Posted by Middleby Mar 20, 2023 1:30 PM

The Profitability of Plant-Based Food and Beverage Alternatives

Over the past several years, plant-based foods have been some of the most popular and trendy in all of foodservice. With popularity comes profits. So, what are the real revenue drivers as it relates to plant-based foods and beverages, and what can operators do to capitalize on these trends in the future?

To begin, it’s important to understand the magnitude of the plant-based food and beverage industry. According to Bloomberg, plant-based foods could make up more than seven percent of the global market within the next seven years. If this prediction is true, the value of the plant-based food market will be more than $162 billion.

“Food-related consumer habits often come and go as fads, but plant-based alternatives are here to stay – and grow,” says Jennifer Bartashus, senior consumer staples analyst at Bloomberg Intelligence. “The expanding set of product options in the plant-based industry is contributing to plant alternatives becoming a long-term option for consumers around the world. If sales and penetration for meat and dairy alternatives continue to grow, our scenario analysis suggests that the plant-based food industry has the potential to become ingrained as a viable option in supermarkets and restaurants alike.”

Considering these points, it’s clear there’s not just staying power in plant-based alternatives, but there’s an opportunity for growth. But where and what types of products will contribute?

As one might expect, plant-based alternatives to meat are driven largely by the big names in the industry, Beyond Meat and Impossible Foods. Driven by healthy eating habits and a desire for sustainability, meat alternatives are following a similar path as plant-based milk. If they do, Bloomberg expects the market for plant-based meats to be near $120 billion by 2030.

Meat Alternatives Aren’t the Only Driver in the Plant-Based Food and Beverage Industry

In fact, they’re not even the leader. In reality, plant-based milk like almond milk or soy milk really began the American foray into vegan food and beverage options, and those trends are continuing to grow. According to the National Restaurant Association’s 2023 What’s Hot Culinary Forecast, oat, nut, or seed milk are the top trend this year in the non-alcoholic beverage category.

Desserts are also on the menu for plant-based alternatives, even for manufacturers like Hershey’s and Reese’s, who have traditionally staked their name on the concept of “milk chocolate.” Their goal is to make chocolate more accessible for those who prefer or require plant-based alternatives.

Plant-based Foods and Beverages Are a Global Movement

The Good Food Institute, a nonprofit think tank that conducts important food and beverage trend studies, found that plant-based food sales in American grocery stores have grown three times as fast as overall food sales. Plant-based alternatives aren’t just an American phenomenon, though.

Alternatives are becoming more and more popular around the world. In Asia, for example, countries like Thailand, China, Vietnam, Japan, and even Australia are seeing significant growth. More than 75 percent of consumers in the Asian-Pacific region say they’re willing to spend similar prices on plant-based alternatives.