Plant-Based Makers Seeks to Reverse Downward Sales Trends

Makers of plant-based meat alternatives are rethinking their business strategies and product formulations as retail sales have continued to decline.

Research from Circana and consulting firm 210 Analytics shows that for refrigerated and frozen meat alternatives, sales totaled slightly more than $1 billion in 2023, down about 9.8 percent vs. 2022. Unit and volume sales fell at an even sharper pace, with units falling 15.5 percent and volumes by weight down 14.6 percent, as inflation helped buoy dollar sales.

“Sales growth for plant-based meat, like the entire food and beverage industry, has been impacted by inflation, which is forcing consumers to stretch their dollars,” Linette Kwon, data and consumer insights analyst at the Plant Based Food Association, told SFA News Daily. “This emphasizes price comparisons and overall purchasing behavior toward lower price food.”

High rates of inflation have impacted trial of plant-based foods, she said, but retailers and brands are responding by offering more frequent promotions and deeper discounts to entice consumers back.

“We expect to see the trends in plant-based meat turn around,” said Kwon.

In its recent fourth-quarter earnings call, Beyond Meat discussed a “tiered pricing” approach for its products that will see the company raise prices on some products in an effort to boost sales and profit margins. The company noted that recent price promotions ended up attracting the same customers at lower prices without moving the needle on sales.

Meanwhile, the company is also responding to public perceptions about the healthfulness of plant-based meat alternatives with a fourth iteration of its product recipe. It is preparing to roll out a new formulation for its Beyond Burger and Beef line of products featuring avocado oil and a simplified ingredient list overall, resulting in reduced levels of saturated fats and sodium. The reformulated products, set to appear this spring, include 21 grams of protein per serving, derived from peas, brown rice, red lentils, and faba beans.

Impossible Foods, meanwhile, recently began rolling out plant-based hot dogs that include 12 grams of protein and less saturated fat than animal-based hot dogs, the company said. Last year Impossible also debuted Impossible Indulgent Burger Patties, which the company touts as a “thick, flavor-forward burger for discerning burger-lovers,” as well as Impossible Beef Lite, which has 75% less saturated fat than its flagship Impossible Beef product.

In forecasting its trends for 2024, Whole Foods Market predicted that plant-based companies would make a comeback in 2024 by revamping their product formulations and cleaning up their ingredient lists.

“We’re seeing new and emerging protein-forward products with mushrooms, walnuts, tempeh, and legumes in place of complex meat alternatives,” the retailer said.

Kwon of PBFA agreed that companies are focusing on product innovations that meet consumer demand for taste and functionality.

“We’re seeing brands leaning into cleaner labels, improving the flavor and texture of their plant-based meats to appeal to consumers who are looking for an easy one-to-one swap for animal-based meats,” she said.

Kwon also pointed out the expansion of the category into more forms, such as shreds, chunks, and strips, and even filets and steaks.

Meati Foods, for example, markets whole-muscle meat alternatives such as steaks and cutlets featuring its own MushroomRoot product, made from mycelium. The Boulder, Colorado-based company, which made its national retail debut last year, has also gone through some growing pains. It hired a new chief financial officer last month and then promoted him to CEO just two weeks later, while slashing its workforce by 13 percent, according to reports.

Driving Sales at Retail
Kwon said one of the challenges that retailers face in growing sales of plant-based foods is that consumers often have difficulty locating them in the supermarket. She cited a survey that PBFA conducted with Dig Insights, which found that 46 percent of consumers who recently purchased plant-based meat alternatives said it was challenging to find them in stores. The survey found that 69 percent of shoppers would prefer to find plant-based meat in the same refrigerated section as animal-based meats.

“Integrating and expanding plant-based foods next to their conventional counterparts — effectively making it easier for shoppers to find a broad assortment of plant-based foods — is an effective strategy to increase overall sales,” said Kwon.

She compared the category to natural and organic foods, which she said benefitted from being integrated into retailers’ mainstream sets rather than being segregated.

It’s also important for retailers to help consumers find these products with signage and shelf tags, and to offer recipe suggestions, Kwon said.

“We are lucky to partner with some of the biggest retailers in the country, and their sights are fixed on understanding the plant-based shopper and meeting their expectations on variety and findability for plant-based foods in their stores,” she said.