Plant-based ingredients: market growth, investments and new product development

Whilst it’s difficult to correctly identify the number of people following a vegan lifestyle or a plant-based diet, according to statistics, 1% of the global population define themselves as vegan or plant-based. 1% may not seem like a big number, but when we consider that there are 7.9 billion people in the world, 1%, – or 79 million – equates to a slightly smaller population of Germany, the second most populated country in Europe. 

The demand for plant-based products is not just driven by vegans, but also flexitarians, those who want to cut down their meat, dairy and fish consumption for health or environmental reasons, and those with allergies and intolerances, such as lactose malabsorption. 

With more people following a plant-based diet and many omnivores swapping meat-based meals for vegan ones,  it’s no wonder the vegan food sector grew by 11% in 2019 (compared to the overall food market which grew by 2%) and in 2020 was worth $15.4 billion.

According to GFI (Good Food Institute), 43% of overall plant-based meat was sold in Europe in 2020 and its global value was of $4.2 billion, up 800 million from the previous year. 

Despite the growth of sales, production and consumption of plant-based food, a study by vegetarian food company Quorn found that 54% of Brits eat meat almost with every meal, whilst 17% will have it every single day. 20% tries to swap an animal-protein meal with a plant-based one and 60% of those trying to reduce their meat consumption do so for health reasons.

MMR Research Chief Ideas Officer and Food Matters Live June 2021 speaker Andy Wardlaw, writes that although the vegan food market is growing, most people are not currently interested in embracing a plant-based diet – 60% in fact, according to the British Nutrition Foundation. The sections of the British population most engaged with vegan food are Gen Z and the over 65s. 

According to AHDB, the sale of meat rose by 8% in 2020, and up again by 1% in the first 12 weeks of 2021. With the coronavirus pandemic preventing people from going to restaurants and pubs, it’s likely that the sale rose because consumers were purchasing more beef, pork and poultry to cook at home. 

Investment in plant-based food at an all time high

Despite the sale of meat growing in the first 12 weeks of 2021, the plant-based market shows no sign of slowing down.

According to the GFI  in 2020 investment in the alternative protein industry reached a record high, with  $3.1 billion invested in the alternative protein industry – including plant-based meat, dairy-free, fermentation and cultivated meat companies. $2.1 billion was invested in vegan meat, egg and dairy. 

“Investment firm UBS forecasts that the global plant based meat market will grow by 28% a year and reach 85 billion dollars by 2030 presenting huge opportunities for those innovating within this space.”, says Tasting the Future Founder and Director Mark Driscoll. 

Plant-based trends

Mark Driscoll, who’ll be giving a talk on Emerging sustainability trends in food and drink at Food Matters Live in June, sees two trends going from strength to strength:

Immune System Boosting Plant Ingredients and Diets

“There are signs that citizens are increasingly making the link between gut and immune health with an increase in the purchase of probiotics for example. Recent research by MMR found that immunity was the top health concern for people in China and South Africa.”

High Protein Leguminous Crops

“Legumes are valued worldwide as a sustainable and inexpensive meat alternative and are considered one of the most important food sources of plant-based proteins and micro-nutrients.”, says Driscoll. Legumes are nutritionally valuable, providing proteins (20–45%) with essential amino acids, complex carbohydrates (approx. 60%) and dietary fibre (5–30%). In addition, their ability to fix nitrogen and improve soil health, offers a significant opportunity to improve both human and planetary health whilst contributing to food security, particularly within low- and middle-income countries.

Most popular plant-based meat ingredients

Soy has been one of the first ingredients used to mimic the taste and texture of meat. Seitan (wheat gluten) is also hugely popular as are mushrooms, grains and legumes such as pea protein and beans.

Ingredients made with mushroom proteins have gained popularity in the last few years, thanks to their texture and meaty umami flavour. 

Herbs, spices and fats such as coconut and olive oil are added for flavour and texture.

According to Deloitte, the UK is the country in Europe with the highest appetite for meat substitutes, counting for 40% of the market.

Dairy-free milk, cheese and ice-cream

The sales of plant-based milk grew by 28.3% in the UK in 2019, with 32% of households choosing a vegan option instead of a dairy one. According to The Lancet, 68% of the global population are lactose intolerant (ranging from an average of 28% in Europe to 70% in the Middle East), so it’s easy to see why dairy-free products have become so attractive.

The NPD of oat, soy, almond, hazelnut, cashew, coconut, rice and hemp milks has been very successful and also easy – after all, vegans were already making their own plant-based milks at home using nuts in the 1930s and 1940s, when the product wasn’t yet available to buy in Britain.

What’s proved more challenging has been developing and manufacturing good dairy-free cheese.
In the last few years many plant-based cheese alternatives have appeared on the market. Whilst commercial vegan cheese found in supermarket can have a high fat and starch content, its artisanal counterpart is often made with nuts, and whilst still high in lipids, it tends to have a lower carbohydrate content.

One of the issues with premium free-from plant-based cheese is the price, which can often reach £10 for just over 100 grams. Commercial alternatives however rival the price of dairy cheese, costing around £2 for 200 grams. Melting point with dairy-free cheese also varies from brand to brand, with some melting easily and some not at all. This is still an area that needs more product development, especially as its demand is high.

On the other hand, other dairy-free products such as ice-cream and yoghurt are very successful and their taste and texture easily rivals that of their dairy counterparts.
The value of the global vegan ice cream market was $520.9 million in 2019 and by 2027 is expected to rise to $805.3 million. Brands such as Ben & Jerry’s and Häagen-Dazs have followed in the footsteps of plant-based companies such as Alpro and launched vegan ice-cream in 2017 – a move that’s proved very successful. 

Plant-based fish alternatives: an opportunity

Plant-based fish has been a challenge in terms of product development. Whilst there are some products on the market – mainly the breaded variety such as fish fingers, fillets and goujons – there stil more that needs to be done to replicate the taste and texture of fish. 

In April, plant-based food manufacturer Planteneers announced the launch of new products, including sushi style raw fish and smoked salmon, however vegan fish alternatives are still few and far between, meaning that this section of the market is still very much up for grabs.