
Plant-based food sector pivots from processed substitutes to fresh whole foods amid sales slump
The plant-based market is shifting away from processed meat alternatives as sales decline. Companies like Unilever and Beyond Meat reformulate products and adjust strategies, while demand for fresher, whole food options and vegan egg substitutes rises amid health concerns and economic pressures.
The plant-based food sector has reached a pivotal moment, characterised by a noticeable shift away from processed alternatives and towards fresher, whole food options. This trend indicates a growing consumer preference for natural, minimally processed ingredients rather than the heavily processed vegan substitutes that have dominated the marketplace in recent years.
Recent data suggests that sales of plant-based meat products and ready-made meals are experiencing a decline, prompting brands to reassess their offerings and marketing strategies. High-profile companies like Unilever and Beyond Meat are grappling with these changes amid a climate where consumer interest in ultra-processed options is waning. Unilever's struggles with its brand, the Vegetarian Butcher, highlight this transition; once positioned to emulate the success of trailblazers like Beyond Meat and Impossible Foods, the brand is now considering divestment due to declining revenues, which hover around €50 million annually. This declining interest aligns with a more general trend in consumer behaviour, where price sensitivity and a shift in focus towards fresh produce are affecting the valuation of many plant-based food brands.
Beyond Meat, a leader in the market, is also facing tumultuous times. The company reported a staggering 34% drop in U.S. sales within the first nine months of 2023. In response, it is reformulating its flagship products to include healthier ingredients, such as switching oils from canola and coconut to avocado and incorporating legumes for improved texture. This shift aims to address growing health concerns while remaining competitive against both beef and other plant-based offerings. Speaking about these challenges, CEO Ethan Brown noted that increasing consumer awareness about the environmental impacts of food production could eventually shift attitudes back towards plant-based diets, but there is scepticism about how swiftly this change may occur.
Recent market dynamics illustrate nuanced patterns in consumer behaviour. For instance, while overall demand for plant-based meats has declined, categories such as vegan egg substitutes are experiencing a resurgence, bolstered by specific market conditions like the avian flu crisis that has driven up poultry prices. Companies like Eat Just, known for their mung bean-based product Just Egg, have reported a remarkable surge in sales, suggesting that consumers are more willing to explore alternatives when prompted by external factors such as price spikes or availability issues.
In the broader context of dietary shifts, the highly processed nature of many plant-based options has come under scrutiny. Economic pressures stemming from inflation are additionally nudging consumers back towards traditional protein sources, as the prices of plant-based products often exceed those of conventional meats. This financial consideration is particularly pronounced among cost-sensitive consumers who previously opted for plant-based alternatives in pursuit of healthier or more sustainable choices.
Meanwhile, Beyond Meat is not just refining its product offerings; it is also streamlining operations, with layoffs and a restructuring plan aimed at cushioning the impact of declining sales. Despite these cuts, the company sees potential in international markets, particularly in Europe, where its products are gaining traction among consumers. However, the key to resurgence in the U.S. market may hinge on both enhancing product appeal and navigating the narrative surrounding the health implications of processed foods.
As this landscape continues to evolve, the future of plant-based foods appears to hinge on a delicate balance—integrating the health and sustainability benefits of a plant-based diet while addressing consumers' growing demand for transparency and freshness in their food choices. The intersection of these factors will likely dictate the next phase of the plant-based revolution, as consumers weigh their preferences against economic realities in the quest for optimal nutrition.