Will plant-based protein rebound in 2024? Chunk Foods, Konscious Foods CEOs share perspectives

“With the companies that are already in retail markets that are already established, I think what we're going to see in 2024 is not necessarily a return to basics as much as just trying to maintain their market share because new companies coming to market every day, and now established veterans like Gardein, they need to battle for their market share. MorningStar Farms they need to battle for their market share,” Miri Eliyahu, senior research analyst of food and beverage at Euromonitor told FoodNavigator-USA.

Was the plant-based market ready for the stock-market mentality? 

Despite declines in units across several categories, the plant-based protein market is registering dollar growth, per Euromonitor data. The US meat and seafood substitute market is valued at $1.82 trillion in 2023, up from $1.729 trillion in 2022, and the segment grew a 9.7% CAGR from 2018-2023, according to Euromonitor.

This year, the plant-based meat market have faced a tighter capital market, while those that went the IPO route quickly faced scrutiny and stock declines, Eliyahu noted. Beyond Meat’s stock price is currently down approximately 90% from its initial offerings and 97% off its peak in July of 2019. 

“The first thing is not to go public ... because a lot of the problems the sector encountered was the investor psychology that drove down Beyond Meat’s stock price,” Eliyahu said. “When you have equivalents to Beyond like Impossible, where the only divergence was they did not go IPO, and [Impossible is] so successful right now, then you learn that perhaps this sector is not ready yet for the stock-market psychology.” 

Plant-based meat startups considering an IPO should first see if their product has widespread appeal, Eliyahu noted. “If it is not a household name, IPOs are not a good way of establishing that,” she added.

Plant-based meat companies will also need to focus less on the technology component of their products and really focus on meeting consumer demands, Eliyahu said. 

“Second thing is to start thinking about [the plant-based meat] market as a food market and not a tech market, focusing less about the patents and more about the production, the end consumer, the mediators. We're already seeing a lot of really good traction towards that way of operating," Eliyahu said. "Chunk Foods, for instance ... in a few years, we'll see them in a lot of high-end restaurants because that is their path to market.” 

Foodservice provides plant-based meat companies with an easier path to market, as retail shelf space has become increasingly sparse, she said. 

“Now, retailers are more skeptical about introducing new companies on their shelves. Shelf space has become more expensive, so they're looking for proof of concept, which also aligns with why a lot of new startups are targeting foodservice instead of retail.”

Plant-based meat companies might also want to consider shifting their focus from the retail space to becoming ingredient companies, which can provide better margins, Eliyahu said. Mycelium-based protein and snack brand Meati hinted​ at moving into the ingredient space earlier this year, and Tofurkey has expanded into private-label manufacturing, revealed at this year’s Private Label Manufacturing Association Event last month. 

“I don't expect [this] to happen in 2024, but where I think plant-based should go is into becoming ingredient suppliers for larger companies. It is a much more sustainable path in terms of revenue, [companies] don't need to invest as much in marketing or customer acquisition, and you still bring products to the market. You just supply it to a different manufacturer, and they decide what to do with it, kind of like what we've seen with the NotCo company and Kraft Heinz​.” 

Chunk Foods focuses on foodservice, remains bullish on US market

Whole-cut plant-based meat company Chunk Foods is focusing on the foodservice space and working in a controlled environment to ensure consumers have the best-tasting version of its product, company founder and CEO Amos Golan told FoodNavigator-USA.

“We're not the first wave of plant-based, and we have seen what others have done, and the great things they've done and the mistakes they made, and what we realized ... a few things. One is that it's very important to make sure that the experience is an excellent experience for the diners and for the consumers, and that's easier to do in a controlled environment like a restaurant than in a supermarket.” 

Plant-based companies will also need to focus on the health and nutritional aspects of their products to grow in the space, Golan said. A majority of consumers (78%) said that they are willing to pay a premium for clean-label food products, according to Ingredion insight from 14,000 consumers​.  

"The health angle is going to be extremely important. We're going to see companies that were in sodium, lowering fat content, making leaner products, making products that have more protein and have [fewer] binders and [fewer] ingredients in general, so cleaner labels. Chunk is very well positioned there. We have about half of the sodium content in your average plant-based burger, there are about a third of the fat and more protein, and no binders."

He added, "We're going to see the trends that we started seeing in 2023. A lot of companies are going to go under, unfortunately, but that basically [is] going to clean up the space, and we're going to start seeing the winners in each category and subcategories." 

Chunk is also committed to building its US business first before moving into other geographies like Europe or Asia, he added. 

“We truly believe that the US market has amazing untapped potential, which is not fully met at the moment. There are a few good brands there, but many brands don’t operate in the US,” Golan said. “We are very bullish on the US market specifically on food service, and specifically within the scope, our scope, which is whole cuts.” 

Konscious Foods CEO discusses price, the further plant-based ‘shakeout’

Plant-based seafood brand Konscious Foods is also committed to the US market, as the company looks to expand its distribution following its launch at Expo West earlier this year​, plant-based veteran and founder and president of Konscious Foods Yves Potvin told FoodNavigator-USA. 

“We're looking at international markets, but North America is the No. 1 market in the world for food, so we want to make sure we explore all the distribution channels in North America before we go worldwide.” 

Similar to other plant-based companies, Konscious Foods is exploring ways to expand its distribution beyond retail shelves, including through foodservices. Recently, the company launched an exclusive Tuna California and Spicy Snow Crab rolls in Whole Foods’ sushi counters, and it’s exploring ways to partner with universities and hospitals to bring its products to these venues, Potvin said. 

When it comes to the challenges facing the plant-based segment, Potvin noted that companies faced problems when they didn’t properly assess the demand for their product in the market and didn’t properly manage the costs of running a plant-based company. 

“I have something in business I always say, ‘Are you the first one? If not, are you the best one? If you're not the best one, how different is your product.’ If you don’t have two out of the three, it's going to be difficult.”

In the new year, "there's going to be a lot of shakeout in the industry," where companies that have "road the coattail of Beyond" will find that they can't scale or keep their costs and profit margins in line to keep their doors open, Potvin said. Additionally, plant-based companies are likely to face a tighter capital market, which will damper their growth potential, investor Jennifer Palmer shared in a recent FoodNavigator-USA article​. 

"2024 will be challenging for a lot of these smaller operator that can't make it," Potvin said. "There's going to be something stronger that comes out of it. There's going to be some dominant player that's going to come up with a great product at the right price, and it's going to be more affordable for the mass, but plant-based is here to stay. There's no doubt. It's not something that's going to go away."