Investment firm UBS projects growth of plant-based protein and meat alternatives to increase from $4.6 billion in 2018 to $85 billion in 2030. The Swiss company said that estimate could be a conservative one if innovation and consumer awareness drive more consumption.
U.S. sales of plant-based milk products grew by almost 6% in the past year as brands such as Alpro and Oatly became household names, UBS said. The plant-based dairy market alone could hit $37.5 billion by 2025, it noted.
UBS said health and wellness are increasing in popularity and shifting consumers away from old consumption patterns. The investment firm said the introduction of cell-based meat and seafood could add to this scenario while at the same time reducing greenhouse gas emissions.
The UBS report sees a number of advantages in today's plant-based meat alternatives segment. With consumers trending toward healthier diets, new product launches presenting increased options and concerns about the environment and animal welfare, more people are seeking out plant-based egg, dairy and meat products rather than conventional ones sourced from animals.
UBS envisions increasing consumption habits based on current trends but also on innovative farming techniques now being adopted. Company analysts noted the way food is produced is changing due in part to increasing interest in plant-based meat. This is being manifested in vertical farming, lab-cultured products and artificial intelligence applications making the system more efficient and safe, Markets Insider reported.
Early players such as Beyond Meat and Impossible Foods targeted carnivores with their plant-based meat alternatives, which seems to be a successful strategy so far. Gallup reports vegans and vegetarians comprise about 8% of all U.S. consumers, so it's a smart move to expand beyond that audience to those who might be switching up their diets on occasion with meatless meals.
Beyond Meat has clearly resonated with the market since its IPO in May shattered expectations and drove its stock up more than 700% and its market cap to nearly $11 billion. And that was for a company that so far has never posted a profit.
The success of plant-based alternatives has attracted the attention of large food companies, too. Tyson Foods plans to launch its own plant-based alternatives this summer. It also owns a minority stake in Memphis Meats, a startup in San Francisco developing lab-grown meat.
Nestlé will introduce a cook-from-raw plant-based Awesome Burger this fall under its Sweet Earth Brand. Perdue is trying hybrids by offering chicken products mixed with vegetables. And dairy giant Danone spent $12.5 billion to acquire the fast-growing organic foods maker WhiteWave in 2017, giving it a premier position in soy and plant-based products popular with American consumers.
More investment will inevitably follow these developments. More than $16 billion has gone into U.S. plant-based and cell-based meat companies in the past decade, with $13 billion of it in 2017 and 2018, according to two recent reports from The Good Food Institute.
Unless the conventional meat industry follows the route Perdue and Tyson have taken and gets into plant-based meat alternatives, it's possible its market share could erode as time goes on. Meat producers could potentially minimize that decline by focusing even more on their sustainability efforts to boost their image with consumers.
The U.S. meat industry is huge compared to the plant-based meat alternative sector, with per-capita consumption hitting a record high last year. But the industry would be wise not take its eyes off of plant-based competition as the trend continues to gain momentum.