Tofu, Tempeh & Alt-Milk Take the Reins As UK Sales of Plant-Based Meat Slide

Brits are buying fewer meat alternatives out of a fear of ultra-processing, which has made traditional proteins like tofu and tempeh the darlings of the UK plant-based industry.

In March, the UK’s biggest supermarket made a prediction for the “second phase” of the plant-based industry: it was going to be a year for whole foods and whole cuts.

Tesco’s forecast couldn’t have been more on point, with whole-muscle steak maker Juicy Marbles and tempeh producer Better Nature the fastest-growing plant-based brands in the UK this year, running against the tide of a wider decline for meat-free products.

NielsenIQ data for The Grocer’s 2024 Top Products survey shows that the value sales of meatless products dropped by 7% this year, while volumes were down by 8.7%. The fall accompanied losses for the three biggest players in Quorn (-9.5%), Linda McCartney (-17.6%), and Richmond (-5%).

But industry giant Beyond Meat and challenger brands like THIS and La Vie have had a good 2024, as have tofu makers The Tofoo Co and Clearspring. And plant-based milk giants Alpro and Oatly both witnessed gains in the dairy sector, raking in more sales than all other companies bar Arla-owned Cravendale.

It comes months after Circana data crunched by the Good Food Institute Europe found that the UK was among the only two analysed European markets where plant-based sales fell. But while weekly unit sales of meat analogues fell by 7% in early 2024, this was lower than a 12% decrease last year.

It mirrors trends from The Grocer’s corresponding survey last year, when meat-free sales fell by £38.4M – this year, the downturn slowed slightly, reaching £37.9M.

Market saturation has been an industry barrier

Quorn’s losses have been widely documented, with its parent company Marlow Foods (which also owns Cauldron Foods) recording its lowest sales in six years. It recently had a change at the helm, with former Heineken UK managing director David Flochel taking over as CEO.

“We are still very confident that the meat alternatives sector will return to growth over the next couple of years and market predictions reinforce this,” Gill Riley, consumer director at Quorn, told The Grocer. “Sustainability and health influences will become even more prevalent in purchase decisions, and financial pressures will hopefully ease for many shoppers as inflation decreases and people settle into new habits of spending.”

There are two major obstacles identified for the plant-based meat slide. Industry experts put the blame on market saturation. “The initial plant-based meat hype has led to an explosion of companies churning out plant-based products just to lay a stake in the category,” Vladimir Mickovic told the publication.

He is the co-founder of Juicy Marbles, the fastest-growing brand this year. It makes ultra-realistic whole-cut steaks, and witnessed a 616% hike in sales. “Many of these products – if not most – were really, really bad,” he said, adding that the overall decline is a “necessary contraction” that will leave behind only the “good players”.

It echoes the sentiments of Impossible Foods CEO Peter McGuinness, who told Bloomberg in May: “There are a lot of companies that are making food that’s not great food. There’s 200 plant-based companies in America – probably only need three, or two… You’re going to be left with a couple of brands and private labels, and that’s going to be the category.”

UPF concerns have paved the way for tofu

The other main deterrent of plant-based meat is the growing apprehension around ultra-processed foods (UPFs). Misleading narratives have led consumers to associate these foods with nutrition, putting meat alternatives in the firing line.

UPFs make up 57% of the average Brit’s diet, and up to 80% when it comes to children or people with lower incomes. And polling has shown that 53% are in favour of a tax on UPF producers, if some of the revenue is directed to funding fresh fruits and vegetables for low-income families.

“While some shoppers have turned away from meat substitutes for being highly processed, tofu is seen as more natural, giving the likes of The Tofoo Co an edge on rivals,” NielsenIQ senior insight analyst Carol Ratcliffe told The Grocer.

It has been a milestone year for The Tofoo Co, which was acquired by German private equity firm Comitis Capital in August following sustained growth in an otherwise faltering category. The startup is the fourth-largest plant-based brand in terms of sales, which grew by nearly 19% in sales this year, reaching £29M.

David Knibbs, co-founder of the company, spoke to The Grocer about being vindicated that tofu, which was “once shunned by so many for being bland, boring and tasteless, has been accepted into consumers’ fridges as a staple natural alternative protein”.

Indeed, tofu’s presence in the UK expanded in 2023, being purchased by 8.7% of households, with The Tofoo Co a chief contributor to this growth. But the company also makes other traditional plant proteins like seitan and tempeh.

Tempeh, clean-label meat analogues, and alt-milk on the rise

Tempeh’s status elevated this year, thanks in large part to Better Nature, whose sales grew by 476%, albeit from a small base. “We still have such a long way to go and so much more that we want to do,” co-founder and co-CEO Elin Roberts said. “But 2024 has undoubtedly been a brilliant year for us.”

The gut-friendly, protein-packed Indonesian staple has found its own in British households looking for clean-label proteins. As have companies catering to this demand for shorter ingredient lists – La Vie has had a stellar year with big partnerships in Europe, a €25M funding round, and listings at Tesco and Sainsbury’s. Targeting flexitarians, its sales in the UK have nearly doubled, although they’re still in the single-digit millions.

THIS, however, isn’t that far down the list. It raised £20M in a Series C round in June to fuel its drive to commercialise healthier products, and rounds out the top five in The Grocer’s Top Products survey, clocking £21.7M in sales, courtesy of a 32.7% growth.

New CEO Mark Cuddigan hinted at the development of a new vegan superfood ingredient that consumers can use in several ways – it’s said to be like tofu, but with more nutritional value than anything on the market right now.

In the dairy world, meanwhile, Danone-owned Alpro is the second-largest brand in the overall milk sector, with £160.3M in sales after a 2% growth.

Oatly is next on the list with a 1.3% rise to £123.4M, demonstrating the popularity of plant-based milk in the UK. After all, 35% of British households are now buying these products.