Long-term optimism takes hold in the plant-based category

Reports of the plant-based category being a passing fad may be conflated. At least, that’s according to several of the dozens of plant-based exhibitors at the National Restaurant Association Show this weekend in Chicago.

Shige Toyoguchi, from Yo Egg, said his company, and the plant-based space in general, is “a rocket ship right now.”

“This is the easiest product I’ve ever sold. The leads we’ve gotten so far from the show have been insane; nonstop,” he said. “And it’s coming from everywhere – restaurants, retail, distributors, universities, hospitals, cruise lines.”

He attributes the interest to what he calls “plant-based 3.0,” which is where he believes his company is positioned. Essentially that means the plant-based space is on its third iteration from its beginning. For Yo Egg's part, the company has developed the technology to create a plant-based poached egg that includes a runny yolk. This product evolution is driving even more demand, particularly among younger consumers.  

“There is a lot of curiosity about our products and plant-based products in general. A lot of colleges are showing interest in our products because their demographic – Gen Z especially – wants more choices and alternatives. They are making decisions about what affects their health, the planet, animals,” said Irma Soria-Garcia from Be Leaf.

Because this demand is driven by younger consumers, the forecast for the global plant-based market is expected to jump by over 12% in the next five years, according to Brand Essence Research. The key word here, perhaps, is “global.” The company Better Balance is bullish on its plant-based products, including a new plant-based hot dog, because it has experienced tremendous success in several international markets. Its hot dog, for instance, has been rolled out to 400 7-Eleven locations in Mexico.

“We expect that interest to grow in the U.S., too. At this show, we’ve gotten more interest than we anticipated and we were optimistic coming into it. We’re having conversations all over the place – retail, restaurants, big and small,” said Better Balance’s Mike Hedge. “We’re on our way to ubiquity.”

That said, reports about the “passing fad” exist for a reason. Revenue has stalled at some companies and sales in the retail space are likely starting to correct themselves from material growth in 2020 and early 2021. There has also been some impact from the persistent inflationary environment and plant-based products, for the most part, have yet to achieve price parity.

“Consumers are more price conscious than ever, so the big audience is flexitarians and they will go with the least expensive choice in this environment, which is why I think things have flatlined a bit,” said Gordon World, from Daiya Foods.

Still, Daiya is extremely bullish about the market and recently invested in a fermentation process for its plant-base cheese and other next-gen products.

“The demand in the aggregate is still there. Globally, there is great data that we think will translate here. The future is still bright,” he said. “We have seen a lot of interest and most of them are saying ‘not yet.’ They’re not saying ‘no.’”

Contact Alicia Kelso at [email protected]