Facing Plant-Based Challenges: Health, Price and Taste

May 2023

A host of challenges to the plant-based alternatives market have seen sales stalling or slowing across some markets, and major producers are reframing their expectations – or exiting altogether. With price, health credentials and taste in the frame, alternatives face a fight to claim greater share from the animal-based products they compete with. This report considers why and looks at how companies are meeting these challenges.

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This report comes in PPT.

Key Findings

Plant-based alternatives face slowing sales growth

From soaring sales growth during the pandemic, plant-based alternatives – particularly plant-based meat – have slowed, with the largest market (the US) seeing negative growth since 2021. Big-name brands have suffered; some have exited the category altogether.

Price premium of plant-based thrown into sharper focus by higher food costs

Plant-based’s higher price point (vs the animal-based foods it seeks to supplant) has become a bigger problem as food price inflation has gripped countries around the world. Simply put, paying a premium has become more difficult for consumers.

Health is a motivator, but claims are under attack

Health concerns remain the number one reason that people buy/eat plant-based alternatives; however, these foods are increasingly challenged on health-based claims. Composition and processes are under scrutiny and producers increasingly have to defend their positioning.

Taste is a major obstacle; producers are responding

Amongst non-eaters of plant-based alternatives, taste is the primary reason for avoiding these foods. Poor experiences deter repeat purchases. New-generation alternatives, often utilising fermentation processes, seek to respond.

New ingredients, attitudes towards sustainability, and cultivation are potentially important

Developments around new ingredients will help address higher prices; concerns over processing/ingredients may become secondary as the issue of sustainability becomes ever more important; cell-cultured foods are on the horizon which may shift (again) the world of animal-food alternatives.

Key findings
A booming market…until recently
Plant-based meat tide turns in 2022
North American slowdown plays out across big names
Case Study: Plant-based milk also misses forecasts - Oatly cuts jobs even as revenues increase
This is not, however, the end of growth
Food with a price premium becomes more of a stretch
Inflation impact sees meat substitutes stay more expensive…
…while dairy alternatives’ price gap accelerates
Price pattern repeats across markets
The potential of price parity
Case Study: Just Egg achieves price parity - thanks to avian flu
Health concerns provide primary motivation
Challenged on many fronts, producers use high protein claims to push back
Processed issue has labelling implications
A shift in focus would work in plant-based’s favour
Case Study: Moma sponsors research to improve oat milk
Case Study: Beyond Meat enters into cancer prevention study
Taste is the most cited roadblock
Taking on the taste challenge
How fermentation is addressing the taste challenge
Case Study: Fermentation for whole cuts by Meati
Case Study: NotMilk expands into high protein arena
Case Study: Shiru claims to have solved the animal fat issue
Looking further ahead, cell-cultured may meet the taste challenge
Plant-based enters a new phase
Plant-based products have spread significantly beyond core categories
Case Study: Hershey’s joins confectionery majors launching plant-based variants
The elephant in the (waiting) room: Cell-cultured alternatives will present challenges…
…although perhaps not on all fronts
Facing the challenges: Key summary

Staple Foods

NOTE: Couscous, polenta and quinoa are excluded from staple foods.

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