A considerable number of people have embraced the vegan diet and lifestyle in recent years. The younger population has accounted for a large part of the acceptance of plant-based products. The COVID-19 pandemic was also a major factor in the market growth of vegan food products. Disruptions in the supply chain of meat and dairy products, and a stockpiling of food during the early part of the pandemic led many people to seek alternatives, and vegan products were the primary beneficiary of that search.
The Current State of the Vegan Food Market
The worldwide vegan food market size was around $26 billion in 2021. Current projections have that market growing to over $65 billion by the year 2030, more than doubling the market size in less than a decade. Some projections are even higher, with the possibility of topping $100 billion. The biggest growth area has been in North America, with the continent contributing 40% of worldwide growth over the last two years. Previously, Europe had seen the biggest increase in the vegan market.
An interesting factor in the growth of vegan food products has been the packaging. Producers of vegan food products are aware of the environmental concerns of their customers, so they have changed their packaging to sustainable, environmentally friendly methods. They are also increasingly placing information on their packaging that details the environmental benefits of vegan foods. Vegan food producers are especially tuned in to the interests and attitudes of consumers and use social media to advertise their products.
The vegan food market is currently wide open. No one or two companies dominate market share, and the market has seen a large number of start-up companies jockeying for position in recent years. Additionally, some large companies like Starbucks and Domino’s are beginning to add vegan alternatives to their menus. It is likely that many other large food sellers will follow suit, making the market even more fragmented.
Vegan food companies are aware of the value of cultural differences in various regions of the world. Products are often tailored to specific markets in a way that appeals to the indigenous culture. This approach has had a great deal of success in the Asian/Pacific market recently.
Challenges to the Growth of the Vegan Food Market
While the growth of the vegan food market has been phenomenal in the last decade, and is expected to experience even greater growth in the years ahead, there are some warning signals out there for wary investors to consider. One barrier to further growth is cost. Despite the large number of companies offering vegan food products, the price of those products still tends to be higher than traditional meat and dairy products. Americans are also notorious for adopting fads for a short time, then abandoning them when the next trend comes along. So far there is no indication that this will be true of vegan products, but the possibility does exist.
Vegan foods do have a different taste and texture as compared to animal-based products. While many consumers enjoy this difference, there are also many who have not yet acquired a taste for vegan foods. The key here is whether or not vegan foods are introduced to young people. If so, there will be a growing population already used to the vegan food experience. If not, there will be resistance to these foods. The large and growing older population is also not as likely to make a lifestyle switch.
The relatively new vegan food market has witnessed a lack of regulatory standardization. Regulations vary widely among countries regarding what can be identified as vegan. This creates a serious challenge for any companies wishing to do business internationally. Because of the current chaotic state of the worldwide regulations, there is fear that there might be bans on specific ingredients in one nation or another that would require significant variation in both preparation and packaging of vegan foods, further increasing costs to the consumer.
The vegan food market is currently experiencing astonishing growth worldwide, but especially in the United States. Most analyses see the market continuing to grow for years to come, but there are significant risks to that growth. As with any newly developing market, investors would be wise to do their research before committing considerable financial resources to the vegan food market.
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