Plant-Based Food Sales Continue To Grow By Double Digits, Fueled By Shift In Grocery Store Placement
Sales of plant-based alternatives to meat, seafood, milk and other dairy products booked another year of double-digit growth as companies of all sizes created beefier plant-based burgers, improved on past generations of vegan cheese, and launched new dairy-free ice cream flavors.
U.S. retail sales of plant-based foods grew 11.3% in the past year, compared to a 2% rise in overall food sales, according to a SPINS report commissioned by the Good Food Institute and the Plant Based Foods Association. Plant-based sales were up 31.3% in the two-year period from April 2017 through April 2019, to a total of nearly $4.5 billion, according to the report released Tuesday morning.
The surge in sales is the latest sign that mainstream consumers are seeking out more alternatives to animal-based foods, and in many cases retailers are making those options easier to find.
U.S. consumers spent nearly $1.9 billion on plant-based milks over the past year, making milk the top-selling plant-based category. The rise in plant-based milk sales in recent years has been helped by a few factors, including a decision by a growing number of grocers to move the beverages to the dairy case instead of continuing to merchandise them in a separate section in another part of the store.
“One of the key things we can point to in plant-based growth is the move to the refrigerated dairy set,” Good Food Institute Associate Director of Corporate Engagement Caroline Bushnell said.
Shoppers searching for milk to pour over cereal, put in their coffee or use in other ways were now exposed to alternatives made from soy, almonds, oats and other plants, and that positioning encouraged many of them to try the new offerings that they likely wouldn’t have sought out had they still been merchandised in a separate vegetarian or vegan section of the store, she said.
“There are a lot of parallels generally with where plant-based is now and where natural and organic was 10 years ago,” Bushnell said.
A decade ago, retailers realized that integrating natural and organic products into the same areas where they were merchandising conventional products would help more shoppers find them and sales of the products would increase, she said.
“Now, almost all mainstream retailers have them in the same aisles with conventional products, which is the way consumers shop.”
Familiarity with plant-based milk alternatives has encouraged consumers to try alternatives to traditional dairy products in other categories.
“As they’ve gotten familiar with almond milk and coconut milk, they’re saying ‘Maybe I will try plant-based cheese,’” Bushnell said. “It’s helping to re-frame this idea of the dairy category for consumers, show them they can have dairy products made from plants and that cashews make absolutely delicious cheeses.”
Once again, retailers have been feeding the trend, moving more of the plant-based cheese options to the section where consumers are used to shopping for dairy cheese.
“That’s how you get the other 90% who aren’t vegan or vegetarian to try them. When these products are in a set that says ‘vegan’ or ‘vegetarian,’ that tells the 90% that these products aren’t for them, whereas if you integrate them, it’s ‘Here’s a new option, let me try this,’” she said.
The categories with the biggest growth rates over the past two years are all plant-based dairy and egg alternatives, led by dairy-free creamer sales which grew 192.7% between 2017 and this year. Dairy-free alternatives to ice cream, yogurt and dips also racked up triple-digit growth rates.
While the animal-based versions of those products still dominate the categories, they’re growing at a much slower pace and some categories including milk and yogurt actually declined last year, Bushnell said.
Where and how plant-based foods are merchandised in the supermarket was a hot topic at the first Plant Based World Conference and Expo in New York City last month. Plant-based food makers, retailers and industry experts explored the best ways to connect with the growing number of people who aren’t giving up meat and dairy altogether but are increasingly looking for plant-based alternatives for some meals.
One statistic from Tuesday's report might highlight that trend more than any other. While sales of plant-based meat and dairy alternatives have soared, sales of tofu and tempeh—seen as more traditional vegan and vegetarian protein sources—lagged. The category grew 4.9% year-over-year and booked only 17.2% growth over the two-year period.
Some stores have begun going beyond the dairy section and are putting new products including Beyond Burgers and other plant-based meat alternatives in the meat case.
“GFI has a vision of the future where there’s a protein department,” Bushnell said.
The department would put all the center-of-the-plate protein options in one place, giving shoppers easy access to both animal- and plant-based options, she said.
And that time may be coming soon. The success of the Beyond and Impossible Burgers has fueled a surge in other brands developing plant-based meat alternatives that mimic animal meat more closely with each new iteration.
“We can expect to see really significant growth in plant-based meat over the next year,” Bushnell said. “There are five new burgers set to launch this year alone – there’s a feeling of being at a tipping point.”