Plant-based foods are bigger than ever.  

Recent research by the Plant Based Foods Association (PBFA) found that 70% of the U.S. population consumes plant-based foods (alternative meats, dairies and plant-based foods), up from 66% one year ago. There is 60% household penetration and an 80% repeat purchase rate.

According to PBFA, plant-based foods dollar sales grew 6.6% to $8 billion in 2022, with units mirroring total food growth and animal-based foods declining 3%. The increase is driven by younger generations who are purchasing for personal and planetary health. In addition, Sodexo and Aramark, two of the country’s leading foodservice providers, have committed to doubling their plant-based products.  

Pricing parity is considered paramount when it comes to truly competing with traditional sources of protein because plant-based meats typically cost more than grains, beans, beef and chicken. With outside influences like inflation and drought affecting meat prices, the gap is closing between the analogue and its replacement.

“The response it two-fold. We expect that plant-based inputs to come down with scale as the sector grows, but we also see that meat prices are rising.  Price parity should come as meat prices increase as well as plant-based inputs decrease,” said Elysabeth Alfano, CEO of VegTech Invest, an investment management company. 

Research conducted by VegTech Invest indicates governments and food manufacturers are paying attention to the shift in consumer behaviors. Food corporations are increasingly building out plant-based platforms, while ingredient suppliers and supporting business amp up plant-based and alternative protein offerings.  

The world’s largest protein producers are also increasingly involved in the industry: of the 60 largest global meat, dairy, and seafood companies tracked in the Coller FAIRR Protein Producer Index, half are investing in the alternative protein market as of 2022, more than double the amount in 2019.

Low-cost plant-based commodities like soy, wheat and grains can be used for plant-based products in an almost one-to-one ratio of calorie inputs and outputs. Soy and wheat are among the most cost-effective wholesale plant proteins, but weather changes, escalating global demand and the Ukraine-Russia war could lead to unpredictable price swings. 

“These market conditions present an opportunity for forward-thinking companies to champion additional alternative proteins in 2024,” said Dr. Sasha Goodman, chief investment officer of VegTech Invest. “Among these, pea protein is capturing attention and market share. Although not yet as inexpensive as soy or wheat, its increasingly competitive pricing, coupled with its ability to grow in different climates than soy, make pea protein a compelling alternative. Alongside pea protein, chickpea, faba, mung and barley are gaining traction. As 2024 unfolds, we anticipate an uptick in diverse plant protein sources, especially as producers seek to increase biodiversity in their supply chains.

Corporate climate mitigation strategies increasingly include investing in plant-based products.

A report by the Boston Consulting Group (BCG) and Blue Horizon compared the emissions reduction potential of 10 climate mitigation sectors and found that investment in plant-based proteins saved the most CO2-equivalent emissions of any sector by far, with three times the impact of the next best sector.

“The Plant-Based Innovation sector is a very powerful tool to mitigate climate change due to not using animals, which are huge methane producers, not deforesting and destroying biodiversity by cutting forests to grow crops to feed animals and not transporting the heavy animals around the world,” Alfano said. 

The market potential for plant-based proteins is high, with the BCG predicting the segment to grow to $290 billion by 2035 from $39 billion in 2021. The rise of the overall plant-based sector has the potential to create 83 million jobs, according to the Good Food Institute.