The vegetable meat industry is on the rise, but the challenges remain

SINGAPORE – Demand for meat alternatives has grown and will continue to grow, but the industry still has obstacles to overcome in different parts of the world, analysts said.

Worldwide research interest in the term “vegetable meat” skyrocketed in early 2019 months before Beyond Meat’s initial public offering, according to Google Trends.

The global meat substitute sector is worth $ 20.7 billion and is expected to grow to $ 23.2 billion by 2024, market research firm Euromonitor told CNBC.

This growth is being fueled by concerns ranging from animal welfare to food security and the Covid-19 pandemic.

“In this age of shocks and instability, building a low risk value chain means focusing on where the opportunities are, and the shift to plant-based meat shows no signs of slowing down,” said Elaine Siu, managing director of The Good Food Institute Asia Pacific.

But the obstacles remain for the expanding market.

The vegetable meat market in Asia may be limited by established perception issues, said Siu.

For example, simulated or vegetarian meat was previously eaten mainly by followers of Buddhism in China, she said.

“The replication of meat flavor and texture has never been pushed beyond a relatively basic level,” she said, adding that these traditional products serve a specific purpose and “their appeal is seen as limited” to certain groups.

“For vegetable-based meat to reach its full market potential in Asia, the sector must continue to free itself from its association with traditional simulated meats, which must be sold at a low price and carry a baggage of historic image” , he stated. said Siu.

Livestock farmers can also disrupt the alternative protein industry, especially in the United States, said Simon Powell, global head of thematic research at the American bank Jefferies.

The US Cattlemen’s Association in 2018 filed a petition asking for an official definition of the terms “meat” and “meat” in an attempt to keep vegetable proteins out of description.

“Incumbent producers will lobby their governments to change the labeling, to mess with consumer advertising to say that you can’t call it meat,” Powell told CNBC via Zoom. “I think it is potentially one of the biggest barriers.”

The European Union rejected proposals in October to ban restaurants and shops from using words like sausage or hamburger when describing meat alternatives.

Powell added that if any of the vegetable meat companies had “some sort of accident” or problem with their recipe that resulted in a “massive recall”, it could make customers afraid to eat those alternatives.

“This is a big ‘if’ … but if they had a big product recall, it could hurt consumer confidence,” he said. “At some point, you will have these events. This will slow the industry down a bit.”

Separately, Powell said that the “Instagram capability” of plant-based foods is one of the reasons why the market is growing “worldwide.” Market growth could be hampered if the novelty of meat alternatives disappears or passes, he said.