The shape of plant-based trends to come

The global meat market is worth USD 2tn, explained a former C-level executive from Impossible Foods Inc, with plant-based alternatives making up only a fraction of this. Although the faux-meat category is growing faster than the former, the small base means that it is far outstripped in absolute terms, added a former C-level executive from Tyson Ventures. But that doesn’t mean there aren’t significant ventures involved in the alternative meat industry. Investments in 2019 stood at USD 824m¹https://www.foodmanufacturing.com/capital-investment/news/21133576/q1-investment-in-alternative-protein-was-higher-than-all-of-2019 – and this year has already eclipsed that amount, with USD 1.5bn²https://techcrunch.com/2020/09/17/alternative-protein-companies-have-raised-a-whopping-1-5-billion-through-july-of-this-year/ raised in January-July 2020.

Vegans and vegetarians make up a minority of populations; a former C-level executive from Meatless Farms Inc estimated these figures at around 1-2% and 10-15% respectively. However, “the bigger business opportunity comes from this term flexitarian or meat reducers” – in the UK alone, there are “around 22 million flexitarians, so maybe a third of the population consciously trying to reduce meat as part of their lifestyle.” Meanwhile, in the US, 23% of people had cut their meat consumption in the prior year, according to a Gallup poll conducted in late 2019.

While numerous drivers are pushing people towards plant-based food – from climate change to animal welfare – COVID-19 has also played a part. The pandemic altered consumer behaviour in myriad ways this year, to the benefit of plant-based food. In the US, sales of alternative protein skyrocketed by 264%³https://www.theverge.com/2020/5/15/21259997/plant-based-meat-coronavirus-impossible-beyond in the nine weeks ending 2 May. While this could be interpreted as being intertwined with the general upward trajectory of interest in vegan diets, some of our Interviews unveiled how people’s appetite for meat has changed. 

One major influence, and an enduring image of life this year, was food stockpiling. Following lockdown “[there was] a run on protein and stores need to start limiting the amount of protein that people can buy. That drives people to alternative proteins and say, ‘Okay, well, if I can’t get my animal protein but I need to feed my family, I’m going to turn to whatever alternatives are out there’”, commented the Tyson Ventures executive. Added to this, another specialist said that families sheltering together could have accelerated interest in flexitarianism: “a lot of people go off to university and maybe try vegetarianism or veganism, so coming back in and just [having] that dialogue around the products”. 

Moreover, two specialists pointed to the fact that slaughterhouses have acted as virus hotspots, which has received major media attention. “It is not a matter that meat processing facilities are more susceptible to the spread of a coronavirus than other facilities are. It is a matter of vectoring the virus. It is a matter of environment. It’s a matter of filtering of air, distancing, etc. We consume a lot of protein in the US”, said one specialist. However, as pandemics have been linked with meat consumption, this news could still taint consumers’ perceptions.

With COVID-19 hitting economies hard, what started out as a boost for plant-based food could transform into a burden with concern mounting about unemployment and prolonged downturns across the world. “It’s all going to be about the amount of time that these unemployment [rates] stay high. If it’s for a prolonged period of time, I think the plant-based folks could be in trouble”, said the former Tyson executive. Alternative meats are generally significantly more expensive than their traditional counterparts. For example, Beyond Meat retails at USD 11 per pound of patties, compared with around USD 8.50 for the same amount of organic ground beef. Pricing within the traditional meat category can also come down more during recessions, as there is more of a margin to play around with, especially with retail value-added products, according to one specialist. Whatever happens with employment, though, a bounceback is expected once people have more disposable income: “people are going to be price-sensitive in the short term, in the mid term. I think in the long term, they will be looking for alternatives to meat.”

Indeed, in future, it is possible that meat alternative prices could come down. The Impossible Foods executive commented that as “it’s really heavily technology-based, the scale really drives cost, because I think the ingredients don’t represent as large of a portion of the total cost of the product as do other things like manufacturing… so you can drive scale faster with efficiency and volume.” And, consequently, if the price comes down “it becomes more available to broader populations with incomes that are not in the middle to upper-middle class.” 

Looking forward again, different kinds of alternative meat are also likely to become more mainstream. At the moment, faux beef patties are the “Holy Grail… because of the size of the market”, said one specialist, but fake pork is an emerging trend. “If you go to Asia, of course the leading meat there is pork, so you’re starting to see some of the players, even Impossible… look at producing pork meat alternatives.” Impossible Pork debuted at the CES trade show in January this year and is designed to replace ground pork (this is separate from the Impossible Sausage product), but is still being developed and not available in stores yet. Another example is Hong Kong-based Omnipork, which was founded in 2018 and offers products for both consumers and foodservice. The company launched its products in China and has also partnered with ALDI on ready meals, which are available in Shanghai. Seafood alternatives also have the potential to make waves. As one specialist mentions: “80% of seafood in the US is consumed out of the home just because home-based cooks who aren’t professional chefs are intimidated by seafood. It’s not an easy protein to cook.” 

COVID-19 has propelled criticism of the meat industry into the spotlight, adding to the other influences pushing people to forgo animal products. With awareness and acceptance continuing to grow, it’s safe to say that the move to plant-based diets is not going away. “It’s no longer a consumer fad… It is a real, fundamental consumer trend.”