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Market Report

The Plant Based Revolution
The Plant Based Revolution

Request White Paper

Market Report - Plant Based Food Market Revolution

Future Market Insight published a whitepaper on the plant based food market titled, “The Plant Based Revolution: Growth Opportunities and Winning Strategies in the Global Plant based food market" in collaboration with Plant Based Food Industry Association (PBFIA). The report is based on opportunity analysis of the plant based food market and interviews with global and Indian players, to provide a holistic view on lucrative markets, ingredients scenario, key challenges this industry is facing and what could be the winning strategy for players in this ecosystem for transformative and sustained growth. Additionally, the study also maps prevailing trends in the plant based food market across multiple geographies.

The plant based food market has been growing exponentially since 2019, thanks to consumers’ changing food consuming choices. Millennials and Gen-Z are becoming conscious of the impact their food consumption choices have on the environment. Thus, they have shown a rising inclination towards plant based foods that are environmentally friendly in more ways than one.

According to Sentient Media, around 79 million people in the world are vegans. This, in turn, is changing the landscape of the plant based food market across the globe. Between 2020 and 2021, the number of vegans worldwide doubled from 0.5% of the global population to 3%. The COVID-19 pandemic played a key role in altering the food-consuming choices of people as more people focused on boosting immunity through organic food.

The global plant based meat market predicted to witness explosive growth in coming years. What makes us say so?

  • As of 2020 and 2021, the plant based food market raised US$ 4 billion in investments. This is three times more than in any single year in the industry’s history
  • Global investments in plant based seafood market soared nearly 2x in 2021, compared to 2020.
  • More than 50% of global food and beverage brand owners are likely to invest their new product development and R&D budgets in plant-based products.
  • Several global retailers like Tesco committed to increasing sales of meat alternatives by 300%, while Amazon Foods promised to widen its plant-based food sales in the years to come.
  • 17% of consumers aged 18-24 identify as flexitarians, this number increases to 20% in age group 45-54, and 25% for 65 or older.
  • Valued at US$ 5.6 Billion in FY 2021, the global market for the plant-based meat industry is likely to surpass US$ 34 Billion by 2030, experiencing strong and sustained double digit growth. This data is sourced from FMI’s plant based food retail sales data.
  • There remains a significant ongoing opportunity for plant-based seafood, with an anticipated CAGR of 31.3% from 2022 to 2032 globally.
  • The plant-based food market in India is in its nascent stage with plant based milk market occupying the maximum share (16% of total milk sales) and awareness.
  • The Indian plant based food market is expected to reach US$ 400-450 Million in next 5 years.
  • Soy, wheat and pea protein comprise 95% of the overall plant protein market.

How well is the Plant Based Food Market slated to perform?

  • Existing trends in the plant based food market suggest that retail and grocery stores are quite profitable for plant-based food companies because of shelf visibility and market exposure the products may obtain through optimal shelf placement.
  • Sales for plant-based meat are likely to skyrocket globally. As of 2021, the category accounted for more than 2/5th of the global market share
  • Plant based meat products are a major driver of sales growth at grocery stores across the United States, growing nearly twice as fast as total food sales.
  • The plant based meat market is rapidly expanding, securing US$ 1.4 billion in 2020. Sales in the retail sector increased 45% in the last year and 72% over the previous two years. With growing opportunities in the global plant-based food market, key companies are developing various new way-outs to enhance their sales in the retail sector.
  • Plant-based eggs are the least developed but fastest expanding category in the global plant-based food market.
  • Retail sales of plant based foods that directly replace animal goods reached US$7 billion on April 6, 2021, a 27% increase over the previous year.
  • With US$2.5 billion in 2020 sales, plant based milk market is the most developed, capturing over 15% of all retail milk dollar sales.

Top players in plant based food market

Top players in plant based food market and disruptors are undoubtedly companies such as Beyond Meat and Impossible Foods. Several others are quickly catching up, such as:

  • Planterra Foods
  • Kerry Group
  • Amy's Kitchen
  • Upside Foods (Memphis Meat)
  • Ojah
  • Finless Foods
  • Sunfed Meats
  • ChickP
  • Quorn Foods
  • Before the Butcher
  • v2food
  • Aspire Food Group
  • Aleph Farms

These players are gaining a competitive advantage by expanding their plant-based product distribution and launching advertising efforts that highlight their diversity of possibilities.

In January 2022, Beyond Meat and PepsiCo. entered into a joint venture with the plan to launch a plant-based Beyond Meat® Jerky as its first product. Furthermore, they announced the PLANeT Partnership, with the goal of creating plant-based snacks and drinks together. Beyond Meat Jerky offers a full-flavored, on-the-go snack experience that furthers Beyond Meat and PepsiCo's shared passion for creating products that are better for both people and the planet.

The partnership gives Beyond, a chance to leverage Pepsi’s production and marketing expertise for new products. For its part, Pepsi can deepen its investment in plant-based categories — which are growing increasingly crowded — while working with one of the top creators of meat substitutes. It also helps Pepsi work toward its sustainability and health goals for its portfolio.

Plant-based Food Market treads with its own set of Challenges. Which are some most Prominent Ones?

Although there is substantial growth in the plant based food market, there are some serious challenges that are impeding this progress. Some of the significant obstacles are product formulations, raw material procurement, increased operational or production expenses, and a lack of sufficient capital.

Vegan customers are unconcerned about the texture and appearance of the items, whereas flexitarians are. Plant-based food products are evaluated by flexitarians based on appearance, taste, and texture, and this has set the level high for top plant-based food companies to make items that can mimic animal products. This necessitates a major effort on product creation strategies, enhancing ingredient functioning, and supplementing products with macro and micronutrients to deliver the same, if not more, nutritional value than animal products. As a result, the manufacturer faces numerous challenges during the plant-based product development process.

Plant-based firms and top players in plant based food market are currently concerned about sourcing concerns, including how to obtain enough raw ingredients. Aside from farm production delays, labor shortages, fluctuating demand, and logistical problems with processing and delivery, many brand owners are dealing with pandemic-related sourcing challenges. This presents a significant hurdle for growing Plant-based food brands because ingredient acquisition is highly tailored and naturally more difficult.

Plant-based food is thought to be more expensive due to the expenditures associated with R&D and ingredient procurement, and most companies in this field have relied on venture capital to fund their operations, which raises their costs even further. These elements have a direct impact on the product's price. Due to their current scale, plant-based meat enterprises also have the insufficient infrastructure. They lack infrastructure, facility design, manufacturing capability, and advanced technology. As a result, until costs are decreased, plant-based meat will remain a luxury product, preventing businesses from obtaining cost advantages.

Due to the uniqueness of the plant-based food market, it requires significant investment, particularly in product development, R&D, and product sourcing. It would be impossible to develop products to compete with the animal market in terms of flavor, texture, quality, shelf life, or price parity without investment. Financing has proven to be a significant barrier, particularly for start-up enterprises in the plant-based food market. To prevent further losses, key players must first identify the core of these challenges and then design their strategies accordingly.

Strategic Recommendations for Top Players in Plant Based Food Market

Like any industry, the plant based sector is also riddled with challenges such as high capital investment, sourcing issues, supply chain shortages, high price competition with animal based industry. It is imperative that players in this ecosystem take cognizance of these challenges and work towards maneuvering them for sustainable growth. The report also provides strategic recommendations on how successfully work around these challenges.

Both start-ups and established market players must anticipate future supply or demand shocks, price fluctuations and other market uncertainties. Future-proofing is all about using flexible and scalable design strategies to protect against volatility and embracing new technologies and opportunities with minimal capital investment. Those who successfully future-proof their operations with flexible, innovation-friendly designs and processes will find this transition easier, faster, and more cost-effective.

With regard to Indian players, inadequate access is a concern. There are still pockets which remain significantly underfunded. Therefore, top players in domestic plant based food market are focusing on bringing in more venture capital funding, which is expected to solve most financing issues. In the past two years, the country has experienced spawning of major financiers, with players such as Ahimsa VC and Lever VC emerging as the front runners.

Currently, plant-based food companies are concerned about sourcing issues regarding raw ingredients. In addition to farm production bottlenecks, demand fluctuations, labor shortages, and logistical issues with processing and transportation, many brand owners are afflicted by pandemic-related sourcing issues. Furthermore, Environmental conditions, such as drought or flooding, can destroy crops and lead to a shortage of raw ingredients. For plant-based brands, this can be a big loss. To offset such challenges, brand owners need to diversify their ingredient profile, at the same time form cooperatives with farmers in order to source sustainably.