PLANT-BASED MARKET BOOM LEADS TO GREAT OPPORTUNITIES
With the plant extracts market expected to grow from $29,238.91 million in 2021 to $47,421.44 million by 2028, the opportunities for new players entering the market are significant and extensive.
Drivers include the increasing and ever-popular trend towards veganism, growing demand for natural ingredients in food and beverages and a growing inclination towards herbal products. The plant-based market is segmented into fruits and vegetables, herbs and spices, flowers, and others.
The herbs and spices segment is expected to hold the largest market share during the forecast period, Research and Markets said. The plant extracts from herbs and spices are gaining popularity across the world due to rising health consciousness among consumers.
The Research and Markets study chimes with data from the EU Smart Protein Project published in July this year. It found that the meat sector of the European plant-based market has exploded in popularity in recent years, reaching an estimated value of €1.4bn in 2020.
The UK’s plant-based market is the fastest growing in Europe
According to the Smart Protein study, the UK is driving the European plant-based market, with sales values peaking at €502 million in 2020, Germany is next at €357 million, closely followed by the Netherlands (€174m).
Looking at consumer demands reveals a strong preference for plant-based refrigerated meat, and more specifically plant-based burger patties and sausages, which in 2020 grew by 51% in the UK and 127% in Germany.
Plant-based milk is another key sector quickly growing in popularity and value across Europe, according to the study. Oat milk is the consumer favourite, showing sales volumes of over 100% in both Germany and the UK, followed by almond and soy milk.
By geography, the plant-based market is primarily segmented into North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South & Central America. In 2021, Asia Pacific held the largest market share. The region has a long history of traditional remedies; instead, there is a high demand for scientifically backed and clinically trialed ingredients.
Hence, the highly competitive nutraceuticals market in Asia Pacific is providing conventional therapies to enhance health and prevent from diseases. Further, China, Japan, Indonesia, India, and other Asian countries are significant markets for flavors and spice extracts. Different flavors and spices are usually used in the food additives industry to extend the shelf-life and enhance taste.
Besides this, turmeric, ginseng, caffein, lettuce, and cucumber extracts are being incorporated in skincare products by the manufacturers. Also, increasing awareness of botanical extracts and their benefits among the population encourages them to adopt natural ingredients, which is fueling the plant extracts market growth across Asia Pacific.
To maximise profitability in the plant-based market, brands must seek to lower the price of plant-based products so that the are competitive with traditional meat products, all the while achieving an indulgent, meat-like taste, Smart Protein said. Several players such as Beyond Meat, who are forecasting that their alternative products will undercut the prices of their conventional animal-based competitors within the next two years, are already making practical steps to respond to these demands.
Following the plant-based trend closely, many large manufacturers of traditional animal-based products have recently begun introducing plant-based alternatives to conventional products, realising the potential of the sector.
Key market players such as JBS, the world’s largest conventional meat company, and Nomad Foods, European frozen food giant, have entered the plant-based space via acquisition and collaboration with the likes of Vivera, Dutch-based alternative company, and BlueNalu, an alternative seafood producer, respectively.
And for German meat producer, Rügenwalder Mühle, revenues from plant-based alternatives exceeded those from traditional cold cuts and sausages in 2020, after only six years of coming to market.
In addition, Foodservice companies have introduced new plant-based products, such as McDonalds’ McPlant burger, and many new food processing companies have expanded their operations, including the likes of fermentation companies, Mycorena and ENOUGH, who are due to open plants in Europe later this year.
According to Research and Markets, this trend is not exclusive to food manufacturers and stakeholders at every stage of the food chain are taking advantage of the new opportunities emerging from the plant-based space.
The trending taste and flavoured drinks coupled with the healthfulness and sustainability drive the market growth for the herbs and spices segment. The beverage manufacturers are widely using spices extracts, including cloves and cinnamon, as they have therapeutic properties, such as antioxidative, anti-inflammatory, antidiabetic, antihypertensive, and antimicrobial activities. Hence, the demand for spices extracts is booming in the healthier beverage industry, which would fuel the growth of the plant extracts market for the herbs & spices segment during the forecast period.
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