The plant-based meat business has grown right into a $ 20 billion enterprise – however the challenges stay
A visitor tries a plant-based meat substitute at the Restaurant & Bar and Gourmet Asia Expo at the Hong Kong Convention and Exhibition Center in Hong Kong on November 11, 2020.
Peter Parks | AFP | Getty Images
SINGAPORE – The demand for meat alternatives has increased and will continue to increase, but the industry still has hurdles to overcome in various parts of the world, analysts said.
According to Google Trends, global search interest for the term "plant-based meat" skyrocketed in early 2019 months before Beyond Meat went public.
The global meat substitute sector is valued at $ 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 to the Covid-19 pandemic.
"In times of shock and instability, building a low-risk value chain means focusing on opportunities, and the shift towards plant-based meats shows no signs of slowing," said Elaine Siu, executive director of The Good Food Institute Asia -Pacific.
However, obstacles remain for the burgeoning market.
The plant-based meat market in Asia could be constrained by established perceptual issues, Siu said.
For example, pig meat, or vegetarian meat, used to be mainly eaten by Buddhist practitioners in China, she said.
"The replication of the taste and texture of meat has never been pushed beyond relatively basic levels," she said, adding that these traditional products serve a specific purpose and "are considered to be of limited appeal to certain groups."
"In order for plant-based meat to develop its full market potential in Asia, the sector must continue to break away from its association with traditional fake meat, which is expected to be sold at a low price and which carries historical image baggage." said Siu.
Objections from the traditional meat industry
Ranchers could also stand in the way of the alternative protein sector, particularly in the US, said Simon Powell, global head of thematic research at Jefferies, the US bank.
The US Cattlemen & # 39; s Association filed a petition in 2018 calling for an official definition of the terms "beef" and "meat" to keep vegetable proteins out of the description.
A herd of cattle gathers in the shade of an old barn in Owings, Maryland on May 4, 2020.
Mark Wilson | Getty Images News | Getty Images
"Incumbent producers will be working hard with their governments to change labeling and play around with consumer advertisements to say it can't be called meat," Powell told CNBC of Zoom. "I think that's possibly one of the biggest obstacles."
The European Union rejected proposals in October to ban restaurants and shops from using words such as sausage or burger to describe meat alternatives.
Consumer confidence, consumer fatigue
Powell added that if any of the vegetable meat companies had "an accident" or an issue with their recipe that resulted in a "massive recall", customers could fear consuming these alternatives.
"This is a big 'if' … but if they have a big recall of products, it could hurt consumer confidence," he said. "Eventually you will get these events. It will set the industry back a little."
Separately, Powell said the "instagrammability" of plant-based foods is one reason the market is growing "all over the world". The market's growth could be hampered as the novelty of meat alternatives wears off or wears off, he said.