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Plant-based meat alternatives

Introduction to plant-based meat alternatives category

Plant-based meat alternatives is an exciting category at the moment. Consumers are moving towards a flexitarian diet (consuming less meat). In addition to health benefits, consumers are changing their diets for products that are ‘good for the planet’. Major retailers and QSR (Quick Serve Restaurants) are responding by ranging more plant-based meat alternatives to meet this demand. For example, Coles ranging Sunfed “Chicken Free Chicken”, made from yellow peas (news.com.au), to Hungry Jacks trialling “Kinda Meat Burger” in ACT and Goulburn (Facebook). Forbes even predicts that “embrace a plant-based lifestyle” will go mainstream in 2019.

Facebook Post for Hungry Jack’s plant-based meat alternative burger

This blog provides an introduction to the plant-based meat alternatives category. The blog focuses on why manufacturers and retailers are investing in this category and consumer insights.

Market Size

As reported by Forbes, Euromonitor research highlights that U.S. meat substitute sales, in the packaged food industry, have risen an average of 15.4% between 2013 and 2018. This sales growth suggests consumers like the new product ranges being offered. The category is growing from a small base and still accounts for less than 5% of processed meat sales.

Allied Market Research estimates that the global meat substitute market was worth $4,175M in 2017 and is expected to grow to $7,459M by 2025. Frozen meat substitutes had a share of 77.2% of the category, in 2017.

There are a lot of predictions of major growth for the category. For example, CNBC reported that Barclays predicts the alternative meat could reach $140B in the next 10 years. This would equate to 10% share of the current $1.4T global meat industry.

These statistics highlight the sales growth (from a small base) being achieved in the plant-based meat alternative category. Many are predicting long term strong sales growth from this category.

“Plant-based meat alternatives could achieve a 15% share of both of these markets. That means the opportunity here could be in the range of $30 billion just in the US”.

Sean Connolly, Conagra President and CEO

Source: Forbes

The health problem

WHO (World Health Organisation) research has highlighted “an escalating global epidemic of overweight and obesity – ‘globesity’ – is taking over many parts of the world.” WHO estimates the number of obese adults worldwide increased from 200 million in 1995 to over 300 million in 2000. In response the Australian Federal Government added obesity to its list of national health priorities in April 2008. As reported by The ABC (2014) Australias’ obesity rate is “climbing faster than anywhere else in the world”. The recent, 2017/18, ABS National Health Survey estimates that 67.0% of Australian adults are overweight or obese. The Australian Federal Government has launched initiatives, such as the Health Star Rating for packaged food in 2014, to try to decrease the number of overweight / obese people in Australia. These statistics highlight the size of the health problem in Australia.

Consumers want healthier diets

Not surprisingly consumer research has highlighted Australian consumers are changing their diets to be healthier (good for you). Some consumer research highlighting this trend includes:

“Australians have a simple approach to health with most aiming to eat more natural foods, fresh and unprocessed foods”

Source: Ipsos 2016: Food Chats

“Australians have also become more health-conscious with the food they eat and many have been eating more healthy food over the past decade.”

85.7% respondents agree or strongly agree to: “I try to make health conscious decisions regarding the foods I eat.”

Source: Choosi Modern Food Trends 2017

Vegetarian / flexitarian diet

Eating a vegetarian diet is not a new concept. Historians suggests religions such as Jain and Buddhist have supported the principle of nonviolence towards animals since 6th century BC (Wikipedia).

One of the healthy changes Australian consumers have made to their diets recently, has been to decrease the amount of meat eaten. They are more likely to follow a flexitarian or vegetarian diet. As highlighted by Roy Morgan research (The slow but steady rise of vegetarianism in Australia 2016):

“between 2012 and 2016, the number of Australian adults whose diet is all or almost all vegetarian has risen from 1.7 million to almost 2.1 million.”

Norman Morris, Industry Communications Director, Roy Morgan also noted:

“almost 9.9 million Aussie adults (53.4%) agree that they’re eating less red meat these days.”

Today many consumers are choosing to eat less meat (flexitarian diet) or adopt a vegetarian diet. As outlined by Vegetarian Times a vegetarian diet can have numerous health benefits, is ethical (not killing animals) and minimises the impact on the environment. Nielsen (US) research has highlighted

“that nearly all (98%) meat alternative buyers also purchase meat, and they do so more than the average meat buyer ($486 vs. $478 per year)”

A major reason why manufacturers and retailers are investing in plant-based meat alternatives is due to consumers changing diets. This change in diets is creating strong sales growth (off a small base) for the category.

Responsible / sustainable food production

Consumer demands are changing to prefer products that are ‘good for the planet’. Some of the research highlighting this change in consumer demand includes:

“Furthermore, social, environmental and animal rights issues, as well as ‘fair trade’ principles, also influence the food choices that Australians make.”

Source: Choosi Modern Food Trends 2017

“In fact, a whopping 81% of global respondents feel strongly that companies should help improve the environment. This passion for corporate social responsibility is shared across gender lines and generations. Millennials, Gen Z and Gen X are the most supportive, but their older counterparts aren’t far behind.”

Source: Nielsen Global Consumers Seek Companies That Care About Environmental Issues (2018)

“In 2019, support of and demand for more corporate sustainability programmes is likely to grow as consumers come to understand the various roles required to get closer to achieving a truly circular food and drink economy. These sustainability efforts will include not only improving access to recycling, but incentivising consumers to recycle packaging and offering upcycled goods.”

Source: Mintel Global Food and Drinks Trends 2019 report

Manufacturers and retailers are responding to this consumer demand by offering plant-based meat alternatives. Some research highlighting the environmental benefits of plant-based meat alternatives includes:

Based on a comparative assessment of the current Beyond Burger production system with the 2017 beef LCA by Thoma et al, the Beyond Burger generates 90% less greenhouse gas emissions, requires 46% less energy, has >99% less impact on water scarcity and 93% less impact on land use than a ¼ pound of U.S. beef.

Source: Beyond Burger

“While the pollution generated to produce a typical 8-ounce steak is equivalent to driving a small car for about 29 miles, replacing that steak with the same weight of a vegetarian meat substitute is like driving the same car just three miles.”

Source: Sciencedaily

The second reason why manufacturers and retailers are investing in plant-based meat alternatives is due to consumers preference for products that are ‘good for the planet’.

Potential issues with plant-based meat alternatives

Historically plant-based meat alternatives (soy, tofu based) did not deliver the same experience as eating meat. Newer plant-based meat alternatives claim to have improved the taste and texture of the product. The sales results suggest consumers prefer the newer products. However, the range of plant-based meat alternatives is still limited vs meat products.

“In countries like the US or UK, a plant-based burger will do,” says Yuki Hanyu, CEO of ShojinMeat in Japan. “But in countries like France, Japan and China, it can’t really stimulate meat dishes like Peking duck or yakitori.”

Source: World Economic Forum

Another issue with plant-based meat alternatives is that some ingredients are not healthy. For example, research by Berkeley Wellness, suggests that some servings have “more than 400 milligrams of sodium”. Similarly, Action on Salt, found that “28% of products surveyed are higher in salt than their MAXIMUM salt targets”. Some other issues raised by Berkeley Wellness include:

Use of hexane (a chemical solvent) to remove oil from soybeans when manufacturing processed soy beans

Use of GMO (genetically modified) soybeans

Contain common food allergens, including wheat, nuts, soy and dairy

Summation

The plant-based meat alternatives category is achieving high growth rates, off a small base. This growth is due to the new range of products meeting consumers demand for products that are ‘good for you’ and ‘good for the planet’. Over time the range will probably be furthered developed to meet current concerns, such as high salt content. Many suggest that this category should enjoy long term sales growth.

The information provided in this blog post was general in nature. If you require more information I offer a free initial consultation by completing a contact us form.

Thank you,

Tim Bowen