The latest State of the Marketplace report by the Plant Based Foods Association unveils new data on e-commerce sales and highlights emerging trends in foodservice, alongside retail and consumer insights.
The report includes perspectives from key industry leaders at Sodexo, Whole Foods Market, and Earth Fare, discussing their strategies for expanding their plant-based food offerings, which serve as a key resource for informing stakeholders in the plant-based food industry.
Sales growth across platforms
The report reveals a substantial increase in e-commerce sales of plant-based foods, which reached $394 million in 2023, a growth of 16.4% over three years. This trend is significant compared to the slower growth rates in traditional retail, where plant-based food sales accumulated to $8.1 billion.
Despite economic hurdles, the segment has maintained a 3.8% share of the total market and captured a significant 18.4% in the natural market channel. The e-commerce boom is particularly notable as it surpasses the 3.8% market share in traditional retail, demonstrating a 6.8% online market share and outpacing animal-based food sales online.
Impact of foodservice innovations
In the foodservice sector, incorporating plant-based options is proving highly effective. The report indicates that foodservice outlets that added plant-based options to their menus saw an increase of 112% in plant-based sales and a 35% rise in mixed orders. This suggests a growing consumer readiness to include plant-based foods in their dietary choices, with 41% of diners opting for plant-based meals weekly, and 88% maintaining or increasing their consumption over the past three months.
“Despite inflationary pressures and economic challenges […] plant-based has held strong”
Julie Emmett, PBFA’s vice president of marketplace development, states, “As the data demonstrates, the plant-based foods industry is resilient, consumer interest remains strong, and the potential for further growth is indisputable. Despite inflationary pressures and economic challenges that have affected the entire food landscape, plant-based has held strong and established its faithful role in the shopping carts, shelves, and menus of a large and diverse group of consumers.”
Consumer demographics
The report describes the typical plant-based consumer as health-conscious, spanning all generations and socioeconomic backgrounds, with a considerable portion belonging to higher income levels. A notable 62% of US households buy plant-based products, with 81% returning for more.
“Educating them on the choices available to them without ‘preaching or dictating’ is very important”
The broad appeal across demographic groups reveals the potential for sustained growth, particularly with Gen Z consumers, who are gaining more purchasing power and showing heightened environmental and health awareness. When plant-based foods are easy for consumers to find with ample space and signage, both units and dollar sales outpace all other plant-based categories.
Challenges in foodservice
The report also delves into the obstacles facing foodservice providers and the need for consumer and chef education on plant-based options to enhance comfort and creativity in menu development.
Rob Morasco, vice president of innovation at Sodexo, notes, “Our customers can be anywhere on the ‘knowledge spectrum’ on these products, especially those that don’t identify as vegan or vegetarian. Educating them on the choices available to them without ‘preaching or dictating’ is very important. Second, our operators and chefs also need the same education on plant-based overall – whether alt products or whole food plant-based, there is work to do to help our chefs feel more comfortable in this space.”
Evidence from various case studies included in the report suggests that strategic menu placement and thoughtful presentation of plant-based options can significantly influence consumer choices. For instance, positioning plant-based dishes as the default or at the top of the menu increased their selection dramatically, with plant-based meals being chosen over three times more often than meat options when they were the default choice.
Adding plant-based items has not only boosted revenue but also attracted a new customer base. Restaurants reported a 109% increase in new guests for plant-based orders and saw higher check averages by 8% per guest for plant-based orders compared to a minimal increase for animal-based orders
Mitch Orland, senior vice president of merchandising and procurement at Earth Fare, commented on the sector’s future: “Looking ahead, plant-based foods will continue to play a pivotal role in shaping the future of the marketplace. As consumers become increasingly conscious of the environmental and health impacts of their food choices, demand for plant-based options will only continue to rise.”
“Now more than ever, the industry has an opportunity to come together to increase the reach and expand the influence of plant-based foods across retail, foodservice, and e-commerce,” furthered Emmett.
Click here to read our recent interview with Rachel Dreskin, CEO of the PBFA.
The full report is available for download here and is free for PBFA members.
