Plant-based Milk and Meat: The Backbone of the United States Plant-based Market

Market Size of Plant-based Alternatives in the US

According to the Good Food Institute (GFI), retail sales of plant-based alternatives across the United States (US) was worth USD 8 billion in 2022, with a year-on-year (YoY) increase of 7% in value and a 3% decrease in unit sales. The increase in sales value is a result of price increases as evidenced by the decrease in unit sales. This trend was broadly in line with the total food and beverage and animal-based food sectors. The sales value of plant-based alternatives in the US grew at a compound annual growth rate (CAGR) of 13% between 2019 and 2022 and grew 44% in total over the period. Unit sales of plant-based alternatives in the US grew at a CAGR of 7% between 2019 and 2022 for a total growth of 23%. Over this three year period, growth in sales value almost doubled that of unit sales, suggesting that prices of plant-based alternatives are increasing at a rapid rate.

Figure 1. US plant-based retail sales from 2019 to 2022

Largest Plant-based Food Categories in the US

Plant-based meat and milk are by far the two largest categories in the US plant-based meat industry, as illustrated in Table 1. Together these two categories make up around 52.5% of the total plant-based food market in the US. Plant-based meat and milk function as the backbone of the plant-based food industry in the US. However, these two categories performed below the average growth of the entire industry between 2019 and 2022, suggesting that these two categories are in a more mature phase of development compared to smaller, faster growing sectors such as plant-based eggs and creamer.

Table 1. US plant-based food sales and growth

According to GFI data, the plant-based milk market in the US is the largest in the plant-based sector and generated USD 2.8 billion in retail sales in 2022, selling 749 million units. The plant-based milk market grew 9% in value in 2022, exhibiting growth of 36% since 2019. Unit sales on the other hand fell by 2% in 2022, but still grew by 19% since 2019. For comparison, during the period from 2019 to 2022, animal-based milk sales declined by 4%. The plant-based milk market is by far the largest plant-based food category in the US, more than doubling that of plant-based meat, the second largest category.

Plant-based milk also has a large share of the overall milk market at 15.3%, suggesting it is a well established market with existing repeat customers. Plant-based milk has a household penetration rate of 41% among US consumers with a repeat purchase rate of 76%. This is the highest penetration and repeat purchase rate among all the plant-based food categories.

The primary motivations for the purchase of plant-based milk among US consumers are taste, health, easier to digest, and lactose intolerance. Taste is also the primary barrier to the consumption of plant-based milk, followed by cost, does not meet expectations and texture. Research from GFI suggests that households with young children and households with high income levels are more likely to spend more on the plant-based milk category.

Figure 2. US plant-based milk retail sales from 2019 to 2022

Plant-based meat retail sales in the US amounted to USD 1.4 billion in 2022, down 1% YoY but up 43% since 2019, mainly due to the substantial growth experienced in 2020. Retail sales amounted to 255 million units in 2022, down 8% YoY but up 18% since 2019. The downturn in both the value and volume of sales in 2022 highlights the negative impact of inflationary pressures on the plant-based meat market.

The plant-based meat market in the US only has a 2.5% share of the total retail packaged meat dollar sales and a 1.3% market share of the total meat category. However, in the natural channel, plant-based meat’s market share of packaged meat dollar sales is higher at 15%. Plant-based meat also has a relatively poor market penetration into US households of 18%, down slightly from 19% in 2021. Repeat purchases are higher at 63%.

Thus, there is significant room for growth for the plant-based meat sector in the US. The sector’s main challenge is attracting new consumers. US plant-based meat buyers are more likely to be Asian. Furthermore, African American and Gen X buyers are more likely to spend more in the plant-based meat category. Companies aiming to increase their plant-based meat sales should take these demographic indicators into account.

Figure 3. US plant-based meat retail sales from 2019 to 2022

Taste is the primary consideration for plant-based meat consumers, but is also cited as the top barrier for consumers in trying plant-based meat and repurchasing it. Thus, enhancing the taste of plant-based meat should be a top consideration for companies when designing and introducing new products. Cost is another major barrier to entry for US consumers, with a third of consumers not eating plant-based meat because it is too expensive. GFI data indicates that the overall price premium for plant-based meat in 2022 was 67%, making plant-based meat significantly more expensive than animal-based meat.

Conclusion

In conclusion, the plant-based milk and meat sectors form the backbone of the plant-based food industry in the US, with both sectors having significant room for future growth. However, the two largest barriers for further growth for both the plant-based milk and meat categories are taste and cost. In order to increase the consumption of plant-based milk and meat in the US, companies should focus on reducing the cost of production by increasing production efficiency and investing in new production technology and processes. Plant-based companies should also investigate which aspects of taste and texture are deterring consumers from continuing to purchase plant-based milk and meat, and attempt to address these issues in future iterations of their products.

For a detailed analysis of the US plant-based alternative industry, read the US Plant-based Market: Analysis And Opportunities report on Tridge's website.