, discounting their plant-based alternative products to appeal to more consumers and expanding into more stores.
- In March 2020, the Plant-Based Foods Association (PBFA), the U.S. based trade association representing 180 plant-based food companies, partnered with Dot Foods to increase access to plant-based foods in North America. Further, COVID-19 is providing a surprising increase in sales of plant-based food, which is benefitting stakeholders in the alternative protein market:
- As of May 2020, Green Monday’s online sales have more than doubled, citing the impact of the coronavirus. Among the most popular purchases was a pork substitute called Omnipork.
- In April 2020, JUST, Inc.’s egg sales on Chinese e-commerce platforms—JD.com and Tmall surged 30%, since the outbreak.
Key Findings in the Global Plant-Based Food Market Study:
The global plant-based food market is segmented on the basis of product type, source, distribution channel, and geography. The study also evaluates industry competitors and analyses the market at a country level.
Based on product type, the plant-based food market is segmented into dairy alternatives, meat substitute, plant-based eggs/egg substitute, and confectionery. Among these, the dairy alternatives segment held the leading share of the overall plant-based food market in 2020. However, the egg substitute segment is expected to grow at the fastest CAGR during the forecast period. The rising availability of plant derived eggs across the globe and their increasing adoption with nutritional benefits and reduced allergic properties are driving the growth in this product segment.
Based on source, the plant-based food market is segmented into soy protein, wheat protein, almond protein, pea protein, rice protein, and others. In 2020, the soy protein segment commanded the largest share of the overall plant-based food market. Factors such as easy availability and cost effectiveness in comparison to other sources of protein, increased demand in meat protein alternatives, and wider-application base in many plant-based food categories are responsible for the major share of this segment. However, the pea protein segment is expected to grow at the fastest CAGR during the forecast period due to growing consumer’s desire to find sustainable and good tasting alternatives to animal-based proteins and growing investments from leading manufacturers such as Roquette Frères Le Romain (France) and Ingredion Inc. (U.S.) in this space.
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Based on the distribution channel, the plant-based food market is mainly segmented into business to business and business to customers. The business to customers distribution channel segment commanded the largest share of the overall plant-based food market in 2020. This growth in the B2C business model has been facilitated by the increase in online shopping and the increase in social media use, which allows businesses, including startups, to reach a wide market from a relatively low-cost base, while avoiding the need to route product through traditional wholesale and retail operators. This segment is also expected to grow at the fastest CAGR during the forecast period due to rapidly growing online retail sector.
Geographically, Europe commanded the major share of the global plant-based food market in 2020, followed by North America, and Asia-pacific region. The leading position of the Europe in plant-based food market is primarily attributed to the well-established food sector in the region with huge demand for processed foods. Plant-based diets are rapidly gaining ground in Europe due to changing consumer demand; growing concern over the climate impacts of meat production; many new food innovations coming from start-ups; flood of investment; consumer preferences for greater choice; and concern about the environmental impacts of food production, including climate change, biodiversity and animal welfare. However, Asia-Pacific market is developing and expanding at a significant pace. Among other regional markets, this region is demonstrating signs of strong growth.
The plant-based food industry is fragmented and competitive, with the presence of numerous players operating in various segments of the market. Lately, the market is witnessing a number of mergers & acquisitions by players directed to capture a significant share of this growing industry. A key rationale for existing F&B companies using this strategy was to enter or expand in the fast-growing protein alternatives market that offers potentially higher returns than from other food categories. Another key trend is the consolidation of companies within the alternative protein-based foods sector, as buyers seek to capture a major share of the market and enhance their revenue faster with synergies from expanded portfolios and expansion into aligned products or new territories. Furthermore, as the industry is at a relatively early phase, there are several start-ups and relatively small businesses, which have sought expansion capital.
Some of the key players operating in the overall plant-based food market are Beyond Meat Inc. (U.S.), Impossible Foods Inc. (U.S.), Danone SA (France), Garden Protein International, Inc. (Canada), Amy’s Kitchen Inc. (U.S.), Follow Your Heart (U.S.), The Hain Celestial Group, Inc. (U.S.), Sahmyook Foods (South Korea), Sanitarium Health and Wellbeing Company (Australia), Axiom Foods (U.S.), Daiya Foods Inc. (Canada), Earth's Own Food Company Inc. (Canada), Lightlife Foods, Inc. (U.S.), Marlow Foods Ltd. (U.K.), Taifun –Tofu GmbH (Germany), Atlantic Natural Foods LLC (U.S.), VBIte Food Ltd (U.K.), and Nutrisoy Pty Ltd. (Australia) among others.
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Scope of the report
Plant-Based Food Market, by Product Type
- Dairy Alternatives
- Plant Based Milk
- Ice Cream
- Creamer
- Yogurt
- Butter
- Cheese
- Others
- Meat Substitute
- Tofu
- TVP
- Tempeh
- Seitan
- Burger Patties
- Sausages
- Ground Meat
- Meatballs
- Nuggets
- Crumbles
- Others
- Plant-Based Eggs/Egg Substitute
- Confectionery
- Others
Plant-Based Food Market, by Source
- Soy Protein
- Almond Protein
- Wheat Protein
- Pea Protein
- Rice Protein
- Others
Plant-Based Food Market, by Distribution Channel
- Business to Business
- Business to Customers
- Modern Groceries
- Convenience Store
- Specialty Store
- Online Retail
- Others
Plant-Based Food Market, by Geography
- North America
- U.S.
- Canada
- Europe
- U.K.
- Germany
- France
- Italy
- Spain
- RoE
- Asia-Pacific (APAC)
- China
- Japan
- India
- RoAPAC
- Latin America
- Middle East and Africa
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