Shrinking price gaps and wider consumer acceptance propels EU plant-based food sales

Plant-based food sales are gaining momentum in the EU, with plant-based milk and meat now considered “mainstream options” in the UK, Spain and Germany. An analysis by the Good Food Institute (GFI) Europe reveals the category sales surged by 5.5% to €5.4 billion (US$5.8 billion) last year, as consumers continue to exhibit an increasing appetite for alt-protein foods.

The nonprofit and think tank analyzed six European countries between 2022 and 2023 and found that Germany — Europe’s largest market for plant-based foods — continued to show growth across most product categories, while the overall sales volume grew in Spain and France and remained stable in Italy.

Meanwhile, sales declined in the Netherlands and the UK, although there were signs that the slow-down started to level off throughout 2023 and the early months of 2024, notes the report.

Food Ingredients First speaks with GFI Europe, ProVeg Incubator, Cargill and Planteneers to understand where the category is heading.

“Plant popularity shows no signs of ebbing; its popularity is accelerating very quickly on a global scale. No longer confined to vegetarians or vegans, plant-based products are gaining appeal among a broader consumer audience,” Sandy de Houwer, global marketing director for Meat and Dairy Alternative Solutions at Cargill, tells us.

The study found more than a third of German and British households bought plant-based milk at least once during the studied period.“In fact, 62% of shoppers are extremely interested or interested in plant-based protein in EMEA.”

In Europe, the plant-based sector has “continued to make headway despite a difficult few years for the wider food industry,” says Helen Breewood, research and resource manager at GFI Europe.

“Plant-based meat and dairy are becoming mainstream options in many European countries, emerging plant-based categories are growing and some products are beginning to compete with their animal-based counterparts on price.”

“Our report shows that plant-based milk and drinks have already become well established in several European countries, with a nearly 10% market share compared to conventional dairy milk in Germany.”

Improvement in plant-based milk quality, use of barista-style products for hot drinks and lowering the price gap between conventional and plant-based milk could be contributing to the category’s success, she notes.

Analyzing plant-based growth

A significant portion of households are now purchasing plant-based meat and milk, with sales of plant-based milk growing despite being a well-established category, details the report.

Nearly 37% of all households in Germany, 33% in the UK and 19% in Spain bought plant-based meat at least once last year, while more than a third of German and British households and 40% in Spain bought plant-based milk at least once.

Wolfmeyer believes that with further enhancement of taste, texture and nutrition, plant-based cheese and seafood can grow more.Amid the rise in plant-based sales in the EU, it is important to put the numbers in perspective, believes Albrecht Wolfmeyer, international director at ProVeg Incubator.

“The sales figures vary from market to market and between categories. For Europe, only in the Netherlands and the UK did sales numbers go down in 2023,” he tells Food Ingredients First.

“Milk and meat alternatives are by far the largest categories while others, in particular seafood, remain very small for now. It’s noteworthy and positive to see other categories like plant-based cheese and cream growing and becoming more popular among consumers.”

Meeting consumer demands

While consumers enjoy plant-based foods for adventure and concern for the environment, they demand variety in these foods. Innova Market Insights’ analysis indicates that more than half of consumers, especially Millennials and Gen Z, want to have more choice.

Cargill’s De Houwer agrees that there is a clear age dimension with younger adults “more likely to be eschewing animal-based foods, meaning the trend will remain alive for years to come.”

“Product growth is coming from a mainstream desire to weave more plant-based items into the weekly menu.”

Innova Market Insights’ analysis indicates Millennials and Gen Z demand more choice in plant-based F&B.Dr. Pia Meinlschmidt, team lead product management at Planteneers, also believes the category is experiencing growth, with a primary focus on retail. 

However, plant-based has also recently “conquered the foodservice sector, which presents manufacturers with new opportunities,” she adds.

Lowered prices and cost of living

GFI’s analysis also highlights the demand for smaller plant-based food categories whose falling prices led to an increase in value. For instance, plant-based cream’s value increased by 24% to €138 million (US$149.3 million) and it was cheaper on average than branded conventional cream in Germany and the UK.

Meanwhile, the value of plant-based cheese sales increased by 7% to €194 million (US$210 million). The sales volume grew by 24% in France, 34% in Spain and 33% in Italy. Plant-based yogurt sales also rose across all six countries between 2023 and early 2024, with sales of plant-based seafood growing in value by 10% in Germany and the UK.

However, the analysis noted a decline in sales of plant-based ready meals, desserts and ice cream, which GFI says could be due to cost-of-living pressures prompting shoppers to cut back on non-essential items.

Breewood believes that with the right product improvement, price reduction and marketing efforts, other categories can emulate plant-based milk's success.Breewood believes these other plant-based categories can emulate plant-based milk’s success “with the right product improvements alongside price reduction and marketing efforts from producers and retailers.”

Targeting price parity

The analysis also found that price differences between conventional and plant-based meats have shrunk in Germany and the Netherlands, although they have “increased slightly” in Spain.

The value of plant-based meat sales rose by 3.9% to €2.0 billion (US$2.2 billion) and the sales volume measured by weight decreased by 3.2%, which could be linked to inflation and the higher price of plant-based meat relative to conventional meat.

Competitive pricing is an important factor in propelling growth in nascent plant-based categories like seafood and cheese, says Proveg’s Wolfmeyer.

“This year, prices for butter have spiked in Europe, which makes quality non-dairy products much more attractive and competitive. Once price parity, combined with great taste, a better nutritional profile and a way better ecological footprint is achieved, the plant-based industry will grow even more.”

Data by Innova Market Insights indicates a robust growth of 57% in butter launches tracked with plant-based or vegan claims (Global, CAGR July 2019–June 2024).

Clean label, cost optimization and price parity are becoming increasingly important, says Dr.Meinlschmidt.Truly mainstream?

According to Planteneer’s Dr. Meinlschmidt, plant-based foods are truly mainstream.

“As with conventional foods, it is no longer just taste and texture that determine the purchase of plant-based products. Issues such as clean label, cost optimization and price parity are becoming increasingly important.”

However, ProVeg’s Wolfmeyer considers this true only for the main categories of milk and meat alternatives, while emerging segments like plant-based cheese hold the potential for mass appeal. 

“Plant-based food has been available in major European supermarkets for some years and the shelf space for these foods has grown. This corresponds with data ProVeg has gleaned from its EU-funded Smart Protein project which found that most Europeans are reducing their meat consumption.”

“There is still a lot of potential for growth and room for improvement, for sure. Price parity paves the way to the mainstream, as also the new data published by GFI suggests.”

However, Cargill’s De Houwer believes all forms of protein are essential. 

“We take the view that we need all forms of protein on the table and that the conversation around how to feed all of us should be a “yes, and” conversation, not an “either or” argument.”

In future, De Houwer expects the number of flexitarians to rise, switching between animal, plant-based and cultivated protein.“Anything that comes to market will need to have great taste and texture, and with continued investment and innovation, the next generation of meat alternatives will bring more variety, offering optimal nutrition and sensory satisfaction while enabling a conscious choice for a better planet.”

In the future, she expects the number of flexitarians to rise, switching between animal, plant-based and cultivated protein. 

This will depend on their taste, “what dish they are preparing, who they are serving and what personal goals they have for their meal at that moment in time,” concludes De Houwer.