What are the purchase drivers for plant-based foods and beverages? And what’s the real size of the plant-based meat prize?

02-Aug-2019 - Last updated on 02-Aug-2019 at 14:59 GMT

Picture: Datassential

New consumer research from Health Focus International shows that perceived health benefits and taste preferences are more significant purchase drivers for plant-based foods and beverages than sustainability or animal welfare concerns, echoing recent research from The Hartman Group.

The market researcher – which conducted a survey with 2,014 US consumers in November-December 2018 as part of its 2019 Shopper Study – asked a subset of respondents who said they consumed plant-based foods and beverages to rate a series of purchase drivers (see graphic below).

Promotes daily health and Promotes long-term health came out on top with 57% of these consumers rating these as extremely or very important, followed by Helps prevent disease (53%), More energy (52%), It’s a taste preference (49%), Eating clean (48%), Better treatment of animals (47%), and at the bottom of the list: It’s a lifestyle preference, and Environmental/sustainability reasons (44% apiece).

Negative taste perception a barrier for mainstream consumers

However, questions directed to all respondents showed that while just over a third (37%) agreed with the statement that plant-based foods and beverages were “healthier overall than animal-based foods/beverages,” only 12% agreed they were “better tasting.”

This also backs up Hartman Group research showing that for mainstream consumers, one of the biggest barriers to growth for plant-based meats, at least, is negative taste perception – which the latest generation of products from brands such as Beyond Meat and Impossible Foods is clearly addressing.

Nutrition and plant-based foods and beverages

When the statement about the relative healthfulness of plant-based foods was re-phrased as “plant-based foods/beverages are more nutritious than animal-based foods/beverages,” the percentage of consumers in agreement dropped from 37% to 26%, reflecting the fact that shoppers see ‘overall health’ and ‘nutrition’ differently.

It may also reflect the fact that while large observational studies suggest that vegan dietary patterns result in better health outcomes, there is an ongoing debate about ‘nutritional equivalency’ when it comes to some dairy/egg/meat analogs, with dairy farmers arguing that many plant-based milks lack nutrition, and some dietitians drawing attention to the sodium and saturated fat levels in some plant-based burgers.

Without delving deeper into what consumers understood by the term ‘plant-based’ in this study, it is hard to tease out what is behind some of these responses, however.

Health-Focus-International-2019-plant-based-purchase-drivers — Source: Health Focus International

Rabobank: ‘Is plant-based meat a fad or lasting trend? A bit of both, actually’

In his latest report To Infinity and BYND, which focuses on the plant-based meat trend following the IPO at Beyond Meat (BYND), Impossible Foods’ impending retail launch, Rabobank executive director, food and consumer trends, Nick Fereday, said:

“Is it a fad or lasting trend? A bit of both, actually.
What is driving this? Important new drivers center around sustainability, animal welfare, and health & wellness, but none of these add to the taste profile.
How big will the market go? Bigger, but not as big as some are making out.
And, what’s the fixation with burgers? Welcome to America!

'How big will the market go? Bigger, but not as big as some are making out'

He added: “Shares [in Beyond Meat] were initially priced at $25 [in May at the IPO] and, as of mid-July, were trading at about $160. This puts the company’s valuation at close to $10bn, just $2bn shy of Campbell Soup’s market capitalization. Not bad when you consider Campbell pulled-in about $9bn in revenue last year, and Beyond Meat made 1% of that, at around $90m.”

While Beyond Meat’s sales surged 287% in the latest quarter (it’s now predicting full year sales of $240m) and the Impossible Burger is about to roll out nationwide at Burger King (albeit for an undefined 'limited period'), Fereday said the ultimate size of the prize is not yet clear.

Is it logical, for example, to assume that just because plant-based milks have captured 13% of the fluid milk market that meat, cheese and eggs will follow suit? Or are different dynamics at play in these markets?

Consumption of dairy milk has been declining since the 70s, but sales of meat, cheese and butter are still growing, and some of the purchase drivers for plant-based milk (new flavor options, variety, lower calories, lactose or milk protein allergy issues, digestive comfort, perceived health benefits) don’t necessarily apply to plant-based meat, noted Fereday.

Impossible Foods, Perfect Day ‘have been able to help move the conversation beyond the binary bleat of GMO bad, natural good…’

The ‘highly processed’ nature of some of these products is also attracting some media attention, although it’s not clear whether the mainstream consumers that Impossible Foods is targeting are losing any sleep over this. (Plus, as Beyond Meat CEO Ethan Brown recently observed, a visit to a plant-based meat factory probably beats a trip to the slaughterhouse for those interested in where their food comes from.)

Companies such as Impossible Foods and Perfect Day (milk proteins minus the cows) have also been “able to help move the conversation beyond the binary bleat of ‘GMO bad, natural good’ or ‘never more than five ingredients’ to a more multidimensional Maslow-like ’hierarchy of needs’, where attributes such as mission and sustainability form an integral part of the product’s value,” noted Fereday.

However, Chipotle says next gen faux meats are too processed to go in its stores, while activists in the natural products community have repeatedly bashed Impossible Foods over its use of genetic engineering, despite its arguments that growing GM soy to make plant-based burgers is considerably less damaging to the planet than growing exponentially more of it to feed cows. (It has also argued that non-GM soy is not necessarily a greener option.)

Citing the challenge to find the ultimate sugar replacement, “Substitutes rarely ever perform as well as the real thing across market segments for the simple fact they are not the real thing,” claimed Fereday, who noted that Michael Pollan’s ‘rules for eating’ - which include, ‘Don't eat anything your great grandmother wouldn't recognize as food’ - are resonating with more consumers (although this hasn’t held Soylent back) .

…But ‘even when negative perceptions result from bad science, they leave a mark’

He added: “As soda sales started to slip at the start of the century, diet beverages were seen as the future of the market, until they came under greater scrutiny because of their artificial ingredients and sweetness profile that failed to deliver, and they ultimately fell victim to changing consumer perceptions about what is healthy and natural.

“Even when some of these negative perceptions are the result of misinformation or bad science, they leave a mark. Meat-alternative companies take note: consumers are fickle, and today’s solution and good idea can quickly become tomorrow’s problem and bad idea.”