Could more Americans be going meatless this Thanksgiving?
According to the U.S. Department of Agriculture, frozen turkey inventories have tumbled in the wake of higher prices and supply chain disruptions, and are about 25% below three-year average volumes.
"Turkey consumption over the last number of years is down across the board — [slipping] about 20% over the last 25 years," Greenleaf Foods COO Adam Grogan told Yahoo Finance during a recent interview. Greenleaf is the plant-based division of Canadian consumer food company Maple Leaf Foods (MLFNF).
Grogan added that Greenleaf is seeing a surge in customer desire for more plant-based offerings overall, explaining that "93% of all new consumers that are coming into our space are actually meat eaters."
Last week, the St. Louis Federal Reserve published a study touting the virtues of a "soybean-based dinner" that, at 66 cents per serving, costs less than half of a Thanksgiving meal featuring poultry, and provides nearly double the protein.
While the central bank came in for heavy derision and ridicule on social media, Grogan suggested they might be on to something.
"We're seeing an explosion of plant-based roasts that are made for the holidays, both for Thanksgiving and the Christmas timeframe. In the last year, it's up about 48%," he added.
Even meatless products hit by COVID, inflation
Forbes estimates 4.5 million plant-based turkeys will be served this holiday as the nation's diet shifts. Currently, about 5% of the U.S. population identify as vegan and/or vegetarian while 25% say they are 'flexitarians' (a cross between full vegan and vegetarian with the ability to occasionally enjoy traditional meat.)
Price pressures have also impacted demand. Turkey prices are up nearly 25% compared to last year, and nearly 50% over the five-year average through September, according to a recent Wells Fargo analysis of USDA data.
Still, plant-based companies are not immune to inflation or COVID-related challenges. Greenleaf Foods saw 6.6% fewer sales in the most recent quarter compared to 2020. In the previous quarter, the division reported a year-over-year sales drop of 20.6%.
Meanwhile, Beyond Meat (BYND) cut its fourth quarter revenue guidance after a disappointing earnings miss as weaker grocery sales and higher prices dampened demand.
"Meat costs across the board are up quite substantially, around 12%. For us in plant-based, obviously we're also facing a number of cost increases — combination of labor and input costs," Grogan noted.
The executive went on to explain that the company is "evaluating" what else could have contributed to the sales dip.
"Over the last couple of years, the category has reached a year-over-year sales growth of 100% since 2019," he said.
"And while many other categories have had what I would deem to be a 'COVID bump'...the plant-based category has stayed relatively stable at an elevated level...so a slight decrease in category consumption [was] to be expected," Grogan added.
We have a whole new generation of consumers that are interested in mixing their plates with both animal-based proteins as well as plant-based proteins.Greenleaf Foods COO Adam Grogan
U.S. plant-based food sales grew two times as fast as animal-based food sales in 2020, totaling $7 billion, according to the latest Good Food Institute industry report.
Within that category, plant-based meat crossed the billion-dollar mark and grew 45% in dollar sales from 2019.
However, labor shortages at retailers and food services have "really stymied some of the innovation and growth that we were seeing prior to the pandemic."
Overall, Grogan believes that consumer interest will lead the plant-based comeback.
"We have a whole new generation of consumers that are interested in mixing their plates with both animal-based proteins as well as plant-based proteins," he told Yahoo Finance.
Furthermore, despite labor and supply chain challenges, the executive revealed that "plant-based has fared a little bit better relative to animal-based protein" due to greater concerns over health, wellness and the environment (The meat and dairy industry is responsible for about 14.5% of greenhouse gas emissions, according to the UN's Food and Agricultural Organization).
"There's incredible tailwind here. We'll see how that progresses over the next couple of years...But we're really excited about the future," he concluded.
Alexandra is a Producer & Entertainment Correspondent at Yahoo Finance. Follow her on Twitter @alliecanal8193