Sales Take Another Hit with Double-Digit Declines
The plant-based meat industry is facing its third consecutive year of declining sales, with the latest data painting a concerning picture. Plant-based meat and seafood dollar sales fell 7% to $1.2 billion in 2024, while unit sales declined even more dramatically at 11%. Refrigerated plant-based burgers, which were driving significant growth just a few years ago, experienced a precipitous 26% year-over-year decline. This downturn follows similar patterns from 2022 and 2023, showing that the industry’s struggles aren’t just temporary hiccups.
Retail Shelves Are Shrinking for Plant-Based Options
Retailers have been gradually reducing their assortments in the refrigerated alternative meat category, with an average of 9.7 items per store in April 2024, down 10.3% since April 2023 and down 31% since early 2021. This reduction in shelf space reflects retailers’ response to declining consumer demand and poor sales performance. Alternative meats saw a 2.3% decline in sales by the end of 2024, prompting retailers to limit their offerings and focus more on core meat products. The shrinking presence in stores creates a challenging cycle where reduced visibility further limits consumer adoption.
Price Premiums Remain a Major Barrier
Cost continues to be one of the biggest obstacles preventing wider adoption of plant-based meats. Plant-based meat and seafood were 4% more expensive in 2024 versus just a 1% price hike for conventional counterparts, widening the premium to 82%. In ProVeg’s research, 38% of respondents who didn’t buy plant-based meat cited cost as a reason, with price continuing to be the most significant obstacle to widespread adoption. Even with some products achieving closer price parity in specific categories, the overall affordability gap remains substantial enough to deter many potential consumers.
Taste Still Doesn’t Meet Consumer Expectations
Despite years of product development, taste remains the primary barrier to plant-based meat adoption. According to Mintel, 53% of all consumers agree that plant-based protein products should taste indistinguishable from meat, with taste being the top reason consumers haven’t tried or continued purchasing these products. A Plant Based Foods Association study found that 36% of consumers cite the taste of plant-based proteins as a reason for not purchasing these products more frequently. Among consumers who previously ate plant-based meat but not in the past year, 36% say they would repurchase if the taste and texture were exactly like conventional meat.
Consumer Engagement Shows Troubling Signs
In 2024, 59% of US households bought a vegan product, similar to the previous year but down from 63% in 2022, with penetration of plant-based meat and seafood remaining low at just 13%. Recent reports show that over half of US consumers have never tried plant-based meat, and about a quarter remain firm in their decision to avoid it, suggesting significant barriers to adoption persist. This data indicates that the industry is struggling to expand beyond its core customer base and attract mainstream consumers.
Investment Funding Crashes by Nearly Two-Thirds
Funding for startups making plant-based meat, dairy, and eggs plummeted by 64% in 2024 from $854 million to just $309 million. This dramatic reduction in investment capital reflects investor skepticism about the sector’s growth prospects and profitability potential. The Good Food Institute notes that investments going forward will likely be distributed to fewer companies and in smaller quantities than during the low-interest-rate environment of 2020-2022. Without successful exits to demonstrate viability, analysts predict consolidation is inevitable as companies unable to secure funding downsize, close, or merge with competitors.
Traditional Meat Sales Show Strong Growth
While plant-based alternatives struggle, conventional meat continues to perform well in the marketplace. Circana data shows US retail sales of conventional fresh meat rose 6% over the same period, while frozen processed meat and poultry were up 10.9%, and frozen unprocessed meat and poultry increased 4.2%. Conventional meat and seafood unit sales grew 3% while dollar sales grew 4%, and conventional milk dollar sales grew 1%. This contrast highlights how traditional animal products maintain strong consumer loyalty despite growing awareness of plant-based alternatives.
Industry Leaders Face Financial Pressures
Beyond Meat was down 18% from the same period last year in Q1 2024, with revenue of $75.6 million and gross profit declining from $6.2 million to $3.7 million. Impossible Foods, despite being privately held with more than $2 billion in funding from investors like Bill Gates and Google Ventures, has conducted multiple rounds of layoffs, with CEO McGuinness stating profitability remains “years away”. Product demand has slowed due to customers like McDonald’s and Yum Brands seeing sluggish consumer demand, while Beyond Meat’s volumes fell 16.1% as consumers held their wallets close.
Foodservice Sector Also Shows Decline
In the US foodservice sector, which experienced moderate overall growth in 2024, sales in the plant-based proteins category fell 5%. Plant-based proteins in foodservice suffered a 5% decline in sales, though non-dairy milk continued its climb with 9% growth. Bright spots included plant-based pork, chicken tenders, chorizo sausage, tofu, and tempeh, which all experienced growth. However, these positive segments couldn’t offset the overall decline in the broader plant-based protein category.
Global Market Shows Mixed Results
While investment in alternative protein continued to fall in 2024, global sales of plant-based meat and dairy alternatives are up, with Europe leading at $9.7 billion in sales, followed by Asia-Pacific at $8.9 billion, and North America at $7.3 billion. Europe dominates the global plant-based meat market with the largest share in 2024, driven by strong consumer demand for sustainable and healthy food alternatives. This international perspective suggests that while the US market struggles, other regions may offer more promising growth opportunities for plant-based meat companies.
The data reveals an industry at a crossroads, facing fundamental challenges around taste, price, and consumer acceptance that go beyond temporary market fluctuations. Whether companies can innovate their way out of these challenges or continue to see market share erode remains the critical question for 2025 and beyond.
