The Rise of Plant Based Alternatives
The rise of plant based and vegan alternative food companies in the last few years has been remarkable. Startups such as Oatly, Beyond Meat and even some of our clients like Alpro, are becoming enormously important businesses, with the Los Angeles based Beyond Meat reaching a market cap of $4.37bn.
The growth of this industry is clearly at breakneck speed as people are switching from meat and dairy, to plant-based diets at an incredible rate. Some of the world’s most famous and successful athletes, including Lewis Hamilton, Kyrie Irving and James Wilks are outspoken advocates of their plant-based diets and are enormous driving forces in this unignorable trend.
Here at KeyIS, we are aware of these market developments, having extensive experience working with food manufacturers such as; Alpro, Muller and Mondelez, and we are fully expecting to take on many projects with clients in similar industries to enhance their existing facilities to facilitate the production of plant-based foods.
In many developed nations, there is growing consumer awareness of, and interest in, these alternative proteins. Meat was always a staple of an inhabitant of a developed nation’s diet, but changing consumer behaviour and interest in alternative-protein sources, due in part to health and environmental concerns as well as animal welfare, have made way for growth in the alternative-proteins market. As per McKinsey, the race for market share is now on, with entrants scrambling to get a foothold in this burgeoning market.
Whilst global meat consumption rose at around 2% per year in the last decade, the majority of this growth was seen in China as their middle class was experiencing unprecedented financial growth. The next ten years are set to look notably different from the past decade. While aggregate consumption of meat proteins is expected to continue to rise, the growth rate is expected to slow by as much as 50 percent, to around 1.0 to 1.5 percent a year. Many entrants into the vegan alternative food sector are rolling out new technologies and ingredients to attempt to solidify their place in the market. Innovative food companies are also able to mirror the customer experience of eating meat to a much higher degree.
Therefore, we are expecting significant investment from food manufacturers in this sector in the short and medium-term and thus we are developing our capabilities accordingly. Whilst the US consumed a record 225 pounds of red meat and poultry per capita in 2020, the COVID-19 crisis has shifted consumer habits and virus outbreaks in factories have dealt major blows to the meat supply chain, with the beef industry alone facing an estimated $13.6B in losses. In contrast, startups focusing on plant-based protein; such as Plantible Foods, Rebellyous Foods, Livekindly, and InnovoPro, have continued securing millions in funding amid the pandemic.
Demand for vegan meat has soared, with retail sales of plant-based meat alternatives reaching $7B in 2020, an increase of 27% from 2019, according to one report. Going forward, the meat value chain could be simplified dramatically, as “clean meat” labs could take the place of farms, feedlots, and slaughterhouses. Therefore, at KeyIS, we have made it our mission to stay on top of this burgeoning market sector. We anticipate that many of our current and future clients in the food sector will be looking to upgrade their production facilities in line with this emerging demand. If you are looking to expand your manufacturing portfolio into the exciting realm of alternative protein production, please do get in touch! We have proudly worked with some of the largest food businesses in the country, such as Greggs and Brakes and are looking forward to partnering with businesses in this exciting market sector going forward.