When Beyond Meat went public in the spring, the company smashed expectations. Originally valued at US$1.5 billion, as of late May the market cap exceeded US$4 billion. Wall Street clearly believes there’s a strong future in plant-based meat alternatives, and it is putting its money where its mouth is.
Recently, Mintel published a report on plant-based food and drinks to get the average Canadian’s take on this burgeoning category. The first clear finding from the report is that a large number of Canadians are showing interest in plant-based foods and drinks. In fact, more than a quarter (28%) of Canadians say they are trying to add more plant-based food substitutes to their diet, with younger adults under the age of 44 most likely to hold this attitude (34%), suggesting the market is primed for future growth.
While vegans and vegetarians are often perceived to be the core market for plant-based foods, those operating in the space can think more broadly. According to Mintel’s research, just 5% of Canadians self-identify as vegetarians, and only 2% as vegans. Flexitarians, on the other hand, represent one quarter of Canadian adults. Flexitarians can be viewed as being less dogmatic when it comes to avoiding meat or dairy, choosing to eat meatless meals just some of the time.
The rationale for limiting or avoiding meat or dairy products differs by diet type to some degree. Ethical considerations, for instance, prove to be more top-of-mind for vegans and vegetarians, whereas flexitarians are more likely to point to health as being a primary motivation for limiting their consumption of animal-based products. To put it another way: one group of consumers (vegans and vegetarians) is more likely to be motivated by what can be interpreted as philosophical considerations, while more pragmatic concerns such as health serve as a stronger motivation for flexitarians. With the latter accounting for a greater slice of the population, it would be wise for makers of plant-based meat and dairy alternatives to focus on health-related considerations.
Protein, of course, is a cornerstone for plant-based alternatives. The good news is that according to Mintel’s findings, over half of Canadians (55%) agree that “plant-based foods can provide all the protein (they) need,” with the same share of Canadians also agreeing “a healthy diet does not need to include meat” (54%). This translates to a broad base of support for growth of plant-based alternatives. That said, there are potential barriers to overcome.
As demand for “natural” foods continues to pervade the food industry, many Canadians appear skeptical of what goes into making plant-based meat alternatives, with two-thirds of Canadians agreeing that “plant-based meat alternatives that mimic the taste and texture of real meat are overly-processed” (66%). This highlights the need for transparency in communicating how meat alternatives are made to provide a greater sense of comfort to consumers who are less familiar with the category. That said, the size of the opportunity means the payoff in investing in this area is likely worth it. Just look at where Wall Street is putting its money.
This article appeared in Canadian Grocer's June/July 2019 issue.