Plant-Based and Alternative Protein Market - Global Outlook & Forecast 2024-2029

MARKET INSIGHTS

The alternative protein market was valued at USD 20.04 billion in 2023 and is expected to reach USD 33.17 billion by 2029, growing at a CAGR of 8.76% during the forecast period. The market's expansion is driven by several key factors, such as dietary restrictions and allergies, compelling consumers to seek plant-based alternatives as they provide safe, nutritious options for those unable to consume animal proteins. Additionally, increasing awareness of sustainability and climate change has led consumers to reduce their carbon footprint by choosing plant-based diets, which are generally more environmentally friendly. The perceived health benefits of plant-based diets, including lower risks of chronic diseases, are another significant driver for the plant-based and alternative protein market. Ethical considerations concerning animal welfare are crucial in shifting consumer preferences. Furthermore, Millennials and Gen Z are at the forefront of this dietary shift, prioritizing health, sustainability, and ethical consumption. Government support through favorable policies and initiatives and improved labeling and standards have facilitated market growth by enhancing consumer trust and accessibility. Urbanization and globalization have further spurred market expansion, as urban populations are more exposed to diverse dietary trends and have easier access to plant-based products. These factors propel the global plant-based and alternative protein market towards substantial growth and wider acceptance. Also, in 2023, the offline distribution channel segment accounted for the highest share revenue due to local market penetration, with widespread availability, shelf-life and storage, and established retail presence.

The plant-based and alternative protein market includes a broad range of protein products and ingredients designed to substitute traditional animal-based proteins. This market includes plant-derived proteins, such as those sourced from soy, wheat, pea, rice, potato, and more, used to create various food products, including dairy substitutes and protein-enriched snacks. It also includes innovative protein sources such as cultured or lab-grown meat produced through cellular agriculture and microbial proteins derived from fungi, algae, or bacteria. These alternatives are often sought for their potential health benefits, environmental sustainability, and ethical considerations compared to conventional animal agriculture. The market is driven by growing consumer demand for healthier, environmentally friendly, and cruelty-free food options and is supported by advancements in food technology.

MARKET TRENDS & OPPORTUNITIES

Increasing Demand for Plant-Based Meat

Plant-based proteins are the most popular form of modern alternative protein, widely prevalent in the food industry due to consumer demand for eco-friendly alternatives to animal protein. Lab-grown meat alternatives rapidly expand, with over USD 1.2 billion invested in startups developing cell-cultured meat and seafood. According to ADM Outside VoiceSM global plant protein discovery research, 68% of global consumers are interested in adopting lab-grown meat. This growing interest parallels the plant-based and alternative protein market, indicating a strong consumer shift towards sustainable and innovative protein sources.

Rising Demand for Plant-Based Products for Kids

The rise in the combination of plant-based meat and dairy in children's diets, as evidenced by the global 29% increase and even higher in APAC, is significantly influencing the plant-based and alternative protein market. In 2024, Glanbia plc published an article highlighting the increase in plant-based product consumption among children. This surge is especially prominent in countries like India, China, and Indonesia, where 46%, 31%, and 30% of parents have added more plant-based products to their children’s meals. Several factors drive this trend, including health concerns, increasing availability, and cost-effectiveness. Health motivations likely stem from the growing awareness of the benefits of plant-based diets, such as lower risks of obesity, heart disease, and certain cancers.

INDUSTRY RESTRAINTS

Side Effect of Protein Product

Plant-based protein powders, such as those derived from peas or protein isolates, offer many benefits but can have drawbacks. They can sometimes cause digestive issues like gas, bloating, or discomfort because plant proteins can be harder for the body to break down. Additionally, there is a potential for allergic reactions to ingredients like soy. Also, overreliance on plant-based protein powders may lead to nutritional deficiencies since they often lack the full spectrum of vitamins and minerals found in whole foods. Some powders might also contain additives, artificial sweeteners, or heavy metals, which can negatively affect health if consumed in large quantities. To avoid such issues, it's important to complement protein powders with a variety of whole foods like beans, nuts, and seeds to ensure a balanced intake of essential nutrients.

SEGMENTATION INSIGHTS

INSIGHTS BY PRODUCT

The global alternative protein market by product is segmented into plant-based, cultivated, microbial, and insect-based proteins. In 2023, the plant-based protein market accounted for a significant market share. Additionally, there has been a significant rise in the vegan and vegetarian population worldwide as more people adopt plant-based diets for health, ethical, and environmental reasons. This demographic shift is complemented by increasing awareness of the benefits of plant-based proteins, which are often highly digestible and suitable for individuals with dietary restrictions. The growing community of fitness enthusiasts also contributes to the plant-based protein market growth. These individuals actively seek high-quality protein sources to support muscle growth and recovery, and plant-based proteins are gaining favor for their nutritional profiles.

INSIGHTS BY APPLICATION

The global alternative protein market by applications is segmented into food & beverage, dietary supplements, and animal feed. The food and beverage and dietary supplement segments are the major revenue contributors to the alternative protein market. Increased consumer spending on food and beverages significantly affects this growth. Additionally, there is a growing demand for diverse dining options as consumers seek variety and healthier alternatives. This trend reflects a broader shift towards more conscious eating habits, where consumers prioritize nutritional value, sustainability, and innovative food products. Also, the global rise in obesity rates has increased awareness and proactive measures among individuals seeking weight management solutions, propelling the demand for proteins designed to aid in weight loss and metabolism enhancement.

INSIGHTS BY DISTRIBUTION CHANNEL

In 2023, the offline distribution channel accounted for the highest global alternative protein market share. Several stores strategically located in central parts of various localities attract a considerable customer base. Consumers in different countries prefer purchasing plant-based and alternative protein products from supermarkets and hypermarkets. Furthermore, the online channel is the fastest-growing segment in the distribution channel. These products are made available to consumers through the vendors' online websites and third-party websites such as Amazon, Walmart, and others.

GEOGRAPHICAL ANALYSIS

North America holds the most prominent share of the global alternative protein market, accounting for a global share of over 38% in 2023. North America led in revenue share, propelled by technological advancements and the emergence of new regional startups. The region's market is characterized by strong innovation and a diverse product range, including plant-based burgers, dairy alternatives, and meat substitutes. Companies like ADM and Cargill Incorporated contribute to the mainstream acceptance of these products. Additionally, environmental concerns, particularly the impact of traditional animal farming on climate change, motivate consumers to seek sustainable food options. In the U.S. and Canada, demand was spurred by health and wellness trends and Gen Z & Millennial's preferences for vegan products.

Meanwhile, the European plant-based and alternative protein market is driven by awareness of the benefits of plant-based diets, and an increasing number of people are adopting vegetarian, vegan, and flexitarian diets, leading to higher consumption of plant-based proteins. Germany and the U.K. are the major revenue contributors in the plant-based and alternative protein market due to a cultural shift towards more diverse and inclusive food choices, embracing plant-based options as mainstream rather than niche. Furthermore, APAC is the fastest growing region in the global plant-based and alternative protein market due to growing awareness of health benefits associated with plant-based diets, including reduced risk of chronic diseases like heart disease and diabetes. Concerns over environmental degradation, including deforestation and greenhouse gas emissions associated with animal agriculture, are prompting consumers and governments to seek more sustainable food sources in APAC. Latin America is rich in biodiversity, and there is increasing awareness of the environmental impact of deforestation and habitat loss due to agriculture, including livestock farming. In Brazil and Mexico, economic growth in Latin America enables consumers to afford healthier, premium food options. Further, rapid urbanization in the MEA region is changing dietary habits and increasing demand for convenient and healthier food options, including plant-based and alternative proteins. Many consumers in the MEA region adhere to dietary laws, including halal and kosher requirements, which may favor plant-based proteins as they can be certified compliant more easily than animal-based products.

COMPETITIVE LANDSCAPE

The global plant-based and alternative protein market is highly fragmented, with a notable lack of cohesion across different regions. While a few key players have a broad international presence, most significant participants are focused on the U.S. and Europe. This fragmentation means that the market is characterized by a diverse range of local and regional players, each with varying levels of influence and reach. The major global plant-based and alternative protein market vendors are ADM, Cargill, Incorporated, Glanbia plc, International Flavors & Fragrances Inc., Kerry Group plc, Roquette Frères, and Beyond Meat. These companies have a global presence, at least in three major regions: North America, APAC, and Europe. However, local vendors provide products with similar specifications at lower prices. This has intensified price wars among vendors, and the market is threatened by penetration with low-quality products. The major vendors continually compete for the leading position in the market, with occasional competition coming from other local vendors.