The landscape of plant-based meat alternatives in the U.S. is undergoing a significant transformation, as new data reveals a stark divergence between refrigerated and frozen products. According to Circana, sales of refrigerated plant-based meat alternatives have continued to plummet, while frozen options are beginning to stabilize. This trend highlights the shifting preferences of consumers and the evolving dynamics within the plant-based market.
In the 52 weeks leading up to September 29, 2024, the combined sales of refrigerated and frozen alt meat fell by 9% year-over-year, totaling $1.1 billion. Volumes also dropped by 9.9%. However, the details reveal a more nuanced picture. Refrigerated alternatives, which make up 29% of the category, experienced a staggering 22.8% decline in sales, dropping to $22.6 million, with volumes down 31.7%. In contrast, frozen alternatives, accounting for 71% of the market, saw a much milder decrease of 1.3%, with sales reaching $54.3 million and volumes dipping only 1.4%.
Anne-Marie Roerink, president of 210 Analytics, noted that after three years of double-digit declines, the sales figures are starting to level off, particularly for frozen products. “This is driven by frozen that experienced single-digit decreases, while declines in refrigerated remained in the double-digits,” she explained. The initial strategy of placing refrigerated products next to conventional meat in stores aimed to attract meat-eaters, but sales have been in decline since the third quarter of 2021. Retailers have responded by reducing the variety of refrigerated items they stock, which has contributed to a significant drop in volume from a high of 61.8 million pounds in 2020 to just 39 million pounds in the latest year.
To contextualize these shifts, conventional meat sales have seen a robust increase. In the four weeks ending September 29, 2024, dollar sales of refrigerated meat rose by 5.5% to $7.9 billion, while volumes increased by 3.3%. Year-to-date figures for the meat department show a 4.4% rise in sales, reaching $76.8 billion, with pound sales up 2.1%. Meanwhile, dollar sales of frozen meat and poultry also rose by 8.3%, indicating that consumer preference for traditional meat products remains strong.
Despite the challenges facing refrigerated plant-based alternatives, a recent report from Kroger, the Plant Based Foods Institute, and 84.51° sheds light on consumer motivations behind plant-based purchases. The report indicates that health benefits are the primary driver for households choosing plant-based foods, with nearly half of those increasing their spending citing personal health concerns. Rising costs of animal-based foods are also influencing this shift. However, taste and cost remain significant barriers for households that have decreased their spending on plant-based options.
Linette Kwon, a data and consumer insights analyst at the Plant Based Foods Association (PBFA), offered insight into the declining sales figures. She emphasized that the drop is not solely due to waning consumer interest but also reflects retailers reducing shelf space and product assortments for plant-based meats. Julie Emmett, VP of marketplace development at PBFA, noted that the plant-based food sector is held to the same sales velocity standards as animal-based products, which can lead to products being moved to frozen sections or discontinued altogether.
Despite the challenges, Kwon pointed to evidence of a shift in consumer behavior, indicating that shoppers engaged with plant-based foods are reducing their consumption of animal-based products. This trend suggests a growing acceptance of plant-based alternatives, albeit with varying motivations among consumers. As the industry continues to evolve, the emphasis on innovation and variety within the plant-based sector could pave the way for a resurgence in consumer interest, particularly as brands adapt to meet the diverse preferences of modern shoppers.