Alternative Meats Could Be 60% of the Market by 2040

In case you haven’t heard, plant-based food is trending. 

Every day, there are multiple articles talking about the rise of plant-based eating and the innovative companies that are making it possible. The market is worth billions and is growing five times faster than the overall food industry. Leading business consultants are projecting that plant-based and cell-based meats will make up 10-28% of the market in just 10 years and as much as 60% of the market in 20 years! 

Whether you’re a food startup or an established brand, knowing these numbers can help position you to best capture some of this incredible growth. Let’s dive in… 

Where Are We Now?

Thanks to the Good Food Institute, the Plant-Based Foods Association, and SPINS, we have reliable retail sales data to help us size the market: 

“New data show that the U.S. plant-based foods retail market is worth $4.5 billion. It grew five times faster than total U.S. retail food sales over the past year.”

Specifically, the U.S. plant-based foods market grew from $3.4 billion in the 12 months ending in April 2017 to $4.0 billion in 2018 to $4.5 billion in 2019. The growth rate from 2018 to 2019 was 11% for plant-based foods, compared to just 2% for overall food sales. Additionally, plant-based alternatives are outpacing their animal-based counterparts in every major category

GFI Chart - Total U.S. Plant-Based Food Market

The GFI-PBFA-SPINS data also provides wonderful insight into the size and growth rate of plant-based foods by category. Plant-based milk products are easily the biggest category, but the market has started to mature and the annual growth rate was 6%. Plant-based meats are currently a smaller market, growing at 10%. Niche categories like plant-based spreads, creamers, and yogurts are smaller still, but growing at 39% or more. 

There’s even more evidence of the popularity of plant-based diets in a forthcoming Cultivate Insights report. Nearly half of all adults (48%) had consumed a plant-based alternative to meat, dairy, cheese, and/or eggs during April-June 2019). Our report will provide details of consumer habits for plant-based meat, milk, cheese, and eggs, including comprehensive segmentation data to understand the consumers that drive each category. The report will be available in September — contact us for details.

Over the Next 10 Years

High-growth industries are notoriously difficult to forecast. But that doesn’t stop us — or leading consulting agencies — from speculating. That’s what Barclays Capital did in their recent report, “Global Food: I Can’t Believe It’s Not Meat” (PDF file). Taking a worldwide perspective, they project rapid growth for the alternative meat space, capturing 10% of the market by 2029

Barclays quote on market size.

The report also notes that the current market share for meat alternatives is less than 1% globally (and less than 5% in the U.S.). Barclays says that the growth from 1% to 10% market share is going to come from both innovative new companies and also established meat businesses venturing into alternatives. The report is skeptical of the growth of cell-based meats over the same time horizon and suggests that most growth will be from plant-based alternatives. 

Over the Next 20 Years

AT Kearney, the global business consultancy, goes even further. In a recent in-depth report, they make the exciting (and bold) prediction that plant-based and cell-based meat will be the majority (60% combined) of meat sold by 2040. Their qualitative assessment says most of that growth will come from cell-based meat, which will hold 35% of the market in 20 years compared to 25% for plant-based meat and 40% for animal-based meat.

AT Kearney chart on growth of meat alternatives.

According to AT Kearney: “It is noteworthy that the demand for conventional meat declines by 3% despite a global increase in meat consumption of 3% per year. Novel vegan meat replacements will show a strong growth in the transition phase (until 2030), whereas cultured meat—with an annual growth rate of 41% per year—will outgrow novel vegan meat replacements between 2025 and 2040 due to technological advancements and consumer preferences.”

The report also goes into detail regarding the challenges faced by the conventional meat industry over the next 10-20 years. It notes that alternatives will fair better when it comes to availability of input materials, production processes, scalability, consumer acceptance, ethics, and sustainability. “The new market entrants will take their place, converting agricultural inputs into meat alternatives directly without the detour of raising and processing animals.”

AT Kearney Chart on disruptive potential.

Experts agree, the plant-based food industry is growing fast and capturing substantial market share. Conventional meat and dairy producers are being advised to get on board or risk obsolescence. Now is the time for innovative plant-based companies to take your business to the next level. To do that, you need to understand the opportunity, know your target audience, and measure your results. Cultivate Insights can help… let’s talk.

Leave a Reply