Sales of plant-based products are skyrocketing during the Covid-19 pandemic.
According to a report published by Nielsen, demand for plant-based food has increased 278 per cent since this time last year.
Two factors are driving the alternatives sales during that time: meat and dairy shortages and the growing awareness of the environmental damage caused by animal farming.
The coronavirus crisis is causing trouble in the food supply chain. The Covid-19 outbreaks among workers forced the closing of numerous meat processing facilities, causing shortages of beef and pork at grocery shops across the country.
In April, Tyson Foods, one of the largest meat producers in the world, warned "the food supply chain is breaking" in a full-page ad published in main newspapers including the New York Times.
According to the Agriculture Department, US beef production went down nearly 25%, and pork production went down 15% compared to last year.
That situation created a huge business opportunity for plant-based alternatives producers.
World's biggest plant-based meat companies Beyond Meat and Impossible Foods have seen surges in sales due to a shortage of meat during the pandemic.
In March, as the coronavirus started breaking the supply chain, Beyond Meat CEO Ethan Brown said, "This is a time of hyper-growth. We are doing everything we can right now to grab as much market share as we possibly can."
Beyond Meat reported its revenues increased 141 per cent compared to 2019, ($97 million, compared to $40 million in the first quarter in 2019). Market Watch reported that Beyond's shares have spiked 85 per cent since March 18 and retailers are requesting expedited deliveries of its product.
"During this unprecedented time, we remain steadfast in our resolve to continue to provide great-tasting plant-based meats to consumers, to solidify our support to our retail and foodservice customers, and to continue to lead the global plant-based meat movement," Brown said in a statement.
Beyond Meat estimates that its products have reached just 3.6 per cent of US households.
The company already sells its products in Singapore, Hong Kong and Taiwan. This year, it will open a production facility in Asia to launch in main China which is the key market for meat alternative products. Last month, Beyond signed a massive deal with Starbucks to supply coffee shops in China with their meat-free products.
Beyond's main competitor Impossible Foods had closed a $500m funding round just before coronavirus hit and has also reported increase in sales during the pandemic.
"Our existing retail partners have achieved record sales of Impossible Burger in recent weeks," said the company's president, Dennis Woodside, in a statement. "We expect our retail footprint to expand more than 50-fold in 2020 alone, and we are moving as quickly as possible to expand with additional outlets and in more retail channels."
During the crisis, the company accelerated its retail expansion launching its products in additional 1,700 Kroger grocery stores around the US. This will mark a 500 per cent increase in grocery stores selling the Impossible Burger.
The brand is also releasing a cookbook for home chefs.
"We've always planned on a dramatic surge in retail for 2020 — but with more and more Americans' eating at home under 'shelter-in-place' orders, we've received requests from retailers and consumers alike," Woodside said.
"More Americans are dining in and that's what's driving the acceleration in retail grocery store sales. March was by far a record for retail production for us, and April blew past it by a big margin," Rachel Konrad, Impossible's chief communication officer, added.
Plant-based meat's production process somewhat protects it from the damages of the pandemic. The supply chain is still unaffected by factories shutdowns. The workers are not contracting Covid-19 because they do not work shoulder to shoulder as it is in meat processing facilities.
Consumers are also opting for more plant-based products concerned about the meat safety as it is believed that coronavirus has originated from a wet market in a Chinese Wuhan where animals are slaughtered for consumption.
“We knew that people were turning towards plant based for a number of reasons but mostly for health reasons. I think now we can safely say that’s still the number one driver, but there might also be the perception of meat shortages,” said Michele Simon, executive director at Plant Based Foods Association.
According to Simon, all of the association’s members are seeing theright now.
The plant-based industry is optimistic that the recent growth in sales will become the norm when the pandemic ends.