BUCKINGHAMSHIRE, ENGLAND — Decreased demand continues to be a hurdle for the manufacturers of plant-based alternative products, said Marcel Goldenberg, chief market reporting officer for Mintec Ltd., a market analytics company.

Mr. Goldenberg cited inflationary pressures as one of the primary factors in the lessened demand, with consumers shifting away from plant-based foods amid higher grocery store prices. Shoppers still see plant-based items as luxury alternatives, not necessities, making them a prime candidate for budget-saving cuts. There may be some improvement as these pressures are relieved, however, as Mr. Goldenberg expects consumers to return to the category when inflation begins to slow.

Taste and texture issues also have continued to be a key factor for consumers, with research from 84.51° and the Plant Based Foods Association finding that taste, texture and quality were the largest unmet needs for consumers across plant-based meat and dairy products, particularly cheese.

Mr. Goldenberg attributed some of these issues to retailers overstocking lower-priced and lower-quality plant-based products in response to initial high levels of demand, potentially turning away consumers after negative first experiences.

“There’s so much on the shelf because every retailer thinks, ‘Oh my goodness this is the next big thing, we need to push this,’” he said. “They just signed off every product that was being pitched to them and it actually didn’t taste that good. The flexitarians went and bought it, and they don’t come back to buy it again.”

Another factor behind the decreased demand has been consumers’ concerns about the ingredients and healthiness of plant-based products. Unfamiliar ingredient lists and high sodium levels have contradicted many shoppers’ initial beliefs about the benefits of plant-based foods, resulting in skepticism about plant-based health claims.

“Ultimately what consumers want is they want to understand more about what they eat, where it comes from,” said Rob Dongoski, founder of EY’s Global Agribusiness Center. “People are reading the back of the package now more than ever, and it's one thing to see all these healthy for you claims on the front, but you flip it over on the back and it feels highly processed.”

Mr. Goldenberg also suggested that some of the change in demand may simply be the market settling into a more normal period of growth. Consumers are likely no longer seeking novel experiences with plant-based products, and the early exponential growth in the category may have led to unrealistic projections about how many consumers would permanently convert a portion of their diet to plant-based items.

“You had this perfect storm initially where people were cooking at home and they went to the supermarket and said, ‘Hey, why don’t I try this stuff?’” Mr. Goldenberg said. “You see all of those upticks and that’s where numbers can also be misleading. I think we are coming more toward now understanding that was just people trying it.”

Amid these difficulties, Mr. Goldenberg noted that the plant-based future isn’t bleak and pointed to how plant-based producers are looking to innovate in the space. For instance, some companies are looking to improve ingredient concerns by developing clean label products with shorter, recognizable ingredient decks. A number of food technology companies have developed plant-based texturizers to help mimic the mouthfeel of their traditional counterparts, such as Motif Foodworks’ Appetex hydrogel.

Manufacturers also are reexamining what types of plant-based products might have an easier time reaching cost parity with their conventional alternatives. Equalizing the price points between beef and plant-based patties is still challenging, due in part to factors like energy costs in extracting proteins and other inputs, resulting in some companies looking at products where meat and dairy ingredients are not prominently featured. Examples include dairy powders and concentrates, like Butter Buds Inc.’s concentrate that reduces the use of lipidized milk and cream, and alternative bases for meat sauces like Bolognese.

“We can still make these products that have pea protein and stuff, but maybe it’s more in areas where we don’t necessarily need the beef portion,” Mr. Goldenberg said. “It’s another space where I can see a little bit more growth in us as a consumer and not minding as much if it’s made out of pea or soy.”