Demand for alternative meat surged during the COVID-19 pandemic, and appears set to rise in popularity, with strong potential for halal-certified products. There may also be potential through the diversification of plant-based alternatives, such as in fish substitutes made from soya, say analysts.
Plant-based meat alternatives have garnered significant media attention since the launch of the Impossible Burger in 2016. It was dismissed in some quarters as a fad that would have limited commercial appeal but sales of meat alternatives have steadily risen.
“There was a bit of a media hype around meat substitutes,” Monique Naval, a Food and Nutrition Senior Analyst at Euromonitor International in Dubai, told Salaam Gateway.
“If we compare the attention it got compared to actual sales it was much smaller than the attention, but due to the (COVID-19) disruption this year we might see a spike in demand moving forward, with proponents saying plant-based foods will remove the question around zoonotic diseases spreading from animals to humans.”
The sector picked up a huge pace recently, with Cailifornia-based Beyond Meat's Beyond Burger hitting supermarket shelves in China after being taken up by foodservices such as Starbucks, KFC and Pizza Hut in the Republic. Another indication of the lucrative future of the segment is Nestle's $103.58 million investment to build a plant-based facility in China.
Euromonitor estimates the global value of meat substitutes at $18.6 billion, and in the Middle East and Africa $176.5 million, with growth at 4% and 5% per year respectively from 2019-2024. Currently over 200 companies produce meat substitute products.
Demand has been particularly strong in the USA, driven in part by meat shortages due to outbreaks of the novel coronavirus at processing plants. Sales of frozen and refrigerated plant-based meat alternatives increased 41% over the past three months, according to data from SPINS, a Chicago-based wellness-focused data technology company.
“Demand has definitely seen an explosion in growth in recent years. Plant-based meat alternative products have increased 27% in the last year alone,” Kasey Farrell, Data Product Manager at SPINS, told Salaam Gateway.
Between 2012 and 2018, plant-based food and beverages – from dairy-free milks and cheeses to meat alternatives – have grown 268% in the United States, according to CCD Innovation, a product development and commercialization agency for the food and beverage industry.
Demand rose this year not just due to meat shortages. “During COVID-19 lockdowns more people cooked at home, and if they were unfamiliar with how to cook meat, chose meat alternatives instead, to not risk consuming raw meat or seafood. That has been a big benefit for many consumers,” said Betty Kaufman, Director of Product Development at CDD Innovation.
Better pricing also helped, with meat more expensive due to shortages.
The question now is whether such demand will continue, with the price of alternative meats higher, said Euromonitor’s Naval.
In January, a kilogram of Beyond Burger cost $26 in the USA, and $24 in Germany, while German supermarket chain Lidl’s imitation burger cost $15 a kilogram, according to Euromonitor figures.
“While the meat shortage is specific to this time, there could be more adoption of plant-based meat due to higher household penetration and trial rates, as it’s got more exposure than before COVID-19. Many carnivores are also re-evaluating whether the value proposition of eating meat right now is worth it. It’ll be interesting to see how many consumers have a long-term adoption of these products, or if it reverts back,” said Kaufman.
Alternative meat producers have been able to tap into the trend in North America and Europe for flexitarian diets, which emphasizes vegetables over meat. The market has become increasingly segmented, with certain protein-rich, plant-based products targeting vegetarians and vegans, and others like Impossible Foods trying to replicate meat to appeal to carnivores.
“The Impossible Burger consumer is a carnivore that wants better for their body and the environment, but is not willing to completely give up meat. Those are the consumers that know what meat tastes like, unlike vegetarians that are not yearning for a bloody burger,” said Kaufman.
The market has also become segmented as certain alternative meats will have limited consumer appeal in particular markets, such as pork and beef in Muslim, Jewish and Hindu communities. Impossible Foods for instance has held back from halal certifying its Impossible Pork burger, and Malaysian food start-up Phuture Meat had to assure the public its plant-based pork was not targeted at Muslims.
There are challenges ahead for plant-based meats to become more popular. “Pricing and availability are the two key factors holding back penetration worldwide. In developing markets, consumers are more likely to prefer fresh meat as it’s cheaper than meat substitutes,” said Naval.
Prices are however expected to come down due to economies of scale, improved technology and heightened competition between producers.
Investment has also flooded into the sector, with Impossible Foods raising $500 million in a funding round in March to develop alternative lamb, goat and fish meat, while in May, Singapore’s plant-based protein company, Growthwell, attracted $8 million funding from the country’s sovereign wealth fund.
But while investors are eyeing up the potential, a further challenge may arise from the touted health and environmental benefits of alternative meats, which typically contain over 20 ingredients, said Naval.
There’s no “pharmaceutical like label list” on products, said CDD Innovation’s Kaufman, who questions how consumers can know if plant-based alternatives are better than real meat if they don’t know what’s in them. Companies are fighting to win consumer trust, she said.
“It is a huge challenge for these plant-based products, because each consumer has a hierarchy of values,” said Kaufman.
It is expected that plant-based brands will increasingly try to match ingredient statements with consumer needs, which is where halal certification could be a plus as there would be greater traceability. “Halal certification would have a positive effect,” said Naval.
Currently, few alternative meat producers have halal certification, such as the Impossible Burger in 2018, in part because of the lengthy ingredients list, as well as not being actual meat that requires ritual slaughtering.
“There are a lot of opportunities for halal-certified plant-based meat alternatives, which brands have not tapped into yet,” said Kaufman.
There may also be potential through the diversification of plant-based alternatives, with significant investment into ethnic meat and fish substitutes made from soya, with tofu particularly popular in China and Japan.
“The Asia Pacific market is the biggest for tofu derivatives, but for meat analogues, the USA, UK and Germany are leading,” said Euromonitor’s Naval.
Halal-certified alternative fish is an expected growth market, as the product would be plant-based and no animal-based feed used. “It could be 100% halal,” said Naval.
With the alternative meat sector becoming increasingly saturated, new food categories are emerging.
“We’re seeing expansion in new categories like seafood and meat snacks where plant-based options have rarely been seen before. SPINS is seeing new plant-based seafood products, with vegan tuna becoming one of the top selling items among shelf stable plant-based meats,” said Farrell.
Products are also emerging with blended plants and meats as an introduction to convert new consumers to purchasing more plant-based options, she added.
“We anticipate the plant-based protein trend to continue and innovation to rise.”
(Reporting by Paul Cochrane; Editing by Emmy Abdul Alim [email protected])
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