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As consumers become increasingly health-conscious and environmentally aware, the demand for plant-based products has skyrocketed.
The plant-based movement has gained momentum among vegans, vegetarians, and flexitarians—individuals who are reducing their consumption of animal-based products in favor of plant-based alternatives.
This trend is reshaping the CPG (Consumer Packaged Goods) industry, forcing companies to innovate and adapt to their customers' changing preferences.
The growth of the plant-based market
A report by Meticulous Research predicts that the global plant-based food market will reach $74.2 billion by 2027, with a forecasted growth rate of 11.9% during the same period.
This rapid growth is driven by factors such as the rising awareness of the health benefits associated with plant-based diets, increasing incidences of foodborne illnesses due to animal products, and growing concerns surrounding the environmental impact of the meat and dairy industries.
The growth and rising awareness of the plant-based market present a significant opportunity for CPG companies to tap into this burgeoning market by offering innovative, high-quality plant-based products.
Opportunities for CPG companies
1. Product innovation: The demand for plant-based products allows CPG companies to diversify their product portfolio by introducing new and innovative products. For instance, plant-based meat substitutes, such as Beyond Meat and Impossible Foods, have gained immense popularity among consumers, leading to partnerships with major fast-food chains like Burger King and McDonald's.
Additionally, plant-based dairy alternatives, such as almonds, oats, and coconut milk, have become increasingly mainstream, leading to a surge in demand for plant-based yogurts, cheeses, and ice creams.
2. Health and wellness focus: As health and wellness become top priorities for consumers, CPG companies can capitalize on this trend by offering products that cater to the nutritional needs of their target audience.
Plant-based diets are associated with numerous health benefits, including lower risks of heart disease, type 2 diabetes, and certain types of cancer. By offering nutrient-dense, plant-based products, CPG companies can cater to consumers who seek healthier alternatives to traditional animal-based foods.
3. Sustainability and ethical appeal: The environmental impact of animal agriculture, coupled with growing concerns about animal welfare, has led many consumers to seek more sustainable and ethically sourced products.
CPG companies can capitalize on this trend by highlighting their plant-based offerings' environmental benefits and ethical considerations. By positioning themselves as responsible and environmentally-conscious brands, CPG companies can stand out from their competitors and attract a loyal customer base.
Challenges for CPG Companies
1. Taste and texture: One major challenge for CPG companies in the plant-based market is replicating the taste and texture of animal-based products. Although significant advancements have occurred in this area, there is still room for improvement. CPG companies must invest in research and development to create plant-based products that compete with their animal-based counterparts' taste, texture, and overall eating experience.
2. Pricing: Plant-based products are typically more expensive than animal-based counterparts, which deters some consumers from switching. CPG companies must optimize their production processes and supply chains to reduce the cost of plant-based products, making them more accessible and appealing to a bigger audience.
3. Consumer education: Another challenge for CPG companies is the lack of consumer awareness and understanding of plant-based diets and their benefits. Companies must invest in marketing and educational campaigns to inform consumers about the advantages of plant-based eating and dispel common myths and misconceptions surrounding this diet.
The bottom line
The rise of plant-based diets is reshaping the CPG industry, compelling companies to innovate, expand their product offerings, and adapt their supply chain, marketing, and branding strategies. As the plant-based trend continues to gain momentum, CPG companies that successfully embrace and capitalize on this shift will be well-positioned to thrive in the evolving market landscape.
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