Plant-based meat consumption is rapidly growing, study reveals

WNM | Nov 11, 2019 at 11:32 AM

In its latest “Future of Food Q”-series, UBS forecasts the coming revolutions in plant-based meat and gene editing. Two thirds of the surveyed consumers have not yet tried plant-based meat, but UBS forecasts the global plant-based market to grow to $50 billion by 2025.

The report on “Food of the Future II: What will the coming revolution mean for Global Chems & Machinery?” by financial services firm UBS’ Andrew Stott looks at what the coming revolutions in consumer diets (plant-based meat) and gene editing will mean for chemicals and machinery stocks.

The commercial success of plant-based meat (“PBM”) takes aim at the $1.2 trillion animal meat industry. Unlike the “veggie burgers” of decades past, which often target a smaller vegetarian or vegan market (~6% of U.S. and Europe population), plant-based meat targets a large "flexitarian" consumer market, or consumers looking to reduce animal-based meat (“ABM”) intake, rather than eliminate it.

In a “Q-Series” report, a number of UBS analysts from the U.S., Europe, Asia and South America worked together to forecast the total addressable market sales opportunity for plant-based meat products by 2025.

UBS estimates the total global addressable market for plant-based meat is ~$1.2 trillion, across both the foodservice and retail/grocery channels. The firm estimates plant-based meat has less than 1% share of this global market today.

Key Highlights from primary UBS Evidence Lab data include:

- Plant-Based Meat Awareness is high and growing: Based on the UBS Evidence Lab survey of 3,100 consumers, 79% of respondents in developed countries (US, UK, Germany) are aware of plant-based meat. Further, engagement on social media is rising, with Instagram interactions across 13 plant-based meat brand pages up 120%+ year-to-date.

- Trial is relatively low, but retention is high: 36% of all consumer survey respondents have "trialed" at least one PBM product.

- Conversion Keys: Of the remaining consumers (64% of total population) that have not yet tried plant-based meat, 58% show potential to convert (i.e., indicated “interest” in trying or were “indifferent” about trying). Respondents note that improving the taste profile for plant-based meat products is a key catalyst to driving increased customer trial and better retention. Looking across all survey data, UBS found that more consumers believe that the taste profile of plant-based meat products is presently less preferred than animal-based meat products.

- Distribution Channel Insight: Roughly 2/3 of survey respondents first purchased plant-based meat from the grocery retail channel. 54% of the restaurant franchisees we surveyed indicated that selling plant-based meat benefitted restaurant traffic and ~70% of franchisees believed PBM products would help increase restaurant unit sales in the next twelve months. UBS also spoke to industry contacts who suggested that in the restaurant channel, plant-based meat represents ~5-10% of protein mix, and has retention rates in the high 20%s.

- Brand Awareness: In the U.S. surveyed consumers cite Kellogg’s MorningStar Farms as their favorite plant-based meat brand, due principally to brand awareness. However, unaided brand awareness was tied between Beyond Meat and MorningStar Farms, and globally, Beyond Meat has the highest level of Instagram interactions across 10+ plant-based meat competitors.

UBS forecasts the global plant-based market to grow to $50bn by 2025, implying that world meat penetration increases to ~2.5% penetration from ~0.5% today (on a volume basis).