Plant-Based Food Manufacturing: What You Need to Know

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plant-based food

Many trends come and go in the food industry. Among these, plant-based food has undoubtedly been one of the biggest. In fact, it’s no longer considered a trend these days. Rather, it’s a growing movement that’s attracting more and more people for reasons like sustainability and increased health consciousness. 

So given the current market dynamics, there are many opportunities to explore in plant-based food manufacturing. Whether you’re just starting your business or planning to switch to plant-based ingredients, this guide will cover the basics to help you understand the market and opportunities better.

plant-based food

The Growing Plant-Based Food Market

The global plant-based food market has been growing rapidly in recent times. It was valued at approximately $10 billion in 2021 and is expected to increase by 12% annually to reach $34 billion by 2030. Data from the Good Food Institute (GFI) and Plant Based Food Administration (PBFA) also showed that US consumers spent over $7 billion on plant-based food in 2021. 

Consumer Demand

Generally, the huge demand for plant-based food can be linked to changing consumer behavior. First, many people have shifted to vegan, vegetarian, and flexitarian diets to support their health during the pandemic. As such, they’ve begun shopping for plant-based meat and dairy alternatives to incorporate more vitamins and minerals into their meals.

Recently, rising inflation has also led to changes in consumers’ grocery spending habits, with many cutting back on meat, poultry, and fish. While plant-based meat is sometimes more expensive than conventional meat, other plant-based ingredients like tofu, peas, and fresh produce are cheaper. 

Industry Demand

Aside from consumers, the food industry is also experiencing a shift. More and more plant-based food companies are entering the space. At the same time, manufacturers, food service companies, and restaurants are adding plant-based options to their product lines. Moving forward, you can expect this trend to continue further, with more companies venturing into unique plant-based products.

Plant-Based Food Manufacturing’s Eco-Friendly Aspect

Sustainability is another major factor driving growth in the plant-based food market. Animal-based food is notorious for contributing to climate change due to its high carbon footprint. According to one study, it generates 57% of the global greenhouse gas emissions (GHG) that come from food production, which is much higher than 29% from plant-based food. 

In general, plant-based food manufacturing is more eco-friendly since it consumes fewer resources and emits fewer greenhouse gases. For more perspective, a pound of beef contains about 90-100 grams of protein but requires 20-80 gallons of water per gram of protein. On the other hand, a pound of oat contains 75 grams of protein but uses only 3.8 gallons of water per gram of protein. 

The big difference between the two shows how you can still get enough nutrients from plant-based food without creating as much of a carbon footprint. With customers becoming more conscious of their environmental impact today, many are gravitating towards plant-based options and supporting brands incorporating sustainability into operations. 

Investing in Plant-Based Food Manufacturing

Now is undoubtedly a great time to invest in plant-based food manufacturing, given the booming market and growth rate. But doing this isn’t so straightforward. To start, you’ll need to consider many factors, including the following:

Capital Investment

First, you’ll need a good amount of capital to set up your infrastructure and launch operations. While it’s difficult to pinpoint a specific amount, plant-based food companies have raised over $16 billion in the last ten years. Generally, the capital requirement for the industry tends to be high due to the research and development (R&D) needed to create your products. 

Naturally, the more product innovation you plan to undertake, the higher the investment required. This is because aside from more R&D efforts, you’ll also need to build more or expand your facilities to support more product lines and stock-keeping units (SKUs).

Product Category

The plant-based category is quickly expanding to include all types of food products. So to decide what path you should take, research the prospects and opportunities of each category. To give you a brief idea of the market, here are some of the top categories based on their sales in 2021:

  • Plant-based milk – $2.6 billion
  • Other plant-based dairy products – $2.1 billion
  • Plant-based meat – $1.4 billion
  • Plant-based meals – $513 million
  • Plant-based protein liquids and powders – $289 million

That said, it’s important to note that the highest-selling categories don’t necessarily mean the ones with the best opportunities. For example, plant-based milk may have generated the most sales in 2021, but it’s also filled with many competitors. On the other hand, plant-based eggs had the lowest sales but have shown the fastest growth in recent years.

Consumer Trends

Consumer preferences are always changing, so you should stay updated with the latest trends. Get to know more about customers’ purchasing habits and what they’re looking for to understand their tastes and preferences. These insights will help you make critical decisions like ingredients, packaging, flavor lines, processing methods, and others. 

Stock Up on Top Quality Plant-Based Ingredients For Your Manufacturing 

The market and consumer behavior in the past few years have shown that plant-based food isn’t going anywhere. If any, it’s only going to continue growing. So whether you shift to plant-based products or start incorporating these into your current offers, it’s best to get started with plant-based manufacturing today. 

Whatever the case, Sunleaf makes it easy to source plant-based ingredients to support your operations. We offer a wide range of products from our domestic and global partners, so you can rest assured that we’ll give you the best quality. Call us today at 949-799-4802 to get started.

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