By Srini Rajamani, SVP and Sector Head of Consumer and Life Sciences at Wipro Limited
Interest in meat alternatives has grown in recent years, fueled by sustainability concerns and advancements in food manufacturing. Imagine you go to the grocery store and the shelves are nearly wiped clean. There’s very little to choose from, and what is left is expensive. This might sound familiar if your local grocery store was hit hard with supply shortages during the COVID pandemic, but this is a possibility if we don’t proactively look at the food supply chain. According to many experts, moving toward plant-based meats could help alleviate these food crises.
“It’s just mathematics: If instead of feeding all of these crops to animals, and then eating the animals, you just use the crops directly for human consumption, you need less crops overall and therefore alleviate the constraints on the system,” Malte Clausen, a partner at Boston Consulting Group, said.
Traditional meat processing can come at a high environmental cost, and consumers appear more willing than ever to try diets that can reduce their environmental impacts. Despite disruptions associated with the pandemic, the global plant-based meat market is expected to grow to $25.1 billion by 2030 with a 22.71% compound annual growth rate.
Even meat manufacturers have started branching into meat alternatives, suggesting the start of a major shift in the global food value chain — one that could affect public health, environmental health, and bottom lines.
Food companies are becoming tech companies
More options for meat alternatives are on the market now than ever before. Advancements in technology and food science have also elevated these offerings, allowing companies to create products comparable to the original. The Impossible Burger, for example, uses a modified soy protein to produce a texture and flavor similar to a beef patty. Beyond Meat uses pea protein and beet juice to recreate a traditional meat burger look and taste. Then, there are cell-based proteins grown in labs from animal cells and blended products that combine an animal protein like chicken or beef with a plant-based protein like soy or peas. These options are flooding the once-scant market of meat alternatives, creating a slew of choices for consumers.
What’s more, these companies are no longer targeting primarily vegetarians or vegans. Instead, they’re marketing to meat eaters and flexitarians — people who are curious about meat alternatives but may not want to give up eating meat. This demographic has different expectations for their meat alternatives than previous generations of consumers. More than a substitute, they want a product that closely mirrors the original. Food companies are leaning on food scientists and technologies to develop products that are more natural, sustainable, and realistic.
Lifestyle and sustainability: A powerful combination
But perhaps the most significant forces driving this trend toward meat alternatives are lifestyle changes and sustainability concerns.
From a lifestyle perspective, many consumers today are interested in plant-based diets. Doctors have long advocated for diets heavier on plants to combat health conditions like obesity, heart disease, and diabetes. This message is echoed by lifestyle brands promoting self-care through healthy eating — including natural, plant-heavy diets.
Alternative meat producers are benefiting tremendously from this overlap. Young people might be inclined to try an Impossible Burger because they saw it on Instagram, while their parents might order one because they’re listening to their doctor. The support from both sides is encouraging new consumer behaviors, elevating meat alternatives from food fad to conscious consumption.
The climate crisis also poses a challenge for the meat industry. Businesses face pressure from consumers and governments to reduce their impacts on the environment and adopt more sustainable business models, but traditional meat production is notoriously bad for the environment. Analysis by Cornell ecologists shows the ratio of energy consumption to protein output for beef cattle is 54:1. It takes tremendous amounts of water, grain, and land to feed and raise livestock for meat production: “100,000 liters of water for every kilogram of [beef]” compared to 2,000 liters for soybeans and 900 for wheat and potatoes.
Livestock production also emits a lot of greenhouse gasses (GHG) through animal waste and processing. To meet their sustainability goals, companies like Tyson, Hormel, and Cargill are exploring alternative revenue streams that are less taxing on the environment, such as investing in startups producing meat alternatives or experimenting with their own alternatives in-house.
Meat producers are getting involved
This combination of market drivers has created significant momentum, demonstrated by the popularity of front-runners like Beyond Meat and Impossible Burger but also the participation of large meat producers like Tyson, Cargill, Hormel, and Smithfield. Traditional meat producers recognize they cannot meet their goals for GHG emissions or carbon neutrality without offsetting some of their production to more sustainable products — whether this means developing their own meat alternatives or investing in startups already making successful products.
The interest from large meat producers suggests we may be on the cusp of a major change in the global supply chain. Large meat producers have processing and distribution capabilities that startups need for keeping up with growing consumer demand. They also have established customer bases and marketing capabilities that can accelerate growth for these small companies (and their own companies) while minimizing their environmental impacts.
Building a meatless future for a sustainable future
Large food manufacturers have established lines of production and distribution (and, of course, funding) that smaller companies may not have yet. By working together, these companies can implement larger, more sustainable supply chain changes that the entire food industry could capitalize on to amplify and accelerate its positive environmental impact.
1. Improved track-and-trace
When food is not processed, stored, or shipped properly, it can spoil or become contaminated. Food waste contributes to global hunger, costs businesses money and resources, and muddies supply chains. Food producers and suppliers need a better way to trace ingredients and products from the source. This shift in market demand is an opportunity for businesses large and small to reevaluate their value chains and make any enhancements necessary to improve track-and-trace.
2. Shifting supply sources
As companies move away from traditional livestock supply, they’re strengthening partnerships with ingredient suppliers. Chickpeas, for example, are a popular ingredient for plant-based meat manufacturers. Producers of meat alternatives need to establish relationships with farms that can meet growing consumer demand and develop a supply chain that can scale with their businesses. Impossible Foods already encountered a supply chain issue when it began distributing to retailers worldwide and couldn’t meet the sudden increase in demand.
3. Change management
As consumer preferences shift, however gradually, away from meat, the food supply chain will need to adapt. This will likely mean greater demand for certain crops — like chickpeas, soy, and yellow peas — that might require new farm subsidies and training and reskilling for new processes. Protein producers need to manage these changes to limit the impact on traditional farmers and empower them to thrive in these new roles.
4. Technology partners and system integrators
Technology partners and consulting partners can also be a huge help throughout these transitions because of how technical the processes are becoming. R&D is essential for success in this industry and requires full-time staff to drive innovation and outpace competitors. Technology companies familiar with Agile operations and rapid prototyping can help smaller companies that might be more focused on establishing and maintaining the business, or larger companies that might not be as agile or ready to innovate.
5. Automated, smart supply chains
How do you bring in technologies like artificial intelligence and machine learning to enable smart manufacturing? As consumer demand changes, supply chains need to adapt. Technology companies can help by integrating technology like machine learning and advanced data analytics into supply chain management for greater visibility throughout and the ability to make changes faster. Alternative foods require more processing than whole foods and can benefit from standardized, automated operations to promote health, sustainability, and efficiency. Blockchain solutions are already enhancing tracking and tracing, temperature controls, and handling controls throughout the production and shipment of sensitive items like food.
A technological food future
From the taste and texture of the food itself to product offerings and the brand ethos, customer experience is a broad and important area for brands, especially emerging ones. Technology partners can help brands collect and analyze data on customers and the markets, use data analysis and algorithms to generate more targeted campaigns, and implement automated and intelligent technologies to augment sales and marketing teams. Most importantly, technology provides tremendous potential for process enhancements for promoting sustainability — such as machine learning to help farmers plan and manage crops to maximize yield, or processes to limit waste or treat it to be recycled safely elsewhere.
This is a true evolution of the market — a steady, incremental change likely to reveal transformation in the way we source, manufacture, distribute, and consume food products to support a sustainable future. Businesses are already benefiting from early investments in meat alternatives, but it’s not too late for others to get involved.
