Plant-based meat gets a reality check

After years of growth, plant-based meat sales in the United States are stagnating; we look at possible reasons behind the slowing demand.

Plant-based meat gets a reality check

by

Spencer Young
Brian Baker
Justin Cook
Jagadish Upadhyaya

Plant-based food is hot.¹ Plant-based alternative meat (PBA meat)² … not so much—at least right now. After years of double-digit growth, sales are now flat.³ What’s happening?

There are many contributing factors, including supply chain problems and a tough comparison point from an impressive prior year.⁴ However, data from Deloitte’s Future of Fresh survey⁵ suggests three consumer-driven reasons for the current stagnation:

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The addressable market may be more limited than many thought. Dramatically improved taste in recent years (vouched for by seven in 10 consumers) unlocked new interest in PBA meat.⁶ But the portion of the US population open to trying (and repeat buying) it may already have reached a saturation point. The number of consumers who sometimes buy PBA meat for themselves or a household member did not grow in 2022 (figure 1). The half (53%) who aren’t buying it may not be easily reachable, partly due to cultural resistance to a product some view as “woke.”⁷ Others, many of whom say they want to reduce their red meat consumption, still aren’t interested in PBA meat.⁸

With inflation, fewer people are willing to pay a price premium. Paying more is a tough ask amid high food-price inflation. Willingness to pay a premium for PBA meat dropped 9 percentage points from last year and remained well below the number of people who say they would pay a premium for the best traditional fresh food.⁹ PBA meat producers believe they are on the path to achieving cost parity with animal meat, partly because animal meat prices are rising. But until they get there, price will likely continue to be a PBA headwind—especially for consumers who are less passionate about the product.
Some assumed benefits are being questioned by consumers. Even buyers of PBA meat are changing their views on some of its attributes. The biggest change is in health perceptions. Many early adopters believed that the health benefits of plants would apply to all food products made from plants. Last year, almost seven in 10 consumers (68%) who had purchased PBA meat believed it was healthier than animal meat. But some of these consumers are changing their minds, as this year, the number dropped by 8 percentage points. A similar but smaller drop occurred with environmental sustainability, down 5 percentage points.¹⁰

To return to growth, PBA meat producers should explore ways to expand the addressable market, bring down relative costs, and create formulations that provide health benefits while maintaining taste. No easy task, but until then, a return to sustained double-digit growth could be hard to realize.

One thing that did grow rapidly over the past year is investments in plant-based protein from global venture capital and major consumer brands.¹¹ Perhaps resulting innovations can help ease the way forward and bring the market to the next level.

Deloitte Future of Fresh Survey

Each year, Deloitte surveys 2,000 US consumers for their views and shopping behaviors regarding fresh and other food. For more details, read our latest report, Fresh food as medicine for the heartburn of high prices.

Emma Ignaszewski, “A deeper dive into plant-based meat sales in 2021,” Good Food Institute, March 24, 2022.View in Article
Plant-based products meant to mimic the taste, texture, and properties of animal-derived meat products as closely as possible.View in Article
Ignaszewski, “A deeper dive into plant-based meat sales in 2021.”View in Article
Ibid.View in Article
Danny Edsall et al., Fresh food as medicine for the heartburn of high prices: The advantage of connecting consumers to healthy choices, Deloitte Insights, September 29, 2022.
View in Article
Barb Renner et al., Fresh versus frozen: The future of fresh in a changing competitive landscape, Deloitte Insights, September 28, 2021.View in Article
Tim Carman, “Cracker Barrel faces blowback after adding Impossible sausage to menu,” the Washington Post, August 3, 2022.
View in Article
Brian Kateman, “Plant-based meat is running out of steam, but it’s still the future,” Fortune, April 12, 2022; Emiko Terazono and Judith Evans, “Has the appetite for plant-based meat already peaked?,” Financial Times, January 27, 2022; Changing Tastes, “Plant forward,” 2021.
View in Article
Based on Deloitte’s analysis of data from the Future of Fresh survey of US consumers, 2022.View in Article
Ibid.View in Article
Terazono and Evans, “Has the appetite for plant-based meat already peaked?.”View in Article

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