Sales of plant-based food have dropped due to rising prices, CBC News wrote.
The decline in sales followed a period of surging sales in the sector over the last few years, the 5 June report said.
Sales of meat alternatives at the five biggest North American producers dropped by 4% last year after growing by 13% in 2019 and almost 40% in 2020, according to Bloomberg Intelligence analyst Jennifer Bartashus.
One of those companies, Canada’s Maple Leaf Foods, which took almost US$45M on sales in the first quarter of this year, said it did not expect “spectacular category growth rates” when announcing its financial results in May.
“We do see the plant category growing, but at a steady pace,” the company, which sells under the Lightlife, Field Roast and other brand names, said, adding that it was planning to return some of its plant-based factory space to making meat products.
The company said it still expected its plant-based meat business to reach US$10bn in sales within the decade. However, that total was less than half of what it had previously anticipated.
Industry-wide, the sales slowdown is due to the same inflationary and supply chain problems facing the entire food business, according to the report, with consumers more reluctant to pay higher prices.
Although meat prices rose by more than 10% in the year up to April, according to Statistics Canada data, prices for meat alternatives had also risen, the report said.
Plant-based meat is, on average, 38% more expensive at the retail level than its meat-based alternative, according to a recent report by Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University in Halifax, in Canada.
“With a very high inflation rate, a lot of people are looking for bargains. But if you're… looking at plant-based products, that's not what you're getting,” Charlebois was quoted as saying in an interview. “These products may be good for the environment and good for your health, but they're certainly not good for your budget.”
Bloomberg's Bartashus remains confident that there is potential for growth in the plant-based sector, according to the report, and is forecasting sales for all plant-based meat products to increase from the current figure of US$30bn to almost US$170bn by 2031.
A major reason for her confidence is the environmental aspect.
“Concerns about sustainably feeding a growing population are driving interest in plant-based products that can serve as a replacement for conventional proteins,” Bartashus was quoted as saying in a recent report to clients.
“We expect growth for plant-based meat and dairy alternatives will outpace conventional products.”
Others are not convinced that plant-based eating is anything more than a trend that may have run its course.
“Three years ago, we were seeing these large sales … to a very large number of consumers that were very curious and wanted to try it out,” Simon Somogyi, a professor who studies the food business at the University of Guelph, in Canada, was quoted as saying. “But the true marketplace is showing itself now.”