Despite negative numbers, the meat substitutes category is ripe with innovation — especially in the processed chicken segment.
The meat substitutes market has experienced a significant downturn in recent months, evidenced by a 5.2% drop in dollar sales and a 14.6% decline in units during the 12 weeks ended Jan. 1, according to Chicago-based market research firm IRI (iriworld
wide.com). Industry observers say it’s a saturated market that has seen a softening of repeat purchases. However, manufacturers hoping to survive the inevitable shakeout continue to roll out new innovative products, particularly in the frozen segment.
Although inflation drove a 3.1% Q4 dollar gain in the frozen meat substitutes subcategory, sales of refrigerated meat substitutes, typically found in the meat case or produce department, tumbled 18.7% versus the same period a year ago, according to IRI. At $416 million for the year, sales have fallen below 2020 levels by 12.0%. Of course, some of that is due to SKU reduction.
“Retailers carried 11.1% fewer [refrigerated meat substitutes] per store in December 2022 than they did in the same month in 2021,” reports Anne-Marie Roerink, president of Austin, Texas-based 210 Analytics. “And it appears that the reduction in the…refrigerated area is speeding up.” She adds that while some of that assortment is moving to the frozen aisle, dollar gains there haven’t been nearly enough to offset losses in refrigerated. So what’s the problem?
WANTED: A REAL MEAT EXPERIENCE
Consumers choose plant-based proteins for three reasons: personal health, the environment and animal welfare. But along with all of that, they’re also looking for products that offer a real meat experience, says Matias Muchnick, CEO and co-founder of NotCo, Santiago, Chile. “Consumers are demanding that plant-based proteins meet three criteria: taste, affordability and a sensory experience that matches animal-based products.” Unfortunately, he adds, many products fall short.
Growing demand for meat substitutes that mimic the real thing is also reflected in shifting sales. Chicken, beef and pork alternatives are driving category growth, while non-animal-type plant-based proteins (veggie and black bean burgers, veggie dogs, etc.) are becoming a drag on the category, according to Ross Mackay, founder and CEO of Los Angeles-based Daring Foods. “Consumers also are turning to new formats beyond the traditional burgers and patties that used to dominate the plant-based section of the grocery store,” he reports. “Nuggets, sausages, bacon and center-of-the-plate cuts are some of the formats that continue to see growth in this category.” Indeed, the nascent processed poultry subcategory is one of the category’s only bright spots, registering an 18.1% unit sales gain, according to IRI.
To that end, category leader Beyond Meat, El Segundo, Calif., recently introduced Beyond Chicken Nuggets, Beyond Popcorn Chicken and Beyond Steak sliced steak tips that the company describes as a category first. Meanwhile, NotCo unveiled NotChicken Crispy Patties made from a unique combination of plant-based ingredients, including fava beans, bamboo and peaches. “Not only is it crispy and juicy, but it cooks up like traditional chicken with an aroma you usually only get from animal-based chicken,” says Muchnick, citing the company’s use of recently patented technology that detects plant-based essences and transforms them into desired scents. NotCo recently announced it will add NotChicken Tenders to its lineup in April.
Another company jumping into the frozen processed chicken substitutes space, Pittsburgh-based VFC North America, has introduced Vegan Fried Chick*n Crispy Fillets, Tenders and Popcorn Chick*n — for the perfect burger, for dipping and dunking and for sharing, respectively. “Plant-based chicken is the fastest growing segment of plant-based proteins, and VFC is tapping into the trend of easy-to-make, guilt-free comfort food,” says Craig Bowlin, general manager.
Meanwhile, on the unprocessed side of the chicken substitutes category, Daring Foods adds a teriyaki flavor to its line of frozen, un-breaded plant-based chicken products. “We decided to launch this item because flavor is the number one purchase driver for consumers and teriyaki is one of the top-selling flavor profiles in animal meat,” Mackay says. “Our target consumer is the flexitarian who is looking to eat more plant-based products to improve their health and the environment, so we plan to introduce more products like this.”
For consumers looking for prepared options, Impossible Foods, Redwood City, Calif., launched a new line of single-serve frozen entrees last fall. Ready in minutes, Impossible Bowls feature the company’s plant-based proteins — beef, chicken and pork — as the core ingredients in eight flavorful dishes. Each contains 10 to 13 grams of protein, 3 grams or less of saturated fat, zero grams of cholesterol and zero grams of trans fat. “Convenience and accessibility are a huge part of this, and we’re excited to give people even more ways to try Impossible products,” says CEO Peter McGuinness.
WILL LAB-GROWN MEAT CATCH ON?
While consumers are still skeptical about lab-grown meat (“It’s not natural,” “It’s not healthy,” “It’s science fiction come to life,” etc.), several companies are moving ahead with their cultivated meat initiatives. In fact, the U.S. Food and Drug Administration (FDA) recently approved the first meat product grown from animal cells for human consumption.
Berkeley, Calif.-based Upside Foods, which harvests cells from live chickens and uses them to grow meat in stainless-steel tanks, will be able to bring its products to market once they’ve been inspected by the U.S. Department of Agriculture. Meanwhile, Rehovot, Israel-based Believer Meats, formerly known as Future Meat Technologies, broke ground in December on what’s expected to be the world’s largest cultivated meat plant when it opens in early 2024. Located in Wilson, N.C., the facility will produce chicken meat grown from cells in bioreactors. Although they don’t have FDA approval yet, company officials are optimistic that they will get the green light to sell and distribute cultivated meat in the U.S. soon after the plant goes into operation.
‘JUST ANOTHER PROTEIN’
While it’s up to manufacturers to bring more desirable meat substitutes to market, retailers play a key role in determining how successful they are, says Patrick Baskin, U.S. market lead for unMEAT, which is owned by Century Pacific Foods, Glendale, Calif. “We have a ways to go to change the perception that plant-based equals fake food,” he explains. “It’s simply another protein that often is healthier and cleaner than traditional meat.” As such, it should be merchandised alongside animal-based meats rather than in a separate section.
Retailers should also recognize that meat substitutes are not a passing fad. “There are some who take the double-digit declines from the past 18 months as a sign that plant-based meat alternatives are not here to stay. That is incorrect,” says Roerink. “I believe plant-based meat companies recognize that there is still work to be done on taste, smell, consistency and shortening the list of ingredients. But that innovation process is ongoing.”
Roerink also expects a wave of true plant-based meat alternatives made from vegetables and mushrooms. “I see more items such as stuffed portabella mushrooms, which is a true plant-based meat alternative, in the meat case. And companies are developing meat alternatives that are 100% grain-, vegetable- and mushroom-based, which have a strong health and sustainability halo.”