How big a threat is plant-based protein for poultry?

The market for alternative proteins is becoming ever more established and diverse. Should poultry producers be concerned, or do alternative proteins offer valuable lessons for the chicken industry?

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Nando’s is the latest chicken restaurant chain to offer a plant-based version of chicken, which it has called The Great Imitator. | Courtesy Nando’s
Nando’s is the latest chicken restaurant chain to offer a plant-based version of chicken, which it has called The Great Imitator. | Courtesy Nando’s

How worried should the poultry industry be by the growing interest in alternative proteins? Are plant-based proteins simply a passing trend or are they here to stay? If the latter, will they take significant market share from poultry?

The variety of meat substitutes and space dedicated to them in supermarket aisles seems to grow by the day yet chicken consumption is forecast to continue growing over the next decade.

There is no contradiction in growth forecasts for chicken meat and alternatives when viewed globally. Even in those markets where plant-based proteins are making inroads chicken consumption is still expected to carry on upwards. Yet the interest in plant-based proteins is causing alarm for some.

Developed markets are, on the whole, those where meat consumption is already highest and where, with or without competition from plant-based or cultured meat alternatives, growth in meat consumption will slow. There is a limit to what any of the U.S. can eat. However, it is these same higher-income markets that are now the focus of the developers of meat alternatives and where alternatives may be the biggest threat.

Perhaps no surprise, therefore, that new product launches have become particularly strong in North America and this is where innovative and fast-moving companies have emerged.

Take, for example, Los Angeles-based Beyond Meat. In a little over a decade its products have entered approximately 112,000 retail and foodservice outlets in 85 countries and the company is now worth around U.S.$112 billion.

In the alternative egg market, San Francisco based Eat Just, which is less than a decade old, has grown to a value of approximately U.S.$1.2 billion.

Who eats what?

North America is home to numerous consumers with high-income levels and high levels of meat consumption. Little wonder that this market has seen the emergence of alternative protein companies that have grown quickly, achieved global reach and grabbed headlines.

North American consumers are far more likely to be omnivorous., ie regularly eating both animal and non-animal products, than those in other parts of the world, and less likely to be flexitarian, defined as eating meat occasionally. In short, a large market of consumers with high-income levels that might be persuaded to change their eating habits.

In Latin America, consumers are already more likely to follow a flexitarian diet compared to other regions, and significantly less likely to follow an omnivorous diet.

The Middle East and North Africa are more likely to be pescatarian, while India is the market that is different from all others – 22% already follow a vegetarian diet and 15% are vegan.

While many European consumers may have started to reduce their meat intake some time ago, the three biggest meat consuming countries are European – Serbia, Hungary and Russia.

Globally 75% of the population is omnivorous, while 15% are flexitarian. Vegetarians make up 5% of the global population, while only 3% is vegan, according to data from market research company Ipsos.

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In just over a decade, Beyond Meat has grown to establish its presence in 85 countries around the world. Photocritical | Bigstock.com

How deep is the trend?

Interest in meat alternatives is rising as consumers look to limit their meat intake yet, in some markets, the trend has become far more established than in others.

Recent plant-based meat launches in North America may have been attention-grabbing and quickly penetrated markets but, in other regions, limiting meat intake has been occurring for longer and has become much more established, with food companies reacting accordingly. Mycoprotein based Quorn, for example, came out of the U.K in 1985 and is now established in 14 countries around the world.

Meat consumption in Germany has been trending downwards for decades and a recent study found that, for the first time, consumers in Germany that are not deliberately limiting their meat consumption are now a minority.

A joint survey conducted by the U.K’s University of Bath, France’s University of Burgundy - Franche-Comté, and Ipsos in Germany found that out of 1,000 German consumers only 45% identified as full meat-eaters. The study’s results, published earlier this year, revealed that 31% of consumers were following a flexitarian or meat reduced diet.

The same survey conducted in France found that 69% of respondents identified as full meat-eaters, with 26% following flexitarian diets. Almost half the meat-eaters in that country said that they intended to limit meat consumption in years ahead.

What is driving the change?

Interest in meat alternatives is due to a variety of factors and, just as interest in some markets is more established than in others, so the reasons behind this change vary. However, three key drivers are common across markets – health, animal welfare and environmental concerns.

According to Christopher Bryant, of the University of Bath’s Department of Psychology, people are turning against meat for ethical and environmental reasons. He believes that, as eating animals becomes less normal, we will likely see a rise in demand for alternatives, such as plant-based and cultured meat.

Where health is concerned, Nathalie Rolland, author of the study that looked at France and Germany’s changing eating habits, points out that data for the study was collected before the COVID-19 pandemic and that the disease will have caused many to further re-examine the role of animals in the food chain.

A similar conclusion has been drawn by market research company Mintel. In June this year, it noted that 25% of U.K. millennials said that the pandemic had made vegan diets more appealing. This view was not exclusive to millennials, with 1 in 10 of U.K. consumers saying that COVID-19 had made vegan diets more appealing.

Mintel believes that, globally, consumers will prioritize plants in their diets over the decade ahead, with health being the key driving force. Yet this certainly does not equate to the end of meat.

While many consumers may believe that plant-based foods are healthier options, it is the flexitarian approach that is gaining the most ground, not vegetarianism or veganism. The vegan market is particularly small. In the U.S. only 8% of adults say that they follow a vegan diet. By attempting to replicate the taste and texture of meat, alternative protein companies have omnivores and flexitarians in their sights.

Mintel also points to a growing interest in environmental issues linked to meat production. Half of U.K. consumers, for example, have said that reducing the consumption of animal products is a good way to lessen humans’ impact on the planet.

2019 research from information and measurement company Nielsen in the U.S. found that amongst Americans interested in livestock’s impact on climate change, 61% of those surveyed said that they would reduce their meat consumption, 43% would replace meat with plant-based protein alternatives, while 22% would become vegetarian or vegan. 

Whether for health, the environment, or for animal welfare survey results published earlier this year from the U.K. found that 79% of meat-free purchasers responded that plant-based foods made them feel good, however, a vegan diet remains unappealing.

At the start of 2020, Mintel noted that the number of U.K. consumers that had eaten meat-free foods had shot up from 50% in 2017 to 65% in 2019. Those consumers expressing an interest in reducing their meat intake rose from 28% to 29% over the period, while sales of meat-free foods in the U.K., it said, had grown by 40% since 2014 to stand GBP816 million in 2019. By 2024, sales are forecast to be worth over GPB1.1 billion.

What’s in the supermarket?

Nielson notes that 15% of all food and beverage sales in the U.S. come from diets that support plant-based diets.

In the U.K., almost a quarter of all new U.K. food launches in 2019 were labeled vegan, compared to 17% in 2018.

Mintel notes that while sales of meat-free foods in the U.K., it said, had grown by 40% since 2014 to stand GBP816 million in 2019. By 2024, sales are forecast to be worth over GPB1.1 billion.

In October this year, U.K. supermarket chain Tesco announced that it had committed to increasing its sales of meat alternative products by 300% as part of a commitment to sustainability and would be placing alternative meat products alongside traditional meat products.

Fellow U.K. supermarket chain Asda also announced that it would be the first U.K. supermarket chain to launch a vegan destination in store, with two areas entirely dedicated to plant-based products and more than 100 product launches planned.

Will cultured meat appeal?

Alternative proteins are not all protein-based products. While some practical issues around laboratory meat remain, these are being overcome.

According to Benjamina Bollag, CEO and founder of U.K. cultured meat start-up Higher Steaks: “The variety of cultured meat products in progress is astonishing.”

Seven years may have gone by since the first cultured meat was developed, but many consumers still find the idea harder to embrace than plant-based alternatives.

A study conducted in Australia found that nearly three-quarters of Generation Z – those born between 1995 and 2015 – were not ready to try laboratory-grown meat.

The research by the University of Sydney’s and Sydney’s Curtin University surveyed 227 randomly selected consumers and found that, while 41% believed that cultured meat could be a viable source of nutrition, several believed that it could be resource consuming and environmentally unfriendly.

Seventeen percent of the survey’s respondents rejected all meat alternatives, including cultured meat, seeing it as chemically produced and heavily processed.

Dr. Diana Bogueva, from the University of Sydney’s School of Chemical and Biomolecular Engineering, commented: “Gaining widespread acceptance of cultured meat will be a difficult process because Gen Z would prefer not to try it. They’d much rather eat vegan, vegetarian, or simply high-quality meat or poultry."

But attitudes change. In October, Eat Just announced that it was discussing expanding its partnership with Proterra Asia into the production of cultured meat.

Food products can help to create a safer, more secure global food supply and they look forward to exploring future phases of their relationship.

Are all alternatives the same?

To date, developers of plant-based alternatives have focused their efforts on beef and pork, replicating chicken has proved more difficult. However, this is changing.

In October, it was announced that a U.S.-based plant-protein chicken manufacturer, Daring, had closed a U.S.$8million funding round, with plans to use the money for retail and foodservice expansion.

The company believes that it has created the cleanest plant-based chicken on the market that is as close as possible to the texts and textures of the real thing.

But some companies would appear to be happy with chickens substitutes that are already available. Also in October, chicken restaurant chain Nando’s announced the launch of its first plant-based alternative. Named The Great Imitator, the pea protein product has been designed to taste, look and smell just like its peri-peri chicken breast fillet.

Where next?

Currently, alternative meats account for only approximately 1% of global meat sales and, according to Barclays Research, this is expected to increase 10-fold by the decade end to be worth U.S.$140 million.

To achieve this, there will need to be buy-in from consumers and retailers alike and the path to achieving this may not be easy. While plant-based meat alternatives may satisfy consumers looking to satisfy health, environmental or welfare concerns, they are, nevertheless viewed as being too processed and containing too many ingredients. Additionally, for many consumers, these products are expensive.

How should such products be labeled or regulated? The European Parliament recently ruled that terms such as burger or sausage could be used for plant alternatives and were not the preserve of traditional meat products. Not all markets, however, have followed this view, and labeling and regulation of laboratory-grown meats may prove to be even more difficult.

Where poultry is concerned, the industry is in the fortunate position of producing meat that is already considered to be the most healthy, has the lowest environmental footprint, has taken, and continues to take, considerable steps to address welfare concerns and, importantly, is cheap.

Perhaps the main threat posed by alternative meats to the poultry industry is the sector’s ability to successfully promote its products, rather than the products themselves.

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The poultry industry continues to produce a healthy product that has a low environmental footprint and that addresses welfare concerns – all issues of increasing importance to today’s consumers. Monkeybusinessimages | Dreamstime.com

 

 

 

 

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