Bloomberg’s Senior Research Analyst Jen Bartashus breaks down the REAL numbers (not the click-bait story) of the Plant-based Innovation trend. Plus, we crack open the GFI State of the Industry Report for added understanding. It’s another episode of Plant-based Business Hour with Elysabeth Alfano.
Specifically, they discuss,
- Is the Plant-based Sector a trend or a fad?
- The GFI State of the Industry Report results.
- The problem with and what’s missing with the IRI numbers.
- The importance of indicators like the Biden BioTech and BioTech Manufacturing Goals and
- How does the growth of tech chips in the U.S. impact the growth of plant-based innovation?
Below is a short clip and transcript from their conversation. Podcast here.
Elysabeth: So, I’ll just start straight away. Is the plant-based foods sector and plant-based meats perhaps in particular, a fad or a trend?
Jen Bartashus: It is not a fad. It is a nascent industry. I think what people need to remember is that with an industry that’s so small and still growing, there are going to be bumps up and down the road. And we’re in a little bit of a turbulent time because we’ve been through a turbulent time. But we’re still very optimistic about the long-term opportunity and growth potential for the industry. It may be a little slower than we originally thought it would be but then we had a pandemic and we had supply chain issues and we had all sorts of things that kind of influenced consumer behavior.
But in the long term we still think that it’s here to stay and it’s going to continue to grow.
Elysabeth: So, let’s put a finer point to that. I’ll add that we’ve also had inflation and basically, they haven’t called it officially yet, but we’re in a recession, sort-of. I mean the job numbers are still good, but we are toying with enough to make everyone panicked and freaked out with a recession.
So, obviously some headwinds for all businesses, not just plant-based businesses. So, if you still consider this a trend, what kind of numbers are you seeing from your research department for growth?
Jen Bartashus: So, when we look at what’s been happening on a rolling 52-week basis- we use IRI scanner data and that’s what we look at very closely to measure how well this segment is doing in the United States. And so, looking at it on a 52-week basis, plant-based sales are down 4% and volume is down 10%. That is part of what’s giving fuel to the naysayers, I guess we should say. Now that said, we do still expect by the end of this calendar year, that’s going to move up and we’re going to see positive sales growth and either flat to very-slightly positive volume growth by the end of the year. There are a couple of things that are really going to help support that.
The first is, it looks like beef prices in terms of conventional beef are going to be going up. We’re in a cycle of the beef production cycle where there’s limited supply and that generally means that prices are going to go up. So for hamburger alternatives like your Beyond Meats or your Impossibles and the Gardein-type products, that’s actually good news because one of the biggest drivers is price and price parity to conventional products. So higher beef prices is something that could actually be very good for the plant-based sector as we get to the second half of this year.
Then, secondly, we have an improving supply chain. That means that there’s better distribution. That means that products that are in stores have better quality and better shelf life so that when people see them, they can take them home and they last a little bit longer in the refrigerator. Those are things that when it looks more optically appealing and has a longer shelf life or expiration date that is also a driver for consumers when they’re making their decisions in the store.
So those are the kinds of things that we’re looking at and we do think that the trend is going to shift as we get towards the end of the year.
Elysabeth Alfano is the CEO of VegTech™ Invest, the advisor to the VegTech™ Plant-based Innovation & Climate ETF, EATV. She is also the founder of Plant Powered Consulting and the Host of the Plantbased Business Hour.
