Continued growth in increasingly fragmented alternative meat industry
Growth in the alternative meat industry shows “no sign” of slowing down, an advisor at Lever VC told Third Bridge Forum.
In the Interview – which began with a look at how the market has become more fragmented – the specialist explained the challenges of improving alternative meat products, the costs of cellular growth against traditional agriculture and the impact alternative meat is having on traditional meat producers.
In recent years, alternative meat has grown across “every major category, and that continues to be strong YoY,” the specialist said. They explained that industry fragmentation was being driven by new companies targeting smaller niches in the market, and that they are increasingly “tailoring products for these people” as they figure out exactly why they are choosing alternative meats.
We heard that health and the environment continue to be the biggest reasons consumers choose alternative meat products, but that taste is becoming increasingly important. Consumers are “making less and less of a sacrifice by choosing these products over their peers,” the specialist said, with the combination of plant-based meat with “little bits of real animal flavour”, such as cultured fats, contributing to improvements in taste.
Increased spending in R&D is improving results in terms of texture and taste but is not yet cost-effective, with cultured meat still pound-for-pound more expensive than animal meat. But costs are decreasing YoY, the specialist said, and long term they expect alternative meat to be cheaper than animal meat, given it cuts the cost of rearing animals – but that won’t happen until the technology making alternative meat is more efficient, the specialist added.
Attracting customers through grocery retail spaces that allow products to promote their branding and “story”, rather than B2B sales is still the preferred method, the specialist said. But partnerships with food services such as Burger King and Starbucks have also been effective, and “there’s a lot more adoption of these products happening than there is any kind of delisting,” which points to a growing trend, the specialist said.
The specialist ended the Interview by saying they were less upbeat about traditional meat, despite sales remaining robust, citing the growing number of traditional meat processors with “venture arms to some degree” in alternative meats, and that few global companies “see traditional meat as the long-term vision” for the industry.
To access all the human insights in Third Bridge Forum’s Alternative Meat Update – Consumer Demand Channel Check & New Entrants, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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