Dive Brief:
- Retail sales of meat alternatives have continued to decline, according to new data from Circana.
- Purchases of plant-based meat alternatives fell 12.6% in the five weeks ending July 2, to $106.8 million, a 19.8% decline year-over-year, the data said.
- While inflationary pressures have affected consumer spending overall and sales are down across all temperature states, the refrigerated alternative meat space has seen the biggest declines, where retailers have also been cutting their assortments, according to reporting from AgFunderNews.
Dive Insight:
Back in May of this year, the alternative meat space was showing signs of maturity.
Between lower production prices, capital improvement plans and readiness to scale up, the industry looked ready to expand.
However, inflationary pressures and a tight investor market may make that difficult in the months ahead, with experts predicting capital to be tighter than it had been in recent years.
The price per unit across all foods and beverages in multi-outlet stores increased by 6.4% in the five weeks ending July 2, according to the data, and dollar sales of conventional refrigerated meat fell by 2.7% year-over-year to $8.4 billion in the five weeks ending July 2.
There is still concern among consumers about the continued effect of inflation, and although the plant-based space has seen some improvement with price parity, it is not there yet.
In order to be able to offer competitive prices to that of conventional meat, plant-based companies will have to pay off their R&D costs. Once that occurs, their market share has the potential to grow exponentially.
Volume sales of plant-based meat alternatives have not been able to hang onto the growth they saw in the past two years, adding to the decline in sales and struggle to remain competitive with conventional meat.