As was the case with many other food categories, be it food or non-food, the plant-based one had to suffer due to inflation and rising costs of living.
The reasons behind all those issues are well-known, so let’s focus on the actual dynamic: global retail sales of plant-based meat in 2022 were USD6.1bn and grew from the prior year by both value sales (+8%) and weight sales (+5%), according to Euromonitor, with notable growth in Latin America and Europe in particular.
Meanwhile, plant-based meat sales in US retail in 2022 declined slightly by 1% and unit sales declined 8% compared to the prior year, according to data from the Good Food Institute and the Plant Based Foods Association commissioned from SPINS.
While signs point to a stagnation of plant-based products in terms of sales, the free-from and better-for-you trends continue to have a major impact on the market. The health ingredient market is expected to witness significant growth, recording a CAGR of 7.8% during the period starting from 2022 up to 2027.
The market value was projected to reach USD146.3bn by 2027, while that for 2022 was estimated at USD100.5bn. This is highly attributed to increasing trends in personalized nutrition and nutrigenomics within the food industry, which are effective in enabling the development of need-based products for functional health purposes.
The products range from immune health and digestive to mental health, beauty enhancement, and cardiovascular health, among others. Reasons include growth influenced by the increase in popularity of plant-based diets inspired by a mix of veganism, health awareness, and a growing number of animal welfare concerns.
In fact, according to the 2021 Good Food Institute report, plant-based foods over the last three years have outpaced total foods in dollar sales growth and unit sales growth. In particular, plant-based food sales have surged by 54%, whereas total food sales grew just by 2%. While the overall food unit sales remained flat, plant-based unit sales increased by 6%, thereby driving retail growth in the health ingredients market.
Food segment is expected to hold the highest share in different applications during the forecast period. Health ingredients are those intended to enhance nutritional value in the food products; they are ingredients that provide much healthier food options through functionality enhancement. Food ingredients are increasingly customized by their manufacturers to enhance nutrition for consumers with diverging nutritional needs, especially among those consumers who regularly exercise but have peculiar needs regarding proteins, carbohydrates, and vitamins in their diet.
For instance, George Western Foods, a subsidiary of Associated British Foods based in the Asia-Pacific region, is fortifying omega-3 fatty acids into its baked products under its Tip Top brand. The health ingredients market is projected to rise at an above-average CAGR in the Asia-Pacific region during the next couple of years.
This has, on one hand, caused rampant deficiency of vitamins and minerals among people while on the other it has opened fresh avenues for dietary supplement and functional food and beverage manufacturers to spread up their network in order to consolidate their leading positions in marketplace.
Besides, chronic diseases such as diabetes, cardiovascular diseases, osteoporosis, and arthritis have also become endemic in this region, which is further mooting demand for health ingredients. With constant change in the health ingredient marketplace, one thing’s for sure: consumer demands for healthier, easier, and tastier foods will continue to drive this marketplace.
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