Planting The Meat Seeds: Can Plant-Based Food Save Retail?
“Where’s the beef?”
In this day and age, that once popular catchphrase has now been supplanted — no pun intended — by “Where’s the plant-based meat?”
With consumers now more conscious about the type of food they put in their bodies and how its production affects the environment, the demand for plant-based meat is growing — and restaurants and retailers are capitalizing on the trend.
Redwood City, California-based Impossible Foods, which has raised more than $750M to develop plant-based meat, announced that Gelsons would be the first retailer on the West Coast to begin selling the company’s signature plant-based Impossible Burger ground meet.
Gelsons has 27 stores across Southern California.
Impossible Foods then followed up that announcement with another: their ground "meat" will also be available at more than 100 stores on the East Coast.
This is the first time that Impossible Foods’ plant-based meat — made up of soy protein, potato protein, coconut oil, sunflower oil and heme — will be available at grocery stores, opening up the brand to the mass consumer market.
Previously, Impossible Foods’ Impossible Burger was only available at restaurants and quick-serve restaurants, or QSRs. Its rival, Beyond Meat, already has its products available at grocery stores such as Kroger, Publix and Whole Foods, along with various restaurants.
In the first weekend Impossible Foods' ground product was available, Gelsons sold more of the Impossible Foods' plant-based ground meat than all regular ground beef brands combined, Impossible Foods Senior Vice President of International and Retail Nick Halla told Bisnow.
“Consumers are looking for delicious food,” Halla said. “In the last few years, consumers are making environmentally and nutritious choices. We’re preparing for the next generation of consumers.”
Cushman & Wakefield Senior Associate Capital Markets Rainier Nanquil said he expects to see the alternative meat industry to continue to skyrocket.
Nanquil, who specializes in restaurant real estate, has also seen an increase in foot traffic of people heading to QSRs and restaurants that offer plant-based meat.
"Even though most critics do not agree with the strategy to scale by partnering with historically unhealthy restaurant franchises, it is interesting to see affordable plant-based alternatives accessible across the country," Nanquil said. "As both the valuations continue to grow in the billions, I think they will continue to disrupt the retail industry in every aspect."
The introduction of Impossible Foods products is just the latest example of the moment popular plant-based meat is having.
Last year, sales of plant-based foods reached $3.3B, a 20% uptick from the previous year, according to a report done by Nielsen and commissioned by the Plant Based Food Association, an advocacy organization that lobbies on behalf of the plant-based food industry.
In April, Del Taco rolled out its plant-based Beyond Meat taco. As of June, Del Taco had sold 2 million Beyond Meat tacos, according to Vox. Due to its popularity, the fast-food chain is expanding its plant-based offering to other items on the menu.
In August, Burger King teamed up with Impossible Foods for the Impossible Whopper and unveiled it to all of its 7,200 locations. Starting in October, McDonald’s in the Ontario province of Canada will begin selling P.L.T.s, burgers with plant-based meat, lettuce and tomatoes.
Is plant-based meat a fad or here to stay?
With more restaurants, QSRs, food trucks and other places now offering this product, which increases foot traffic, retail sales and new restaurants and franchises opening, plant-based meat is here to stay, Kaplan said.
"It's going to be around now and forever," Kaplan said. "It'll evolve over time and get better and better."
An NPD Group report in June found 228 million servings of veggie burgers and veggie sandwiches were ordered at QSRs from the beginning of the year to the end of May, an increase of 10% from a year ago. At the same time, there were 6.4 billion traditional beef burgers served at quick-serve restaurants, which remained even year over year.
In its report, NPD Group said that beef burger eaters are open to trying plant-based alternative, with 95% of beef burger customers also ordering or sampling a plant-based burger in the last year.
"Plant-based burgers allow consumers to substitute without sacrifice. They get the ‘burger’ experience while assuaging their need for more protein and social concerns,” NPD Food and Beverage Industry Analyst Darren Seifer said in the report. “With that said, U.S. consumers have not given up on beef burgers but are willing to mix things up every now and then.”
Though plant-based meat and food still have a ways to go — the global beef market could reach $496B by 2025 — analysts are bullish on the alternative plant food sector's potential. Barclays boldly predicts the alternative meat industry could reach $140B over the next decade, CNBC reported.
"There is a need for this and that’s what creating the demand," Impossible Foods' Halla said. "Environmentally, we need this. Our food supply production is not sustainable."
By 2050, the world is expected to have a population of 10 billion people.
A scientific report released last year found that global warming and other environmental changes could threaten agricultural production. By the year 2100, corn production could decrease by 18% and overall vegetables and legume production could fall by 35%, according to Columbia University. Farmers rely on corn and other vegetables to feed their livestock.
Feeding people while taking care of the environment, Halla said is "by far the biggest challenge we face today ... We can do this better than a cow can."