Keto Diet Market Growth Forecasts for 2021-2024
During the past decades, the prevalence of obesity in the United States has grown steadily without showing any signs of slowing down. According to statistics from the CDC, “the prevalence of obesity in the United States has increased substantially since the 1960s. From 1976–1980 to 2007–2008, obesity prevalence increased from 15% to 34% among adults and from 5% to 17% among children and adolescents.” Today, that figure has sadly risen to 42.4% in 2017 – 2018. Given these statistics, the popularity of fat loss diets like the Keto diet should not come as a surprise.
Obesity, of course, is linked to several serious health issues, including chronic heart disease, diabetes, and other metabolic disorders, among the leading causes of death in the United States. It should not come as a surprise that the state of Mississippi, which is the most obese U.S. state, also has the lowest life expectancy of 74.5 years. Similarly, the second most obese state West Virginia has the highest rate of type 2 diabetes in the U.S. at 15.7%.
Calculated in dollars and cents, the medical care costs of obesity are almost $150 billion per year in the United States, over 20 percent of total medical spending in the United States. Obesity is thus seen as one of the primary public health problems in the country. As obesity rises, the link between nutrition and health has never become clearer. A 2018 CDC poll found that “17 percent of Americans said they were on diets during the 2017-2018 survey period, up from 14 percent a decade earlier. Over the same period, obesity rates rose in the U.S. to 42 percent of Americans, up from 34 percent.”
In summary, people want to be healthier and achieve their optimum weights, but many of the diets they follow do not yield tangible results. This issue is the most prominent driving force for the explosion in the popularity of the ketogenic diet.
The keto diet has been used to successfully combat neurodegenerative disorders for over a century. In recent years, however, it has become the most popular and fastest-growing diet in America today. This growth is not fueled by an increase in people looking for innovative ways to treat epilepsy or other neurodegenerative disorders. Instead, the Keto diet has been shown to lead to rapid and effective weight loss.
The Keto diet has been the most “Googled” diet in 2018 and 2020 and shows no sign of letting up. The synthesis of ballooning obesity rates, a population fervently looking for practical ways to lose weight, and a diet that lets people shed pounds quickly has driven Keto to new heights. One recent market report found that the “global ketogenic diet food market is forecasted to reach USD 12.35 billion in 2024, at an estimated compound annual growth rate of 5.3 percent during the forecast period.”
The keto diet’s massive popularity is trending in the market due to its ability to aid in weight-loss goals. However, a more precise analysis of the conditions driving this growth is necessary to understand and forecast the future market direction for the keto diet. Below, we take an in-depth look at the specific, emerging consumer values that are driving the continued and sustained popularity of the keto diet. This analysis will help businesses within the consumer packaged goods (CPG) industry, specifically within the health food and low carb sectors, better position their brands to align with the emerging consumer values driving the growth and popularity of Keto.
Consumer-Led Demand for Low-Carb Diets like the Keto Diet
The drivers of specific dietary tendencies and nutrition trends have historically varied. Recent research states that the transitions in dietary inclinations “may result from differences in socio-demographic factors and other consumer characteristics. Among other factors, including urbanization and food industry marketing, the policies of trade liberalization over the past two decades have implications for health by being a factor in facilitating the ‘nutrition transition’ that is associated with rising rates of obesity and chronic diseases such as cardiovascular disease and cancer.”
Similarly, dietary guidelines published by national governments and even the role of celebrities and influencers inducing popular opinion can also significantly shift nutrition patterns among large percentages of the population.
In the specific case of the keto diet, however, its massive popularity has been chiefly propelled by consumer-led demand for low-carb diets. This has occurred even though leading medical reviews and most significant hospitals aggressively attack the keto diet. One recent study states that “given often-temporary improvements, unfavorable effects on dietary intake, and inadequate data demonstrating long-term safety, for most individuals, the risks of ketogenic diets may outweigh the benefits.”
Nutrition parameters set forth by the government or the mainstream medical community have certainly not been the catalyst for the low-carb craze. Consumers are leading the charge in the rapidly evolving food sector dynamics, precisely the rising demand for healthy, low-carb food products. In the past years, consumer demand for organic, non-GMO, and other health food products that align with their values and dietary tribes has been steadily increasing.
As we have stated above, the ketogenic diet trend that is taking the nation by storm has benefitted from the relatively quick and evident weight loss effects that it provokes. However, other consumer values and standards make this restrictive diet so popular. Many consumers in the keto world choose this diet due to a growing sense of environmental duty and responsibility. Others appreciate the ability of a keto lifestyle to deliver nutritional targets and indulgences.
Below, we look at four of the primary emerging consumer values and standards that will continue to be the foundation for the sustained popularity of the keto diet. These four values and standards are:
- Health and Environmental Benefits of Regenerative Agriculture
- • Plant-Based Lifestyles
- • Functional Foods and Fibers
- • Accurate Quantification of Net Carbohydrates
Health and Environmental Benefits of Regenerative Agriculture
For many years, the meat industry was the main target for attack by both health and environmental organizations, and for a good reason. According to one report, an estimated 90 percent of animals farmed worldwide — and 99 percent of U.S. livestock — are raised on CAFOs (concentrated animal feeding operations), factory farms, or feedlots.” These highly concentrated animal “farms” require an enormous amount of antibiotics, growth hormones, and other inputs that are increasingly coming under attack for their adverse health effects. For example, at least 60 percent of all antibiotics produced and used worldwide are used in animal production for therapeutic and non-therapeutic purposes. The widespread use of these antimicrobial agents in animal husbandry has shown clear links to developing and spreading resistant bacteria.
On the environmental level, factory farms also present serious problems. The air pollution around factory farms and CAFOs has been a significant source of litigation in recent years, as affected neighbors claim that these farms have negatively affected their health by releasing compounds such as hydrogen sulfide, ammonia, and methane. Furthermore, the 450 million tons of manure produced by factory farms in the United States each year presents a serious environmental hazard and often contaminates local watersheds.
Given these adverse effects associated with the factory farming of animals, consumers nationwide have widely accepted the promise of a healthy and environmentally-friendly form of animal agriculture. Regenerative agriculture is a holistic system of farming that prioritizes biodiversity, soil health, watersheds, and ecosystems. In livestock farming, regenerative agriculture emphasizes grass-fed and/or pasture-raised animals, better animal welfare practices, and frequent paddock rotation to regenerate barren soils while potentially sequestering enormous amounts of carbon dioxide from the atmosphere.
The Natural Resources Defense Council (NRDC) report states that “regenerative farming also benefits water quality and quantity. Less chemical and pesticide inputs on regenerative farms and ranches means less chemical pollution impacting ground and surface water, and in turn, a reduction in harmful algal blooms and drinking water pollution.”
The growth of regenerative, pasture-raised meat is slowly beginning to make its way into the mainstream, both of consumer values and significant players within the industry. For example, transnational food companies such as General Mills plan to expand regenerative agriculture practices by one million acres by 2030. The company released a lifecycle assessment with one of its animal suppliers (White Oak Pastures) that shows farms’ net carbon benefit that practices regenerative grazing.
Some ardent supporters of regenerative-raised meat claim that transitioning 10 to 20 percent of agricultural production to best-practice regenerative systems will sequester enough carbon dioxide to reverse climate change. However, academics and other researchers have been less optimistic about the carbon sequestration benefits of pasture-fed farms, claiming that further research is needed.
Consumers are demanding more opportunities to purchase regenerative meat and animal byproducts despite disagreements on the carbon sequestration potential of regenerative agricultural practices. Food brands that cater to people following keto lifestyles might consider searching for providers of meat, dairy, and other animal byproducts that follow regenerative agriculture practices. This space in the health food industry should continue to provide a unique market niche for small farmers and larger multinational food companies.
Will Harris owns White Oak Pastures, one of the nation’s largest and most well-known regenerative farms. Despite his enormous success at raising and marketing pasture-raised and grass-fed animals, he believes that “there will never be a truly regenerative, humane, fair farm that will scale to a national level–much less multinational.” This belief, widely shared amongst regenerative farmers, speaks to the scalability problems associated with regenerative-raised meat, dairy, egg, and poultry products. However, the changing climate conditions are changing how we produce food and how consumers see and react to what they consume.
Increasingly, people are looking for ways to align their diets with their environmental values so that their food choices positively impact both themselves and our environment. This allows them to get to know their local beef, dairy, poultry, and egg producers while lowering the carbon footprint associated with the distance transportation of the food they eat.
Food brands within the keto market should search for ways to include regenerative farmers in their supply lines. By prioritizing regeneratively-raised animal products, these brands can help to create a firm sense of customer loyalty within the rapidly expanding keto diet. Primal Pastures is one strong example of a direct-to-consumer regenerative farm that has leveraged regenerative farming practices to attract and develop a loyal consumer base within the Keto market niche.
Opportunity Gap for Plant-Based Keto Diet CPGs
The keto diet is not just about eating large amounts of meat, eggs, and dairy. As a high-fat and low-carb diet, people following the keto diet can also include many plant-based keto-friendly foods.
The Plant-based Keto diet consists of high-fat plant-based foods, such as nuts, seeds, and certain vegetables, such as avocado. Plant-based fats are polyunsaturated, containing Omega-3 and Omega-6 fatty acids that our bodies need, while generally high in essential vitamins and minerals, such as vitamin E. Flaxseeds, walnuts, avocados, coconut oil, and olive oil are a few examples of keto-friendly fat sources.
Unfortunately, many people throughout the health food world tend to place plant-based and keto diets at the opposite (and opposing) ends of the dietary spectrum. Keto is seen as the “meat-friendly” diet and is often seen as a competitor to plant-based nutrition paradigms. However, many consumers are interested in low-carb diets but want to lower or eliminate their meat consumption.
Thus, there is a growing need for Plant-Based Keto Consumer Packaged Goods (CPG). The successful weight loss effects of the keto diet, alongside the ever-increasing number of individuals adopting plant-based diets worldwide, confirm that this is an unmet market niche.
Consider the following:
- Only 2.5 percent of Americans over 50 consider themselves vegetarian, and 7.5 percent of Millennials and Gen Z have entirely given up meat.
- The younger generations have taken on a vegan diet at nearly double the rate of older Americans.
- The ‘Vegetarian Times Survey’ conducted in 2017 found that around 26 percent of U.S. adults consume less meat weekly compared to 2016 (25 percent).
- According to new figures from the United Nations Food & Agriculture Organization (FAO) released last month, per capita meat consumption fell by 3 percent during the COVID pandemic.
These statistics substantiate that the Plant-Based Keto CPGs are poised to witness significant growth in the coming years owing to growing consumer interest towards low carb high, fat (LCHF) diets and the rising desire for plant-based natural ingredients among health-conscious individuals.
One recent market study confirmed this trend saying that “the market for the plant-based food category was valued at $2,633 million in 2017 and is expected to reach $3,278 million by 2022 across U.S., Europe, Asia Pacific (APAC), Middle East & Africa (MEA) and Latin America.”
Transitioning to an entirely plant-based diet can be challenging, especially when limiting carbs and finding ways to incorporate good sources of plant-based fats. Thus, food brands looking to cater to consumers following plant-based diets should search for ways to provide convenient sources of protein and plant-based fats that can be easily integrated into everyday food choices like snacks or meals.
There is certainly an opportunity to strengthen the plant-based keto market sector by driving demand for plant-based keto foods. Whereas vegetarian diets have often been represented by foods such as tofu and soy, the new generation of plant-based dieters is looking for more meal diversity, ready-to-eat plant foods, and healthy plant-based fats. As Paleo Foundation CEO Karen Pendergrass says, “Never ignore the vegans.”
Some examples of Plant-based Keto foods in the CPG sector include:
- Plant raw
- Love Lava Yogurt
- Octonuts Almond Protein Powder
- Sir Kensington’s line of Keto Certified Vegan Mayo’s
- Avocajoe Plant-based “bulletproof” coffee
Keto Diet CPG Products with Added Fiber
One of the challenges people who transition to a low-carb diet often face is the need for soluble fiber. Soluble fiber plays a vital role in the gut microbiome, attracting water and forming a gel-like substance with food as it is digested. This process slows digestion and helps you feel full faster, an essential element of weight management. Furthermore, adequate fiber intake may also help lower your risk of heart disease, regulate your blood sugar, and help reduce LDL cholesterol.
Because there is no fiber in meat or dairy products, many people on a keto diet may lack fiber. Thus, there is an apparent demand for added fiber in keto products with a low net carb per serving. Keto CPG companies might be able to attract consumers by adding highly viscous, soluble prebiotic fiber at an affordable cost to improve the texture of their products while simultaneously reducing their manufacturing costs. As people search for easily digestible Keto products with lower net carbs and added fibers, this approach could help food brands drive sales growth.
The scientific and industrial interest in prebiotics has grown considerably since the discovery by Gibson and Roberfroid, as they play an essential role in contributing to good gut health. Prebiotic fibers are a specific type of dietary fiber found in plants, animal products, and certain types of grains. Applications for prebiotic fibers range from beverages, cookies, and yogurt to supplements and pharmaceuticals.
One recent market report finds that the “prebiotics market size is set to surpass USD 9.5 billion by 2027…Rising consumer awareness with regards to the health benefits of prebiotics and increasing incorporation of fiber-rich foods in daily diet by consumers should raise the demand for prebiotic ingredients during the predicted period. Moreover, the rising incidence of gastrointestinal ailments among the global population is compelling consumers to look for food products made from nutrient-rich ingredients, which should escalate the demand for prebiotics.”
As the importance of prebiotics becomes more recognized, it is expected to become increasingly popular. Brands catering to people on the keto diet can expect further sales growth and increase customer loyalty by adding prebiotic fibers to their manufactured low-carb products.
One crucial classification of prebiotic fibers for Keto CPG brands to consider adding to their products is food-grade polysaccharide prebiotic fibers, known as hydrocolloids. Prebiotic hydrocolloids are polysaccharides with a linear, unbranched structure, and they are soluble in cold water, e.g., guar gum, locust bean gum (LBG), and xanthan gum.
While previous consumer preferences from 2010 to 2017 showed a dislike for these gums and, as such, often eschewed by CPG brands, data from robust microbiome-focused research has shown that these high molecular weight hydrocolloids prebiotic gums impart tremendous health benefits. Nevertheless, consumer acceptance should constantly be tested first when it comes to substances added to foods for health benefits.
The following are a few of the many advantages of adding fiber into CPG keto products’ formulations:
- • lower the cost of manufacturing on a gram-per-gram basis in comparison with other ingredients.
- • drive down the net carbohydrate content per serving
- • improves protein to total energy ratio, which may increase satiety among individuals with a propensity toward poor dietary choices
- • provides nutritional value that consumers perceive as healthy and wholesome
- • provides viscosity to liquid product, making it thicker or creamier, improving mouth “feel”
- • replaces part of the flour in baked goods like bread and cakes; Increases firmness or body to bakery foods
- • acts as a complete replacement of fat in chilled desserts, lowering the calories without affecting taste or texture
- • improves the nutritional profile of baked goods
- • improves the microbiome profiles for end-consumers
Here are a few examples of products that have added fiber to their formulations to render them high-fiber products that compete with conventional products:
In short, adding fiber to Keto product formulations is an effective strategy to consider to remain competitive during this time of rapid growth in this market.
The Growing Importance of Accurate Net Carbohydrate Quantification
The Keto category should see an increase in products claiming to have low net carbohydrates. However, an essential step in satisfying consumer concerns will be inaccurately quantifying the net carbohydrate content per serving of a keto-positioned product. In recent years, consumer trust in nutrition labels has been wavering, and keto brands can bolster brand loyalty by offering accurate, transparent net carb quantification.
An essential step in satisfying consumer concerns is accurately quantifying the net carbohydrate content per serving. It is currently viewed as one of the most critical nutrients on food labels and the only one that can be manipulated like a budget.
Research shows that the number of low-carbohydrate foods on the market has grown exponentially since 2000. However, there are no regulations or standards for labeling these products to indicate relative carbohydrate content. The U.S. Food and Drug Administration (FDA) has been in the process of clarifying the regulations regarding its expectations for the quantification of net carbohydrates. During an April 2018 webinar, they indicated that any brand not accurately quantifying their products’ net carbohydrate content per serving might be subject to enforcement actions by the FDA.
While some protections for keto claims can be aided by adding third-party Keto Certification to product packaging, other methodologies for quantifying net carbohydrates that are far more accurate than the traditional method has emerged. The conventional method of determining carbohydrate content is by difference. While current procedures for the determination of net carbohydrates vary, many use the following formula:
- Net carbohydrates = (100-protein-fat-water-ash) – sugar alcohols – fiber – polydextrose – glycerin – fructan
Assessing the accuracy of carbohydrate count on food labels using the traditional method is difficult because many types and combinations of carbohydrates and processing can produce inconsistent results for net carbohydrate quantification. Due to the limitations of these methods, food chemists and food scientists developed a new technique that used high-performance anion exchange and a pulsed amperometric detector (HPAEC- PAD) that was found to be accurate, consistent, and inexpensive.
This method, HPAEC-PAD, has shown considerable success with separating and detecting carbohydrates, including higher oligosaccharides that had previously been difficult to quantify. An HPAEC-PAD assay can be performed to accurately quantify net carbohydrates for products by contacting Eurofins and requesting the FS217-1 test.
Food brands that use the best methods for net carb quantification can further cement their standing within the keto market.
In the coming years, the keto diet should continue to grow. Brands within the keto CPG industry can utilize this expected market growth by leveraging the four emerging consumer values and demands explained above.