KANSAS CITY — Reducing price gaps, focusing on frequent buyers and emphasizing sustainability benefits all may spark sales in the plant-based meat alternatives category, according to speakers in an Aug. 21 webinar presented by sister publication Food Business News called “The future of plant-based dairy and meat alternatives.”

The frozen and refrigerated meat alternatives category achieved US retail sales of $1.03 billion in the 52-week period ended July 14, which was comparable to the category of salad toppings and croutons, according to Circana, a Chicago-based market research firm.

“This is a billion-dollar industry,” said Chris DuBois, executive vice president, perimeter practice leader at Circana. “It’s a big deal in terms of the supermarket.”

Over the past four years, however, sales of meat alternatives decreased by 2% per year on average, which compared to a compound annual growth rate of 5% for dairy alternatives. The average price gap of meat alternatives to conventional meat was $4.20 per lb over the 52-week period ended July 14, which compared with a price gap of 31¢ per lb for dairy alternatives when compared to conventional dairy, according to Circana.

“One of the things that always, always, always matters — and I mean, always — is what’s your price gap to your very specific competition or competitors,” DuBois said. “While value can be defined by taste and convenience and enjoyment and so many other different elements, if price is out of wack, it’s going to be a problem.”

The percentage of households buying meat alternatives two times or more per year decreased 1.7 percentage points over the 52-week period ended July 14, which compared to a decline of 0.7 percentage point for households buying one time. Consumers who frequently buy meat alternatives, which Circana called heavy buyers, make up 20% of the category, but they take four times as many trips to purchase the items and spend two times more per trip. They represent 75% of dollar sales in the meat alternatives category.

Gen X consumers and higher-income consumers tend to buy plant-based meat alternatives more frequently. DuBois said heavy buyers are “highly identifiable.”

“In other words, you can create target groups of audiences and go after them,” he said, adding that “to me, this is very fixable.”

Source: Innova Market Insights

An Innova Market Insights’ 2023 survey of consumers in the United States and Canada backed up the need to reduce prices in plant-based meat alternatives. When respondents were asked why they did not consider buying plant-based alternatives, price/value for money and taste and texture were the top two answers, both at 38%.

When asked what top three attributes they associated with plant-based products, 22% said environmentally sustainable, which trailed healthy at 36%, expensive at 33% and natural at 28%. Survey respondents also were asked whether they agreed that plant-based alternatives were more sustainable. Thirty-eight percent said they either strongly agreed or agreed that dairy alternatives were more sustainable than conventional dairy, and 37% said the same for meat alternatives when compared to conventional meat.