Inflation has taken a toll on plant-based meat analogue (PBM) sales, causing actual sales to come in lower than predictions.
Despite an increase in PBM production, consumers have been purchasing less expensive proteins, including conventional meat and seafood, Insider Intelligence reports. Plant-based meat analogue category sales dropped by 10.5 percent by volume for the 52 consecutive weeks ending 4 September.
Investments in the PBM sector reached almost USD 5 billion (EUR 5.1 billion) by 2021. IAMECON reported a 19 percent increase in sales in 2019, followed by a 45 percent in 2020. Compared to conventional meat prices increasing by 11.2 percent, PBM pricing has only increased by 2.4 percent, and a number of companies have launched new plant-based seafood analogue products in recent months.
According to IAMECON, the Boston Consulting Group projected the entire plant-based industry would grow 14 percent annually between the years of 2019 and 2035.
Current factors causing a lack of sales for plant-based foods, IAMECON said, stem from a combination of ingredient shortages, supply chain disruptions [due to the COVID-19 pandemic], and supply-side factors.
Insider Intelligence explained other factors causing the declining demand for plant-based meat can be attributed to other setbacks in major retailers, in addition to inflation. For example, McDonald’s ended the test period of the its McPlant burger without plans to add them back to its menu. Cracker Barrel also received major negative backlash from its addition of impossible sausage.
Evidence of declining success in the sector overall also includes the drop in market cap of Beyond Meat, a major manufactuer of PBM products, which has fallen 75 percent.
Despite the inflation and sales decline, production still has been rolling out in plant-based startups. Major companies such as Eclipse Foods and Planted Foods have invested money to increase plant-based meat products, according to Insider Intelligence. The biggest takeaway from the current market, Insider Intelligence said, is that consumers aren't willing to pay too much of a premium for any plant-based meat analogue products.
Photo courtesy of Hooked
