ALEXANDRIA, Va.—The demand for plant-based food is impacting the grocery industry. Retail sales were worth $7 billion in 2020, thanks to a 27% growth rate overall for products that specifically replace animal-derived options, reports Fooddive.com.
According to SPINS data released by the Good Food Institute and the Plant Based Foods Association (PBFA), 57% of U.S. households purchased plant-based food in 2020, up from 53% in 2019. Plant-based meat saw $1.4 billion in sales, increasing 45% overall compared to 2019 and making up 2.7% of all U.S. retail packaged meat sales. Also in 2020, refrigerated plant-based meat sales saw the highest growth percentage, up 75%.
Plant-based food sales have been increasing for several years, with $5 billion in sales in 2019. But last year’s growth took a steep upward turn, with sales growing more than twice as fast as the 11% growth the segment saw in both 2019 and 2018.
And the biggest sales winner was plant-based meat. Traditional meat also saw large sales growth in 2020, but plant-based meat doubled that. Today, 18% of all households purchase plant-based meat, up from 14% in 2019, SPINS found.
Plant-based meat also has a high repeat rate, with 63% of consumers purchasing it multiple times. SPINS believes that changes in the way retailers shelve and display plant-based meat is helping boost sales. Last summer, Kroger and the PBFA found that when it's merchandise next to traditional meat, plant-based meat sells about 23% better.
Of course, one reason for the sales high is that there are more products available. Impossible Foods saw huge expansion, with its Impossible Burgers now available at about 20,000 outlets today versus about 150 stores nationwide at the beginning of 2020. The plant-based meat companies are working hard to close the price difference between plant-based meat and animal meat, which is important to attract customers.
Meanwhile, the largest category in the segment, plant-based milk, enjoyed great sales growth last year. SPINS found a 20% increase in dollar sales in this segment, compared with the 5% growth rate of 2019. Nearly four in 10 U.S. households purchased plant-based milk, which is now worth $2.5 billion and 15% of the total category. Making up about two-thirds of all dollar sales, almond milk is still the segment leader, while oat milk is now in second place since sales more than tripled last year.
Plant-based milk is not a new segment, but analysts say that is growth has received a boost from both industry innovation and the pandemic. When consumers want to stock their pantries, shelf-stable plant-based milks are appealing for their storage ability.
Other plant-based dairy and related products are collectively worth about $2 billion and also saw large sales increases. Today’s fastest growth is in plant-based eggs. The category saw a 168% increase—nearly 10 times the rate of conventional eggs. Category leader Eat Just has expanded a lot and has lowered the cost of its pourable Just Egg substitute by nearly half since the start of 2020. In addition, plant-based yogurt sales were up 20% last year—about seven times the growth rate of conventional yogurt—and plant-based cheese grew 42%—about twice as fast as regular dairy cheese.
The 2020 growth rates for plant-based items may not be anomalies, although the COVID-19 pandemic impacted the retail food landscape. Large companies such as Nestlé and Unilever plan to ramp up production of plant-based products and make the category a larger part of their sales. In 2019, plant-based food is predicted to be an $85 billion industry by 2030, and last year’s sales figures indicate that forecast might come true, according to investment firm UBS.
To learn more about plant-based meats and dairy products, be sure to read “Meat Your Plant-Based Burger,” “Dairy Dilemma” and “Milk It” in NACS Magazine.