A new report by agribusiness banking specialist Rabobank reveals the growth of plant-based meat substitutes as creating new opportunities for grains, oilseeds and pulse producers.
Rabobank says that as consumer preferences start demanding certain brands over others, and with them certain ingredients over others, producers of plant-based meat substitutes will increasingly turn their attention toward ingredient sourcing to strike the right balance between quality and price.
The report says current New Zealand consumption of plant-based proteins is dominated, as it is in Europe and North America, by soy and wheat proteins accounting for more than 70% of the proteins used.
While varying between markets, pea proteins, rice, lentils and niche grains have also gained prominence in the plant-based meat substitute segment.
NZ’s prospects of capitalising on the growth of plant-based animal protein consumption would largely hinge on greater demand for products utilising protein sources other than soy, RaboResearch grains and oilseeds analyst Cheryl Kalisch-Gordon said.
She says that for NZ provenance will support success.
Plant proteins are already an important contributor to meeting the protein needs of the global population.
Wheat in the form of bread, pasta and other flour products provides 20% of the daily protein for more than half the world’s population, while soy proteins have been used for thousands of years in Asia in tofu and tempeh, and in textured protein food additives since the mid-late 1900s.
Historically plant proteins have primarily, though not exclusively, been consumed where meat has been unavailable or unaffordable, or to extend the available meat further given cost considerations.
Over the past decade the global consumption of plant proteins has continued to increase in developed economies, but with change driven by consumer demand and with innovation for plant-based proteins aimed to complement or substitute animal proteins.
Global growth in the total meat substitutes category of tofu, veggie burgers and analogues, averaged 4% a year between 2014 and 2019, well above that of the much larger total global meat consumption.
Growth in plant-based meat substitutes has been a key driver of this growth and is expected to continue to be so over the coming decade, supported by the extent of investment in the sector.
Over the past decade, in the US alone, more than US$2.3 billion of venture capital was raised by companies in the plant-based food domain.
The investments from outside the US should also be counted, as well as the non-venture capital.
In 2019, plant proteins consumed in NZ and Australia in plant-based meat alternatives amounted to 10,000 tonnes of whole grain equivalent.
“Increased usage of field peas as a protein source in meat substitutes creates the greatest opportunity for NZ,” Kalisch-Gordon said.
“Currently, field peas are the only pulse produced in NZ at scale.
“At just 8,000 tonnes per annum, this is still a relatively small volume.”
There is no protein isolate capacity in NZ, so plant-based meat substitute consumption in NZ relies on imported consumer-ready products.
There is scope to increase to 20,000t of field pea production with appropriate price signals, but this would still represent a small supply base on which to build processing capacity.
“Given the challenges in achieving competitive unit costs in production and fractionation without scale, a NZ supply chain aiming to secure opportunities from plant-based meat substitutes would be relying on an even stronger provenance premium to be paid by manufacturers and consumers to cover the costs of production,” she said.
Plant protein ingredient suppliers expanding capacity and diversifying ingredients to meet demand growth; collaboration along the supply chain ranging from purchasing agreements to joint ventures and vertical integration to cater for changing geographic volume, variety, quality and availability; and new entrants that can develop state-of-the-art greenfield facilities to cater to the emerging needs of the segment – are highlighted in the report as ways to best make use of the opportunities presented.