When plant-based protein first arrived on the scene, it sparked considerable curiosity among consumers. With animal rearing recognized as a significant climate change contributor, the stage was set for plant-based protein brands to make a grand entrance.
Following a successful market entry, key players like Beyond Meat and Impossible Burger, supported by phenomenal media coverage, experienced explosive growth. Revenue soared as consumers flocked to meet the new kid on the block while investors bought into the hype. By July 2019, Beyond Meat’s share price reached a peak of USD $234.90, catapulting its valuation to over 13 billion USD.
All Sizzle, No Sausage?
The initial euphoria of the sector proved to be short-lived. Having posted sales drops of 30 percent just in the second quarter of 2023, Beyond Meat’s shares dipped to just over USD $10 by December. This downturn signalled more than just a rough patch for a single company; it’s an industry-wide issue.
The global plant-based protein market has grown to an estimated USD 13.3 billion in 2022 and is projected to grow at a CAGR of 7.7% and reach a value of USD 19.2 billion by 2028. While these figures are impressive, they fall short of the lofty expectations set during the industry's initial surge.
This leads us to ponder: Is this scenario merely a case of ‘all sizzle, no sausage’ or does the plant-based protein movement have a more substantial foundation? The current struggles of the industry stand in contrast to the still-present consumer interest in plant-based options, suggesting an underlying potential yet to be fully realized.
A Fresh Perspective
It’s time to bring in some old news: Plant based protein is not a novel concept. This food offering has been around for quite some time. Plant-based protein started gaining mainstream appeal in the ‘80s, together with other niche segments such as “Organic” and “Bio” foods. Some of the early players in this segment, brands like ‘Nutrition & Santé’ in France, were inspired by Asian culinary and cultural influences, particularly from vegetarian-majority countries like India.
Over the decades, plant-based protein evolved from “something for the niche” into “something for everyone”, appealing to a broader audience beyond those dedicated to vegetarian lifestyles. The industry initially capitalised on the global warming discourse and leveraged a robust promotional strategy to tap into underlying consumer sentiment. This approach drove the initial momentum, but has proved inadequate to sustain long-term growth.
Reframing The Issue: Destination Or Substitute?
Consumers have shown a clear interest for plant-based protein, drawn not only to its accessibility, but also to the moral aspect it brings in the context of global warming concerns. Coupled with big promotional campaigns, these factors have positioned plant-based proteins favorably in the market. Yet, the industry is still struggling so we must understand the reasons behind this slowdown.
Each market category follows a set of explicit or implicit norms, rules, and conventions. We should question the rationale behind plant-based protein comparing itself to real meat. Drawing a product parallel with an existing one provides a familiar reference point for consumers, so this makes a lot of sense at an initial stage when you’re trying to attract consumers into the category. The long-term implications of such comparisons however, needs to be reflected upon.
Defining a product's purpose as an attempt to mimic what nature has meticulously crafted presents inherent challenges. The novelty of experiencing a new product that replicates meat, complete with 'fake blood' – a feat achieved through in-depth research – is intriguing. But, if the quintessential experience of meat is what consumers seek, then plant-based alternatives are destined to fail. When a plant-based protein brand claims to 'taste like the real thing', they inherently cap their potential at merely matching the taste of meat. This self-imposed ceiling of parity limits their ability to play a relevant and distinct role for consumers, diluting the strength of its proposition.
Time To Lean Into Your Weakness?
The Achilles' heel of the plant-based protein offering lies in its attempt to mirror the attributes and flaws of traditional meat products. The waning consumer response to the current approach suggests it might be time for this sector to pivot from trying to be a substitute to embracing its unique identity.
Food categories are not defined by any of these dimensions that matter in the “war on animal meats”. For instance, ice cream has raised eyebrows over its carbon footprint and nutritional profile. Yet, its popularity remains unshaken because this frozen dairy offers more than just taste: Color, fun, and variety.
Rather than conforming to the rules of the meat category, plant-based proteins could benefit from finding its niche to deliver great culinary experiences for consumers. Plant-based proteins have the potential to play a significant role not as a mere meat substitute, but as its own category.
The Road Ahead
Recalling Bob Marley’s lyrics, 'You can fool some people sometimes, but you can’t fool all the people all the time,’ it’s clear that authenticity is key. Brands that insist on being a 'meat-too' are likely to find their appeal waning, as they are unable to avoid the shadow of the “authentic” product.
Having worked for Unilever in the margarine sector, I can attest to how being unable to see beyond just ‘replacing butter’ led to its downfall. Unilever sold the margarine portfolio to Upfield who, unburdened by preconceived notions, took over and grew the category based on a plant-based spread proposition. Beauty really is in the eye of the beholder, it seems.
Similarly, plant-based protein must find its pivot point. Going beyond a second best compared to meat, it needs to leverage consumers’ endless need for culinary variety as a base to reinvent itself into a plant-based culinary adventure and become a destination in itself.
While the category has fallen short of the expectations created, it still holds untapped potential, awaiting visionary players who can create an entirely new value proposition.