Plant-based food and meat alternatives showed significant growth in 2019, most substantially in beef alternatives as popularized by brands like Beyond Meat and Impossible Foods. Looking forward, consumers and brands alike are looking for new plant-based food and meat alternatives beyond burgers and beef. Both big food companies and new start-ups are exploring chicken, seafood, and so-called “blended” alternatives to continue capitalizing on this growing trend.
Food manufacturers have good reason to break into this space. The industry is predicted to be worth $4.15 billion by 2026 thanks to interest from eco and health conscious consumers. The increased interest by consumers has also fueled interest for investors. In Q1 alone there was a record $930 million invested in the alternative protein space, up significantly compared to the $824 million invested in all of 2019.
With all these new investments and increased consumer interest, what’s next for the plant-based food and protein category?
Chicken and Seafood: The Next Frontier of Plant-Based Food and Meat
Big food companies such as Kellogg’s, Nestlé, General Mills, Tyson, Smithfield, and Perdue are investing in young start-ups or have themselves spun up internal initiatives focused on plant-based meat alternatives, many of which focus primarily or exclusively on chicken alternatives. Nuggs, Rebellyous Foods, and Beyond Meat have all found success within the chicken plant-based alternative – evidenced most clearly by Beyond Meat’s recent venture with KFC at a location in Atlanta, GA where the fried chicken alternative sold out in a matter of hours.
Shellfish and fish plant-based food alternatives have also been an active area of investment by many of the Big Food Companies. Companies such as General Mills and Tyson have shown a real interest in this growing industry with their investments in Good Catch, a plant-based fish startup, and New Wave Foods, focused on plant-based food alternatives for shellfish and crustaceans.
There has also been some interest in developing “blended” alternatives. While companies like Perdue see the real potential and market appeal for consumers, not all plant-based meat companies are keen on the idea of blended “almost-meatless meat”. Companies such as Beyond Meat and Impossible Foods “are not interested in such compromises.”
Regardless, this approach has seen a lot of interest from “lessitarean” consumers who are interested in reducing the amount of meat they eat without entirely giving up their carnivorous habits. Nestlé is moving forward with blended options, adding products from its Awesome Ground label to some of its most popular products, including DiGiorno Pizza and Stouffer’s Lasagna.
Challenges on All Sides
As with all plant-based meat alternatives so far, challenges to consumer adoption is mostly related to five concerns: consistency, texture, eye-appeal and appearance, taste and nutrition. Recreating the “experience” of meat is both an art and a science.
But outside of the commercialization challenges, operational issues plague start-ups and big food companies alike in plant-based meat production. Pea proteins have been the reigning source of plant-based protein in production. Lately, increase in demand has placed greater pressure on the companies manufacturing pea protein and putting strains on supply. Some companies are mitigating this risk by finding alternative sources of plant-based protein including mushrooms and fungi, legumes, chickpeas, soy, lentils and various kinds of beans such as fava and navy beans. Combinations of these plant-based proteins can also allow for a more diversified texture and taste and alleviate the pressure of pea protein producers. As always in the consumer products industry, challenges are also forcing innovation with one startup exploring the applications of turning carbon dioxide into usable, tangible protein.
The rise of plant-based meat alternatives is hitting an inflection point in the consumer goods industry, creating an opportunity for both startups and Big Food to capitalize on the growing consumer trend. Growing with this trend requires businesses keep a careful eye on evolving consumer preferences and maintain scalable, sustainable means of production.
Contributions by Ashley Stufano.