The Plant-Based Meat Industry Could Be Facing Some Big Challenges
There's no question that plant-based meat is sustainable and better for the environment than traditional, animal-sourced meat. As The Guardian has noted, meat and dairy generate the majority of greenhouse gases related to food production. Plant-based meats, on the other hand, require significantly less land, use vastly less water, and emit far fewer greenhouse gases, according to Reader's Digest.
The more pressing question at the moment is whether sales of plant-based meat are sustainable? After a sensational 2020, when sales of plant-based meat skyrocketed by 45%, per Good Food Institute, the momentum for plant-based meats has cooled considerably. Sales declined minimally (0.5%) in 2021, and have continued to disappoint in 2022, per Financial Times.
There are several potential reasons for this sales stall. Most notably, the high price of plant-based meats, which are still typically more expensive than animal-sourced meats, observes Deloitte Insights. Given the rise of food inflation and the way this has impacted shopping habits, cost could certainly be a factor in the diminishing sales. A dissatisfaction with the taste or mouthfeel of plant-based meat could also be a factor.
Whatever the reason, sales have definitely trailed off, and it's having an impact on manufacturers. One major meat company, in fact, just shut down its plant-based meat division.
JBS closes its plant-based meat company
JBS Foods, whose website claims it's the world's biggest beef producer, recently announced that it's axing Planterra, its plant-based meat company. The Denver-based Planterra, which is best known for its Ozo brand, will halt production entirely by the end of 2022, according to Food Dive. It's a rather startling development given the company has only been in business since 2020, but JBS maintains that it's still committed to plant-based meat products, which it will continue to manufacture in Europe and Brazil.
Despite the recent sales slump, there is still optimism for the long-term prospects of the plant-based meat industry. Market and Markets is projecting that the plant-based meat sector will almost double in value during the next five years, rising from $7.9 billion this year to $15.7 billion by 2027. Financial Times quotes a Maple Leaf executive who predicts steady annual growth for the sector in the 10% to 15% range.
But JBS' decision to close down Planterra is one of several signs that dispiriting sales for plant-based meats are seriously affecting the industry. Reuters has reported that Kellogg's is looking to sell MorningStar Farms, its plant-based meat business; And Beyond Meat made news when it laid off some of its workers in August, per U.S. News & World Report, citing a bad second quarter in which both its revenues and stock price had fallen.