Plant-based consumers spend less on meat and dairy, study finds

Dive Brief:

• Many consumers who bought plant-based products in 2020 not only continued to buy them in 2021 but spent less on animal-derived products, according to a study from the Plant Based Foods Institute, Kroger and its affiliated data insights firm 84.51°. The study used Kroger shopper data.
• Health concerns were the top motivator for consumers switching to plant-based food, with 54% listing it as a reason. Nearly half said they think plant-based alternatives are healthier than their animal-derived counterparts, and 39% said they like the taste of plant-based alternatives.
• Until 2021, the plant-based category consistently saw huge year-over-year sales growth. Last year, sales growth was much more gradual. While it’s too early to look at 2022 as a whole, category sales have become stagnant, forcing plant-based companies to take steps, including widespread layoffs or closures.

Dive Insight:

This study was published at an interesting time for the plant-based sector. While business was booming in 2020 and slowing down in 2021, this year has served as a contrast.

But while some news outlets seem poised to write the plant-based sector’s obituary, there’s still investment, innovation and sales for plant-based, as well as businesses that find the segment important. And there are still people interested in the segment. According to a study done by Moonshot Collaborative in October, two-thirds of consumers had plant-based food at least once a month in the previous quarter.

While this report doesn’t address the current year, the study points the way to some aspects that have drawn consumers to plant-based — as well as what may keep them there.

The study looks at consumer purchases for different plant-based categories — milk, cheese, yogurt, frozen meals, frozen meat and refrigerated meat. In 2020, 59% of shoppers were either new to the plant-based category or increased or maintained their previous purchases. Last year, 54% were in that realm, with nearly three in 10 increasing the amount of plant-based products they bought from the previous year. In 2021, more than a third of consumers in the plant-based cheese and yogurt categories were new to them. Nearly a third of plant-based frozen meal and refrigerated meat consumers were new.

Households that spent more on plant-based products also spent less on their animal-derived counterparts, the study found. In 2021, a household that bought some plant-based products spent an average of $31 less year-over-year on traditional foods. And that wasn’t just for those that bought more of the alternatives. People who bought less plant-based food in 2021 than in 2020 tended to spend about $42 less in the plant-based category — but they also spent just over $60 less on animal-based foods.

The data also found some trends among plant-based consumers. They tend to be more interested in convenience, believe they are less healthy and are more sensitive to price.

Some of the newest initiatives from plant-based companies target this kind of consumer. Impossible Foods recently launched frozen meal bowls, which zeroes in on the convenience meal sector. Plant-based breakfast sandwiches and burritos also are available in grocers’ freezers. Beyond Meat, which is working to regain sales and bring its operations back into the black by the second half of 2023, is zeroing in on its health message. The company recently partnered with the American Cancer Society to advance research on whether plant-based meat can play a role in cancer prevention.

The one area that plant-based might have problems is with wooing price-sensitive consumers. With inflation hitting a four-decade high earlier this year and consumers paying more across the grocery store, many plant-based products still are premium priced. Analysts looking at buying patterns have shown consumers buying less expensive meats and products, putting plant-based in an even tighter spot.