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A 45% increase in sales over one year is a big deal, but more than 99% of the meat we eat in the US still comes from animals.

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A 45% increase in sales over one year is a big deal, but more than 99% of the meat we eat in the US still comes from animals. This continued year-after-year growth at the very least shows there is growing demand for alternatives.

But this continued year-after-year growth at the very least shows there is growing demand for alternatives.

Plant-based is now more than a trend

In the mid- to late 2010s, it was common for  journalists  and  market research groups  to predict plant-based as the next big trend. Years later, it’s clear that it’s more than a trend — it’s a sizable sector of the food industry, especially alternative dairy, which is becoming less and less alternative.

Fifteen percent of fluid milk sales in retail are now plant-based, plant-based butter is at 7 percent, and plant-based coffee creamer 6 percent. Some subcategories of plant-based meat are getting more and more consumer dollars, too — for example, 2.7 percent of packaged meat sales are now plant-based. To be clear, these figures are for sales, not volume. Since plant-based products tend to cost more than their animal-derived counterparts, the actual volume of plant-based milk and packaged meat that Americans are picking up at the grocery store is likely a good amount lower than 15 percent and 2.7 percent, respectively.

Despite the relatively small share of grocery dollars spent on plant-based foods, investors are confident that alternative proteins will continue to capture more and more of the overall food industry. Last month,  GFI reported  that in 2020 alone, the alternative protein sector raised $3.1 billion from investors. That’s more than half of all the money raised in this space over the past decade. Much of the $3.1 billion went to big names like Impossible Foods and Oatly, but many  newer companies  got a  boost, too .

It will take many years to see if this investment — a lot of it likely to be used on R&D — pays off, but it sets up the industry to make headway on its biggest challenges: bringing down the cost of plant-based products, making them taste better, and making them more widely available.

On the price and availability front,  Impossible Foods, Beyond Meat , and Eat Just  have continually lowered prices while getting into more and more grocery stores (and restaurant chains) — though  not quite enough to bring in lower-income consumers .

Compared to the popularity of meatless burgers and sausages (the products the biggest plant-based food companies have focused on),  consumers aren’t buying a lot of plant-based chicken or fish alternatives , which is bad news for chickens and fish, as they’re killed in the highest numbers and typically raised in the  worst conditions .

Better news for animals is the rise of plant-based eggs, which saw sales grow by 168 percent from 2019 to 2020. But more so than any other subcategory mentioned here, plant-based eggs were starting from an especially low baseline —  Eat Just’s liquid plant-based egg  only became widely available in late 2020, with practically no predecessors (or competitors).

Who’s buying plant-based food?

In addition to looking at in-store sales, PBFA and GFI also commissioned a consumer survey to look at who’s buying plant-based foods at the supermarket. They found that households with under $35,000 in income spend the least on these foods, while a little more than half of all money spent on plant-based foods comes from households making over $70,000 a year (the  US median household income is $68,703).

Those who are purchasing plant-based foods the most?  Consumers ages 35 to 44, consumers with graduate degrees, households with children, and households with income over $100,000.

This data underscores the importance of plant-based companies’ efforts to lower prices, and suggest that more companies ought to try to make plant-based meat as  cheap as possible from the get-go , rather than creating an expensive, high-demand product at first in the hope it can scale and become affordable over time, the approach taken by most startups so far.

The survey also found that  people of color overindexed on plant-based purchasing, meaning they were both more likely to buy plant-based foods and spend more on plant-based foods compared to the consumer panel, whereas white consumers underindexed.

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