Plant-Based Foods: Sowing the Seeds of Disruption and Growth

Beyond Meat’s headline-grabbing IPO is just one example of how plant-based alternatives are poised to grab market share and reshape the food and beverage industry.

Friday, September 6, 2019

Plant-based options are transforming the food and beverage industry, with the potential to become one of the most significant trends for years to come. Several forces are driving the massive growth—and tremendous upside—of this burgeoning segment. In addition to recent improvements in the taste and texture of plant-based foods, an increasing number of consumers are drawn to plant-based options for health and dietary reasons, as well as environmental and animal welfare concerns.

Plant-based options are no longer a niche part of today’s food and beverage industry. They are now a mainstream set of offerings, increasingly appealing to not just vegetarians or vegans, but also a growing number of flexitarians and traditional consumers. The U.S. plant-based food and beverage market is now valued at $4.5 billion in retail sales, growing 11% in the past year compared to only 2% for all foods, according to SPINS. Plant-based leader Beyond Meat increased its sales 287% in its most recent quarter, according to public filings.

These trends are leading to intense interest from both public and private investors and high valuations across the plant-based food supply chain, especially for plant-based meat producers. In this issue of Food For Thought, we examine how grocers, restaurant chains, consumer packaged goods (CPG) companies, and ingredient producers are thinking about how to position themselves within this industry-shaping segment.

Highlights include:

  • Plant-based meat: Beyond Meat and Impossible Foods show the disruptive potential
  • Nondairy milk: a roadmap for success
  • Private label: a conduit for growth and innovation
  • Supply chain: strong ingredient demand spurs increased investment

Compelling Opportunity for Plant-Based Meat Alternatives

If plant-based meat is able to achieve the same level of market acceptance as plant-based, dairy alternative milk, this could represent an incremental sales opportunity of $30 billion in the United States alone, according to William Blair equity research analyst Jon Andersen.

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