Climate- and health-conscious shoppers turn to plant-based foods
What this means: Health and wellness continue to be top priorities for consumers, even during the post-pandemic period. But, those attributes can look different to consumers depending on the sector of retail with which they are engaging. Plant-based foods are often viewed as healthier alternatives and provide that sense of comfort to consumers looking to improve health. Opportunities exist in different retail sectors to drive adoption of healthier and sustainable items for consumers similar to the success of plant-based foods.
Shoppers are becoming more aware of how their everyday grocery choices impact the environment. According to a recent Kearney survey, 42% of respondents reported always or nearly always considering environmental impacts when making a purchasing decision. This is a historic high and an 18-percentage-point increase from last year. Kearney concluded that “climavorism” — consumers who consider climate impact in their food consumption – is growing from niche to mass market appeal.
“Climavores can be vegans, vegetarians or omnivores,” explained Moritz Breuninger, a principal at Kearney and co-author of the firm’s “2023Earth Day Survey.” “Chickens have a lower carbon imprint than cattle do, so the decision by consumers to eat less beef and more poultry in order to help the environment is a good example of climavorism in action.”
Concerns about health and the environment have also driven many consumers toward plant-based foods, according to research conducted by 84.51° with the Plant Based Foods Association (PBFA) last year. Plant-based food sales in the U.S. grew 6.6% and hit a record $8 billion in 2022, according to PBFA.
84.51° and PBFA’s research found the top three reasons consumers decreased animal-based consumption in favor of plant-based alternatives were:
- Personal health concerns, such as cardiovascular or cancer.
- That they thought plant-based alternatives were generally healthier than animal-based foods.
- That they believed plant-based alternatives were better for the environment.
Retailer’s responsibility
Consumers also consider the environmental impact more when shopping in grocery stores than when purchasing food in restaurants or online. Kearney found that 39% of respondents indicated environmental issues were a significant influence on their specific food choices in grocery retail — up 12 percentage points from last year — compared to 33% in online purchases and 29% in restaurants.
“Consumers believe grocery stores have a responsibility in driving faster adoption of environmentally friendly food choices,” Breuninger said. “Twenty-five percent of respondents even see them as playing the largest role. The consumer market opportunity is clearly there – whoever capitalizes on this can differentiate and win in the marketplace.”
Within the food value chain, consumers said the top role players in driving faster adoption of environmentally friendly food choices were:
- Food manufacturers — 54%.
- Grocery stores/retailers — 25%.
- Farmers — 14%.
- Seed producers —8%.
Plant-based foods gains
Total plant-based foods grew 41% in dollar sales for the last three years and 8% for the year ending March 25, NIQ reported. In comparison, total food and beverage grew 28% in dollar sales for the last three years and 11% in dollar sales for the latest 52 weeks ending March 25, NIQ reported.
Meat alternatives — up 27% in dollar sales — and milk alternatives — up 34% in dollar sales — have been category growth leaders during the last three years ending March 25, NIQ reported.
“Areas we are seeing continued growth over the last three years are: beverages, prepared foods, diet and nutrition, creamers, and oil/butter substitutes,” Sherry Frey, NIQ’s vice president of total wellness thought leadership, told Retail Leader Pro. “We’re also seeing more claims in categories around plant-based, driving sales in cereal and granola, and cookies and crackers.”
Of the six major plant-based categories — fresh meat, frozen meat, frozen meals, milk, cheese and yogurt — 84.51° and PBFA reported the greatest sales growth in plant-based milk followed by yogurt and frozen meat from 2021 to 2022. Consumers said they are looking for plant-based foods that have better texture, fewer/simplified ingredients, and have bold or exciting flavors, according to a “2023 Unmet Needs” study from 84.51° and PBFA.
A key finding of 84.51° and PBFA’s research demonstrated that almost all households that engaged with the plant-based foods — except for households new to plant-based foods — decreased their overall animal-based product group spend. Additionally, 95% of plant-based consumers surveyed said they increased or maintained their plant-based spend versus the prior year. This trend illustrates growing consumer commitment to plant-based foods, 84.51° and PBFA said. Additionally, 20% of plant-based shoppers were new to the category.
Among the group of active plant-based consumers:
- 43% report they are choosing plant-based milk instead of animal-based milk.
- Nearly 30% are choosing refrigerated plant-based meat and frozen meals instead of animal-based in the same categories.
- Nearly 20% are choosing plant-based cheese and yogurt instead of animal-based in the same categories.
In regard specifically to plant-based meat alternatives, consumption and perception of plant-based proteins varies significantly by the consumer’s preferred diet, Mintel reports. While an entirely plant-based protein diet remains niche, flexitarianism is slightly trending as more consumers seek to reduce their meat consumption due to health and environmental reasons, according to Mintel.
Inflation vs. eco-friendly foods
Rising inflation particularly has hindered plant-based meat alternatives market growth, Mintel reported. While meat prices are rapidly rising, consumers prioritize familiarity during periods of economic uncertainty and many plant-based meat alternatives are still more expensive than their meat counterparts. Consumers will simply purchase more affordable meat products or increase their consumption of natural plant-based proteins, such as legumes, rather than purchase plant-based meat alternatives in response to rising meat prices, Mintel said.
“Shopper’s level of comfort with inflation has been trending more neutral compared to this time last year,” Catherine Cowan, 84.51°’s lead insights manager, told Retail Leader Pro. “However, it is still something that more than 30% of shoppers are worried about. Overall, this has likely impacted spend on plant-based items and is likely one of the reasons we have seen plant-based sales not grow as quickly in core categories versus previous years.”
Kearney data, though, suggests the growth of climavorism is inflation-resistant and should continue.
“In fact, one might argue that higher prices can also aid consumers in making climate-friendly choices, such as substituting more expensive beef with more affordable chicken,” Breuninger said.
Among plant-based consumers who decreased consumption that were asked what would make them more likely to consume plant-based, 64% say lower pricing and/or more frequent sales and coupons, and 58% say better taste and/or texture, 84.51° and PBFA reported. For plant-based food consumers who increased consumption, when asked how shopping could be made easier, 61% cited price promotions and 29% said that recipes would be helpful.
Typical plant-based consumer
All age groups are buying plant-based foods, but not every age group wants the same thing. For example, in 84.51°’s study, more mature age groups looked for products that closely mimicked the taste of animal products. Younger age groups looked for unique products that taste good but are different from animal products.
“This is because younger age groups are shopping plant-based due to animal welfare, so they are not looking for items that taste like animals,” Cowan said.
Gen Z and Gen Y over index for alternative meat, spending more than the average consumer, according to NIQ. These buying households also increased 19% versus the latest 52 weeks ending March 25 compared to down 5% for total consumers.
NIQ still expects plant-based foods will grow moving forward.
“Consumer interest in plant-based and alternative protein is strong with anticipated growth, but consumers are confused and not always satisfied with alternative proteins,” Frey said.
Consumers will likely be expecting new plant-based foods, convenient options that taste good. “Think of grab-and-go as well as frozen options that have bold flavors and more spices like cultural cuisines,” Cowan said.
What’s next: Food and beauty trends often have a lot in common, and the growth of plant-based food options also align with the growth of attributes like cruelty free or clean within the beauty space. Looking across the aisle at the similarities between these two categories may signal shifts in consumer awareness and preferences for the net health-related trend.