Market Value of Plant-Based Foods Hits All-Time High of $7.4B

Despite the challenges of the past two years, including supply chain issues and inflation, plant-based foods have persevered, building on growth seen in 2020 and 2021, according to new data released March 24 by the Plant Based Foods Association (PBFA), The Good Food Institute (GFI) and SPINS.

The companies found that U.S. retail sales of plant-based foods grew 6.2% in 2021 over a record year of growth in 2020, bringing the total plant-based market value to an all-time high of $7.4 billion.

What’s more, plant-based food retail sales grew three times faster than total food retail sales, with most plant-based categories, including milk, meat and eggs, outpacing their conventional counterparts.

Dollar sales of plant-based milk—the largest category in the plant-based market—grew 4% in 2021 and 33% in the past three years to reach $2.6 billion. Accounting for 16% of all retail milk dollar sales, plant-based milk is the growth engine of the milk category, noted PBFA, GFI and SPINS, contributing $105 million in growth, while animal-based milk's decline equated to a loss of $264 million.

The category is benefiting from product innovation and expanded merchandising space and assortment, the groups said. Almond milk is the category leader, accounting for 59% of the total category, with oat milk following at 17% of category sales.

Across the store, plant-based dairy products, which reached $2.1 billion in total sales in 2021, are also growing faster than its conventional counterparts. In 2021, dollar sales of plant-based yogurt grew 9%, three times the rate of conventional yogurt, for 4.5% dollar share; plant-based cheese grew 7%, while conventional cheese declined 2%; and plant-based ice cream and frozen desserts grew 31% over the past two years to reach $458 million.

The plant-based egg category also grew rapidly in 2021, with a 42% increase in dollar sales, and in the past three years, dollar sales have grown more than 1,000%. Dollar sales of conventional egg, meanwhile, decline by 4% in 2021.

Over in the meat case, dollar sales of plant-based meat remained strong in 2021 after seeing record growth in the years prior. The category delivered a repeat year of $1.4 billion in sales, and grew 74% in the past three years, outpacing conventional meat by almost three times, found PBFA, GFI and SPINS.

The unit comparison between conventional and plant-based meats is even more striking, the groups said. Unit sales of conventional meat grew 8% in the past three years, while unit sales of plant-based meat grew 51%. This reflects the trend that more households (19% in 2021 vs. 18% in 2020) are purchasing plant-based meat, with 64% of buyers purchasing plant-based meat more than once throughout the year.

It also reflects supply chain disruptions and escalating inflation, which the conventional protein market, in particular, has been hit hard by, the groups said. They noted that after an overstimulated 2020, the unit sales of almost every single animal-based category experienced negative growth in 2021, as did a couple of select plant-based categories, although to a lesser extent. Conventional meat dollar sales grew three times faster than its unit sales over the past three years, indicating that the growth is driven solely by price hikes. (IRI's inflation index shows that in March 2022, U.S. retail conventional meat price per unit was up 13% compared to March 2021, while plant-based meat price per unit was down 2%.)

Plant-based burgers continue to lead the plant-based meat category as the top-selling product type, but the fastest-growing plant-based meat products in 2021 were meatballs, chicken nuggets, tenders and cutlets, and deli slices, the companies note, evidence that the industry is resounding to consumer desire for more variety within the meat category. There’s also opportunity in plant-based seafood, which despite accounting for just 1% of the plant-based meat market, grew 14% to $14 million in 2021.

The Consumer Equation

PBFA, The Good Food Institute and SPINS also examined the consumer purchasing behaviors of plant-based products, and found that 62%, or 79 million U.S. households, are now buying these alternatives, vs. 61%, or 77 million, in 2020.

In indication of strong consumer commitment and interest is increased repeat rates. The companies found that the percentage of consumers purchasing multiple times within the plant-based category grew from 78% in 2020 to 79% in 2021.

"More and more consumers are turning to plant-based options that align with their values and desire to have a positive impact on personal and planetary health,” PBFA Senior Director of Retail Partnerships Julie Emmett said in a release. “By taking consumer concerns to heart, the industry is actively embracing its role as a key driver of change that moves us closer to a secure and sustainable food system."

Millennials and Gen Z consumers, especially, are motivated by an interest in foods that are better for their health and deliver on positive environmental impact and social responsibility. These generations, which compose 47% of the population, are also increasing their e-commerce spending the most, the companies note; e-commerce sales of total plant-based foods grew 47% in the last year to $351 million, up from $240 million in 2020.