Consumer research: Plant-based meat proving popular

Consumers are looking into alternative ways to get their protein intake beyond traditional meat. According to Food Frontier's 2023 State of the Industry report, plant-based meat sales in Australia have increased by a total of 47% between 2020 and 2023 and per-capita consumption has increased by 28%.

The report shows the economic contribution of the Australian plant-based meat industry and indicates that the industry is moving upwards in Australia, while navigating growth fluctuations typical of a new food category.

Foodservice taking on plant-based demand

Comprising Deloitte Access Economics insights and industry data by Food Frontier, the report found that in 2023 total plant-based meat sales in Australia reached AU$272.5m, representing a compound average growth rate (CAGR) of 14% since the 2020 financial year.

Significant growth has been seen in foodservice, where the wholesale surge of plant-based meat represents a CAGR of 59% since 2020.

Inflation pressures push up prices

In the face of inflationary pressures, the report reveals that the prices of plant-based meat products have inched closer to conventional meat prices, reducing the price disparity. The average price premium for plant-based meats has reduced from 49% in 2020, to 33% in 2023.

"The category has been affected by lower retail sales, attributed to inflation and the increased cost of living, which has impacted all food products perceived as either premium or discretionary," said Dr Simon Eassom, CEO of Food Frontier.

"Some products were not meeting consumer expectations around taste, and the higher price point compared to conventional counterparts has reduced repeat purchases, leading to a revised forecast value."

Based on current economic factors and market dynamics, Deloitte Access Economics now forecasts a market size of $1.65bn by 2033, down from the 2019 estimate of $2.9bn by 2030.

Driving success in the meat-free sector

"While there is likely to be ongoing expansion in the plant-based meat industry, success within the sector varies among businesses. With the market adjusting during an economic downturn, we can anticipate further consolidation in retail offerings.

"Noting that most foodservice sales of plant-based meats are in quick service restaurants, the report found there is strong potential for growth if plant-based meat manufacturers expand into new foodservice outlets and across untapped foodservice segments. This is discussed among the recommendations included in the report," Eassom said.

Alejandro Cancino, CEO and co-founder of The Aussie Plant Based Co, said: "As advancements in plant-based meat production continue, efficiency will improve, eventually rivalling the lean production processes of conventional animal meat. This will see it eventually scale to compete in the mass market food industry where manufacturers operate on a volume-driven tight margin business model.

"If plant-based meat companies are to survive they need to focus on profitability, efficiency and returning value to the consumer. Key to this equation is the paramount importance of taste. And there is a need to educate consumers about the taste and the benefits of their products."

Eassom said: "We're interested to watch how the growing awareness of food systems' role in climate change will influence the adoption of plant-based diets, including the consumption of plant-based meats as centre-of-plate protein. While Australia has been slower to act on the environmental sustainability of our food systems compared to some other nations, this is anticipated to shift in the years ahead."

The full report is available here.

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