The plant-based protein trend is growing more rapidly than most people anticipated.
Just last week, Beyond Meat, which makes meatless alternatives to beef, pork and poultry, went public. Its main competitor, Impossible Foods, reported that demand is so high it’s causing a shortage. Burger King announced plans to roll out an Impossible burger nationally, and Ikea said it’s developing a new meatless meatball designed to taste like animal meat.
Even McDonald’s is inching closer to getting on board the meatless burger bandwagon.
“It’s definitely taking off at a rate ... that has not been seen before,” said Dewey Warner, a research analyst at the market research provider Euromonitor International. Warner examines developments in the food sector.
Demand for plant-based meat alternatives is being fueled by consumers looking to make their diets healthier and reduce their impact on the environment. And there’s clearly room for growth. The question is, how much?
A wild week for plant-based protein
Beyond had a wildly successful first day of trading on May 2, surging 163% above its IPO price of $25.
Meanwhile Impossible Foods, Beyond’s main competitor, is seeing so much interest that it’s running out of product. Impossible CFO David Lee told CNN Business that this year, demand for Impossible’s meatless protein has more than doubled at the roughly 7,000 restaurants it serves.
On top of that, Impossible is about to more than double the amount of restaurants it serves: Burger King announced that it’s going to roll out a version of its Whopper featuring an Impossible patty at its roughly 7,300 stores nationwide.
Other chains, like White Castle, Carl’s Jr., Bareburger, Qdoba and others also feature Beyond Meat or Impossible Foods items on their menus. People can buy Beyond Meat at supermarkets like Safeway or Kroger, and Impossible plans to start selling in retail locations this year.
McDonald’s started selling a vegan burger, the Big Vegan TS, last month in Germany, one of its five leading international markets. Nestle is making the meatless patty for McDonald’s.
Even Ikea is jumping on the trend. The furniture retailer known for its Swedish meatballs said it will start testing out a new plant-based version of its classic meatball, designed to taste just like meat, next year.
For Impossible, the question a year ago was, “How quickly will the market develop?” David Lee, the company’s CFO, told CNN Business this week. “Now, it’s clearly, ‘How quickly can we create more capacity to supply this tremendous amount of demand?’”
What’s driving the trend
Veganism and vegetarianism used to appeal mostly to those worried about animal welfare, said Warner, the Euromonitor analyst. But concerns over climate change and health are driving a larger group of people to rethink how much meat they consume, he added.
Because of that, growth among plant-based protein products designed to mimic the taste and appearance of meat has been growing over the past decade, he said, and especially in the past five years.
Beyond, which started about 10 years ago, saw demand in spike in 2017 and 2018, CEO Ethan Brown told CNN Business.
During those years, consumers “moved so quickly into this category” because they were “bombarded” with information about the negative health and environmental effects of processed red meat, he said. A few years prior, in 2015, the World Health Organization linked the consumption of processed meat to cancer, and named red meat a likely carcinogen.
As people come around to eating less meat, fast food chains like Burger King are pitching plant-based products toward meat eaters. Burger King, for example, said it was going after meat lovers who want to diversify their diets with its Impossible Whopper test, rather than vegans or vegetarians.
Where it’s going
It looks like the plant-based trend is here to stay.
“There’s a lot of flash-in-the-pan, fast-growing things in the food industry,” Warner said. But growth in the plant-based meat alternative space is accelerating, he said, indicating that “this is more than just a fad. This may have some staying power.”
Plus, there’s growth in parts of the sector — like plant-based alternatives to seafood — that haven’t hit the mainstream yet.
And bigger companies like Nestle want a piece of the market.
Last month, the company launched a plant-based protein product, the Garden Gourmet Incredible Burger, in Europe. The meatless burger is made with soy and wheat protein, and uses beet, carrot and bell pepper extracts to help create a meaty look and texture. Nestle plans to roll out a plant-based burger in the United States under its Sweet Earth brand in the fall.
Tyson Foods, one of the world’s largest producers of poultry, beef and pork, also plans to start selling a meat substitute.
The product will first enter the market “on a fairly limited basis” this summer and plans to roll out its meat substitute “on a much larger scale” this fall, CEO and president Noel White said. — (CNN)