Meat alternative, as a dark horse in food market, has gained attention for many years. Unprecedented achievements have been made. On the other hand, there is a barrage of headlines declaring that plant-based meat (PBM) has “peaked” and is “facing leaner times”. What happened to this sector in 2022? How will the meat alternative market be in 2023?
This article shares the current situation for alt-meat globally, as well as the existing challenges. The opportunities to watch in 2023 are specified in the last part including regulatory supports, new product types and how the APAC market is for alt-meat.
1. Achievements in 2022
The alt-meat space saw plenty of promising events and growth, like Impossible Foods which recently reported more than 50% sales growth1 for 2022.
Here are a few of the other big stories from the last 12 months to catch you up on what’s happening in the world of alternative meat.
Big Plant-Based Meat News in 2022:
(1) Some Big Funding to Plant-Based Innovators
Several companies landed major funding deals to support their growth, including some big ones in APAC. Here are some examples:
Next Gen Foods, the parent company of TiNDLE, the plant-based chicken company taking the world by storm, received USD 100 million in Series A investment.
Starfield Food Science & Technology, a leading plant-based meat company in China whose products are sold in 14,000 stores, received USD 100 million to expand operations.
Maker of Mediterranian-inspired plant-based products Huera raised a USD 20 million Series A and doubled turnover to EUR 14.7 million.
(2) More Types of Plant-Based Meat on the Menu
In a market saturated with burgers, 2022 saw the rise of different categories of plant-based meat.
Slovenian company Juicy Marbles launched a plant-based loin2.
Black Sheep Foods rolled out plant-based lamb3 across 44 US restaurants.
Several companies, including THIS Isn’t Bacon4, developed plant-based bacon products to satisfy consumers' crispy cravings.
(3) Some Big Food Giants Bet on PBM
Nestle, off the back of close to USD 1 billion in plant-based sales in 2021, announced plans to expand their vegan portfolio with offerings such as plant-based foie gras.
Japan’s Ajinomoto announced it has begun developing plant-based and cultivated meat products, recognizing alternative protein as a key area for growth5.
Unilever announced its ambition to achieve USD 1 billion in sales of plant-based meat and dairy in the next 5 years6.
(4) Global Fast-Food Expansion
2022 saw more enthusiasm for plant-based products from major fast-food chains.
Dominoes partnered with Impossible to launch a range of plant-based beef pizzas in Australia.
McDonald’s made their McPlant a permanent fixture on menus in the Netherlands.
The Vegetarian Butcher, a plant-based meat subsidiary of Unilever, partnered with Subway to launch plant-based beef subs in Northern Europe.
(5) Fungi-Based Protein Geared up for Growth in 2022
Several fungi-based protein companies banded together to form the Fungi-Based Protein Association, the industry’s first trade group. The organization will collaborate to raise awareness about the benefits of fungi-based proteins.
Mycorena, one of the leading fermentation-based protein companies, partnered with TetraPack to build a production facility to make fungi-based protein ingredients. This is also after they opened Europe’s largest mycelium production facility.
Meati Foods received USD 150 million in series C investment to grow their mycelium-based meat offerings. The company sells their products online and in some stores in the US. They aim to achieve a nationwide footprint in 2023.
2. Challenges and Opportunities for Alt-Meat Market
2.1 Challenges Worth to be Noticed
Plant-Based Meat Mania Slows
In 2022 a barrage of headlines declared that plant-based meat (PBM) has “peaked” and is “facing leaner times”. What is behind all this?
In key markets such as the US, sales of plant-based meat7 flattened and dipped in 2022. Recent data8 from November 2022 for the US shows that volume and sales of PBM are down 3.8% and 11% respectively. Sales in the UK began to decline in Q2 of 20229. Singapore, Asia’s most developed PBM market, is seeing the same trend, which may be a sign of things to come for the region.
What’s at the Root of Sudden Reservations Toward Plant-Based Meat?
Analysts point to several factors behind the loss of appetite for PBM. One is the high price of plant-based meat combined with rising inflation. Plant-based meat is generally sold at a premium and so customers purchased less. This in turn may have prompted producers and retailers to shift focus away from PBM.
Another reason is health. Recently, PBM has been called out in the media10 for its long list of ingredients and high saturated fat content. This caused consumers to question the supposed health benefits that initially attracted them to try PBM.
If health were the only factor though, then brands such as OZO Foods, which had lower saturated fat and more fibre than rivals, would surely be top sellers (OZO was part of JBS’s now-defunct US branch of Planterra Foods). This didn’t seem to be the case according to Food Navigator8.
Quality is also an important factor in consumers waning appetite for PBM. The market is oversaturated with products. Many are great, but as people have sought to capitalize on the PBM boom, sub-par products have made it to market too. Unfortunately, low-quality soy burgers have ended up burning consumers.
The meaning of all this is nothing so dramatic as the death of plant-based meat, however. After all, the same environmental and food security problems that spurred the rise of plant-based meat have gone nowhere. If anything, the need for a sustainable food system loom even larger today.
It is rather that, in 2023, plant-based meat faces more discerning stakeholders across the board. Going forward, investments will be harder to come by. Retailers will be more selective in the alt-meats they offer. Consumers will scrutinize ingredient labels more intensely. And producers will have to work harder to develop products that wow.
This is not a bad thing. It forces innovators across the board to focus on quality PBM that meets customers’ expectations and reignites appetites. Backs against the wall, we believe the industry will deliver.
2.2 Opportunities to Watch
(1) Hybrid meat products are an exciting space to watch.
Recent advances in cultivated fat11 have the industry wobbling with excitement about the potential this holds for improving the mouth-feel and texture of plant-based meats, one area they have failed to wow consumers so far.
There’s also a trend towards blends of plant-based meat and conventional meat. For example, Japanese supermarket giant AEON is testing a 50/50 blend of pork and pea protein, and Swedish firm Mycorena is working on a mycoprotein meat mince12 prototype with supermarket ICA.
A 50/50 blend of plant and animal could be the stepping stone needed to get more consumers to buy into a plant-based diet, while also cutting down conventional meat production. This may be especially true in Asia, where meat is a significant part of the diet as a status symbol (in some areas), and is widely seen as healthy. Those who aren’t interested in 100% plant-based alternatives may find it easier to get on board with a 50% meat, 50% alternative product.
(2) Investment In Cultivated Meat Stayed Strong
Investment in the cultivated protein space was at USD 693 million as of November in 2022. A small dip from 2021, but minor compared to the drop in funding for PBM. In addition, favorable regulatory events, government support, and industry-wide collaboration all served to raise hopes amongst stakeholders for the potential of cultivated meat.
(3) Regulatory Progress Was Made
Advances in regulation also contributed to enthusiasm for this futuristic technology. The FDA13 awarded GRAS status to Upside Foods, and the Singaporean government gave the green light to Vow14 to sell cultivated quail meat.
(4) Governments All Over the World Support Cultivated Meat
Governments worldwide showed support for cultivated meat. For example:
Cultivated meat was served at COP 27 to officials from around the world.
The Dutch government made EUR 60 million investment in the form of a grant for cultivated protein.
Japan’s health ministry began the process for regulatory approval15 of cultivated meat.
Israel’s Innovation Authority awarded $18 million to a consortium of cultivated meat companies to further the advancement of their field.
South Korea is consulting on the Standards of Meat Alternative16
After the industry banded together in 2022 and united stakeholders in Big Food and government alike, 2023 is bound to bring more regulatory milestones across the world.
(5) The Foundations for A Cultivated Meat Industry Formed
The cultivated meat industry is taking shape as an industry.
Earlier this year, the APAC Society of Cellular Agriculture formed to unite stakeholders across the region17. They joined forces with UK and EU bodies to speed up the development of cultivated proteins worldwide.
Big food companies continued to forge partnerships with, and show support for, cultivated meat startups. European premium meat company Luiten Food joined forces with US startup Orbillion Bio to bring cultivated wagyu to Europe. Tyson Foods18 also made-up part of Upside Foods USD 400 million series C.
(6) Investment in Mycelium
Regulations are a barrier globally to mycelium-based meats. In the case of Europe for example, mycelium meat makers are currently restricted by novel food regulations. Currently, companies must apply for approval of their mycelium ingredients before commercializing products. At present, the process can take anything between 18 months to several years19. But this is a category of alt-meat that promises production efficiency and, as Quorn has demonstrated, is appealing to consumers.
Mushrooms are also versatile alt-protein ingredients being used by companies such as Green Rebel and Libre Foods to make waves. Startups, Big Food companies, and (hopefully) regulators alike will push forward with innovations in this space in 2023.
Opportunities for Alt-Meat market in APAC
It’s unclear (publicly available data is virtually non-existent) whether APAC is following the trend in the US of slowing growth for plant-based meat sales. What is clear is that a lot happened in 202220 to set the stage for future growth of the alt-meat category in APAC.
The region is home to over 60% of the world’s population and counting. Estimates suggest that APAC will account for 65% of the world’s middle class by 2030 and the largest share of the world’s GDP.
Despite the significance of the region, it faces challenges in terms of food security. For its size, APAC has limited agricultural land21, only around 30%, and is considered under-resourced to support its growing population. Also, several of the major economic centres - Japan, Hong Kong, and Singapore - have poor food self-sufficiency. They rely heavily on imports and have limited agricultural land to produce their own food. This does not translate well into food systems that look to land-intensive livestock for protein sustenance.
Governments are taking this issue seriously and have made commitments to building sustainable, future-proof food systems. Last year China, Japan and South Korea all emphasized alternative protein in policy and initiatives aimed at food sustainability, including support for cultivated meat. Singapore too is considered the world leader in its support for food technology and efforts to build an innovative and sustainable food system, investing heavily in alternative proteins.
Businesses across the region also continue to invest in alternative meat. A 2022 report22 shows that APAC accounts for over half of all IP in the plant-based meat space. Thailand’s CP Foods, a global top three pork and poultry producer, launched its own line of plant-based meat in 2022. Japan’s Ajinomoto announced that alt-protein products would be a major pillar of their business going forward. Several APAC startups received record-breaking funding rounds, such as Starfield, Next Gen Foods, and Vow which secured the largest ever series A for a cultivated meat startup.
APAC clearly has a lot going for its alt-meat market. In fact, tempted by the potential, godfathers of the industry Impossible Foods and Beyond Meat both expanded their presence in the region last year. Impossible to Australia, New Zealand, and Hong Kong, and Beyond Meat to Japan.
Disclaimer: this article was originally written and published by MarketShake by GourmetPro. ChemLinked compiled the key points. Find the original version here.
MarketShake by GourmetPro is Japan’s food and beverage industry innovation publication. MarketShake publishes bi-weekly newsletters that summarize all the need-to-know information about an emerging trend in Asia’s F&B industry, with a focus on Japan. We conduct on-the-ground research with consumers and experts to bring you actionable insights about Japan that aren’t available anywhere else. Market Shake is curated by GourmetPro, Asia’s premier network of food and beverage industry experts.
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