By John Crawford and Tim Grzebinski, IRI
Carl’s Jr. set the food industry abuzz in January 2019 when it announced that it would be rolling out the plant-based Beyond Meat patty in 1,100 of its stores. As with other, more mainstream adoptions of plant-based foods, the category has come a long way in the past few years due to the growing focus on higher-protein diets, celebrity adoption and social media, which has helped drive awareness of new food options among the public as more people become interested in health and wellness. What hasn’t been known until recently is if plant-based foods are good for CPG retailers’ and manufacturers’ bottom lines.
Plant-Based Study Highlights
Although there are only about 8 million vegetarians in the U.S. currently, research from Mintel’s “Better for You Eating Trend survey from August 2018 shows that 60% of Americans are interested in consuming less meat, 31% are choosing to have meat-free days, and one-third plan to buy more plant-based foods. Weight management and health are the two big motivators.
A new study from IRI looked across 15 product categories, including refrigerated milk, butter, yogurt and ice cream, and found that plant-based dollar sales are trending upward across most categories compared to a year ago. The only product category we studied that saw a small decrease in dollar sales was plant-based mayonnaise. However, even after seeing declines, in 2018 mayonnaise, along with seven other categories (milk, ice cream, yogurt, creamer, meat substitutes, protein bars and supplements, and frozen meals), earned more than $100 million in annual plant-based dollar sales.
Not surprisingly, milk is the category that has been the most impacted by the rise of plant-based foods. Almost one in five Americans say they are drinking less dairy milk for health concerns, and sales bear this out. Plant-based milks now have 10.2 percent dollar share in the category. While almond, coconut and soy milks remain most popular, varieties of plant-based milk that are newer to the market, such as flax, quinoa and oat, are gaining faster growth than the common staple. Also, households are increasingly purchasing both dairy and plant-based milk as fewer households are sticking only with dairy milk.
Plant-based foods are now in 53 percent of households and we expect that this trend will continue to grow. While every generation purchases plant-based food items, the consumers most likely to buy these foods currently are millennials, those with higher incomes and acculturated Hispanic households. In general, younger consumers have a far more positive view of the health aspects of plant-based milks than older generations.
Success Drivers and Opportunities
The IRI study also showed that the main drivers for buying plant-based food alternatives were health and diet. With plant-based dairy specifically, we found that the drivers of purchase were taste (family appeal) and trust (habit) Among the households purchasing both dairy-based and plant-based milk products (which is also growing), shoppers said their dairy-based milk purchases were driven by family appeal, flavor and ingredient usage, while their plant-based dairy purchases were driven by health and wellness concerns, social consciousness and the products extended shelf life.
So what does this all mean for CPG manufacturers and retailers? It’s clear that consumers across the board have a growing interest in plant-based foods, including plant-based protein – and they are buying more of these items. It’s important to note, however, that the specific types of products they are most interested in is constantly shifting due to continually-evolving diet trends and their openness to trying new products.
As consumers grow more interested in hyper-personalized diets that focus on their individual needs, manufacturers and retailers have a huge opportunity to highlight health and wellness in the products themselves as well as with consumers’ in-store and online experiences. Innovators in this space who focus more on the changing diets and health needs of consumers, and less on traditional categories or occasions, will be able to capture both attention and sales.
For a copy of the study findings, please contact your IRI representative or one of us at John.Crawford@IRIworldwide.com or Tim.Grzebinski@IRIworldwide.com.