Navigating the Plateau: Rethinking Terminology and Strategies for the Future of the Plant-Based Sector
Intro
The trajectory of the plant-based sector has been nothing short of remarkable, transitioning from a slow climb before 2016 to an explosive surge between 2019 and 2021. However, the enthusiasm waned in 2022 and 2023, with reduced interest from consumers and startups. Amid revising projections and a seemingly gloomy atmosphere, this position paper posits a cautiously optimistic perspective on the future of the plant-based industry. This article aims to illuminate a path forward for the alternative space by proposing an alternative terminology, addressing critical issues, and exploring untapped potential.
Introducing Alternative Terminology
Let us start with common industry jargon. The term plant-based1 is consumer-oriented and commonly used to describe various products intended to substitute for animal products. This term is not used (at least not commonly) to describe naturally vegan or vegetarian foods. No one will call hummus plant-based (I hope), but it certainly could be.
I also want to address (discourage) the use of the term alternative protein2 within the industry. While I like the term, its simplicity leads to miscommunication and limits creativity in product development. As a term, alternative protein is surprisingly ambiguous. I typically define it as non-animal origin, replacing animal origin (imitation products). However, tuna or chicken as a partial substitute in a (beef) hamburger is an alternative protein. What about cultivated meat? Is pea protein an alternative to soy? While this may sound pedantic, I have met people who think this way, and it is reasonable and technically correct. In my career, I have spent a surprising amount of time explaining what I needed / how I think as a product developer (I have given more than three 45-minute presentations in this area). While I enjoy giving these presentations and believe in their value for others, it takes a fair amount of work. More specificity would save time and enhance my own (and other people's) productivity. I suggest saying non-animal protein when working on imitation products. It is more helpful to state the desired functionality and source (if required) when functionality is needed. This would benefit people working in food safety, equipment manufacturing, recruiters, and sales, who will better understand what ingredients / products we are working with.
The overemphasis on protein leads to an anchoring bias (see Protein Premium for more details). Not all functionality comes from protein, and not all products are high in protein. A product developer will think about the product as a food matrix (the structure and interaction between ingredients). Too much focus on protein can lead to issues with cost, texture, and taste. Most product developers can tell you exactly which protein, be it isolate, concentrate, or texturized, they will be using in their product (spoiler alert, it is probably the cleanest tasting pea), even though there are plenty of options to choose from. However, tell them they cannot use coconut or palm oil in their product, and they may start sweating (those in the know might look at inulin). Generally, a wide range of ingredients is needed to generate the right texture (this is counter to the clean label trend). We need functional fats and hydrocolloids, too.
I suggest using “alternative” to describe ingredients and finished products offered as substitutes for conventionally sourced animal products3. Alternative better includes cultivated meat4, and the many forms of precision fermentation5 produced animal proteins, fats, and carbohydrates. I refer to this as the alternative space because we are trying to develop products requiring animal-sourced ingredients without relying on the traditional animal farming system. Hopefully, the advantages of this definition will become more apparent as I discuss some of the problems the industry has faced in the alternative sector.
1Plant-based: Usually used as a catch-all term to describe vegan or vegetarian products. Often used as a marketing term to describe an alternative product in which the animal product has been replaced by anything of non-animal origin. While this could refer to plants, it could also be used to describe fungi, algae, and yeast-containing products.
2Alternative protein: Usually, this refers to non-animal proteins, specifically those sourced from storage proteins such as beans, nuts, and seeds. However, it has been used to refer to any protein source replacing animal proteins' functionality or nutrition.3Conventionally sourced animal products: Any product or ingredient whose original source was a whole live animal. This makes a distinction between products with animal origins, such as single cells, or where only a protein or similar compound was produced without relying on multicellular animals.
4Cultivated meat: Muscle, skin, fat, or connective tissue that is sourced from single cells rather than a whole animal. While of whole animal origin, the cells themselves have been modified and grown under controlled conditions.
5Precision fermentation: This is not a true fermentation process; instead, it refers to the process of producing a specific compound or limited set of compounds from a source that would ordinarily not possess this. Whether genetically engineered or not, the organisms have been modified and selected for these metabolic products, and the majority of the biomass is not of financial interest.
Vegan, Vegetarian & Plant-Based Do Not Always Help Sell Products
The beginning of the alternative space has strongly relied on the feedback from the innovators and early adopters in Figure 1 to inform our marketing and product development. I remember discussing this with my colleagues in 2017 while developing Nestle’s plant-based burger. While extremely valuable, the feedback and preferences that vegan consumers provide do not reflect the opinions of the general market. For example, many vegans and vegetarians do not need or want their foods to taste like “real” animal products. However, the majority within Figure 1 typically likes animal products and cares about matching the quality of taste and texture. The most common type of consumer of the current “plant-based products” are flexitarians6 (Szenderák et al., 2022). It is difficult to expand a product portfolio if all products must simultaneously satisfy vegans and vegetarians.
Simply put, the feedback and products that initially make your brand / product successful may prevent further market adoption. A recent study by Berke and Larson (2023) showed that dishes labeled as “vegetarian” or “vegan” were selected less than when the same dish did not contain those terms. The reverse was not true, as the lack of these labels did not stop vegans and vegetarians from choosing those kinds of dishes. In the next section, I will cover more solutions to this issue, but Berke and Larson (2023) give us a good starting point. For existing products that cater to vegans, vegetarians, and flexitarians, we can keep marketing to them without explicitly using those terms. This should increase the chances of getting some early majority omnivores to try our products. If enough of them like the products, we can start to normalize the consumption of vegan or vegetarian products and even apply peer pressure to the laggards (fear of missing out).
Figure 1. Theoretical adoption curve with price-related purchasing intent. While innovators may be willing to pay high prices, lower prices are needed to entice more consumers (my opinion).
6Flexitarians: Defined by their desire to eat fewer animal products but not to abstain from them entirely. In practice, this means that they may substitute some animal dishes for alternative ones or reduce them by combining them together (a little of both during the same meal).
The Pie Is Too Small and Costs Too Much
While the current consumers of alternative products care about the environment and believe their consumption has a positive effect, the whole story is more complex. Looking at the current American consumer of “plant-based products, you will see a bias toward being younger, wealthier, and more educated (Szenderák et al., 2022; IFIC, 2020). The problem is that there are many more people than just this segment, and as we move away from this small core, we see that price is the second largest barrier (Szenderák et al., 2022; IFIC Survey. 2021a). For intent to purchase, the most significant barrier is taste. It is also worth noting that beliefs in the “healthfulness” (nutrition) or “naturalness” of the products impact intent to purchase (this a can of worms that deserves its own article).
Figure 2 shows the results from a consumer survey in which consumers were asked to rank the importance of various attributes when selecting a protein source. Taste was the most important choice, followed by price (IFIC 2021a). In this survey, environmental sustainability was the least selected choice. These are the current base of consumers who are most likely to buy “plant-based” and are more likely to care about the environment. To become widespread (and thus to have a more significant environmental impact), these products must be regularly purchased by a much wider number of people and more often. This problem is complicated by the fact that there is a general expectation among consumers that “plant-based” products have poor taste / texture. 70% of participants in a survey by the Good Food Institute expected poor texture (GFI, 2021). Unfortunately, this expectation is deserved as blind studies have confirmed (at least for some products) that this perception is accurate (Schouteten et al., 2016).
Figure 2. Ranked order for what consumers care about when choosing protein. IFIC 2021
However, I would not spend time writing this article if I believed there was no hope. Not only can taste and price be addressed, but some products are inherently better suited to meeting consumer expectations. Look at Figure 3; you will see that alternative milk did much better than meat in 2022. This is because alternative milks can better deliver a taste and texture the consumer enjoys.
Figure 3. Retail plant-based food sales metrics (Plant Based-Foods State of the Marketplace 2022 report).
Western Bias
I think I speak for many when I say, “There are too many burgers and chicken nuggets” (for excellent reasons, mind you*). This space is very competitive thanks to the large number of products that have been launched in the last six years. Perhaps an even bigger issue is that consumers have a solid understanding of what these products should be, and they do not always play to the strengths of what alternative products can do. I propose that the industry stop looking at Western products and start looking at Eastern products. The majority of China’s population does not identify as vegetarian or vegan, but they eat an impressive number of soy-based products. The popularity, number, and variety are significant. Indian cuisine has much to offer, as many dishes were designed for vegetarians. An online survey by Bryant et al., 2019 showed that Indian and Chinese participants are significantly more likely to purchase “plant-based meat.”
Singapore and South Korea are home to many innovative blended products, and both have strong government support for cultivated meat research (GOOD Meat). These cultures have very different flavor and texture profiles, making them more suitable for addressing the current limitations of the alternative space.
From a Western perspective, these cultures are a gold mine of new ideas and already optimized products. These cultures are inherently more open to alternative products, and many companies have been producing meat analogs for decades. If you go to an Asian grocery store, you will probably see several imitation ham and chicken products that are usually texturized. Texturization is often lauded as a critically vital technology, and these companies have mastered it. They already have formulas that work and a process that they have scaled up. We should be trying to copy, buy, partner, or consult with these existing companies. At the very least, they deserve to be part of the taste / texture benchmark.
The Protein Premium
I believe that Western consumers are suffering from what I call the protein premium. Everyone is obsessed with and believes that they need more protein in their diet. This is a myth at a population level. The typical American consumes too much protein and barely any fiber (USDA, 2020). However, because consumers believe they need more protein, the industry has focused on cramming as much plant-based protein (or marketing it) as possible. Speaking as a product developer, this has made our products taste worse (partly because we believe consumers are averse to soy) thanks to all the pea protein. It has also made it much harder to optimize for texture because most of these ingredients are nonfunctional. They are also costly to use in a recipe and help contribute to the high prices. This mindset has led to a rush of research by governments, academia, and industry to find more alternative protein sources. Besides not all proteins being created equal (PDCAAS), we also need alternative fats and better recommendations for how and which hydrocolloids to use. I am pleased that more research is being conducted; however, as a protein expert, I want to see a more balanced research diet.
My Recommendations
The solutions to these problems are complex and will require many intelligent and talented people to address these upstream and downstream within the industry. However, here are three goals I believe will help us on that journey:
Better functionality7
Better use of technology
Better business models
Better Functionality
Many companies I talk with have agreed that they need better functionality but have yet to learn how to approach the problem. First, let us start with a definition; functionality should be the most straightforward measurable attribute you care about. For example, many products need a gelling agent (for texture / matrix binding). Many ingredients can do this job, and the best way to evaluate them is to set a quantifiable metric that matches your qualifiable sensibilities. What I have done in the past (with proteins, fats, and hydrocolloids) was to design a measurement (rheometer, texture analyzer, or viscometer) and then test different formulas. These results are benchmarked with our sensory perceptions to ensure meaningful tests. This process quickly produces an empirical data set that can cheaply hone in on the right ingredients for a product. As a business grows and is ready to develop additional products, this process can be leveraged, reducing the time and cost of each additional product. This process can also be repeated for optimization or combined with theory to make a more predictive mechanistic model (for those interested in leveraging artificial intelligence).
Better use of Technology
Technology is more than equipment and computer programs; it is anything that can be applied to accomplish a task. So things like AI are technology, as are extruders, but so are textbooks and fermentation. Technological improvements unlock possibilities that were impossible before, but I cannot ask you to wait or develop groundbreaking technologies (thanks to those developing them). Instead, I propose creatively leveraging and adapting existing technologies to solve our food science-related problems. I spent much of my time developing proprietary processing technologies in the four years I worked at Nestlé on the Science and Technology Team. For the most part, we did not invent new equipment but used standard equipment in new ways. The results were surprising in their effectiveness and simplicity (hence why we did not patent anything). What we achieved was worth the effort, as the process was cheap and scalable when using standard equipment. One project I worked on resulted in significant cost savings and made the product radically better. This kind of novel technology allows a company to build a “protective moat” that sets it apart from its competition.
Better Business Model
So, why do we need a better business model? Well, depending on who you are (the size of your organization), you might not need one. The largest companies, such as Nestlé or Kraft Heinz, can afford to produce alternative products that are marketed to a smaller group at high prices. They can afford to lose money in the short term in case demand explodes. They can also leverage their supply chains and existing know-how to keep the losses proportionally smaller than a startup. Unless you are a 100+ year old multi-billion dollar multinational, your time horizon looks shorter. Companies like Beyond and Impossible deserve credit for being vanguards of the alternative space and surely have been innovative in their business models to some extent. Even if they are doing great, copying them now would be tricky (have fun getting 100 million from venture capital). If we cannot copy and out-compete, then the approach is to try something different. Premium products have higher profit margins, but the market is smaller. Unless you are selling ice cream, you are especially vulnerable to recessions. The premium space is intensely competitive due to its smaller size, and any environmental benefits alternative products might have will be too small if the market is small.
Hopefully, you have been inspired by some of the ideas in my previous sections. We can expand the formulation space, develop products for more than just a Western audience, or develop products that are not breaded or served on a bun. There are over 20 different companies that offer a pea protein isolate, but only two that sell a chickpea concentrate. The technologies being developed by biotech are potentially revolutionary. At the very least, they are new to the food industry and have potential worth exploring. This, combined with a focus on better functionality and technology, should let us expand the consumer base by producing new, novel, better, and cheaper products.
Closing Remarks
I believe that product developers should keep an eye on companies leveraging bulk and precision fermentation. In particular, I think some new formulation space will open up using algae, yeast, and multicellular fungi. Precision fermentation will likely play a significant role for those looking for the functionality we have come to expect from animal sources (so long as the costs can be contained). I am very excited to see the new dairy products announced. Blending old and new ingredients will create some fantastic products. Blending might bring the hither too expensive cultivated meat to the supermarket this year or next. The future may not be predictable, but it is inevitable; I expect great things from the alternative sector this coming year!
7Better functionality: Providing a specific and measurable role within the food matrix. Examples include emulsion stability, gelation, and freeze-thaw stability. The formulation priorities and the ramifications from changes will be much easier to understand the more clearly and narrowly defined the attribute is.
Appendix
*These reasons include the fact that the softer texture of a minced meat product is better suited for the textured vegetable grounds that are commercially available. There are benefits to these products due to flavor considerations. It is much easier to mask the off-flavors of these products thanks to how they are eaten: bun, veggies, cheese ketchup, barbeque sauce, or mustard (burgers). The breading is the primary source of texture and flavor for nuggets. Try these products without breading or additional condiments to confirm this yourself.
References
Plant Based Foods Association. Plant-based foods state of the marketplace 2022 report
USDA 2020. Dietary guidelines for Americans 2020-2025.
IFIC 2020. A Consumer Survey on Plant Alternatives to Animal Meat 1–29
