Written by: Matthew Unsworth
For those following a plant-based diet, burgers and goujons have not traditionally been a tasty proposition. Indeed, from a vegan or vegetarian perspective, minced beef patties and crispy coated chicken seem singularly unpalatable. But with a growing range of substitute meat (‘pseudomeat’) products on the menu, made largely from vegetable proteins, it’s no longer just the carnivores who are chowing down.
As the alternative meat market is predicted to be worth $140bn by 2029, it seems a good time to lift the bun on the factors feeding growth in the sector, the main companies operating in it and the challenges which lie ahead.
A note on terminology
Pseudomeat should be distinguished from artificial or cultured meat; the latter involves growing muscle fibres from animal stem cells, before combining these fibres together in their thousands. As artificial meat is not yet commercially available, we will focus on vegetable protein-based psuedomeat instead. Though we will touch briefly on Quorn below, it is worth pointing out that this too is somewhat distinct from pseudomeat as it relies on protein derived from fungus and a process of fermentation.
Why have we moved towards plant-based meat substitutes?
There’s no question that the market for alternative meat is filling out fast, expected to increase tenfold between now and 2029. Admittedly, this is not as rapid as growth in some other eco-conscious markets; the size of the market for electric vehicles is forecast to grow 35 times larger between 2018 and 2025. Nevertheless, expansion at such a rate reveals that it cannot be solely staunch vegans behind the trend. The Barclays ‘I Can’t Believe It’s Not Meat’ Report, published this year, notes that 92% of plant-based meals in the UK are gobbled up by ‘flexitarians’: consumers who are neither vegetarian nor vegan but who are conscious of reducing their meat intake.
So far, so good, but why go flexitarian? In part, meat substitutes enjoy a perception as healthier alternatives, a perception in which there is much truth. A burger made from pea, potato or soy protein has no cholesterol and, unlike red meat, doesn’t carry a heightened risk of colorectal cancer. At the same time, these substitute burgers tend to have just as many calories as the real thing, plus high levels of salt.
Concerns over the environmental impact of livestock farming are also drawing people towards alternative meat products. A nifty graphic on Beyond Meat’s website proclaims that its burgers take 99% less water, 93% less land and 46% less energy to produce when compared with 1/4lb US beef burgers. They’re also responsible for 90% less greenhouse gas emissions. UK flexitarians hungry for a fuller account of Beyond Meat’s eco-credentials might pause, however, to consider that all of its products currently have to be shipped from the USA (though a factory in the Netherlands is rumoured to be opening next year).
We should note, finally, the impact of the media. A Deloitte report on plant-based foods and M&A flagged up a potential link between an increased journalistic focus on the consequences of livestock farming for the planet and the expansion of the alternative meat market. Pseudomeat companies end up implicitly championed by large news agencies without having to give away a slice of their pie.
Who are the main players in the alternative meat market?
Though the psuedomeat market is relatively meagre (at present only 1% as large as the regular meat market), its key players are anything but.
Beyond Meat is perceived as the market leader, listed by Bloomberg as a company to watch in 2020 alongside the likes of food industry giant Kraft Heinz. Beyond Meat’s ‘Beyond Burger’ is currently on trial in Canadian outlets of McDonalds as the ‘PLT’ sandwich, whilst KFC conducted a ‘Beyond Fried Chicken’ pilot in Atlanta and sold out within five hours. Beyond Meat’s products are even served on Virgin Atlantic flights from New York, Newark and Boston to London (perhaps to offset carbon guilt). The financials are slightly harder to swallow, with the company’s share price having plummeted from a July peak of more than $230 to just over $75 at time of writing. That is still three times the original share price when the company went public, however, and there’s cause for optimism looking forward: Beyond Meat recently made its first quarterly profit.
Beyond Meat isn’t the only company dabbling in fast food. Many of Burger King’s US restaurants serve a burger from Impossible Foods (made of soy and potato protein), whilst Amy’s Kitchen, with its estimated annual revenues of $0.5bn, has just launched its own drive-through: the first ever to serve only plant-based fare. On this side of the Atlantic, Quorn provided the filling for Greggs’s now famous vegan sausage roll. Greggs CEO Roger Whiteside commented that the launch of the vegan sausage roll had helped the company ‘leap forward’, with sales up 14.7%; note, of course, that the media buzz was likely driving sales in Greggs’s other meat-based products too, rather than the vegan roll alone.
Plant-based substitutes seem also to have carved out a space on supermarket shelves. M&S now has a ‘Plant Kitchen’ range comprising over 60 products; Tesco, a ‘Wicked Kitchen’ range, devised with help from innovative chef Derek Sarno (also behind Good Catch, a fish substitute venture). Meanwhile, Waitrose stocks products from The Vegetarian Butcher, which was acquired by Unilever in 2018 for an undisclosed sum.
For the alternative meat market to continue growing in line with predictions, a number of hurdles will need to be overcome. The first is fightback from livestock producers. As noted above, plant-based substitutes haven’t only found favour with vegans and vegetarians (whom producers of beef, pork and chicken would have no interest in) but with individuals who would otherwise buy regular meat products. In America, recognition of this competitive dynamic has led meat producers to lobby state government for legislative reform. Missouri law now reserves use of the label ‘meat’ for products originating from a ‘livestock or poultry carcass or part thereof’. The law in Arkansas is much the same and each infringement will incur a $1,000 penalty. Marketing campaigns may become another battlefield. A 2015 campaign by Meat and Livestock Australia (MLA), which works to promote the national red meat industry, offers a glimpse into how this may play out. The MLA recruited Dame Edna Everage to send the message ‘You’re Better on Beef’ to Australians with low blood iron levels and dismiss alternatives.
Another key challenge, emphasised by the above report by Deloitte, is ensuring continued innovation in flavour and texture. Impossible Foods is in a strong position already, here; coconut oil is used to simulate fat marbling in a regular burger, while the addition of soy leghemoglobin makes its alternative burgers ‘bleed’ like real beef. In spite of this, there remains more work to be done if the industry is to shake off for good the association of meat substitutes with cardboard.
A final challenge is cost. Alternative meat is an imitation product yet it costs more. Impossible Foods’s offering in Burger King is 22% more expensive than a meaty equivalent, whilst at Honest Burgers, a UK chain, its Beyond Meat burger is the most expensive option on the menu. The fear is that high prices will prevent consumers committing to meat substitutes in the long-term, once the novelty wears off. Remember, though, that there is no easy solution given Beyond Meat and co’s fragile profitability; to cut prices hastily would be to swap the frying pan for the fire.
Behind the hyperbole of Beyond Meat or Impossible Foods, we actually uncover a rather steady market, whose persistent growth is supported by generous helpings of innovation (and capital). Plant-based substitutes have found their way into some of our best-known fast-food restaurants and supermarkets; the question now is whether they will remain there. To survive, they will have to get tastier and cheaper, all the while fighting off livestock incumbents. Fail to achieve this, and they’re dead meat.