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Plant-based products are now a key driver of growth for food companies and retailers, outpacing overall food growth by more than five times.

Viewpoint: The staying power of plant-based and why it matters at retail

Plant-based consumption is at an all-time high, as consumers focus on well-being during COVID

Justin Neal is the vice president of sales at Amy’s, a leading maker of organic plant-based meals. The views expressed here are those of the author.

It wasn’t too long ago that plant-based was still on the fringe, familiar mainly to those following a vegan or vegetarian diet. At Amy’s, we’ve been cooking plant-based for decades and have closely tracked growing consumer interest in and adoption of flexitarian, vegetarian and plant-based eating. What none of us could have predicted, however, was the unprecedented acceleration of this growth with the onset of the pandemic.

As we work to update projections, and bolster supply chain and production in preparation for what comes next, one thing we know for sure is the popularity of plant-based shows no signs of slowing. Plant-based consumption is at an all-time high, and what once may have been perceived as a fad is proving to be a trend with staying power that is beneficial to the consumer and retailer alike.

The plant-based growth opportunity

Plant-based products are now a key driver of growth for food companies and retailers, outpacing overall food growth by more than five times. In early March, before COVID even set in, SPINS reported that grocery sales of plant-based foods that directly replaced animal products grew 29% in the past two years to $5 billion. And dollar sales of plant-based foods grew 11% in the past year. This is compared to total U.S. retail food dollar sales, which grew just 2% over the past year and 4% over the past two years. This is record growth even before the unprecedented boom in demand we experienced once stay-at-home orders were issued.

What’s driving consumers toward plant-based

As we do more work to understand who this plant-based consumer is, it’s becoming clearer and clearer that category growth is not largely driven by consumers who follow a strictly vegan diet; rather, it’s a result of flexitarians entering the category and replacing meals and foods here and there with plant-based alternatives. Amy’s has seen this in its own research, and it’s been backed up by findings from the Plant Based Foods Association.

Between health, taste, environment and animal welfare, flexitarians are seeking out plant-based for various reasons, but health tops all. We know, now more than ever, many consumers are looking to incorporate more nutrient-dense plants in their diets and are turning to plant-based to improve overall health in the age of COVID. We’ve also seen, and tasted, the evolution of the plant-based experience. There’s more variety than ever before and the taste of a lot of these products has really improved, thus winning over and bringing new consumers into the fold.

Keeping consumers coming back and spending more

As we start to see sales across categories begin to normalize since those early pandemic highs, plant-based purchases are still increasing; and, even more promising for retailers, repeat purchasers are spending more when they return.

Recent IRI data shows that 30% of new (a.k.a. pandemic stock-up) consumers returned to make another plant-based purchase in subsequent weeks and that they spent more. During a four-week period in March, the average new consumer made two trips to the store and spent a little over $16 on plant-based products that were not part of their usual routine. The 30% who returned during a four-week period in May again made two trips to the store but spent over $3 more. This tells us that there’s a lot more potential for growth and the need for variety and choice in stores so that we can continue to meet the consumer need. When a consumer tries a plant-based product and enjoys it, we need to have more great options ready for them upon their return. Product and flavor innovations are going to be key in continuing to grow the plant-based category.

The future of plant-based and organic

As people become more familiar with the concept of plant-based and more suppliers enter the category, we are predicting that consumers will become more discerning when it comes to ingredients and the process that goes into making their food. Similar to the growth we’ve seen in plant based, sales of organic products have surged throughout the pandemic. At Amy’s, we attribute this spike to an increased focus on health, nutrition and overall well-being in the face of COVID. We anticipate that these two trends — organic and plant-based — will both continue to grow and intersect, and in the near future, health- and environmentally-conscious consumers will seek out plant-based made with organic ingredients over other options.

It’s encouraging to see so many consumers moving toward a more plant-forward diet and retailers and suppliers evolving quickly to meet the growing appetite. As an industry, we have the potential to continue to foster this growth and make meaningful progress toward a better future.

For our most up-to-date coverage, visit the coronavirus homepage.

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