KANSAS CITY — Now that the irrational exuberance surrounding the potential of the plant-based meat alternative market has vaporized, focus must shift to creating realistic growth expectations for the category. While the days of deci-billion-dollar valuations for some meat alternative manufacturers are long gone, there is potential for those business leaders with more realistic expectations.

Plant-based meat sales peaked in 2020 when consumers had more discretionary income and were interested in broadening their food spend in the wake of pandemic-related food shortages, according to a report by the financial services company CoBank. But fewer than half of Americans who tried the products at the time repeated their purchase, per data from the market researcher Mintel.

One reason consumers didn’t make repeat purchases is, despite marketing claims to the contrary, people noticed a taste difference between plant-based alternatives and similar animal-based applications. Consumer research by 84.51, the market research arm of Kroger Co., that was presented earlier this year at the Natural Products Expo West tradeshow identified taste, texture and quality as unmet needs in plant-based meat applications.

Other issues leading to decreased demand have been consumer concerns about some ingredients used in formulations and the health benefits, if any, of plant-based products. Unfamiliar ingredient lists and high sodium levels have undercut many shoppers’ perceptions about the benefits of plant-based alternatives.

Sales of meat alternatives have fallen steadily since 2021 and more sharply over the last year. Volume sales dropped 21% for the 52-week period ended July 2, 2023, according to Circana. The trend is not surprising given the impact inflation has had on the spending habits of some consumers. As people have become more cost conscious, they have tended to prioritize value over experimentation.

Key to a higher consumer conversion rate will be a greater diversity of formats for plant-based meats, an area where the category has made some progress over the past year, according to CoBank. Though still dominated by frozen and refrigerated formats, companies have made considerable investments in developing shelf-stable varieties, which grew by 82% in 2022.

The environmental benefit of plant-based meat alternatives is another potential driver of consumer interest, particularly among younger demographics. However, the category appears to be at a point where such environmental benefits from plant-based solutions are a lower priority than taste, price and convenience for many consumers.

The hockey-stick growth trajectory forecast by some investors, marketers and analysts has not come to pass during the past five years. What has occurred post-pandemic is the market for plant-based meat alternatives has reverted to the category’s long-standing moderate growth trajectory.

Barring the introduction of a truly disruptive product or ingredient technology, the growth that longtime brands like Boca, Gardein, Morningstar Farms and Tofurky have experienced over the years should be a guide. There is growth potential, and innovation has the potential to gradually lift the category.

The day may come when plant-based meat alternatives successfully achieve parity with conventional applications when it comes to taste and price. That day isn’t here yet, and business executives must temper expectations until that day arrives.