Overview of the Global Alt-Meat Market - Next-Gen Meats #2

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Happy Tuesday Market Shakers. Today, we’re catching up on the latest trends in alt-meat. What’s been happening since we wrote our “Redefining Meat” series in 2021? And, in addition to plant-based meat (PBM), how are fermentation and cell cultivation reshaping the future of meat?

In this article, we’re going to give you an overview of the big alt-meat trends from 2022 that will continue to be important in 2023. We don’t have room for everything, so we’ve tried to give you the “prime cuts”, so to speak. Let us know if you think we missed anything important! We’ll also update you on the alt-meat markets in both APAC and Japan. Finally, we’ll share our exclusive list of the top 50 alt-meat companies to watch in 2023. Let’s tuck into this meaty issue.

Contents in today’s article

• The alt-meat trends from 2022 that will continue to shape the markets in 2023

• Overview of the alt-meat markets in APAC and Japan

• The top 50 alt-meat innovators to watch in 2023

A New Era of Multiple Meats

In 2022, an increasing number of restaurants took a leaf out of coffee stores’ books and began offering customers more choices. Not for dairy alternatives, but meat. Far from a lone plant-based option, we’re talking about menus with several “plant-based” options. This represents a sign of the times and a paradigm shift in the world’s attitude toward protein sources.

This shift has by no means ended and began long before 2022. 

Alternatives to animal protein, like tofu and tempeh, have been around for millennia. At the close of the 19th century, Henry Kellog was dreaming of meat analogues. Eventually, he would plumb for cereal as a meat-free breakfast product. In 1930, Winston Churchill was already predicting the rise of cultivated meat. Throughout the 20th century, dreams began to become reality as the vegan movement emerged and commercial vegetable-based alternatives to meat, like BOCA Burger, sprouted up. 

More recently, growing awareness about how unsustainable industrial meat production is and more advanced food production tech has driven the development of a new breed of alternative meats. These products, like the Impossible Burger, are made from plants, fungi, or even cells, and look, cook, and taste like real meat. Crucially, they target regular meat eaters, as well as vegetarians and vegans.

Today we find ourselves in a world where almost every conceivable animal product has a meat-free analogue. Traditional veggie meat options targeted vegan and vegetarian consumers and consisted mostly of veggie sausages and bean burgers. But modern meat alternatives aim to deliver near identical meaty texture across the whole spectrum of animal products, from burgers, to bacon and foie gras, and beyond. They aim to be an additional option for herbivores and carnivores alike. Whatever your meaty craving, there’s an alternative for you in 2023!

Despite so much variety, we are still a long way off from a world where alternatives to meat are as pervasive as dairy analogues are today. In fact, the world had second thoughts on plant-based meat in 2022, prompting some to declare doomsday for alternative meats altogether. Let’s catch up on all the action from the last year.

Alt-Meat Moments in 2022

Plant-Based Meat Mania Slows

In 2022 a barrage of headlines declared that PBM has “peaked” and is “facing leaner times”. What is behind all this?

In key markets such as the US, sales of plant-based meat flattened and dipped in 2022. Recent data from November 2022 for the US shows that volume and sales of PBM are down 3.8% and 11% respectively. Sales in the UK began to decline in Q2 of 2022. Singapore, Asia’s most developed PBM market, is seeing the same trend, which may be a sign of things to come for the region.

Several major brands pulled back on their PBM projects in 2022, particularly in the US. JBS axed their plant-based meat division Planterra Foods. Instead, they are choosing to focus on PBM operations in Brazil and Europe. McDonald's stopped the national roll-out of the McPlant burger in the states. However, they are making it a permanent fixture on their Netherlands menus. Recently, Pret a Manger announced it would close all but two of its UK stores offering a vegan-only menu, in favour of a full fleet of stores serving a hybrid menu.

Meanwhile, pioneers of plant-based burgers Beyond Meat and Impossible both saw layoffs. Beyond’s share price, which has come to be seen as a barometer for the PBM industry, was down 79% at the end of 2022.

What’s at the Root of Sudden Reservations Toward Plant-Based Meat?

Analysts point to several factors behind the loss of appetite for PBM. One is the high price of plant-based meat combined with rising inflation. Plant-based meat is generally sold at a premium and so customers purchased less. This in turn may have prompted producers and retailers to shift focus away from PBM.

Another reason is health. Recently, PBM has been called out in the media for its long list of ingredients and high saturated fat content. This caused consumers to question the supposed health benefits that initially attracted them to try PBM.

If health were the only factor though, then brands such as OZO Foods, which had lower saturated fat and more fibre than rivals, would surely be top sellers (OZO was part of JBS’s now-defunct US branch of Planterra Foods). This didn’t seem to be the case according to Food Navigator.

Quality is also an important factor in consumers waning appetite for PBM. The market is oversaturated with products. Many are great, but as people have sought to capitalize on the PBM boom, sub-par products have made it to market too. Unfortunately, low-quality soy burgers have ended up burning consumers.

For a deeper dive into what underlies the drop in sales, investor Michal Klar recently analyzed this in his newsletter - .

The meaning of all this is nothing so dramatic as the death of plant-based meat, however. After all, the same environmental and food security problems that spurred the rise of plant-based meat have gone nowhere. If anything, the need for a sustainable food system looms even larger today.

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It is rather that, in 2023, plant-based meat faces more discerning stakeholders across the board. Going forward, investments will be harder to come by. Retailers will be more selective in the alt-meats they offer. Consumers will scrutinize ingredient labels more intensely. And producers will have to work harder to develop products that wow.

This is not a bad thing. It forces innovators across the board to focus on quality PBM that meets customers’ expectations and reignites appetites. Backs against the wall, we believe the industry will deliver.

There are Many More Sides To The Alt-Meat Story

It wasn’t all flat sales and business failures last year. The alt-meat space saw plenty of promising events and growth, like Impossible Foods which recently reported more than 50% sales growth for 2022.

Here are a few of the other big stories from the last 12 months to catch you up on what’s happening in the world of alternative meat.

Big Plant-Based Meat News in 2022

💰 Some Big Funding To Plant-Based Innovators

Not all producers of plant-based meat suffered in 2022. Several companies landed major funding deals to support their growth, including some big ones in APAC. Here are some examples:

• Next Gen Foods, the parent company of TiNDLE, the plant-based chicken company taking the world by storm, received USD 100 million in Series A investment. 

• Starfield Food Science & Technology, a leading plant-based meat company in China whose products are sold in 14,000 stores, received USD 100 million to expand operations.

• Maker of Mediterranian-inspired plant-based products Huera raised a USD 20 million Series A and doubled turnover to EUR 14.7 million.

🐑 More Types of Plant-Based Meat on the Menu

In a market saturated with burgers, 2022 saw the rise of different categories of plant-based meat.

• Slovenian company Juicy Marbles launched a plant-based loin.

• Black Sheep Foods rolled out plant-based lamb across 44 US restaurants.

• Several companies, including THIS Isn’t Bacon, developed plant-based bacon products to satisfy consumers' crispy cravings.

📈 Some Big Food Giants Bet on PBM

• Nestle, off the back of close to USD 1 billion in plant-based sales in 2021, announced plans to expand their vegan portfolio with offerings such as plant-based foie gras.  

• Japan’s Ajinomoto announced it has begun developing plant-based and cultivated meat products, recognizing alternative protein as a key area for growth.

• Unilever announced its ambition to achieve USD 1 billion in sales of plant-based meat and dairy in the next 5 years.

🍔 Global Fast Food Expansion

2022 saw yet more enthusiasm for plant-based products from major fast-food chains.

• Dominoes partnered with Impossible to launch a range of plant-based beef pizzas in Australia.

• McDonald’s made their McPlant a permanent fixture on menus in the Netherlands.

• The Vegetarian Butcher, a plant-based meat subsidiary of Unilever, partnered with Subway to launch plant-based beef subs in Northern Europe.

👀 What to Watch in the PBM Space in 2023?

Hybrid meat products are an exciting space to watch.

Recent advances in cultivated fat have the industry wobbling with excitement about the potential this holds for improving the mouth-feel and texture of plant-based meats, one area they have failed to wow consumers so far.

There’s also a trend towards blends of plant-based meat and conventional meat. For example, Japanese supermarket giant AEON is testing a 50/50 blend of pork and pea protein, and Swedish firm Mycorena is working on a mycoprotein meat mince prototype with supermarket ICA.

A 50/50 blend of plant and animal could be the stepping stone needed to get more consumers to buy into a plant-based diet, while also cutting down conventional meat production. This may be especially true in Asia, where meat is a significant part of the diet as a status symbol (in some areas), and is widely seen as healthy. Those who aren’t interested in 100% plant-based alternatives may find it easier to get on board with a 50% meat, 50% alternative product.

Big Cultivated-Meat News in 2022

💰 Investment In Cultivated Meat Stayed Strong

Whether it was just that less investment went into PBM, or investors shifted focus, cultivated protein seemed to get a lot of attention in 2022. Investment in the space was at USD 693 million as of November. A small dip from 2021, but minor compared to the drop in funding for PBM. In addition, favourable regulatory events, government support, and industry-wide collaboration all served to raise hopes amongst stakeholders for the potential of cultivated meat. 

📜 Regulatory Progress Was Made

Advances in regulation also contributed to enthusiasm for this futuristic technology. The FDA awarded GRAS status to Upside Foods, and the Singaporean government gave the green light to Vow to sell cultivated quail meat.

🏛 Governments All Over The World Support Cultivated Meat

Governments worldwide showed support for cultivated meat. For example:

• Cultivated meat was served at COP 27 to officials from around the world.

• The Dutch government made EUR 60 million investment in the form of a grant for cultivated protein.

• Japan’s health ministry began the process for regulatory approval of cultivated meat.

• Israel’s Innovation Authority awarded $18 million to a consortium of cultivated meat companies to further the advancement of their field.

🏗 The Foundations For A Cultivated Meat Industry Formed

The cultivated meat industry is taking shape as an industry.

• Earlier this year, the APAC Society of Cellular Agriculture formed to unite stakeholders across the region. They joined forces with UK and EU bodies to speed up the development of cultivated proteins worldwide.

• Big food companies continued to forge partnerships with, and show support for, cultivated meat startups. European premium meat company Luiten Food joined forces with US startup Orbillion Bio to bring cultivated wagyu to Europe. Tyson Foods also made up part of Upside Foods USD 400 million series C.

👀 What to Watch in the Cultivated Space in 2023?

More activity in the regulatory space. 

Industry insiders generally agree that cultivated meat products won’t hit retail for years to come (at least 5 according to recent estimates from some of our sources). Technological barriers are the big thing here. It will take companies more time to overcome these and achieve commercial scale.

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In the meantime, everyone’s working hard to get regulations in place. After the industry banded together in 2022 and united stakeholders in Big Food and government alike, 2023 is bound to bring more regulatory milestones across the world.

And while cultivated meat won’t be hitting retail anytime soon, most companies are looking to restaurants as a first step. After being served at COP27 so we’re interested to see what cultivated meat menus pop up this year too.

Big Fermentation Powered-Meat News in 2022

💪 Fungi-Based Protein Geared up for Growth in 2022

• Several fungi-based protein companies banded together to form the Fungi-Based Protein Association, the industry’s first trade group. The organization will collaborate to raise awareness about the benefits of fungi-based proteins.

• Mycorena, one of the leading fermentation-based protein companies, partnered with TetraPack to build a production facility to make fungi-based protein ingredients. This is also after they opened Europe’s largest mycelium production facility.

• Meati Foods received USD 150 million in series C investment to grow their mycelium-based meat offerings. The company sells their products online and in some stores in the US. They aim to achieve a nationwide footprint in 2023.

👀 One Thing to Watch in 2023

Investment in mycelium plus more mushroom based-products launching

Regulations are a barrier globally to mycelium-based meats. In the case of Europe for example, mycelium meat makers are currently restricted by novel food regulations. Currently, companies must apply for approval of their mycelium ingredients before commercializing products. At present, the process can take anything between 18 months to several years. But this is a category of alt-meat that promises production efficiency and, as Quorn has demonstrated, is appealing to consumers. 

Mushrooms are also versatile alt-protein ingredients being used by companies such as Green Rebel and Libre Foods to make waves. Startups, Big Food companies, and (hopefully) regulators alike will push forward with innovations in this space in 2023.

Alt-Meat in APAC and Japan

It’s unclear (publically available data is virtually non-existent) whether APAC is following the trend in the US of slowing growth for plant-based meat sales.

What is clear is that a lot happened in 2022 to set the stage for future growth of the alt-meat category in APAC.

The region is home to over 60% of the world’s population and counting. Estimates suggest that APAC will account for 65% of the world’s middle class by 2030 and the largest share of the world’s GDP.

Despite the significance of the region, it faces challenges in terms of food security. For its size, APAC has limited agricultural land, only around 30%, and is considered under-resourced to support its growing population. Also, several of the major economic centres - Japan, Hong Kong, and Singapore - have poor food self-sufficiency. They rely heavily on imports and have limited agricultural land to produce their own food. This does not translate well into food systems that look to land-intensive livestock for protein sustenance.

Governments are taking this issue seriously and have made commitments to building sustainable, future-proof food systems. Last year China, Japan and South Korea all emphasised alternative protein in policy and initiatives aimed at food sustainability, including support for cultivated meat. Singapore too is considered the world leader in its support for food technology and efforts to build an innovative and sustainable food system, investing heavily in alternative proteins.

Businesses across the region also continue to invest in alternative meat. A 2022 report shows that APAC accounts for over half of all IP in the plant-based meat space. Thailand’s CP Foods, a global top three pork and poultry producer, launched its own line of plant-based meat in 2022, citing a 6 - 20% CAGR over the next five years. Japan’s Ajinomoto announced that alt-protein products would be a major pillar of their business going forward. Several APAC startups received record-breaking funding rounds, such as Starfield, Next Gen Foods, and Vow which secured the largest ever series A for a cultivated meat startup.

So, while the above is just a taster, APAC clearly has a lot going for its alt-meat market. In fact, tempted by the potential, godfathers of the industry Impossible Foods and Beyond Meat both expanded their presence in the region last year. Impossible to Australia, New Zealand, and Hong Kong, and Beyond Meat to Japan.

Speaking of the land of the rising sun…

An Update on Alt-Meat in Japan

Since we wrote about plant-based meat in 2021, the alternative meat space in Japan has grown. Estimates by the Japan Management Association Institute put the domestic market for soy meat in 2022 at USD 19 billion. This is more than double the size of plant-based meat market estimates we cited in 2021.

Over the last two years, Japan’s Big Food companies have continued to expand their lines of plant-based meat. Notably, ready-meal-type products have increased in number since 2021, such as Kagome’s pouch-type soy meat curries and pasta sauces. At the end of 2022, Beyond Meat launched via United Supermarket Holdings stores, another potential signal of growing demand for plant-based meats.

All this means that consumers in Japan are more exposed to plant-based products. Retailers have had more to add to their dedicated alt-protein shelves. Food services have also continued to offer plant-based menu items. For example, Starbucks rolled out an expanded plant-based menu last year.

In addition to plant-based, progress has been made in advancing cultivated meat. The government and local organizations showed strong support for the category last year. Japan’s Ministry of Health began assessing the safety of cultivated meat for human consumption, a move seen to signal a start to the regulation process. The Japan Association for Cellular Agriculture also announced that it would form a legal entity to accelerate its efforts to bring cultivated meat to Japan.

While the alt-meat category has grown, and with it, consumer awareness, consumer demand is ultimately tepid in Japan. A report from Japan’s Ministry of Finance highlights:

The same article highlights that Japanese consumers are not motivated by environmental and ethical reasons when purchasing food. Instead, companies need to develop better-tasting alternatives at a lower price point, which is what motivates consumers most. Additionally, companies need to do more to educate consumers about meat alternatives from the angle of taste and price.

But this is challenging, especially now. Inflation is hitting Japan and this will likely dampen consumers’ appetite to invest in higher-priced plant-based products.

It may be telling that AEON supermarkets recently launched a hybrid pork mince made of 50% pork and 50% pea protein. It is competitively priced with regular pork and, as the package promotes, the pea protein helps removes the strong smell of traditional pork mince. Hybrid products like these may be easier for Japanese consumers to accept as their texture is closer to the real thing. They will also be seen to bring dual health benefits of animal and plant protein.

Will hybrid products become a big trend in Japan in 2023? It’s too early to tell. What we can see based on last year is that companies in Japan increasingly support alternative meat products - at the start of the year there are more alt-meats on offer than ever before. To ensure demand meets supply in 2023, players will need to be innovative in their approach to educating consumers and producing enticing alt-meat offerings.

The Top 50 Alt-Meat Innovators To Watch in 2023

To conclude today’s article, check out our exclusive unlockable list of the top 50 alt-meat innovators to watch in 2023.

That’s all folks

Thanks for reading our overview of the latest happenings in the world of alt-meat. What will 2023 hold? Next week we’ll be speaking to real consumers to try and figure out how innovators can meat their needs this year.

See you next Tuesday.

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