Is coronavirus accelerating the growth of plant-based meat?
In March, as offices, restaurants and schools closed because of the coronavirus pandemic, sales in the grocery sector shot up 26.9%, compared to the month before, according to the U.S. Census Bureau.
Food categories from baking ingredients to canned beans saw gigantic sales boosts. Both plant-based and conventional meats saw sales spike as consumers filled their refrigerators and freezers for the long haul.
But comparing plant-based and conventional meat, the size of the increase was very different. According to Nielsen, sales of fresh plant-based meat alternatives have nearly doubled every month this year. In March, grocery stores sold 231% more fresh plant-based than a year prior. IRI data analyzed by The Good Food Institute saw an even larger increase, with plant -based meat sales 454% higher than the previous year the week of March 21.
Conventional meat sales saw a bump too, but it was much smaller. Nielsen reported the largest year-over-year increase in sales was in March, when conventional meat sales were 40% above 2019. IRI statistics found conventional meat sales doubled the week of March 21 compared to the year before, but weekly sales increases stayed for the most part below 50% when compared to 2019.
Though the growth in plant-based meat looks gigantic compared to conventional, it is deceptive. After all, the U.S. meat market is worth about $95 billion at retail, as opposed to about $1 billion for plant-based meat. And while meat alternatives are growing, it will take a lot for them to make a dent in the meat industry. According to a May study from Datassential, nearly seven in 10 people classified themselves as meat eaters.
Plant-based meat sales grew much faster than conventional counterparts
Nick Fereday, executive director of food and consumer trends at Rabobank, said compared to the size and profits of the conventional meat market, he said, the amount of money that consumers put into plant-based meat is small enough to be considered a "rounding error."
"It's easy to get seduced by those numbers, I think, and talk about addressable [future] markets in the hundreds of billions," Fereday said. "When I see all of that, I just say, 'Well, that's normal.' ...It's not that I'm not impressed by those things. It could be any other novel food ingredient that's come to the fore. It just happens to be plant-based right now."
But plant-based meat had already been growing quickly before the pandemic. According to statistics from SPINS and The Good Food Institute, dollar sales of plant-based meat grew 38% from 2017 to 2019. A report last summer from UBS — months before COVID-19 — projected this rapid growth would continue, getting about 18.5 times bigger to becoming an $85 billion industry by 2030.
While it's too early to see the trajectory of 2020's growth curve, early indicators point to a steep climb. As a category, sales growth for plant-based food through mid-April was higher than food in general, SPINS statistics analyzed by The Good Food Institute indicated.
"I think disrupting that model means not even full replacement, but just getting enough people to stop consuming that product to the point where that business model is no longer viable."
Postdoctoral fellow at Concordia University and visiting fellow at Harvard Law School
While some have said that meat alternatives will eventually dominate the protein industry, now could be the time that those winds are starting to change. Coronavirus outbreaks in meat-packing plants led to meat shortages nationwide and put a spotlight on the way the meat industry operates. A pandemic with no cure forces consumers to think about how they can eat better and boost their immunity. And more plant-based and meat alternative products are appearing on grocery shelves nationwide.
There's a lot up in the air right now, said Jan Dutkiewicz, a political economist, postdoctoral fellow at Concordia University and visiting fellow at Harvard Law School.
"It's far too soon to say this is a pivotal moment," he said. "Now, with that being said, I think that while the meat industry is getting bad press, and as alternative teams get better and then offered in more spaces people already shop, and as more consumer awareness of these new products piles up, and as potentially good press — or even conversation around them pops up — and more people are willing to try them, I think that that bodes very well for the future of these products."
Why plant based is growing
Plant-based meat has been trendy since it first started appearing in grocery stores and restaurants.
Consumers, investors, influencers and journalists alike were entranced by products that looked, browned and "bled" like beef, but were made from plants. And the trend has been endlessly studied.
According to a survey from the International Food Information Council released in February, 41% of consumers decided to eat plant-based meat because they like to try new foods. In another study from IFIC that concentrated on comparing plant-based and animal meat, 45% of consumers thought a plant-based product was healthier than ground beef based on the Nutrition Facts label. In the annual IFIC Food and Health Survey released in June, 43% said that a product with a description of "plant-based" would likely be the most healthy one out of several options.
More than half of consumers — 52% — said eating plant-based foods made them feel healthier in a 2018 study from DuPont Nutrition & Health. Whether these products truly are healthier is a large question. Last year, the Journal of the American Medical Association published an article that said more research into the topic was needed. A study by researchers at Stanford Medicine published in August indicated that plant-based meat could lower some cardiovascular risk factors, but that study was relatively small and funded by Beyond Meat.
In these days, Fereday said, perception is everything.
"We all know that we're not eating enough fruits and veggies," he said. "Everyone from grandmothers to the government have been telling me that. And so anything that has kind of plays to that, I think, has a healthy connotation. And certainly during a pandemic where there is no vaccine and our health is our only insurance policy, then people will consciously try and go for things that they know to be healthy or believe to be healthy, whether the science is there or not."
"I think there's this mathematical inevitability of plant-based foods becoming a bigger part of our diet going forward."
Chief growth officer, Beyond Meat
The other factor that has helped this growth is quite simply the number of plant-based products available. Given the interest and investment in the plant-based sector, many analysts predicted in 2019 that 2020 would be a big year for meat alternatives. Since January, there have been high profile retail launches from JBS's Planterra Foods — a brand new division of the world's biggest meat company — Beyond Meat, Nestlé's Sweet Earth and Kellogg's Incogmeato.
While Impossible Foods hasn't released any new products in grocery stores, it's expanded its retail availability considerably. In 2019, the former foodservice-only product was sold in fewer than 150 stores nationwide. A gigantic retail expansion effort in 2020 has brought its products to more than 11,000 grocery stores. Beyond Meat, which is the other biggest player in the strictly plant-based meat sector, tripled its distribution at Walmart stores last month.
Both plant-based and conventional meat sales surged in March
The absence of conventional meat products has also contributed to the plant-based sector's growth. Since workers in meat processing plants work so closely together, they were among some of the first COVID-19 hotspots in the United States. Large numbers of cases forced some large processing plants to step back production or completely close, then slowly reopen as workers recovered and the plants were retrofitted to improve worker safety.
"It closed down a lot of supply disruption and other companies were able to benefit," Fereday said.
These disruptions drove more awareness of the meat industry, which Impossible Foods CEO Pat Brown said consumers often don't give a thought to. The pandemic also put a spotlight on one of the things he says the meat industry is most interested in keeping hidden: meat processing plants.
"It's hard to trace cause and effect here. It's obviously just guesswork," Brown said. "But I think the fact that A: consumers actually had to hear the word 'slaughterhouse' and think about it, if only for a short period, and B: they had to think about what to pick up in the grocery store when they were buying meat because the animal version was out caused people to look at plant-based products who never would have done so earlier."
Kyle Gaan, a research analyst at The Good Food Institute, said consumers may have internalized some of these issues with meat from the early days of these pandemic. Gaan wrote a report detailing the plant-based meat segment's growth during the COVID-19 pandemic. Even though there are no current meat shortages, nor are there any large outbreaks in plants, perspective on what happened months ago could be leading consumers to pick up more plant-based products now.
"I would imagine that the supply chain issues that revealed themselves during the early weeks and months of COVID would be a warning sign or a wake-up call that was highlighting just that security that plant-based meat can provide for the supply chain," Gaan said. "Just having less disruption in the event of future challenges that the animal-based meat supply chain might face."
"Impossible Foods is not a guppy. It's a embryonic whale, OK? That's really important: that we are growing like mad. And we are, by 2035, going to completely replace that industry."
CEO, Impossible Foods
But while the pandemic might have kickstarted growth in this sector, Fereday cautioned that another of its impacts may also slow it down. As shutdowns related to the pandemic have put a damper on the economy and many are out of work, fewer people may continue buying plant-based meat products, especially given their higher price tag. Often, Fereday said, new products that imitate the real thing price themselves lower to try to steal some of the market share from the "genuine" item.
In the case of plant-based meat, that hasn't been the case. Although companies say price parity is one of their goals, and Beyond Meat has edged close to it with its summertime Cookout Classic 10-Pack, Fereday said they really need to get there quickly if they want to continue to grow. Before the Butcher launched Mainstream, its new budget brand, in October. It accomplishes this feat, costing roughly the same as lean ground beef. But other branded competitors have a way to go.
And though plant-based meat companies tend to broadcast their sustainability bona fides, Fereday said now might not be the best time to do that.
"Saving the planet and all that is certainly not as pressing as getting food on the table," he said.
While Dutkiewicz is a researcher and not an analyst who makes predictions, he said novelty likely drives current consumer interest in plant-based meat. Some are becoming more aware of environmental impacts of the industry or animal and worker rights issues, but it isn't at the center of their choices. The pandemic, he said, is unlikely to change any minds on its own, though it could make people more aware of the harms associated with industrial agriculture.
"I think a lot of people, once crises are over, and it comes back to, 'What do I like eating? What can I afford to buy for my family? What does my family like eating?', those decisions are going to take back over," Dutkiewicz said. "...If they can entrench themselves there, I think that's when we start to see a habitual mass-scale uptake."
Meat still gets stronger
While plant-based meat has grown during the pandemic, it would be a mistake to assume that growth has not extended to conventional meat.
Shawn Darcy, director of market research at the National Cattlemen's Beef Association, said sales, consumer sentiment and perception of the meat industry have all been up in 2020. With such a massive industry, even marginal sales growth could mean billions of dollars, he said. According to IRI data the group subscribes to, overall meat sales this August were $8 billion higher than in 2019, Darcy said. In March, when consumers were at "peak pantry loading," he said sales were 90% higher year-over-year compared with 2019.
Beef consumption is at record levels, CattleFax CEO Randy Blach said at the Urner Barry Executive Conference and Global Protein Summit last week. In the U.S., the average person currently consumes 221 pounds of beef a year. The segment has done extremely well through the pandemic, he said.
"Beef has really flourished during these times, and that's with a little bit of inflated prices that we had for a little while," said Darcy.
The NCBA, which promotes the U.S. beef industry and is funded through the Beef Checkoff, does running consumer studies to keep a pulse on how consumers see the industry. They get opinions from hundreds of people per month, and about 1,500 per quarter, Darcy said.
In an average year, he said, about 67% of people say they eat beef weekly. Through July, 73% of consumers said they ate it at least once a week. According to reporting on a presentation Darcy gave over the summer, 29% said they ate meat alternatives at least once a week, though this includes a wide range of items and not just plant-based meat.
Positive perceptions of beef overall — what consumers think about the industry and how beef is raised — are also up about 6%, Darcy said.
In the whole meat sector, Darcy said beef owns a 57% share of sales. This is up from 2019, when beef had a 53% market share. Darcy said most of the gain was from consumers buying more beef and less chicken.
But while some activists have used the pandemic as a launching point to warn consumers away from meat, the NCBA hasn't seen those attitudes filter out to consumers. As the pandemic started, Darcy said the group started several projects to monitor consumer sentiment about the industry.
"And one of them that we were asking about was, 'What are your concerns? Your future concerns about the beef industry,'" Darcy said. "And most people are saying they don't really have one."
There were some concerns, but most had to do with availability and price. When directly asked about plant closures and safety, Darcy said, just under a quarter of consumers — 23% — had any concern about it. In fact, he said, the data shows that concerns about health, the environment and safety during the pandemic have actually trended in the beef industry's favor. Trust in the safety and nutrition of meat are up, he said.
"Some of that might be that there's so much to worry about, whether it's the economy, or politics, or COVID in general, social injustice, whatever the topic might be," Darcy said. "Maybe there's just not room right now for consumers to be thinking about some of those things that they did [before], or as many consumers thinking about it. The environmental impact of animals or animal treatment — it's still there, and maybe it comes back in a few months. So maybe this is just temporary, but we've actually seen kind of that put off the gas a little bit from consumers."
"One of [the things] that we were asking about was, 'What are your concerns? Your future concerns about the beef industry.' And most people are saying they don't really have one."
Director of market research, National Cattlemen's Beef Association
Surveys from other sources have had similar findings. According to Datassential, just 25% of consumers said they are less likely to buy meat because of COVID-19 outbreaks among plant workers. Nearly four in 10 consumers said it made them nervous, but won't stop them from buying meat.
While plant-based meat is a part of the current spectrum of products, Darcy said the beef industry doesn't really consider it competition. According to market data the NCBA collects, plant-based meat represents 0.4% of the entire meat industry now, Darcy said.
"We're actually seeing in that research that people that eat meat alternatives and meat substitutes are still eating other proteins — like beef and chicken and fish and pork — at a high level," Darcy said. "So a lot of it, I think, goes to the hypothesis that they're looking to add variety to their diet, but beef is part of that."
Will the meat industry be a casualty of COVID-19?
Although the plant-based meat segment is small now, Impossible Foods' Brown is known for his sweeping predictions of success for his company — and plant-based food at large — when compared with conventional meat.
"Impossible Foods is not a guppy," Brown said. "It's a embryonic whale, OK? That's really important: That we are growing like mad. And we are, by 2035, going to completely replace that industry."
Others don't see that kind of replacement on the horizon. Rabobank's Fereday pointed out the consumer patterns aren't quite there. If this question was a matter of either eating plants and eating meat, Fereday said plants are far from winning. If consumers really wanted to eat more plants, the less-processed variety — fruits and vegetables — would be seeing more sales.
And though today's consumers are becoming more health conscious, pre-pandemic sales in the produce category have only been improving modestly. In the last quarter of 2019, retail sales of fresh produce were up 1.2% compared to a year earlier, according to the United Fresh Produce Association. But the pandemic has changed this dynamic. In the first quarter of 2020, fresh produce sales were up 7.1% over the same time in 2019, United Fresh found.
Beyond Meat's Chief Growth Officer Chuck Muth said he thinks consumers have heard quite a lot about how eating better could help improve their overall health. Now as the pandemic rages, he thinks they are taking it to heart — something that helps the plant-based meat sector.
"I think there's this mathematical inevitability of plant-based foods becoming a bigger part of our diet going forward," he said. "I can't predict exactly when or where that will happen, and I do not subscribe to demise of animal meat. We don't denigrate animal meat. We're gonna make a choice. We just want to provide a choice that we think is an option for them to consider around health and environmental resources and animal welfare."
Even if the end result of the pandemic is more people choosing meat alternatives, Dutkiewicz said this could still hurt the meat industry. While the meat industry is huge and doing well now, a consumer shift toward more alternatives — which he said are much more efficient ways of delivering protein and nutrition anyway — could be enough.
"If the beef industry just couldn't do the number that it normally does, it couldn't do the scale that it normally does, ... I think that would already lead to a serious disruption of the value chain of that business model, which basically is predicated on economies of scale, very low margins, very high numbers and constant growth," Dutkiewicz said. "And so I think disrupting that model means not even full replacement, but just getting enough people to stop consuming that product to the point where that business model is no longer viable."
Fereday said it is unlikely that plant-based meat will ever take over for its conventional counterpart. There aren't any examples of that happening in the food business, he said. He said the sweetener market is a good example. There are many alternative sweeteners on the market — both artificial and natural. And they're still just a small portion of the market, which is still dominated by sugar. There are some sweeteners that dominated single segments of food and beverage, like high fructose corn syrup in beverages, but sugar is still king.
"Saving the planet and all that is certainly not as pressing as getting food on the table."
Executive director of food and consumer trends, Rabobank
Brown countered, bringing up the example of cameras. When the first digital cameras came out a generation ago, they were expensive and low quality, far from displacing traditional film cameras, he said. But a decade later, the film camera industry was dead.
And Impossible Foods says it can show that its products are taking consumers away from conventional meat. According to findings the company received from analytics company Numerator, which looked at individual consumer data, 72 cents per dollar spent on Impossible Burger would have otherwise been spent on meat.
Improving upon the incumbent protein industry — in taste, sustainability and nutrition — is important, Brown said. But there's also the matter of health at large. Brown, who has a Ph.D. in biochemistry and did significant research in viruses and infectious diseases before starting Impossible Foods, said the COVID-19 pandemic provided a wake-up call to consumers.
"One thing that people are much more aware of, which public health people known forever, is that there's a huge public health risk we take on from our habit of eating foods that we make using animals," Brown said.
COVID-19, which was introduced to humans through a food market with exotic animals in China, came from eating animals. Ebola and HIV also are diseases that experts say may have come from eating animals, Brown pointed out. Brown said the next virulent influenza pandemic is likely to come from chicken or pork farming operations.
"Hopefully, we will have made those things obsolete before that happens," he said.
Article top image credit: Yunjin Kim/Food Dive