Meat substitute opportunities hinge on flexitarians, scientists
In March, a cultured meatball made from animal cells and raised with plant-based nutrients debuted, with a variety of products expected in less than five years. From a broader perspective, manufacturers produce a number of meat substitute products featuring proteins ranging from the well-established tofu-based ingredients to tempeh, pea proteins, risofu (rice based) and seitans (wheat based).
But how realistic is it for major food manufacturers to create meat substitutes or to create a range of vegetarian products? Especially when audiences such as vegetarians oftentimes don’t find major food companies to be trustworthy? William Roberts Jr., senior food and drink analyst, Mintel, asked Food Dive. Those manufacturers offering innovative meat substitutes that move in entirely new directions have a higher chance of resonating with consumers.
But just because the products are plant-based doesn’t mean consumers accept a better-for-you product perception. According to Mintel’s 2015 report on U.S. meat alternatives, 45% of meat alternative consumers believe the products are too processed, and 42% believe they are too high in sodium. Further, the generation most motivated to purchase meat substitutes, millennials, reported they are bored with options in the category. This suggests they are willing to try new options, meaning potential for new products.
The market potential for meat substitutes is promising, projected to reach $5.17 billion worldwide by 2020, at a CAGR of 6.4% from 2015, according to Markets and Markets. Research by Linda McCartney Foods, a vegetarian foods manufacturer, found that in the next 25 years, a quarter of the population of the U.K. will be vegetarian. The research found that six in 10 surveyed said they will cut meat consumption; they are also consuming 7% less red meat than 25 years ago.
Large players focus on acquisitions
One of the major routes to the meat substitutes marketplace has seen larger companies acquire smaller companies who have already done the leg work and established loyal audiences. An example is Pinnacle Foods’ acquisition of Garden Protein International.
A concern when entering the segment is that the products are more costly overall when compared to traditional meat products, Roberts said. One reason for this is the R&D that goes into developing a new product line.
"The problem tends to be producing a quality meat alternative that resonates with consumers is really complicated and challenging from a formulation standpoint," Roberts said. What’s more, major manufacturers may not be willing to dedicate the time and capital needed to reach the consumer once the product has been developed.
Manufacturers should also consider issues with food safety when it comes to meat substitutes. A report by Clear Labs on hamburgers included a review of meatless burgers and found that because more ingredients are added to meatless burgers than traditional burgers, it creates a "complex manufacturing process and room for error." As a relatively new subset of the burger industry, and with consumption rapidly increasing, the risk of pathogenic outbreaks are larger. Clear Labs suggested the meatless burger industry consider the unknown risks and the potential need for strong safety measures.
Roberts pointed out another issue centers on costs, including the marketing of a new product to what he said is a small audience, and "which in some respects is fairly niche. Vegetarian consumers comprise about 6% to 7% of the population."
Major manufacturers could be compelled to further invest in meat substitutes if more non-vegetarians, the so-called flexitarians, continue adding more meatless products to diets.
Flexitarians are the draw
Mintel’s research found nearly 40% of consumers have had a meatless burger. Flexitarians have caught the eye of Ireland-based Kerry, which is exploring a range of different proteins such as soy and wheat, or a blend of both; as well as peas and rice, according to Food Ingredients First. "Even the meat processors, particularly in Germany, are looking for healthy meat-free produce with high levels of protein," Nicky Dear, business development director at Kerry, told Food Ingredients First. "There has been a big move towards flexitarianism recently and we are seeing this being requested from a lot of our suppliers."
Hydrosol is a company that has developed a vegetarian alternative to meat and sausages, partially as a response to flexitarians. The company offers an all-in compound that manufacturers use for further processing in a range of vegetarian items.
Roberts added that manufacturers realize meat alternatives need to mimic the flavor and taste of the protein they are trying to replicate. "There is a lot to be said for the original taste profile of protein, tofu, tempeh, or seitan that consumers could use as the basis for their own dishes."
Lead with flavor when incorporating plant-based proteins, Nicole Peranick, director, global consumer strategy – culinary, Daymon Worldwide, told Food Dive in an email. "You can have all the health claims you want, but without taste, your product will not measure up." She added that beyond plant-based products, Daymon sees the mainstreaming of veg-centric eating, which extends beyond veganism and vegetarianism to a "fundamental refocus on vegetables, from side dish to main course, such as cauliflower rice bowls or squash carpaccio. Whatever the alternative product, manufacturers need to balance health with taste.
Bring in the scientists
Achieving the original taste profile of meat is something Memphis Meats intends to offer with its cultured meat products, Bruce Friedrich, executive director, The Good Food Institute, told Food Dive in an email.
The science is driving the product, and the Memphis Meat’s team includes a cardiologist, tissue engineers, muscle cell biologists, and nutrition scientists.
Because Memphis Meats is creating a food that hasn’t existed before due to technological barriers, the company’s officials plan to be in regular contact with regulatory agencies as to the process and ingredients. They invite people to educate themselves about the product, Uma Valeti, co-founder and CEO, Memphis Meats, told Food Dive.
He said that with the demand for meat worldwide expected to double in the next 35 years due to an estimated population of 10 billion people, the current practices followed by the meat processing industry, no matter "how intense or efficient, cannot sustain the demand for meat. There is not enough land for the billions of animals that will be needed for meat," Valeti said.
Roberts added that activities such as those by Memphis Meats are fascinating ventures. "It will boil down to how it resonates with the consumer and if the manufacturer can communicate many different selling points [such as health concerns]."