Key Takeaways
Healthy plant-based living sweeps across the US, driven by Millennial and Gen-Z women seeking a lifestyle that's good for them and the environment.
The reducetarian lifestyle dominates for now, but more American youth are likely to transition towards veganism in the coming years.
Plant-based snacking takes off in the US. Growth in the snacks category has outpaced that of alternative meat and dairy.
Sustainable sun care is a bright spot in the clean beauty scene. More deal activity expected as independent labels with a cult following are likely to get picked up by large national retailers.
Trader Joe's wins the vegan private label race. Store brands are competing fiercely on price, which means other brands must rethink their go-to-market strategies.
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Full Report
With major food chains adding plant-based options and vegan chicken wings featured at the Superbowl, the US plant-based market is buzzing. It is projected to expand from US$5.6 billion in 2020 to $11 billion by 2027, growing at a compound annual growth rate (CAGR) of 10%. Plant-based food sales in the US increased by 6.2% in 2021, 3.3X faster than the 1.9% growth for total food sales.
The country has the second highest per capita meat consumption globally at 124kg per person per year, and is forecasted to make up the second largest share of the worldwide meat substitute market in 2022. The US is abillion's top market by number of members, making up 22% of our global community. This underscores its prominence in the worldwide race to dampen meat consumption and the potential rewards for businesses which can capitalize on this opportunity. American food conglomerates are already acquiring the most promising plant-based technologies, as seen by Kraft Heinz's recent joint venture with machine learning-powered Chilean start up NotCo. The Kraft Heinz Not Company will develop co-branded products in the US.
Armed with our consumer dataset which spans more than 1.5 million reviews, we shine the spotlight on the US market, exploring geographical variation in demand as well as consumer attributes. With our rich data on ecosystem players, we also uncover insights on the fastest growing categories and brands.
US vegan demand skyrockets by 6X during pandemic as healthy plant-based living trend takes off
Plant-based demand in the US has surged by 6X over the past two years against the backdrop of the global pandemic. In particular, plant-based retail shopping has hit the roof from the start of 2020, as dining was dampened amidst lockdowns.
Recent surveys have shown that vegans in the US and UK tend to be more health conscious than the general population, suggesting that demand is being driven by evolving consumer preferences towards more environmentally and health conscious options. The findings also highlight the strong synergies across health, ethical and environmental motivations for pursuing more plant-based lifestyles.
In addition, latest research found that healthy plant-based diets reduced the risk and severity of COVID-19 (and generally, infectious diseases) even after controlling for other factors such as mask wearing tendencies. For US consumers specifically, 47% of alternative meat consumers are motivated by health factors, higher than the 33% share that indicated ethical reasons. The evidence suggests that health is a particularly effective gateway to reach American consumers.
Strongest plant-based consumer interest in California, New York and Florida; New York and New Jersey lead the reducetarian movement
Leveraging location data, we mapped more than 130K reviews from the abillion app contributed by 8K American consumers by states. (1) Our state-level investigation revealed California, New York and Florida as the top states for plant-based consumer interest.
While most of the demand in New York was driven by New York City, consumer interest in California and Florida was more evenly distributed.
Nevada and North Carolina experienced the most significant uplift in consumer interest in 2021. Las Vegas contributed the bulk of growth in Nevada. In North Carolina, there was a lower degree of geographical skewness in consumer interest. The emergence of a burgeoning plant-based market in Nevada was also echoed by an Ipsos Retail Performance study, where Nevada recorded the largest swing in attitudes towards veganism from 2014 to 2019. Specifically, the study noted a 38-point increase in vegan Google searches in Nevada, the quickest pace of increase amongst all states.
In the past two years, we've also seen the growing prominence of flexitarians, pescatarians and omnivores in the plant-based market. These consumer groups are called reducetarians. In simple terms, they are people who actively reduce their intake of meat and animal-based products, but do not completely give up meat or dairy.
In 2020, we found exceptional growth in plant-based interest from flexitarians and omnivores as compared to other dietary profiles. Within the US, New York and New Jersey have the highest share of non-vegan consumers who demand plant-based items. This reflects the prominence of the reducetarian movement in these states relative to Georgia and Connecticut, which had the highest plant-based demand contribution from vegans, and the lowest from non-vegans.
Demand driven by Millennial and Gen-Z women seeking a lifestyle that's good for them and the environment
The geographical variation in the popularity of plant-based living across the US can be in part explained by demographic differences. For example, California, which has the highest number of reviews, stands out with a relatively young and technologically-savvy population. To profile the average plant-based American consumer, we consolidated insights from recent consumer surveys, and validate these findings with our own data.
There is compelling evidence that age is a strong determinant of plant-based interest. A 2017 report showed that 80% of US Millennials eat meat alternatives, compared to 50% of non-Millennials. This corroborates with a 2018 survey which revealed that 7.5% of American Millennials and Gen-Z consumers have given up meat, triple that of respondents over the age of 50. From our data, states with a lower median age were moderately associated with higher plant-based interest, as measured by the number of reviews. (2)
Millennials and Gen-Z-ers are also strengthening the overlap between plant-based diets and healthy living. A YouGov survey conducted in December 2021 found that 36% and 29% of American Millennials and Gen-Z adults respectively perceive plant-based diets as healthier, compared to 26% of adults from the Baby Boomer generation. Besides age, gender is also important. For instance, 61% of female Millennials and Gen-Z in the US indicated that they don't eat meat, almost twice the share of male respondents. On the app, 65% of our active US users are female, and half are below the age of 34. Other factors are also at play, including political affiliation, education and income.
Without inferring causality, the empirical findings help to profile the average plant-based consumer: Gen-Z and Millennial women pursuing healthier, environmentally-friendlier lifestyles. This implies that product innovation and marketing should target the overlap across health, environmental and ethical factors. We’re keeping our eyes peeled for vegan activewear, healthy plant-based snacks, and vegan health ingredient innovations in the next two to three years. For example, Givaudan expanded its wellbeing portfolio by partnering with Fiberstar, which produces Citri-Fi. Citri-Fi is a non-GMO, allergen-free, vegan ingredient to enhance the texture, taste and stability of vegan baked goods and alternative meats.
The reducetarian lifestyle dominates, for now
Are younger consumers more likely to turn vegan? States with a lower median age like California, Georgia and Texas tend to have a higher share of plant-based demand from vegans. By contrast, those with a higher median age like New York and New Jersey saw a larger incidence of plant-based purchases from meat reducers who do not identify strictly as vegan. (3)
In the UK, The Guardian newspaper estimates that 42% of vegans are 15 - 34 years old, while just 14% are over 65. We believe that this reflects the general rise of strong, vocal, social media-influenced Gen-Z and Millennials consumers who are more likely to transition beyond the flexitarian realm towards veganism, relative to older generations. Indeed, a recent report by Global Web Index (GWI) revealed evidence that in the US, climate change is the top concern among Gen-Z-ers, ranking above national debt and job security. In addition, a Pew Research study discovered that Gen-Z and Millennial Americans were more active than older generations in addressing climate change on- and offline. They are also more likely to be influenced by climate activists and vegan influencers on Instagram, TikTok and Youtube.
Taken together, even as the reducetarian movement sweeps across the US, we foresee this as a transitory phase before more young consumers identify as plant-based. We expect the proportion of vegan Americans among Gen-Z and Millennials to increase over the next three to five years. This implies more dollars spent on vegan goods and services as the younger generations gain purchasing power, paving the way for tremendous growth potential for brands who can ride this movement effectively.
Plant-based snacking presents a unique growth opportunity
American consumers want better-for-you plant-based snacks. The global vegan snack market is set to be worth $73 billion by 2028, expanding at a CAGR of 8.7% from its current value of $32 billion. On the app, meat alternatives made up the largest share of plant-based demand growth from 2019 to 2021. Yet, contribution from the snacks categories (i.e., chips & crisps and cookies, biscuits & crackers) is increasing significantly, as healthier snacking habits become more widespread.
In 2021, growth of snacks categories outpaced that of other major categories like dairy and meat alternatives. Reviews in the chips & crisps, cookies, biscuits & crackers, and chocolate categories rose by 83%, 74% and 63% respectively. Vegan snacking presents a unique market opportunity, and businesses are already moving quickly.
Calbee America revamped the branding and packaging of its flagship plant-based snacks brand, Harvest Snaps, to boost household penetration. Campbell-owned label Late July also launched its vegan tortilla chips line, which has organic ingredients and is certified non-GMO.
Sustainable sun care demand tops growth with high brand concentration
In the personal care and beauty category, sun care emerged as the fastest growing segment (+35%) last year. Demand was mainly concentrated in a few major brands, such as S.C. Johnson-owned Sun Bum, as well as Pacifica, an independent label. (4) Toothpaste, the second fastest growing category, posted 13% growth over the same period.
Pacifica, which was recently valued at $250 million, has achieved exceptional success in the plant-based personal care market. Apart from sun care, the vegan beauty brand also dominates in other segments like cleansers, scrubs & masks and moisturizers, a testament to its strong cult-like following among socially responsible consumers.
In nail care, ella + mila and Pacifica are both hot favorites, competing fiercely with Mineral Fusion and Sally Hansen, which are owned by BWX brands and Coty respectively. In make up, e.l.f cosmetics is far ahead of competition. The brand, which was acquired by TPG Growth Management in 2014, accounts for the lion’s share of consumer interest in cosmetics on the app.
The presence of cult-favorite independent labels points towards further acquisition activity. This is already apparent in the toothpaste, deodorant, hair care and make up segments, where we see a higher share of acquired labels among top reviewed brands. For example, in oral care, Colgate acquired sustainable brands like Hello and Tom's of Maine. Likewise, FMCG giants Unilever and Procter & Gamble (P&G) acquired the top two most highly reviewed vegan deodorant brands, Schmidt's and Native respectively, in 2017. Going forward, we anticipate more deal activity in the beauty & personal care market, especially in nail care where there is a significant share of popular independent brands like ella + mila, Pacifica, orly and Holo Taco.
Trader Joe's beats other plant-based store brands; private labels undercutting brands across major categories
US grocers are banking on the booming potential of the vegan market and expanding their in-house offerings. For example, Aldi, a major international grocery retailer, aggressively invested in private labels with organic, vegan or vegetarian offerings. Earth Grown, in particular, has proven to be Aldi's most successful plant-based label. Similarly, Kroger launched its natural and organic brand Simple Truth in 2019. Based on our data, Trader Joe's has the most popular private label for vegan food items. (5) Aldi and Kroger were neck-in-neck in second and third place respectively, while Whole Foods came in fourth.
From price ratings on the app, we found evidence that supermarket private labels consistently undercut other brands, with the largest gap in price ratings in the chips & crisps, yogurt and mylk categories. This reflects the economies of scale enjoyed by private labels under major grocery chains. On top of price competitiveness, store brands also benefit from more optimal shelf space. They can, for example, optimize shelf space for their own labels, and may be less willing to give prime shelf space to other brands.
We anticipate further investments in plant-based supermarket private labels in the coming years. For other brands, this means that keeping prices affordable, and marketing initiatives to build brand loyalty are essential to differentiate themselves. Pursuing strategic partnerships with retailers is also important to negotiate shelf space allocation. For instance, Kroger and Impossible Foods recently entered a partnership to co-develop alternative meat products. Finally, brands should experiment with other viable go-to-market strategies, such as niche community marketplaces.
Get ready for a new plant-based era, America!
Plant-based demand in the US is booming. We found several key insights to help businesses position themselves. Overall, demand is being driven by social media-engaged Millennial and Gen-Z American women pursuing healthier, more environmentally- and socially-conscious lifestyles. While the reducetarian movement is likely to appeal to more consumers in the coming years, we see this as a transitory phase before more Millennial and Gen-Z consumers inch towards veganism, empowered by their strong desire to live by their values. These cohorts represent $350 billion of spending power in the US, which means it is critical for brands to adapt and stay relevant or risk losing market share. Major US grocers already have their eyes on the prize, and are enhancing their vegan portfolios through private labels. Based on our data, Trader Joe's has the most popular store brand among major supermarket chains. Across categories, we highlighted plant-based snacks and sustainable sun care, which are experiencing rapidly increasing demand.
The Gen-Z-ers and Millennials have spoken. Businesses, it's your move.
Notes
We excluded states with fewer than 100 reviewers. In total, we analyzed 24 states.
Pearson's correlation coefficient: -0.38 (statistically significant at the 10% level.
Pearson's correlation coefficient: +0.42 (statistically significant at the 5% level).
In this report, independent brands refer to labels which have not been acquired based on desktop research as at March 2022.
Vons, Safeway and Publix were excluded from the analysis due to insufficient data.
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