Now KFC is offering faux chicken and Chipotle is promoting their plant-based chorizo. What’s up with plant-based, and what’s driving demand? Let’s turn a leaf and find out.

I attended a webinar recently provided by The Food Institute with some leaders in research from NPD, a top food research organization, and RCB Capital Markets. I will share some of their insights along with my own. 

The early demise of plant-based was predicted when COVID hit, but it only grew as consumers pondered their health, the planet, and their immortality, a good place to start…

Especially among Gen Zs and Millennials, people considered the future state as technology began developing more than a vaccine. The younger demos see a future that will expand their life expectancy by decades of vibrant adulthood driven by artificial intelligence that is emerging. One example was a sensor that has been created for implantation on a person’s tooth that, through the ingredient of saliva, can provide feedback on a person’s health and disease which can be tamed before threatening their life. Technology, along with a belief that real meat is less healthy and harmful to the environment in which they live, makes plant-based foods appealing to the psyche.

Overall, there are more reasons for consumers to choose the plant-based path, led by better health and wellness, the environment, and what even Boomers understand, which is a need to consume more vegetables.

No matter the age, plant-based alternatives are now consumed by 15% of the population, which equates to about 50 million Americans, a large enough target group to inspire innovation and investments.

Meat and dairy companies are hedging their bets. While their primary focus is to grow share and increase profits within animal proteins, many have already launched their own plant-based initiatives or invested in other promising start-ups. In fact, plant-based investment is the fastest-growing segment in the food business, at last count, around $3.1 billion in 2020. Yet, there are plenty of headwinds for the business.

First, plant-based food companies are still trying to tackle two giant hurdles. First, it must taste good and appear to be something like normal food. And, it must be affordable. When the KFC campaign launched a few weeks ago, scores of consumers took to social media to describe their experience. Texture, shape, and price objections were quickly shared around the world.

NPD confirms that there is significant consumer push back with 55% of objections saying the meat just isn’t real and 50% claiming the products are too expensive. Further scrutiny will likely be centered around whether the ingredients in plant-based products are truly better for you and the planet.

As for price, there has been a rapid decline according to RBC Capital in the second half of 2021. But parity with real meat, even with inflation, is still a significant hurdle at retail and at a restaurant. By the end of 2021, the plant-based chicken had declined from $18 per pound in June to $7.50 a pound in December. Even with inflation figured in, the total price was still nearly twice the cost of real chicken. Other issues involve ramping up production to scale and bringing products to market through conventional broadline distribution.

Growing a consumer base from about 15% of the U.S. population to something approaching 40% will be key. A recent consumer study on plant-based meats shows that 62% of the population is simply not interested, no matter the price.

Plant-based marketing should stay away from the niche marketing messages of vegan and vegetarian positioning. Messaging strategies should be about the flavor and quality of the experience instead.

Plant-based and emerging technologies involving molecular/cell-based tech are some of the most interesting and promising pieces of this new movement that is hurtling toward us like a freight train. Want to know more and discuss your opportunities? Let’s talk.