The Shifting Landscape of Plant-Based Foods: Insights from 2025

In a new report from nonprofit The Good Food Institute (GFI), US retail sales of plant-based meat and dairy have experienced a significant decline in 2025. Conversely, the foodservice sector shows more mixed results, highlighting a complex landscape for the plant-based industry.

Retail Sales Dynamics

According to data from SPINS analyzed by the GFI, retail sales of plant-based meat and seafood plummeted by 10% to $1 billion in 2025, with units down 11%. Meanwhile, sales of plant-based milk saw a modest decrease of 2%, totaling $2.7 billion with unit sales down by 5%.

Despite the overall downturn in dollar sales across most plant-based categories, some areas showed potential for growth. Specifically, sales of plant-based ready-to-drink beverages rose by 12%, yogurt increased by 7%, and sales in protein liquids and powders increased by 2%. Tofu, seitan, and tempeh also saw a slight uptick of 1%.

Foodservice Trends: Mixed Signals

Within the US foodservice channel, declines for plant-based proteins—such as meat analogs and tofu—were less severe, with dollar sales dropping by 7% to $291 million. Volume sales also decreased by 5% among distributors to operators in 2025.

However, certain product categories, like pork analogs and chicken nuggets, remained resilient, showing growth in specific non-commercial segments, particularly in education and healthcare. Plant-based milk experienced notable growth, jumping 16% to $288 million in foodservice, capturing a 13% share of the total milk market.

Investment Landscape: A Shift in Focus

Investment in plant-based companies rebounded slightly in 2025, increasing from $342 million to $450 million. However, this figure is considerably lower than the peak investments seen in previous years. Notably, European firms outpaced North American companies, attracting $216 million compared to $181 million in the US.

The GFI notes a decline in public investment across the U.S. in 2025, a trend that contrasts with global investment growth for new protein sources. As federal investment in plant-based R&D decreased, concerns rose about the U.S. losing its top position as the world’s largest R&D funder to China.

Industry Consolidation and Market Pivots

The plant-based sector witnessed continued consolidation as funding challenges prompted numerous companies to seek acquisitions. In 2025, at least 19 plant-based companies were acquired, reflecting a trend toward rationalization in product portfolios and technology.

Several firms have diversified their offerings beyond traditional alt-meat and alt-dairy products. Beyond Meat, for example, has expanded into the beverage category, while Lasso has applied its technology to snacks, and Impossible Foods has collaborated with Equii to produce high-protein pasta and bread.

Emerging Opportunities in Plant-Based Beverages

Despite a slowdown in the plant-based meat sector, demand for plant-based protein in beverages remains robust. According to Nicole Atchison from PURIS, there is a growing interest in pea protein as an alternative due to rising prices in the whey protein market.

Innovations in solubility and taste have increased the appeal of pea protein, especially in beverages, as companies aim to enhance the overall sensory experience for consumers.

The Global Perspective

Globally, retail sales of plant-based meat and dairy increased by 3% to approximately $28.9 billion in 2025. The plant-based meat and seafood segment alone grew by 8% to $6.6 billion, while plant-based dairy products rose by 2% to reach $22.3 billion.

The GFI emphasizes that despite current challenges, the long-term growth potential for plant-based products remains strong. Key drivers include rising protein demand, climate considerations, and the need for diverse protein sources.

Conclusion

While the plant-based sector faces challenges, particularly in the retail space, there are notable areas of growth and innovation. By leveraging advancements in technology and tapping into evolving consumer preferences, the industry may find new opportunities to thrive.

👉 Read the GFI’s state of the industry reports for more insights on plant-based foods and public policy.

Further Reading

• Beyond Meat bets on beverages as alt meat sales slide 19.7% in Q4
• Taste, price, or bust: Bruce Friedrich’s roadmap for alt meat
• MATR Foods to scale next generation of alt meat via solid-state fermentation
• Heura bags $22.2m from EIB to expand plant-based tech platform
• Collaborative efforts in the plant-based sector signal a mature market