It's been more than five years since A&W first started selling
The burger chain sold out of the patties when they first launched, having underestimated how many people would want to try them. The day
These days, however, shares in
Since the flurry of excitement over A&W's beef-free burger and the company behind it, the nascent plant-based meat industry has had to swallow a bitter pill: the exponential growth anticipated by many has notpanned out.
Yet industry experts say there’s still plenty of growth in the future for plant-based meat products — and several areas where the sector still needs investment.
The plant-based meat sector was starting to ramp up not long before A&W made a splash by adding the
"There was so much hype in the beginning, and everyone was so excited," said Carter.
In the second quarter of 2020, Canadian company
The high expectations for consumer interest in plant-based meat were especially evident when traditional protein companies like Maple Leaf started getting involved, Carter said: “I would say they were hedging their bets.”
There was also a spikein saleswhen COVID-19 hit, said
"I think a lot of consumers were shifting from eating out at restaurants to having to cook at home, and they were looking for new products and new experiences," he said.
But the pandemic-relatedlift may have obscured reality, Greuel said: the plant-based meat industry was growing at an unsustainable pace. Sales started to take a turn and some of the companies at the heart of the industry have had to re-evaluate the scale of their investments.
According to market research firm Circana,
Last month,
In 2021,
"We are seeing a marked slowdown in the plant-based protein category performance which may suggest systemic change in the extremely high growth rates expected by the industry,” said then-president and CEO
Experts say the plant-based meat industry still has much to improve upon.
“Unfortunately, they hit a very high inflationary period when the industry was taking off,” she said.
Whether companies are pouring money into new facilities, or raw materials have to leave
With most of
Health-conscious consumers may have also been caught off guard by concerns about how processed plant-based meat is, and its sodium levels, said Carter,a perception
One of the biggest priorities for Protein Industries Canada right now is to incentivize private-sector investment, said Greuel, which can be a challenge: processing facilities cost several hundred million dollars and represent a risky, longer-term investment.
A
The global market for plant-based meat could reach between
The high-profile hits that companies like
According to the
People still want to reduce their meat consumption, said Carter, and he thinks as economic conditions improve they will start to show more interest in plant-based meat again.
The interest in plant-based products is being driven by the younger generation, who are more likely to eat them regularly, said Goddard.
“I think the environmental message is a big deal for the younger generation,” said Goddard.
In its earnings reports this year, Maple Leaf said the very high growth rates previously predicted for the plant-based category were unlikely to bear out. However, it projects growth for the category at a "modest, but still attractive" average annual rate of 10 per cent to 15 per cent this decade.
The industry is still growing, just not at the pace many expected, said Carter. Now the sector is in a period of stabilization, he said, with “a lot more runway” to go.
“As the technology and the innovation and the flavour profiles continue to evolve, we'll see this continue to steal market share from traditional meat.”
— With files from The Associated Press
This report by The Canadian Press was first published
Companies in this story: (TSX:MFI)
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