Plant-based nutrition is a major trend and shows no signs of slowing down. Innova Market Insights identified “Plant-Based Revolution” as one its Top Ten Trends for 2020 and that follows last year’s designation of “The Plant Kingdom” as a top 2019 trend.
Plant-based innovation in foods, beverages and ingredients continues to flourish as a result of consumer interest in health, sustainability and ethics. All of these motivators tie into the broader consumer lifestyle trend towards cleaner living.
Two parallel trends—those involving vegan diets and plant-based alternatives—are driving tremendous growth in new food and beverage formulation. Often for ethical reasons, consumers embrace vegan as an overall lifestyle that excludes animal products in foods and beverages, clothing and accessories.
Worldwide, Innova Market Insights finds a small but growing percentage of consumers are adopting a vegan diet and lifestyle, although this has not been the key factor in growing interest in vegan-friendly products and the use of vegan-friendly positionings. Rather, such a move mainstream is fueled instead by a well-documented boom in the popularity of flexitarian diets. In this instance, rather than avoid animal products for ethical reasons, many consumers simply want healthier, cleaner foods.
According to Innova Market Insights data, 8.3% of all global new food and beverages used vegan-friendly positionings in 2018. In comparison, this figure was more than 9% in North America and Europe and more than 10% in Australasia during the same year. New product development using this type of claim registered strong growth with a global compound annual growth rate (CAGR) of 35.4% from 2014 to 2018.
“Plant-based” is a relatively new term and represents a proactive green eating movement toward plant-derived ingredients. Consumers of plant-based foods may support a combination of health, environment, sustainability and ethical concerns. For these reasons, these consumers are shifting away from animal-based food products although they are not necessarily committed to a complete plant-based diet.
NPD using plant-based or 100% plant positionings remains relatively limited, accounting for just 1% of global food and beverage launches recorded by Innova Market Insights in 2018, although it is rising significantly and seeing even stronger growth than vegan-friendly claims from this small base, with a CAGR of 67.5% from the 2014 to 2018 period. Penetration is highest in North America on 2.1%, but is also strong in Asia on 1.3%, where traditional diets already are strongly plant-based in many countries.
Plant-based innovations fall into four broad categories based on positioning and degree of adaptation. Inherently plant-based and easily adaptable options may be more familiar and less intimidating to mainstream consumers, while plant-based products in new categories or as alternatives to animal-based are more likely to appeal to more adventurous consumers looking for novelty and variety in their diet.
While vegetarian and vegan claims are relatively evenly distributed among a broad range of food and beverage categories, plant-based claims have tended to be focused in fewer areas to date. Dairy is the clear leader and it accounted for just more than 33% of global new food and beverage launches with plant-based claims in 2018. In the relatively established dairy category, plant-based launches are being driven by dairy alternative drinks, such as soy, nut, coconut and other plant-based milks, as well as spoonable non-dairy yogurts.
In 2018, the next most popular categories for vegetarian and vegan claims involved sports nutrition with 14% of all new products, and cereals, with 12% of all new products.
Sports Nutrition, Bars & More
Meanwhile, the sports nutrition category looks to support athletic performance with plant-based food and beverages that also are viewed as clean. Sports nutrition always has had a strong focus on protein content and this probably has grown even stronger with wider mainstream interest in protein.
Within sports nutrition, the shift to alternative protein sources has been one of the most interesting developments in recent years. Observers see the traditional dominance of whey and other dairy proteins now challenged by plant-based ingredients.
Launch activity in sports nutrition products with a plant-based claim grew at an average of 40% globally from 2014 to 2018. As well as this growth in plant-based options, launches still focus on other more traditional sports nutrition benefits and claims, however, with high levels of interest in protein and fiber content and energy, “free from” and clean label positionings.
Some of the fastest-growing plant-based proteins in sports nutrition include soy protein isolate, pea protein and rice protein. Moving beyond the protein arena, there also is increasing use of other plant-based ingredients in new sports products—led by nuts and seeds, many of which already carry an inherently healthy and nutritious image. More specialist vegan sports nutrition ranges are starting to appear, while more mainstream companies and brands are “greening” up their portfolios to attract those increasingly wanting to add more plant-based options.
In cereals, breakfast cereals using vegan and plant-based claims are growing in popularity, but the main area for plant-based alternatives involves cereal and energy bars.
Vegan claims in this subcategory have risen in line with interest in plant-based diets and are now in the top five positionings, used for 27% of launches during the first half of 2019. This is up from 23% in the same period during 2018. As might perhaps be expected, this interest was highest in the developed regions, with vegan positionings used for 29% of launches in North America during the 18-month period to the end of June 2019. Similar launch figures rose to 31% in Europe and an even higher 36% in Australasia, although from a much lower base.
Bottoms Up! New Beverages
In 2018, soft drinks represented the fourth largest category for new products using plant-based ingredient claims; and it ranked fifth for new vegan products.
Some soft drinks—including juices and waters—have an inherently healthy image, while others have specific benefits beyond hydration. Plant-based waters not only fulfill both these criteria but also benefit from the rising interest in plant-based options specifically. Most recently, the category also benefits from the positive influence of key ingredient: coconut water.
Coconut water remains one of the smallest soft drinks subcategories overall in terms of NPD, but has been one of the key growth areas in the soft drinks market in recent years. Launch numbers remain relatively modest and penetration levels low. Despite the rising interest overall in recent years, numbers fell back slightly during the 12 months to the end of June 2019, with penetration levels down to just more than 2% from just more than 3% in the previous 12-month period. It remains to be seen whether this is just a temporary downturn, or whether the subcategory is reaching its limits in terms of new product development—and may remain a small niche.
Overall interest in plant-based waters has been rising in line with interest in plant-based diets in general and the drinks have a strong health image. During the 12 months to the end of June 2019, Innova Market Insights found that more than 80% of all (global) new plant-based waters carried a health claim of some kind; and that figure rose to nearly 87% similar US introductions.
Launches tend to feature multiple health claims, many based on the properties of dominant coconut water, which has isotonic benefits and a natural, healthy, low-calorie image. Many products also are positioned as naturally gluten-free, paleo and vegan-friendly. Increasing numbers of these new waters also carry claims of being GMO-free, low or zero calorie; or containing no additives/ preservatives, no added sugar or sweeteners.
Latin America accounted for a leading 30% of new plant-based waters introduced during the 12 months to the end of June 2019. This reflects the traditional popularity of coconut water (already a popular unpackaged drink) particularly in Brazil, which has offered a strong base for developing the packaged plant-based waters market overall. Europe takes second place in terms of launch numbers, largely reflecting the number of countries involved, while Asia, also with established interest in coconut drinks, is third.
The US is also seeing high levels of interest, initially driven by coconut water, but now increasingly focusing on a range of other sources. An increasing variety of other types of plant-based waters include those that are relatively established, such as aloe and tree-based options such as birch and maple. There also are newer varieties involving almonds, chlorophyll, ginger, cactus and nettle.
Meanwhile, rising competition within the coconut water market has brought an increase in value-added and flavored varieties. Increasingly, new launches also feature additional functional ingredients such as probiotics, fiber and/or protein. Flavored varieties may feature on-trend ingredients such as coffee, tea and cocoa, as well as a range of fruit juices. Still more “cold-pressed” new products also are popular and growing to address consumer interest in minimal processing.
Some new offerings also include blends of different ingredients, such as coconut and aloe vera; while other new products tout texture—including gels or added pulp—as a way to pique additional interest.
More unusual offerings include coconut water packaged in natural and even artificial husks, usually with straws included. So-called “hybrid” beverages also are appearing, with water producers blurring boundaries between juice and water by infusing products with different plants, fruits and vegetables, incorporating plant-based waters into other beverage types.
Plant-based food and beverage innovation continues to grow thanks to ongoing consumer interests in health, sustainability and ethics. These factors all tie into the broader lifestyle trend of cleaner eating and living. Product choice has never been so diverse and innovators continue to deliver more complex, convenient and indulgent options. Likewise, these new products feature improved and prominent labeling for easier identification and more informed choices.
Looking ahead, Innova Market Insights predicts plant-based alternatives will continue to spread across classic, value-added product lines such as dairy desserts, pizzas, side dishes and ready meals. This will let consumers fully move away from animal-based products (if they wish) without sacrificing taste, indulgence or enjoyment.
Key opportunities include the use of a wider range of plant-based ingredients, greater segmentation with the move mainstream, and the development of more indulgent options. Meanwhile, plant-based food and beverage manufacturers will need to improve sustainability credentials in some instances.
Also, as the use of the term “plant-based” moves more into the mainstream, the industry faces the potential nutritional inferiority of some plant-based dairy and meat alternatives—when compared with their traditional animal ingredient-based counterparts. Plant-based manufacturers must increasingly take up the challenge to deliver more clean label, plant-based options with improved nutritional profiles.