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COVID-19 Causes Spike in Plant-Based Food Sales

It appears COVID-19 has accelerated the demand for plant-based food.

According to the Plant Based Food Association, headquartered in San Francisco, plant-based food sales were up 90% in mid-March when compared to last year. Throughout the four weeks following the peak panic buying stretch, total plant-based foods sales grew at 27%, which is 35% faster than total retail food, it states.

Experts believe the reason for this is twofold: the shortage in animal-based meat supply during the pandemic and concerns that the coronavirus originated from animals, creating awareness and the desire for healthier food choices.

Jeffrey Harris, co-founder of Plant Power Restaurant Group, dba Plant Power Fast Food, said in March, the company saw an immediate drop in sales by 41%. But, once the initial panic of the virus wore off, that number began to steadily increase, up to 59% just weeks ago, he said.

Sales Up 9.42%

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Now, Plant Power, with four corporate locations, including three in San Diego, and three franchised, said overall combined sales are up 9.42% when comparing the Ocean Beach headquarters, Encinitas and Redlands stores so far in June to the same weeks the previous year.

“I’m no expert, but my sense is from inside the plant-based world, this COVID-19 has gotten people thinking again about their choices,” he said. “Some would argue the one theory that the virus came from animals to humans. It’s gotten people thinking again about what they are eating. What they are doing is making new choices in their lives. That may be because they want to be healthier and feel better. There’s a secondary aspect from non-vegans growing their awareness of the impact meat products have on the environment, as well.”

Flexitarians

Harris said 75% to 80% of Plant Power’s target customers are non-vegans and non-vegetarians, better known as flexitarians, or people who mostly eat plant-based foods while allowing meat and other animal products in moderation. He said other major fast food brands like KFC, White Castle and Carl’s Jr. all recently began offering plant-based products, which he deems as a move forward for the plant-based industry altogether.

“It is wonderful for the planet, for our animal friends and for people’s health,” he said.

Harris said Plant Power’s average top line net sales in 2019 was approximately $2.6 million and the average corporate unit EBITDA was about 19%. He said it currently has three corporate units in development as well as a handful of franchise units coming to the market soon to further meet demand.

Good Catch

Todd Putnam, executive vice president of Bumble Bee Seafood Company, which announced a joint distribution deal with Ohio-headquartered, plant-based seafood brand Good Catch (owned by Gathered Foods Corp.) in March, said, these days, its plant-based product sales are up when compared to a year ago.

“The rationale for this growth ranges by segment, but as certain meat-based products were struggling with their supply chains, consumers possibly shifted to plant-based substitutes,” he said. “Good Catch has seen purchases increase during COVID. The crisis has accelerated that consumer behavior for sure, but given the benefits of plant-based products, we believe that consumers will continue to explore this segment.”

Putnam said at Bumble Bee, the belief is that plant-based, Good Catch in particular, has a long trajectory of growth ahead of it. Just in March, according to Good Catch CEO Chris Kerr, the company saw an uptick of 400% as far as revenue is concerned.

Jan Tharp, Bumble Bee CEO, said she noticed the plant-based food category had grown by 30% the last two years. And that’s what led the company to partner with Good Catch in the first place.

“Historically, we’ve been looked at as a commodity shelf stable seafood company with an immense history to draw from,” she said. “But what we want to do is pivot into a company that has more consumer relevance and hits on consumer trends of snacking.”

Sales Jumped 35%

To Tharp’s point, even before the coronavirus hit, from late December to early January, sales of plant-based meat product were up 30% over the same period a year earlier, according to data from Nielsen. From April 12 to May 9, plant-based meat substitutes sales jumped 35%, as per the same report.

The plant-based meat market is estimated to reach $30.92 billion by 2026.

Often touted as a leader in the plant-based meat trend, Impossible Foods, founded in 2011 and based in Redwood City, Calif., said it has experienced a growth in retail demand.

Keely Sulprizio, director of communications at Impossible Foods, with a revenue of approximately $90 million in 2019 according to Inc.com, said two of the biggest growth drivers are the animal-based meat shortage and also the increased availability of plant-based meat products nationwide.

“Shelter-in-place and social distancing restrictions due to COVID-19 altered consumers’ buying and eating habits,” said Sulprizio about Impossible Foods, which is headquartered in Redwood City. To answer the call, Sulprizio said “Impossible Burger is now sold in more than 3,000 grocery stores nationwide. Impossible Sausage was just launched in January and is now available at more than 20,000 restaurants nationwide. We also accelerated the development timeline for our direct-to-consumer e-commerce site. Our intention is to make Impossible Burger available everywhere people shop and eat, including directly from our online store.”

Last week, Burger King introduced the Impossible Croissan’wich at 7,500 outlets nationwide and last week, Starbucks announced its own breakfast sandwich made with Impossible Sausage at its 15,000 stores nationwide, said Sulprizio.

Retail Vertical

Danny O’Malley, president and founder of Before the Butcher Incorporated, a plant-based meat company headquartered in Otay Mesa, said although its food service segment took a hit as a result of the pandemic, its retail vertical, like Impossible Burger, has rapidly increased.

“We had our best January and incredible February this year,” said O’Malley, adding that Before the Butcher’s UNCUT line of four retail products was already in over 1,000 locations then, including Albertsons, Vons, Whole Foods, Mother’s Market and Pavilions. “By the time we hit the middle of March, since we shut down, the food service side dropped off the face of the map. We went from 100% to almost zero on that end. Typically, 80% of our business is on the food service side, which is any place that serves you food. But with restaurants and school cafeterias and such closed, we are pretty much the opposite now: 80% of our business is retail at the moment.”

Animal-Based Virus

Much like Plant Power’s Harris, O’Malley credits this increase to people’s desire to eat healthier. He said people are concerned as to where COVID-19 originated and that it is presumed to be an animal-based virus. As a result, consumers are thinking more about their food choices.

“People are more educated today because they’ve had a couple of months to explore,” he said.

O’Malley said as businesses begin to reopen in the state of California, he has been getting orders from clients on the food service side, which includes restaurants and educational institutions like the Los Angeles Unified School District. On the retail side, he said that number continues to increase week over week, presumably because supermarkets have experienced higher demand for plant-based meat products at their stores.

O’Malley said the goal is to ultimately have the company’s business be 50% retail, 50% food service, at least in the next couple of months. He added that Before the Butcher is currently in the build-out phase of a 20,000 square foot production facility right next to parent company Jensen Meat Co., which acquired it in 2019. The plan is to have all of Before the Butcher’s production take place in San Diego by the end of 2020.

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