The plant-based movement is down, not dead

A recent survey by Chefs Plate found Canadians, in a typical week, eat vegetarian protein alternatives more than pork and seafood (seven per cent for plant-based protein versus five per cent pork and four per cent for seafood.) This data shows how our food habits are evolving and that vegetarianism and flexitarian diets are continuing to rise. 

Plant-based proteins have also been identified as an economic driver for Canada with the potential of becoming a $25 billion industry by 2035.

Although these numbers seem promising, the plant-based movement has indeed slowed down. Since 2019, Beyond Meat stocks have dropped by a staggering 82 per cent. Several novel food companies in this space like Merit Functional Foods and the Very Good Food Company have shut shop.

Apart from a chilly investment climate that has made it challenging for start-ups and SMEs to raise crucial funds, the plant-based food movement suffers from a socio-cultural disconnect with the larger Canadian population.

Nine out of 10 people who eat Impossible products are meat eaters. Photo © MichaelVi / Adobe Stock

Sectoral challenges

Similar to Beyond Meat, Impossible Foods came out of the gate with the vision to sell plant-based foods to meat eaters. Indeed nine out of 10 people who eat Impossible products are meat eaters, according to a company report.

Dana McCauley, CEO, Canadian Food Innovation Network, explained, “Almost all other brands who came out with plant-based meat and dairy products continued to go after this segment that is already happy. They crowded the market terribly and created a new category, which is good, but they created the category in the section of the grocery store where the people who would be naturally predisposed to their products don’t go. Vegetarians simply don’t go to the meat and cheese section.” 

This has created a market where meat eaters are overserved, and vegetarians underserved. McCauley explains that for the plant-based food market to thrive, it is crucial to understand the consumer.

“There is an article once a week asking, ‘Is plant-based a bust?’ And the answer is, ‘Absolutely not’. Selling plant-based to people who already eat animal products is saturated, yes. There is too much choice there. But the opportunity still exists to sell to vegetarians and vegans.” 

In Dana McCauley’s chapter, Market Drivers for Barriers for Plant-based Protein Foods in the textbook Plant Protein Foods, she explains that adults who make the decision to give up meat generally find products mimicking the shape, flavour, and texture of animal protein distasteful.

“They chose a meatless lifestyle because the idea of eating meat is abhorrent. This consumer is much more likely to choose an old-fashioned veggie burger, complete with chunks of beans and corn, over a facsimile product that mimics the taste and texture of beef or chicken.”

Consumer pain points

This information signifies that there is still a massive opportunity to serve the vegan and vegetarian markets. While vegan and vegetarian foods have been around for centuries, the mainstream movement of plant-based foods and the products coming to market are focusing on aping ‘meat’, but only with limited success. The industry needs more time to address consumer pain points of taste, texture, and affordability, as well as find its niche in the global food panorama.

“Consumers are purchasing plant-based foods for human and planetary health, and animal welfare, but taste is critical to repurchase. Through technology and advancements in ingredients companies are bringing products to market that are better than ever to meet consumer demand,” said Leslie Ewing, executive director, Plant Based Foods of Canada.

Ewing predicts that as the demand for food increases and consumer eating patterns evolve due to the availability of innovative options, improvement in taste, texture and economic and climate impacts, plant-based foods will continue to grow.

To be clear, Beyond Meat and Impossible Foods aren’t the only players in the plant-based sector and their performance isn’t a reflection of an entire industry. Based in Calgary, Alta., Lovingly Made Ingredients is utilizing Canadian-grown crops to make textured plant-based proteins and starches. Toronto-based New School Foods has created a whole-cut plant-based salmon and closed a $12 million seed investment round with funders including Lever VC, Hatch, Good Startup and Blue Horizon Ventures. B.C.’s own Yoggu is making plant-based yogurt free of refined sugars and fillers and instead contains nutrients, probiotics, and healthy fats. There are plenty of other new technologies such as precision fermentation and cellular agriculture creating additional offerings. 

“The extent of innovation that is occurring and the number of new products coming to market is phenomenal,” said Ewing. “ESGs, now table stakes, are translating into commitments to carbon neutrality, upcycling, and mitigating waste. Our industry is innovating at an incredible pace and accomplishing this in a sustainable way is at the forefront for our members. New technology is making diverse exciting products available to producers and consumers that taste better than ever before and can now be found in every category in the grocery store.” 

The plant-based industry is impacted by the current financial climate just like many other industries, but consumer interest remains high with two-thirds of Canadians stating they eat plant-based foods at least several times a month and 71 per cent of Canadian consumers sharing a positive view of the plant-based foods they are consuming, according to Leger research.

“The meat industry has been around for a very long time. They have efficient and effective supply chains that go from producers and packing houses to wholesale and retail that just doesn’t exist today for plant-based foods. It’s just a function of how mature the ecosystem is and it’s a function of the volume of products that’s being moved, but all of that’s emerging and changing now,” said Bill Greuel, CEO, Protein Industries Canada.

Gruel explains that in Canada, we are seeing a significant investment in ingredient manufacturing to produce protein concentrate isolates. “The strategic imperative for the industry right now is to increase the volume of ingredient manufacturing that feeds directly into the food processing sector and the development of new products that are available to consumers.” 

The global plant-based food market is expected to reach $250 billion dollars by 2035. It is widely acknowledged that our current food system will be insufficient to feed a growing world population that’s expected to reach over 9 billion by 2050.

“As food security, environmental considerations and sustainability continue to be guiding lights for global food policy, the plant-based foods sector with its potential to significantly reduce greenhouse gas emissions from food production, and lower land and water impacts is well positioned to offer solutions,” said Ewing. 

This article was originally published in the April/May 2023 issue of Food in Canada.