Industry: Food & Nutrition
What Do People Expect from ‘Clean Label’ Foods & Beverages?
Within the growing phenomenon of “wellness” and “well-being,” an increasing number of consumers opt for food and beverage products that they perceive to be “clean” or “natural.” Given the absence of the specific definition of “clean,” consumers interpret it in their own way, defining it as products that have “no chemicals/no artificial additives” or “all-natural ingredients.”
Consumer Perception of “Clean” Products
Kline’s Clean Label in Food & Beverages: Perception vs. Reality study found that approximately half (48%) of the consumers surveyed purchase products that are labeled “clean” or “natural.” Out of those who state that buying clean or natural foods is important to them, more than half believe that such products have positive implications for their health; one-fifth are reluctant to ingest chemicals and artificial ingredients.
Buying clean or natural is more important in some categories than in others. For instance, baby food, meat and poultry, and milk from animals are categories where consumers lean toward cleaner and more natural products.
Categories in which Clean and Natural Products are Most Important
Source: Kline’s Clean Label in Food & Beverages: Perception vs. Reality
“All-natural” was considered the most important element in selecting baby food, followed closely by “no added sugar” and “inspected by the USDA.” “Hormone-free” and “antibiotic-free” are key considerations of consumers when buying meat and poultry, while “preservative-free” and “minimally processed” are of top importance in cultured meats.
In packaged foods, “no preservatives” and “no artificial flavors” are neck-and-neck for the most important element. “No artificial flavors,” “preservative-free,” and “no added sugar” all rated highest in importance to those shopping for hot beverages.
When choosing a product, most consumers pay attention to price and nutrition information, and more than half of them avoid certain ingredients. Sugar, corn/corn syrup, artificial additives and artificial sweeteners, and fructose are the top ingredients that consumers avoid.
Top 20 Ingredients Avoided by Consumers
Source: Kline’s Clean Label in Food & Beverages: Perception vs. Reality
Ingredient listing and labeling is another important factor of consideration. While consumers generally trust the brands and their labeling, they do believe that the fewer ingredients a product has, the cleaner and more natural the product. There are no current scientific, legal, or regulatory definitions for clean-label ingredients. However, generally, three main criteria are followed to recognize an ingredient as clean label: Ingredients should be naturally derived, non-GMO, and easily recognizable or do not have a chemical-sounding name. To get a quick snapshot of key consumer research findings, download Kline’s Navigating How U.S. Consumers Perceive “Clean” in Food and Beverages infographic.
Key Retailer Initiatives to Attract Consumers Looking for “Clean” Products
Retailers play a vital role in establishing labeling standards and requirements for clean and natural products. Specialty stores such as Whole Foods and Trader Joe’s have stricter requirements for clean products and their labels. In fact, Whole Foods is the most notable national grocery chain catering specifically to this movement. Not only must brands adhere to a strict list of banned ingredients, but they must also offer proof of humane animal husbandry practices.
Conventional grocers, such as Target, are also establishing banned ingredient lists or creating clean or natural seals identifying brands that offer clean products. However, other grocers, such as Kroger and Wegmans, do not require products or suppliers to follow rigorous guidelines due to a large number of conventional product offerings.
Labels also vary significantly by product category and retailer. In the baby food, hot and cold beverages, cereal, and sweet and salty snacks categories, product offerings from more conventional retailers, such as Kroger, Target, and Wegmans, do not feature clean or natural labels. In contrast, Whole Foods highlights the naturalness of a product through a percentage, such as “100% whole wheat” or “made from 100% fruit.”
Prevalence of Clean Labels in Key U.S. Retailers by Category
Source: Kline’s Clean Label in Food & Beverages: Perception vs. Reality
The most common label across all retailers focuses on animal welfare standards for meats, such as how the animal was raised or that it has no added antibiotics or hormones. Other common labels include “organic,” “non-GMO,” “100% whole wheat,” and “gluten-free.”
Interesting to note is that organic products are a common private-label line. If a retailer does not have a separate line for these products—as is the case with Whole Foods—organic products are identified through labels on packaging.
Rising Market Opportunities to 2024
As consumers become increasingly ingredient-conscious, clean and healthy eating will remain a vital part of the consumer lifestyle. According to Kline’s Clean Label in Food & Beverages: Perception vs. Reality, the U.S. clean-label food ingredient market is expected to grow at a CAGR of 9.3% by 2024. Consumers will largely continue to be responsible for determining what it means to be clean or natural and what the standards will be. This will continue to vary drastically by person, as a common definition establishing the requirements for clean or natural food and beverage products is not expected to occur within a five-year forecast period.
Retailers will also take more initiatives in establishing clean and natural food standards. Conventional grocers such as Walmart may establish seals that signify healthier options. More naturally positioned grocers will also be on the rise, especially on a national level, to compete with Whole Foods.
Some labels are expected to remain popular on product packaging, while others will fall off in favor of trendier labels. The exclusion of artificial additives is expected to remain one of the most prominent labels on packaging. Organic and natural labels will also remain a prominent product label. As new diets and fads rise in popularity, marketers may use labels that call out compatibility with particular diets. For example, as the keto diet continues to rise in popularity, more labels are beginning to indicate whether they adhere to keto standards.
The market will continue to witness a rise in more truly natural or clean food and beverage products, as consumers prefer to seek products that are healthier. Greenwashing and clean-washing are expected to diminish as consumers have more access to resources to better educate themselves. Retailers may also enforce stricter standards, preventing these marketers from misleading consumers.
For a deeper dive into the importance of clean label in key product categories as well as an in-depth analysis of the ingredients used within these categories, along with brand offerings and their ratings, refer to Kline’s Clean Label in Food & Beverages: Perception vs. Reality study. To receive timely insights on the food & nutrition industry, sign up for our newsletter here.
Three Key Drivers of the Global Plant-Based Meat Boom
A considerable number of U.S. consumers are adopting a flexitarian diet, and this change is projected to drive the growth of the global plant-based meat market in the coming years. Furthermore, a notable number of consumers, especially in North America and Europe, are following a vegan diet. Thus, a growing flexitarian, vegan, and vegetarian population is projected to positively impact the global plant-based food industry.
Growing Environmental Concerns
Environmental concerns associated with livestock farming are some of the key reasons behind the development of plant-based meat alternatives. Raising livestock contributes to approximately 14.5% of overall greenhouse gas (GHG) emissions. As per the Down to Earth Organization, “Livestock production is the most prominent methane contributor in the world and is responsible for the emission of more greenhouse gases than all the world’s transportation systems combined.” Furthermore, the majority of global agricultural land (70%) is used for livestock production; that land could be utilized for the production of plant-based agricultural commodities to feed the constantly growing population without emitting greenhouse gases.
ENVIRONMENTAL CONCERNS ASSOCIATED WITH LIVESTOCK AGRICULTURE
Source: Down to Earth Organization; Kline’s Plant-Based Meat: Processing Alternatives and Ingredients Assessment report
Government bodies across the world, from the United Nations to the Honolulu City Council, acknowledged the negative impact of livestock production and therefore began to support the development of alternative proteins, including plant-based meat analog. They are encouraging people to adopt a vegetarian diet for the benefit of their health and the overall environment.
Population Growth
There are over seven billion people in the world; that number is projected to reach 9.7 billion by 2050. A growing population means more mouths to feed and greater demand for food resources. In fact, global demand for meat is projected to reach 557 million tonnes by 2050; this is not sustainable, as it negatively impacts the environment. Thus, to fulfill the food requirement of such an immense population while protecting the environment, it is most likely that there will be a huge shift toward plant-based food sources in the future.
GLOBAL DEMAND FOR MEAT, 2005 VS. 2050
Source: Good Food Institute; Kline’s Plant-Based Meat: Processing Alternatives and Ingredients Assessment report
Rapid Expansion of Key Players
Plant-based meat market leaders, such as Beyond Meat and Impossible Foods, have successfully established their businesses in North America and Europe and are now expanding their presence in Asian economies. This is due to the growing inclination of Asian consumers toward plant-based meat and because new plant-based meat players such as Zhenmeat and Starfield are receiving a positive response from Asian consumers. Moreover, Omnipork, which is a plant-based meat company, has successfully presented its products in Hong Kong and are gaining positive responses from consumers.
Beyond Meat first set foot in China in 2019 when it worked in conjunction with the service industry player Marriot, which added Beyond Meat’s products into its menu. Impossible Foods also entered the Asian market in 2019, and its products have been introduced in several restaurants such as Little Bao, Happy Paradise, Beef & Liberty in China, and Gordon Ramsay’s restaurant in Singapore.
Despite the accelerated growth of the global plant-based meat market, taste remains the primary barrier that prevents more consumers from purchasing such products. However, with constant innovations in terms of product development and advancement in processing technologies, plant-based meat manufacturers are expected to curb the challenges associated with the texture and taste of plant-based meat analog.
For a detailed assessment of existing and new processing techniques used for plant-based meat products, refer to Kline’s Plant-Based Meat: Processing Alternatives and Ingredients Assessment study, developed in collaboration with the Wageningen Food & Biobased Research. The report’s focus is on the science and technology of plant-based meat, coupled with an overview of market dynamics and an ingredients assessment, as well as an analysis of current market participants. To receive timely insights on the food & nutrition industry, sign up for our newsletter here.
Forecast to 2024: The Global Plant-Based Meat Market
The rising trend of adopting nutritious and healthy food products due to factors such as rapid urbanization and lifestyle changes has been driving the growth of the plant-based meat industry globally. Plant-based meat analogs are attractive options for consumers who are willing to change their diet and consume less meat but only if proper alternatives are proposed. In the last decade, the range of plant-based meat analogs in the market, developed by the food industry, has been significantly increased, offering products ranging from burgers and chicken to pork, meatballs, and more.
Breaking Down the Global Industry by Region
The plant-based meat analog industry has shown remarkable successes in North America and Europe, with the former being the largest region in the global plant-based meat analog market. The presence of established plant-based meat companies such as Beyond Meat, Gardein, Field Roast, and Impossible Foods and their constant product innovations have been the key driving factors of the North American plant-based meat market. Moreover, the government bodies supporting the development and growth of this industry also contributed significantly to its expansion.
Meanwhile, plant-based meat analog producers are gradually establishing their roots in Asian markets, where they are projected to achieve notable performances in terms of revenue. However, there are obstacles. Several conventional soy-based meat alternatives, such as tofu and tempeh, have been widely consumed by the Asian population for decades.
Choosing the Right Protein Source
Plant-based meat analogs are derived from plant sources such as soy, wheat, pea, and quinoa; hence, they are becoming the preference of millions of flexitarians and vegetarians around the world. The soy segment dominates the global industry, and it is the most conventional and widely used plant-based source adopted by meat analog producers for its high nutritional value. Demand is expected to rise in the coming years.
Pea proteins are increasingly used as an alternative to soy protein since pea plants can be grown in more moderate climates than soy. In addition, pea proteins are less connected to GMO concerns and are not listed as allergenic. Peas are projected to become one of the key sources of plant-based meat production and are projected to acquire a significant share of the overall plant-based meat market in the coming years, although the shortage of pea protein could be an issue in the near future.
Major Product Categories and Analog Types
Burgers are the most popular and easily available plant-based meat analogs. Several major plant-based meat analog players developed their business with burgers as the first and only plant-based meat product in their portfolio. For instance, Beyond Meat (U.S.) and Impossible Foods (U.S.) initially started their plant-based meat business with burger products; this segment is projected to grow at a considerable growth rate in the coming years, as these players are consistently developing and introducing an innovative range of burger products. Now, the majority of plant-based meat manufacturers are focusing on producing a variety of plant-based chicken analog products.
PLANT-BASED MEAT ANALOG MARKET SHARE BY PRODUCT CATEGORY, 2019
Source: Kline’s Plant-Based Meat: Processing Alternatives and Ingredients Assessment report
PLANT-BASED MEAT ANALOG MARKET SHARE BY ANALOG TYPE, 2019
Source: Kline’s Plant-Based Meat: Processing Alternatives and Ingredients Assessment report
The Future of the Plant-Based Meat Global Industry with Scenario Forecasts
The global plant-based meat market is forecast based on three different scenarios: conservative, moderate, and optimistic.
The conservative scenario is based on the retail sales growth trends of plant-based meat analog products. The market is projected to grow at a CAGR of 20% during the forecast period to reach a market value of USD 5.60 billion by 2024. The rising demand for analogs free of GMOs, allergens, and gluten, combined with the limited supply of some protein ingredients, might impact market growth. Consumers’ negative perception toward highly processed food might also restrict the outlooks in the near future.
The moderate scenario of plant-based meat analogs is based on sales growth trends, consumer trends, and insights from key industry experts who predict market growth to be around 30% in the next few years. Sourcing challenges could also be mitigated by ongoing actions from suppliers. At this CAGR, the market is projected to reach a value of USD 8.35 billion by 2024. The market growth is driven by an increasing global flexitarian population and current companies’ market expansions in terms of geographical footprints, sales channels, and expanding their product portfolios according to regional taste demands.
The optimistic market forecast is based on the plant-based meat revenue performances of leading market players such as Beyond Meat, Tyson Foods, and the Vegetarian Butcher. For instance, the net revenue of Beyond Meat increased by 250% compared to that of previous years due to wide consumer acceptance of plant-based meat analog products based on their benefits, taste improvements, nutritional profile, and high accessibility.
Moreover, enormous investments in the plant-based meat analog market in recent years are also considered while forecasting the accelerated plant-based meat analog market scenario. Considering the significant number of investments taking place, industry experts’ insights, and the revenue growth of the players, the plant-based meat market is projected to grow at a rate of 50% during the forecast period to reach a market value of USD 17.08 billion by 2024.
To deep-dive into the market dynamics and ingredients behind plant-based meat from a global perspective, read Kline’s Plant-Based Meat Global report, and watch out for our next article covering market dynamics with drivers and challenges. To receive timely insights on the food & nutrition industry, sign up for our newsletter here.
