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The State of Alt-Meat: Everything F&B Industry Executives Need to Know In 2023
From market meltdowns to Mammoth Meatballs - here's an objective overview of where the alt-meat industry is going.
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Happy Tuesday Market Shakers. Are you tired of trying to wrap your head around the market for alt-meats? Or is it “meat successors” now? Well, we’ve got you covered.
We’ve compiled 2 months of market intelligence on the subject into an executive summary that serves you the key information you need to know about this category. All in one newsletter 🤯
What’s more, if something stirs your appetite for knowledge, you can easily explore this subject through the links to our deep-dive content about the next generation of meat.
In Today’s Post
Alt Meat Category Context
What is Driving Demand for Alt Meat?
Is the Alt Meat Category Growing?
The Top 20 Key Companies To Watch
Case Study - Green Rebel
What Do Consumers Want?
What Are The Market Opportunities And Gaps?
What Are the Barriers?
The Bottom Line
1. 🔥Category Context
Alternative meats are meat analogs made from a variety of sources, including plants, fungi, and even cultivated cells. Using these ingredients and advanced technologies, producers seek to create products that emulate the taste, texture, and appearance of meat.
The product offerings in this category have expanded significantly, with plant-based alternatives available for various animal products such as burgers, sausages, bacon, and even foie gras.
Modern meat alternatives target a wider audience, including not just vegetarians and vegans, but also regular meat eaters who are seeking more sustainable and cruelty-free options.
From 2019 - 2020, the market for meat alternatives boomed, growing by almost 50% YoY. Sales flattened from 2021, however, and consumer demand has cooled.
2. 🧐 What Is Driving Demand For Alt-Meats?
Global meat consumption has surged by 20% over the last 20 years, driven by population growth and increasing wealth, with over 80% of people regularly consuming meat.
Meat and dairy farming are responsible for approximately 14.5% of global greenhouse gas (GHG) emissions, with beef production being a significant contributor to emissions among food products.
Industrial meat production contributes to various environmental problems, including deforestation, loss of biodiversity, and inefficient land use, with livestock occupying 80% of the world's arable land but producing only 20% of its calories.
Innovators are actively working on solutions. This includes making conventional production more sustainable as well as developing alternatives.
3. 📈 Is The Alt-Meat Category Growing?
In 2022, plant-based meat market growth slowed. High inflation, failure by the industry to deliver products that met consumer expectations for quality, and increased consumer sensitivity to processed products are some of the factors contributing to the downward trend.
The prevailing industry sentiment is that plant-based meat is in the “trough of disillusionment” - when initial market hype around a potential technology dies down, and all but the highest quality products survive. It will emerge with a new focus on high nutrition, minimal processing, and great taste. The global market value is predicted to exceed 30 billion USD by 2027.
Cultivated meat is currently experiencing a boom in interest, investment, and industry activity. Governments including Japan, Singapore, the US, and more have shown support for the sector. So too have corporate giants such as Cargill and JBS. What’s more, several regional cellular agriculture industry bodies have been established recently to accelerate development.
With tough market conditions, investors are reportedly much pickier about making alt-protein investments. Despite this, investment in alt-protein in APAC in 2022 grew by 43% from the year before.
4. ⛹️♀️The Top 20 Key Companies To Watch
These are the companies set to move the market for alt-meat in 2023.
🇺🇸 Beyond Meat - Poster boy of the plant-based meat market Beyond Meat is one of the most established players in this space. Despite a rough 2022, the company has plans to turn things around in 2023 with a focus on boosting health credentials and taste/texture of its core product line.
🇯🇵 DAIZ - Japan’s B2B plant-based ingredient maker provides the raw materials for a lot of Japan’s plant-based meat products. Ingredient company Roquette invested in DAIZ earlier this year to develop pea-based meats.
🇺🇸 Impossible Foods - Impossible Foods defied the plant-based industry’s declining trend and achieved record growth in 2022. They continue to expand their product lineup in 2023 with reduced fat offerings and a new chicken analog line.
🇨🇱 NotCo - Burger King’s plant-based alternative of choice in Latin America, NotCo is a growing plant-based startup that makes meat and dairy analogs from a range of plant-based ingredients.
🇪🇸 Heura Foods - The Spanish startup achieved sales of over EUR 30 million in 2022 with their category-leading Mediterranean-inspired plant-based meat range. Key to their growth was expansion in overseas markets including the UK, France, and Italy.
🇫🇷 La Vie - France’s #1 plant-based bacon launched into UK retailers in late 2022. Despite more competition in the bacon space, the company is confident its product has the chops to convince consumers.
🇨🇳 Starfield Science and Food Technology - Starfield Food Science & Technology, a leading plant-based meat company in China, received USD 100 million to expand its operations, positioning itself as a key player in the APAC alternative meat market.
🇬🇧 This - One of the UK’s fastest-growing plant-based meat makers. The company secured GBP 15 million in series B funding earlier this year. They produce a range of plant-based products sold in major Uk retailers including Tesco and Sainsburies.
🇸🇬 TiNDLE - Next Gen Foods, the parent company of TiNDLE, a plant-based chicken company, received USD 100 million in Series A investment, making a global impact with their alternative meat products. TiNDLE has a strong 2022, launching products through food service in new markets such as the UK and Japan.
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🇮🇱 Aleph Farms - The company is currently working on scaling its production capacity in Singapore and Israel for its cultivated steak products. Their steak is the first cultivated meat product to be certified as kosher in Israel.
🇺🇸 Good Meats - The Cultivated chicken company is currently the world’s only cultivated meat product to be sold (in Singapore). They received FDA approval for their product earlier this year.
🇫🇷 Gourmey - The French startup is working on developing cultivated foie gras to provide a more sustainable and ethical alternative to conventional products.
🇰🇷 Simple Planet - This South Korean cultivated meat startup has forged a partnership with local tofu giant Pulmoane to create hybrid plant/cultivated meat products.
🇮🇱 Steakholder Foods - This startup is developing highly sophisticated 3D printing technology for cultivated meat. Providing the infrastructure for the emerging cultivated meat industry gives them a clear pathway to revenue without the need to overcome regulatory hurdles faced by finished goods makers.
🇦🇺 Vow - Australia’s cultivated meat maker made global headlines earlier this year when they launched a Mammoth Meatball - made with preserved cells from the extinct woolly mammoth. Vow is reportedly close to securing approval to sell its products in Singapore also.
Fermentation Powered Meat
🇺🇸 Meati Foods - Meati Foods is seeking to hit USD 1 billion in sales of its mycelium-based meat alternatives by 2025. They launched across US grocery store chain Sprouts earlier this year.
🇮🇱 Mush Foods - Israeli mycelium startup Mush Foods has developed and launched an ingredient designed to be blended with animal products to produce 50/50 meat/alt hybrid meats products.
🇸🇪 Mycorena - Sweden-based Mycorena opened Europe’s largest mycelium factory. Earlier this year they partnered with Meat Manufacturer Nyberg’s Deli on a hybrid mycelium x meat product that aims to reduce meat consumption without cutting out meat altogether.
🇬🇧 Quorn - The world’s first mycelium meat company. After a slow 2022, the company is pairing back activities in the US and making moves to ensure growth. As a legacy player, how they handle the current market is worth watching.
5. 💼 Case Study - Green Rebel’s APAC Expansion
We interviewed the founders of one of APAC’s leading plant-based meat brands Green Rebel about how they’ve grown their presence in the region.
Who - Green Rebel: Indonesia's leading plant-based food-tech startup
What - Built a thriving plant-based ready-meal brand with distribution to over 1000 food service outlets and 100 retail stores by the end of 2022.
When / Why - Co-founders Helga and Max pivoted from Burgreens restaurant chain to frozen ready-to-eat products during COVID-19
How - Three key success factors:
Products adapted for the Asian palate
Convenient and healthy meals
Meat-like eating experience achieved with Rebel Texturization technology
And then - Plans for 2023:
Quadruple growth with expansion into four new markets in APAC
Testing new lineup of dairy alternatives
Takeaways - Lessons from Green Rebel's story:
Take time to develop quality plant-based products - even with years of experience operating vegan restaurant chains, Green Rebel took its time to develop products for the ready-to-eat format that would wow consumers.
Have experienced experts on your team - at the same time, Max and Helga’s knowledge of the vegan food service industry gave them expert insights about the plant-based category.
6. 🛍 What Do Consumers Want?
Say-do gap: Consumers care about sustainability but prioritize taste and health when making food choices, limiting alt-protein adoption.
Decreased association: Consumer sentiment linking alt-meat with taste and health has declined since 2021, impacting purchasing decisions.
Barriers to adoption: Perception of alt-meat as difficult to cook or meant only for vegetarians, along with taste, texture, and price gaps, hinder mainstream acceptance.
Alternative meat products struggle to satisfy local markets as they primarily replicate generic processed meats (i.e. burgers), neglecting the need for diverse formats and formulations catering to regional tastes.
7. 💰 What Are The Market Opportunities And Gaps?
Players in the alt-meat space should focus on the following to stoke product growth:
🎯 Focus on Quality:
Reignite interest in higher quality plant-based meat products that meet customer expectations.
🌱 Expand Product Offerings:
Plant-based lamb, loin, and bacon are poised to attract new consumers and diversify the market.
🍔 Go Half In With Hybrid Meat:
50/50 blends and mycoprotein mince prototypes target consumers not quite ready to go full plant-based.
🔬 Prepare For The Cultivated Meat Boom:
Strong investment, regulation progress, and government support make cultivated meat a hot opportunity.
🍄 Invest In Fermentation-Powered Meat:
Fungi-based protein gains traction; mycelium-based products set to ride the wave of regulatory adaptation and investment.
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8. ✋ What Are The Barriers?
At the same time, companies challenging this space must be wary of the following:
📉 Alt-Meat Appetite Slump:
US, UK, and Singapore markets see sales dip in 2022.
Major brands like JBS, McDonald's, and Pret a Manger scale back plant-based meat projects.
💸 Pricey Plant-Based:
High cost of plant-based meat + rising inflation = consumers cutting back.
🍔 Health Hesitations:
Concerns about ingredient lists and saturated fat levels question plant-based meat health benefits.
🌾 Quality Quandary:
Oversaturated market leads to sub-par products, disappointing consumers.
🧐 Discerning Stakeholders:
Investors, retailers, and consumers getting pickier about alt-meat offerings
Industry must focus on quality plant-based meat to reignite appetites.
9. 🎯 The Bottom Line
📉 Industry and consumer sentiment for meat alternatives are down. The category is returning to earth after sky-rocketing growth in 2020. Inflationary pressures, loss of consumer appetite, and other factors are behind this.
In response, retailers and big food are having second thoughts about alt-meats, particularly in the US. Reports suggest that alt-meat is losing valuable shelf space, and big food companies are ramping down activities in the category.
📈 But the alt-meat industry is not out. In other areas, the situation is more optimistic. Governments, investors, and big conglomerates remain invested in the space.
Japan, the Netherlands, and the US are just some of the nations that have shown strong support and financial backing for cultivated meat in recent months.
In 2022, Europe and APAC’s investment in alternative protein actually increased.
And there are some big players, such as Cargill, Kerry, and the UK’s Waitrose, that are optimistic about the future of alt-meat.
🤷 For the foreseeable future, the F&B industry and all but the most dedicated consumers will approach alt-meat cautiously. This is not the ideal environment to spur the innovation and progress that this space needs. Yet, waiting for small wins from quality products is perhaps necessary to rebuild consumer and industry enthusiasm in the category. This will lay strong foundations for the next stage of alt-protein growth.
That’s all folks
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