Glacier FarmMedia – The growth in plant-based meat products flatlined in 2021, according to the Good Food Institute.
Sales in the United States stagnated at US$1.4 billion after experiencing a 46 per cent increase in 2020.
The 2021 performance of zero growth fell far short of industry expectations, but GFI doesn’t believe the industry has reached its peak.
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Why it matters: Despite a poor market performance in 2021, the potential for growth remains.
“The category deceleration appears to be transitory and opportunities for further growth abound,” it said in a March 24 article analyzing the statistics.
It noted that the overall plant-based food category grew by six per cent thanks to strong plant-based products which are substitutes for milk, cheese, yogurt, butter and ice cream.
GFI said 2020 was an unusually strong year for the entire food market due to above-average grocery store activity caused by the COVID-19 pandemic.
“It may be particularly difficult for an emerging industry that is still scaling production capacity to lap such a strong year of growth,” stated GFI.
The story was much the same in Canada where Nielsen reported a seven per cent increase in alternative meat sales in 2021 compared to a 34 per cent jump in 2020.
“What we need to be clear about is that 2020 was a unique year for the entire food industry,” said Leslie Ewing, executive director of Plant Based Foods of Canada.
“When you’re looking at it off of that explosive year of grocery sales, it does look like it’s soft.”
She said research from Leger shows that two-thirds of Canadians frequently consume plant-based foods and 31 per cent said they plan to eat more.
There were, however, some alarming financial results from plant-based meat companies on both sides of the border in 2021.
Beyond Meat posted a net loss of US$182 million due to what it believes is a “temporary disruption in U.S. retail growth.”
Maple Leaf Foods reported $184 million in sales in its plant protein segment, a 4.7 per cent decline from the previous year, leading to an adjustment in the company’s business model.
“We now expect steady but not spectacular growth in this category,” former company president Michael McCain said in a news release.
GFI said another reason for the lacklustre growth in plant-based meat sales in 2021 was the ingredient shortages and other supply chain disruptions that plagued the entire food industry.
For instance, Canada had a 45 per cent decrease in yellow pea production due to drought. France also experienced production problems.
The plant-based meat supply chain is particularly vulnerable to these kinds of shortages because it is an emerging industry and lacks the scale and purchasing power of more developed food categories.
“Once plant-based meat supply chains are scaled, they should have a lower risk of disruption than conventional meat supply chains given the inherent vulnerability of supply chains dependent on animals,” said GFI.
The good news for the industry is the percentage of U.S. households purchasing plant-based meat increased to 19 per cent in 2021 from 18 per cent the previous year while repeat rates stayed constant at 64 per cent.
– This article was originally published at The Western Producer.
