By late 2019, the pace of investments in plant-based beverages has accelerated dramatically and is expected to continue into 2020. Plant-based beverages have become a hot category for growth that has seen increased interest from angel, venture capital, private equity, and strategic investors. Further plant-based category segmentation has opened up more new product opportunities and is attracting many new entrants.
Whether it’s coconut water; soy, nut, oat, or pea milk; ready-to-drink (RTD) coffee with dairy-free milk; or plant-based protein drinks, the success of these beverages is being driven by consumer preferences for sustainability which is driving new product innovation and investment in this burgeoning plant-based consumer landscape.
The focus on plant-based products underscores the fact that consumers feel increasingly compelled to make healthier and more ethical food choices. While the number of vegetarians has not grown by more than 1 percent a year since 2010, more people are becoming flexitarians, meaning they are reducing their consumption of meat or processed foods, and are increasing consumption of plant-based foods.
Plant-based beverages are following the lead of the plant-based alternative meat market, which is booming with Tyson Foods Inc., Hormel Foods Corp, Conagra Brands Inc. and Kroger all gaining share in the plantbased, alternative meat category. Additionally, Beyond Meat4 has been by far the best performing new issue, signaling that the disruption in the U.S. meat market is well underway.