What is the future of the plant-based market?
A new report by IDTechEx forecasting plant-based and cultured meat growth for 2020 – 2030, has outlined what’s coming for plant-based eating and the novel meat substitutes as the human population outgrows the sustainability of current animal farming.
The current state of the market
2019 has been a big year for plant-based meat substitutes. Spurred on by consumer perceptions of healthiness and a global megatrend towards conscious consumptions, sales of plant-based meat grew by almost 40%, compared with 2017.
In the three months after going public, plant-based burger maker Beyond Meat’s share price surged by 500% and rival Impossible Foods secured an additional $300 million in funding.
The report, “Plant-based and Cultured Meat 2020-2030“, projects this growth to continue, with the global plant-based meat market reaching $27 billion by 2030. But what does the immediate future look like for plant-based meat? This article looks at what happened in the plant-based meat industry in 2019 and explores what’s in store for 2020.
Growth spurred by fast food and conscious consumption
Plant-based meat is finally shaking off its reputation as a poor imitation of the real thing.
- Plant-based analog producers like Beyond Meat and Impossible Foods are targeting the 95% of consumers who eat meat rather than just targeting vegetarians.
- These consumers are less likely to compromise on quality for ethical reasons than vegetarians.
- A serious R&D focus on product quality, taste, texture and exact replication of meat, something that was less of a focus in previous generations of meat substitutes.
- Plant-based meat products are viewed as healthy alternatives to their meat counterparts, enabling consumers to enjoy burgers and nuggets guilt-free.
- Another major factor in the surge of interest in plant-based meat has been the partnership with fast-food providers. Products like the Impossible Whopper in Burger King gave consumers the ability to try plant-based meat without having to commit to buying a full pack in a store.
- Consumers love customization in fast food, and plant-based products are viewed as a healthy alternative that lets them continue to enjoy their favorite fast food products. In a trial run at KFC stores in Atlanta, Beyond Meat’s trial chicken analogue sold out in 6 hours. 2020 will likely see fast food stores expand their plant-based meat options, further improving the consumer exposure of the products.
Despite only around 5% of American consumers being vegetarian or vegan, 54% of American consumers want to reduce their meat intake, with health being the biggest driver, closely followed by concerns over the environmental impact and ethics of the meat industry.
Moving into 2020 and beyond, the focus will shift towards making these products healthier.
Major food companies to launch plant-based meat products
The major food and meat companies are not ignoring the rapid rise of plant-based meat.
At the Good Food Conference 2019, meat giants JBS, Tyson Foods and Perdue Farms spoke about rebranding themselves as “protein companies”, with JBS launching a new plant-based meat brand in Brazil and the UK, and Perdue Farms launching Chicken Plus – breaded chicken products blended with vegetable proteins.
US retailer Kroger also announced the launch of its own private label plant-based meat under its Simple Truth brand.
As the industry becomes more competitive and the plant-based meat products themselves become increasingly commoditized, Beyond Meat will struggle. Major food companies such as Tyson Foods and Kroger have more money and better distribution than Beyond Meat and will also charge less for their products.
In 2020, we are likely to see many established food companies launch their own plant-based meat products, which could begin the commoditization of plant-based meat.
Can Beyond Meat take over the beef industry?
Here’s what the Beyond Meat hype is all about.
Artificial meat products created from plant proteins and through culture of animal cells are fast-growing areas that have generated much excitement over the last few years, with sales of plant-based meat products skyrocketing and investments surging.
- Cultured meat startups have raised over $125 million since 2015 and investment grew by 85% between 2017 and 2018.
Pioneering Dutch start-up Mosa Meats claims that a single cell sample can create up to 10,000 kg of cultured meat, with the production process requiring 99% less land and 96% less water than traditional livestock agriculture.
- Cultured meat also faces some serious challenges with cost reduction, scale-up, and regulatory approval, with no cultured meat product having yet reached the market.
- Josh Tetrick, CEO of JUST, has claimed that the company’s cell-based chicken nuggets have been ready for market since 2018, despite still costing around $50 per nugget, and could be released as early as late 2019, pending regulatory approval.
- Other companies are more conservative. Uma Valeti, CEO of Memphis Meats, has emphasized the importance of taking time to get the release right, rather than risking a PR disaster similar to that seen with genetically-modified products.
Despite rapid growth, plant-based meat still has less than 1% market share of the US meat industry and struggles to replicate meat products beyond unstructured products such as burgers, nuggets and ground beef.
The labeling argument
As plant-based substitutes for animal products get more popular and capture more market share, some parts of the meat and dairy industries are fighting back. This involves lobbying for labeling restrictions on terms such as “burger”, “meat” and “milk”, claiming that using them to refer to plant-based products is confusing to customers.
- Earlier this year, the state of Missouri passed a law banning the term “burger” from being used in relation to plant-based meat.
- A similar controversy is taking place in Europe, where EU regulations are restricting the use of certain terms. In 2017, the EU passed laws stating that “milk”, “cheese” and “yogurt” can only be used for products derived from animals, although there are multiple exceptions for “traditionally used terms”, such as “coconut milk” and “nut butter”.
These rulings have been extremely controversial, with opponents claiming consumers are unlikely to confuse plant-based meat with conventional meat and labeling restrictions is an anti-competitive move designed to protect the meat industry.
The Good Food Institute recently filed a lawsuit against the state of Missouri, arguing that the labeling law infringes on the First Amendment. The Good Food Institute has stated that “No one buys Tofurky “Plant-Based” deli slices thinking they were carved from a slaughtered animal any more than people are buying almond milk thinking it was squeezed from a cow’s udder.”
As we move into 2020, these arguments are set to get more intense as both the plant-based and conventional meat industries face threats to their sales.