Alternative proteins – plant-based and cultured meat – are gaining interest among consumers and investors, but will they pose a serious threat to the established animal protein industry?
Christine McCracken, a senior protein analyst covering North America for Rabobank’s RaboResearch Food & Agribusiness imprint, discussed what role alternative proteins will play in the diet of the future as part of the 2019 Animal Agriculture Alliance Stakeholders Summit in Kansas City, Missouri. She spoke on May 9.
Plant-based proteins
Plant-based proteins, or products made from vegetables to imitate or replace meat, are hardly new, but they are gaining steam thanks to improved product variety, taste and marketing in the recent past. In the last month, two leading plant-based protein brands, Beyond Meat and Impossible Foods, won headlines thanks to a blockbuster initial public offering and test roll out of the Impossible Whopper at Burger King.
One reason, McCracken said, why the plant based proteins are getting so much attention is because the segment is actually seeing growth in a grocery market where growth is uncommon. Moreover, the products are appealing to younger consumers who seek new options and may not be as inclined to eat meat as their older cohorts.
While Beyond Meat and Impossible Foods are arguably the most well-known brands, they are far from the only companies in the plant-based segment. More and more are arriving on the market every year and many are receiving financial backing from established food and agriculture brands. These companies are interested in these products, McCracken said, because there is little growth elsewhere in packaged foods.
Cultured meat products
The other alternative protein market worth monitoring is cultured-meat – also called clean meat, lab-grown meat or cell-based meat – a protein product derived from the culturing of animal cells. Although there is much investment buzz about the product, and some proof of concept, McCracken said none of the numerous companies working on cultured meat has scaled up their production process and brought anything to market yet.
Nevertheless, cultured meat is interesting. The product does not position itself as a replacement, but rather as a compliment to conventional meat, arguing animal agriculture cannot feed a growing population on its own. She was skeptical about that argument, however, as technology persistently finds a way for farmers to produce more using less resources.
Cultured meat also runs up against regulatory issues. There is already a strong pushback on a state and federal level to keep cultured meat – and other alternative proteins – from being marketed as meat. The dairy segment, McCracken said, is already suffering from lost sales due to the proliferation of non-dairy milk products on the market.
Furthermore, cultured meat will need to overcome what she called the "ick factor" some consumers may feel and it will need to be further developed in order to merit its premium price tag. The way that it could most likely be produced in short order, as a nugget or sausage product, won’t carry a premium cache.
Considerations for the future
Alternative proteins still lag far behind conventional meat products, but they are growing at a rapid pace. Right now, the alternative protein market is worth nearly a billion dollars and is growing by about 20 percent per year.
One factor may yet push alternative proteins further forward: China. The country is currently dealing with an outbreak of African swine fever (ASF) that is devastating that country’s swine herd and domestic protein industry. Going forward, China may see cultured and plant-based products as a necessary way to feed the most populous nation in the world.
In the U.S., McCracken said the meat industry can respond to alternative proteins in three ways: by staying on top of trends, rethinking the meat case and the products on the market and leading on health and sustainability.
Consumer behaviors are changing and a growing number of people are interested in – or are – reducing their meat consumption for health or environmental reasons. She said companies like Tyson Foods Inc. and Cargill Inc. are investing in alternative proteins because they recognize the growing demand.
The industry is expected to enter a period of higher prices and higher demand, so now is the time to focus resources on developing new products that tell meat’s positive story. Meat is high in protein, healthy and sustainably produced. The animal agriculture industry needs to own this message. Alternative protein products are highly processed and they do not have the same nutritional content as meat.
“If you look at the fat content and nutritional content on some of these plant based products it’s not what you might think, it’s not healthier and I think the industry has a good story there,” McCracken said. “Don’t give up the lead on health, I think you’ve got a good natural product that people want.”
