Tesco, the UK's largest supermarket chain, has recently signalled a retreat from its ambitious target of achieving a 300% growth in plant-based meat sales by the end of 2025. This goal, initially established in 2020 as part of Tesco's sustainability strategy, was centred on diminishing the environmental impact of the average UK shopping basket. However, the company has expressed concerns over slowing sales in the plant-based meat category, which have been exacerbated by rising living costs and changing consumer preferences.

Upon reviewing its latest sustainability report, Tesco revealed that while there had been an initial surge in sales of plant-based meats—up 130% from 2018 figures by the end of 2021—this growth has significantly diminished, tapering to 94% by 2024. Consumer enthusiasm appears to have waned as issues surrounding product quality and pricing come to the forefront. The supermarket has noted that many of its customers are now gravitating towards more natural, unprocessed alternatives, including whole foods like lentils, chickpeas, and vegetables. This shift is starkly illustrated by the rise of ‘veg-led’ dishes, which now account for 40% of all plant-based sales.

The decline in interest in plant-based meats isn't an isolated phenomenon. Notably, Quorn, one of the leading brands in meat alternatives, has faced similar challenges. As reported, Quorn's parent company, Marlow Foods, recorded a £15.5 million loss last year primarily due to shrinking sales in supermarkets. With a decrease in volume sold across its product lines, the company has had to implement restructuring measures, including job cuts. This situation is mirrored by Beyond Meat in the US, which has also seen its stock plummet and cut its annual forecasts amidst ongoing losses and reduced demand. The economic environment, reflecting high inflation and budget constraints, has compounded these challenges, making plant-based options less attractive in a competitive market dominated by lower-cost meat alternatives.

The struggles of these companies are indicative of a broader trend affecting the plant-based food sector. Many consumers, facing tightening budgets, are re-evaluating their shopping habits. Instead of seeking meat substitutes, they are opting for traditional, less expensive meat products or simply choosing to prepare meat-free meals that do not rely on pre-packaged alternatives. Nathan Ward, a business unit director at Kantar, emphasised that the trend is not about a complete abandonment of plant-based eating; rather, it’s a transition toward simpler, more cost-effective vegetarian options.

This shift has had a ripple effect across the industry. Unilever's plant-based brand, the Vegetarian Butcher, has reportedly struggled to maintain market interest, prompting the company to consider divesting the brand. The contraction of the plant-based meat sector has led to a 10.9% reduction in meat alternative product lines across major retailers, with analysts advising brands to focus on streamlining their offerings to remain competitive. As consumers increasingly prefer fresh produce over ultra-processed items, many major food companies are reassessing their positions within this rapidly evolving marketplace.

The implications for Tesco's growth target are stark. With the latest reports indicating burgeoning sales in non-alternative plant-based products combined with an overall decline in the obsession with meat substitutes, the supermarket chain may need to pivot its focus if it hopes to retain relevance in a market where consumer preferences are shifting conspicuously. This recalibration, paired with ongoing economic pressures, poses a fresh challenge for companies aiming to fulfil sustainability commitments amidst varying consumer appetites.


Reference Map

  1. Paragraphs 1, 2, 3, 4, 5
  2. Paragraphs 2, 4
  3. Paragraph 4
  4. Paragraphs 3, 5
  5. Paragraph 6
  6. Paragraph 4
  7. Paragraphs 5, 6

Source: Noah Wire Services