Redefining meat #1: Japan vs the world

Are we at a turning point for plant-based meats?

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For the next few months, we will be taking a deep dive into Japan’s plant-based food category. Market Shake comes in to help you better understand what’s happening in this $424 billion market.

The period is exciting in this particular segment in all regional markets. The global demand for plant-based products is growing, and the pandemic gave a significant push to the trend, with ethical, environmental, and health concerns on the rise. Large food manufacturers boosted their R&D. Food innovation start-ups are popping up in North America, Europe, and the Asia Pacific. One after another, major food chains embraced the shift and started offering meat alternatives to consumers or are considering doing so soon. Manufacturers launched new, better, and tastier products. According to experts, what used to be a niche is now becoming mainstream. 

The shift has been happening in Japan, too. And we’ve decided to first talk about the main course: vegetable protein. Meat alternatives in Japan are gaining steam, though the market is relatively small. But a small market notable growth means there’s room for new entrants and opportunities to grab.

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Summary of this edition

  1. The worldwide boom of plant-based meat alternatives

  2. In Japan, it’s an exciting time for the industry.

  3. Projections have Japan’s plant-based meat market growing tenfold in the coming years.

Let’s dig in!


The worldwide boom of plant-based meat alternatives

North America

America is the largest region in the plant-based meat market and is experiencing a rapid expansion and shows no signs of slowing down. Experts considered 2019 as the year vegetable protein became mainstream in the land of the Stars and Stripes. The shift is driven by an increasing number of consumers identifying themselves as flexitarian, vegetarians, or vegans. This trend is particularly notable with the millennial generation, half of them ditching meat for environmental concerns. Home to meat substitute pioneers such as Impossible Foods and Beyond Meat, the United States is considered a leading hub for innovation in this market.

Impossible Foods has revolutionized the meat industry, and their plant-based patties are served in over 17,000 restaurants worldwide. The California-based company managed to develop key strategic partnerships with major chains such as Burger King and Starbucks. Sensing the shift carried by the pandemic, Impossible Foods accelerated their products launch for retail and hit the jackpot with an explosive expansion. In 2020, the company doubled its R&D department

Named ‘Disruptor of the year” in 2019, Beyond Meat is another pioneer in the meat alt industry. Fast-growing, this company too, is heavily investing in R&D and eyeing the Asian market, with building two facilities in China. Beyond Meat’s shares are soaring, also, as the company is teaming up with major food manufacturers.

In Canada, plant-based investments are thriving, and the race is on to compete with US-based companies in the Northern hemisphere. The government encourages the consumption of vegetable protein in its Food Guide. Projections show that up to 60% of ‘meat’ may come from non-animal sources by 2040—it’s worth adding edible insects appear promising as well. Both pioneer companies, such as Gardein (founded in 2003) and more recent players like the Very Good Butchers and Modern Meat, are expanding at home and eyeing foreign markets as well.  

Europe

Europe could very well take the lead in plant-based innovation in the coming years. Encouraged by the European Union, which promotes research and development of cleaner, green ‘protein’ and consumer trends, start-ups invest in the plant-based market. 

The United Kingdom counts many notable companies—Quorn Foods, which sells in no less than 14 European countries, the Meatless Farm, and Plant & Bean. Plant & Bean has recently opened Europe’s largest plant-based meat production facility in Boston, Lincolnshire, to cater to large international brands and retailers.

Launched in 2017 and financially back-up by the government, Spanish start-up Heura Foods announced a 450% growth in 2020. Sold in France and Singapore, the company is looking to expand in other European markets and South America, starting with Chile.

In the Netherlands, Schouten Food, a food company that started developing plant-based meat substitutes in 1990, is a specialist and a leading player in the market, selling 50 countries worldwide. This family business made noise earlier this year by announcing the development of plant-based seafood products

Australia and New Zealand

Both countries are heading towards a transition from animal to plant agriculture, with health concerns as a key driver. Consumers are better informed about product quality and taste, and seek cleaner, healthier alternatives. Meat substitutes are no longer perceived as limited to vegan and vegetarian consumers but became mainstream products. 

New Zealand Sunfed Meats and Sydney-based Fable Foods are the biggest plant meat start-ups in the region, but more players join the table, stimulating food innovation. The start-up Sustainable Foods, which is behind The Craft Meat Co brand, is now preparing to launch hemp-based meat this year. Australian v2food supplies New Zealand’s Burger King stores since early 2020, is gearing for a launch in Asia.

Asia 

Last year, Hong-Kong venture Green Monday Holdings raised 70 million dollars in investments for plant-based food growth. Founded in 2012, Green Monday has been pleading in favor of a more sustainable food system and backs up OmniFoods, a Canadian-based manufacturer of plant-based pork substitute products.

In Thailand, the giant conglomerate Charoen Pokphand Group launched plant-based food products in 2020, announcing that they believe in their potential in the ASEAN region. Thai food tech start-ups are also popping up. A few hours away, in Singapore, the recently launched start-up Karana has raised $1.7 million in funding to launch a pork substitute made from jackfruit. This new entrant will be competing against Beyond Meat and Impossible Food, already on the Singaporean market, where the demand for alternative meat is increasing. 

In Taiwan, where nearly 14% of the population is self-claimed vegetarian, Vegefarm is leading and already has an international presence. 

In Japan, it’s an exciting time for the industry.

The alternative meat market isn’t new to Asia, where soy-based products—tempeh, tofu to mention a few, are part of consumers’ daily diet and traditional cuisines. What’s new, however, is the development of substitutes that are meat-like in appearance and texture, with flavors that mimic meat. Today, soy-based alternatives primarily dominate the market. But other protein sources—peas, mycroproteins, etc., developed in the West, are making their way in Japan.

For this industry in Japan, 2020 was an exciting test-year. Until 2020, the food industry developed meat alternatives almost exclusively for foreign visitors with different dietary needs. The foodservice industry was preparing itself to cater to approximately 40 million tourists, especially with the upcoming Olympic Games, introducing more vegetarian and vegan options. The pandemic brought tourism to a standstill but revealed the existence of a growing domestic demand for plant-based meat. While it is still a niche market from a size perspective, growth opportunities are exceptionally high. 

One after another, restaurant chains joined the plant-based bandwagon in 2020. 

In February 2020, Japan’s biggest curry restaurant chain Coco Ichibanya announced the national launch of a vegetarian set with a deep-fried soy-based patty. The announcement coincided with Mos Burger’s launch of a new plant-based patty for their Green Burger, warmly welcomed by consumers. 

A few months later, a mid-level player among the burger chain heavyweights McDonald’s and Mos Burger, Japanese chain Freshness Burger gathered positive attention when they launched their vegan Good Burger. It was then the turn of beloved coffee shop chain Doutor to join the club with a veggie meat sandwich in the fall.

Now, 2020 isn’t precisely the first-year Japanese fast-food chains give plant-based burgers and sandwiches a try.

Mos Burger launched a soybean patty in April 2015, and it has been on some stores’ menu since then. It’s worth noting the burger chain struggled for years with its plant-based burgers’ image, perceived as intended for vegetarians by mainstream consumers. The chain worked hard to change this perception around and target flexitarian consumers. In 2019, Lotteria, the third biggest burger chain in Japan, also tested with success a vegetarian patty—they made it a permanent addition to the menu in July 2020. The perspective of the Olympic Games opened the door to put more options on the table. 

But if plant-based meat isn’t entirely new to the foodservice industry, 2020 shows the wind has turned. Restaurant chains that had tested the water and spent months or years in product research and development felt the time was right to add more green to their menus. Consumer enthusiasm and results that exceeded expectations surprised everyone. The disruption caused by the pandemic was also a significant push for the movement to take off. 

New products on store shelves, but still a limited retail market

In 2020, the domestic industry rolled out new products one after another, most of which were soy-based. On top of the existing dozen local plant-based meat makers, Marukome and Maisen Genmai, major Japanese food producers such as Nippon Ham Foods Ltd., Itoham Foods Inc, and Marudai Food Co., put more weight into their product development and planning. Under the surface, competition among manufacturers is intensifying, with more effort placed on food technology. The holy grail is to find the best textures and flavors that can convince consumers to embrace these new products. 

The three major convenience store chains (Seven-Eleven, Family Mart, and Lawson) launched ready-to-eat products that contain meat alternatives, while more dried meat products made their way to supermarkets. Other substitutes—sausages, ham, and frozen products also appeared in stores. 

However, Japan hasn’t reached the level of North America or Europe, where consumers can buy various plant-based meat just about anywhere at their local stores. The number of points of sales is still somewhat limited, and manufacturers are still only talking in monthly sales—not weekly or daily. For the industry, the boom is there, and the period is critical for success, but penetrating the retail market is challenging.

The Japanese government is looking to develop the plant-based meat industry. And to regulate it soon.

In April 2020, the Ministry of Agriculture, Forestry, and Fisheries (MAFF) established the Food Tech Study Group, a forum consisting of 164 food companies, start-ups, research institutes, and other entities, to look into diversifying protein sources in the Japanese diet. Their work covered plant-based proteins and insects, aquaculture, algal proteins, alternative meat, and cultured meat.

After their first interim report in July, the ministry created an association to facilitate the cooperation between industry players and the government. While the association is still in the making, it has set its objectives. Research groups will stimulate the development of Japan’s food industry technology and focus on future regulations. They will communicate closely with MAFF and the Ministry of Health, Labour and Welfare, Food Safety Commission, the Consumer Affairs Agency, the Ministry of Economy, Trade, and Industry, and other governmental agencies to establish regulations and standards. 

Projections have Japan’s plant-based meat market growing tenfold in the coming years.

A research paper by the Norinchukin Research Institute on plant-derived meat’s market expansion potential estimated that Japan’s market size is currently at 6.8 million dollars. Small potatoes compared to the ‘real’ meat market, valued at 33 billion dollars. 

But the potential is there, as explained by Mr. Fukuda (Marketing Director at Nippon Ham Foods) in an interview with the Asahi Shimbun on November 8th, 2020.

The market is expected to grow ten times bigger in the future in response to growing health consciousness, demand for vegan foods, as well as the demand for diverse protein sources.” 

That’s all, folks!

Stay tuned for our next issue on Japanese consumers and their perception of plant-based protein as an alternative to animal products. 


This publication was brought to you by GourmetPro - Food & Beverage experts in Japan.

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