“Plant-based protein alternatives are no longer niche products, but rather something that is going mainstream and something that major companies are getting on board with,” Alice Yu, a research analyst with Euromonitor, said during a recent webinar hosted by the market research firm.
She added as such products are becoming more sophisticated and are expanding beyond the obvious animal-based product replacement such as meat and milk.
For example, she noted, by 2021 the US, which continues to be the world’s biggest market for ice cream, will become the most attractive country for dairy-free ice cream options.
“US consumers are greatly attracted to free-from dairy ice cream that is fortified in protein, which helps in both weight management and muscle gain,” Yu said, adding, “what we are seeing in the US is an increased demand for free-from variants of existing products.”
A pivotal example of this was when Ben & Jerry’s announced the creation and launch of a line of vegan-certified alternatives to ice cream using almond milk as the base, she said.
Savory snacks come to the forefront
As consumers become more familiar with plant-based proteins, they are more open to purchasing products that are not just mock or alternatives to animal-based versions, which has opened the door for plant-based protein snacks, Yu said.
Euromonitor data shows that demand for savory plant-based protein snacks in the US will grow slightly more than 2% compound annual growth rate through 2021 – placing it in the middle of the pack for countries catering to this need globally.
Globally, the market leader for plant-based savory snacks is Australia, which could shine a light on potential growth opportunities in the US.
Yu notes that in Australia the fastest growing plant-based snack segments are popcorn, which is projected to grow at almost 9% CAGR, followed by vegetables, pulses, bread chips, nuts, seeds and trail mixes, which are all projected to grow slightly more than 4.5% through 2021.
“Nuts in particular are seeing a lot of growth … [and] have come a long way from once being seen as high fat and contributing to weight gain to being seen as part of a healthier diet,” said Yu, who contributed the shift to campaigns that promoted the health benefits of nuts in reducing chronic disease.
Ongoing interest in milk and meat replacements
Despite the emerging focus on these new categories for plant-based proteins, consumer interest in alternatives to animal protein and cow’s milk remain strong, according to Euromonitor data.
For dairy milk, the recent shift in the US market away from primarily almond or soy as the base ingredient towards a variety of other nuts and pulses is a “potential indicator of what could happen in other markets in the near future,” Yu said. She explained that US consumers have been turning their back on the once favored almond milk because of media reports that it was not high in protein.
As for meat alternatives, Yu says sustained consumer interest in the category will lead to a narrowing price gap between processed meat and meat alternatives – making the plant-based options more compelling.
At the same time, Yu noted that value sales of meat substitutes in the US reached about $700 million in 2016 – which was far beyond any other major country. The segment will continue to hold its own in coming years with a predicted compound annual growth rate of about 5% through 2021 in the US.
Demand for plant-based protein based on health, environmental impact
The demand for more protein across categories and from plant-based sources is not based in a need for more of the macro-nutrient in out diet, said Yu. She explained that most Americans eat at least a third more protein daily than they need and most of it comes from meat, followed by dairy and processed meat and seafood. Baked goods and eggs currently make up less than 5% of the daily consumption, according to Euromonitor data.
Despite this over-consumption, demand for meat will increase globally by 74% and a “shocking” 500% for eggs by 2020, Yu said.
But this increase demand is placing pressure on limited agricultural resources, including land for raising animals and growing their feed. As consumers become more aware of this they are pressuring manufacturers to find other solutions, Yu said.
“Consumers do actually care about these issues…. Particularly [the impact] red meat is having on their health and the environment,” which is leading to initiatives such as Meatless Monday and the adoption of flexitarian lifestyles, Yu said.
“We already have seen that many major food companies are getting on board with investments in plant-based protein alternatives … such as a Tyson Foods investing in soy and plant based burgers and Dannon, the French dairy giant, which bought WhiteWave Foods recently, which is a plant-based food company,” Yu said.
Looking forward, Yu sees significant potential for plant-based proteins coming from quinoa, hemp seeds, chickpeas, algal, Lupin and potentially insects if consumers can get over the ick factor.