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Only a month ago, Oatly, a little plant-based milk startup from a Swedish city of 350,000 people, took the market by storm and launched a $10 billion IPO. Only two short years before this, Beyond, a plant-based burger startup out of California, broke records with one of the biggest IPOs in two decades, at the time.
The message is clear: The growth potential of the plant-based market is exponential and we’re going nowhere but up from here. As we endeavor into this brave new world, many folks are wondering what could come next after vegan burgers and new plant-based milks and how to get in on the craze. Let’s dive deep into the future of plant-based innovation and look at some of the fast-growing — and sometimes surprising — new market categories.
1. Infant and Toddler Nutrition
Despite being worth over $70 billion globally, the infant and toddler formula and nutrition category has seen little disruption since infant formula was first introduced. Now, with increased sustainability concerns and animal welfare concerns, combined with up to 65 percent of the global population unable to digest lactose past infancy, many parents are looking to non-dairy options for their growing babies.
Publicly-traded, Israeli-based Else Nutrition, dubbed “Oatly for Babies,” has emerged as an early leader in the infant nutrition space, while other plant-based formula upstarts like Australia-based Sprout Organic have debuted in recent months. Similarly, the toddler nutrition space continues to grow with U.K.-based Mamamade foods reporting 300 percent growth in sales during the Covid-19 pandemic, while U.S.-based competitors Tiny Organics and Little Spoon continue to scale. As Gen Z and Millennial parents enter parenthood and demand better, healthier products for their little ones, the plant-based infant and toddler market will likely soar.
Apples, mushrooms, pineapples, oh my — that’s just the start of the plant-based leather materials we are seeing emerge. We’ve come a long way since the pleather jackets of the ’90s and, now with the innovation of companies like Pinatex, Mycoworks or Desserto, the soft, supple and durable texture of leather can be achieved through sustainable, plant-based alternatives as vegan leathers are finally hitting the mainstream. This past year, fashion giants like Hermès have debuted their own mushroom-based leather products, which is not surprising as the vegan leather category alone is poised to be worth nearly $90 billion by 2025 with a staggering annual growth rate of nearly 50 percent. With vast applications across automotive, footwear, apparel and furniture, strategic industry partnerships will likely be key to the growth and widespread use of vegan leather.
3. Cosmetics and Skincare
Only a few short years ago, vegan cosmetics were seen as a niche — and perhaps even hippie — product line amidst a sea of corporate giants like L’Oreal and Maybelline. Those days have come and gone with the vegan cosmetics industry now predicted to be worth over $21.4 billion by 2027. Driven by the growing purchasing power of Gen Z and Millennials, mainstay brands like The Body Shop are going vegan, while up and coming brands like The Ordinary and Kinder Beauty continue to surge. Even more interestingly, artificial intelligence (AI) is beginning to make a play in this space, as skincare giant Beiersdorf recently revealed a new AI-driven tool to design custom direct-to-consumer vegan skincare products. As consumers and legislators alike continue to demand cleaner ingredients, both the demand and opportunity in vegan cosmetics and skincare will continue to grow.
4. Seafood Alternatives
If 2020 was the year of plant-based meat, 2021 could be the year of plant-based seafood. While this sleepy category saw early development and funding similar to its plant-based meat counterparts years ago, the category has failed to catch on and take hold — until now. Cited by Whole Foods as one of the trends of the summer, and fueled by a renewed conversation for ocean sustainability after Netflix’s Seaspiracy, plant-based seafood still only comprises 1 percent of the total plant-based foods market in the U.S., yet is expected to grow a staggering 28 percent a year over the next decade. Making waves, a number of established startups in the space closed recent rounds, including Gathered Foods and New Wave Foods, while the world’s largest seafood producer, Thai Union, recently launched its own line of plant-based seafood products.
5. Pet Food
The pet food category is one of the most fascinating emerging trends in the plant-based industry, as younger generations are eager to blend their eco-minded lifestyles with the care of their beloved companion animals. A recent study showed that there is increasing interest among pet owners in the U.S. in plant-based pet food, while industry experts in the U.K. predict a 12 percent compound annual growth rate for the industry over the next eight years. Industry giants such as Nestle and Purina have now launched or acquired their own plant-based lines, as consumers begin to look for more sustainable, safe ingredients for their pets, while plant-based pet food startups such as California-based Wild Earth have earned investment from celebrities like Mark Cuban and U.K.-based THE PACK recently received investment from Leap, a pet care accelerator in the industry.
As we enter into a new economy of post-pandemic life with a growing generation of fresh-faced, eco-conscious consumers, there is no doubt that sustainable, plant-based products will likely rise across all industries. As the vegan market hits its mainstream stride, it won’t be long before this little niche product category becomes a popular consumer choice.