Meatless meat’s pandemic-era gains show that shoppers are ready to try new offerings. And that may become increasingly necessary in the coming decades.
Concerns about the spread of the COVID-19 at meatpacking facilities and supply-chain troubles at grocery stores have raised concern about the safety of meat and pushed consumers to try other options. One result was that grocery store sales of meatless meat grew 264% during the first nine weeks of the pandemic.
Even before the pandemic, investors were becoming increasingly interested in supporting the development of the plant-based food industry. As more plant-based companies go public, their market capitalization will triple in 2021. It could reach $10 billion in the U.S. plant-based sector, which now includes the three public plant-based companies Beyond Meat, Tattooed Chef, and Laird Super Food.
Polaris Market Research expects the global plant-based meat market to grow 15.8% per year over the next seven years, from $11 billion in 2019, boosted by the surging popularity of veganism and pandemic-fueled health concerns.
The interest in new food options comes from global population growth, which is set to increase by a quarter to almost ten billion people by 2050. A booming global population will put strain on already limited resources to raise livestock and put more pressure on that industry to reduce its role in global warming. Climate change itself is expected to make water availability more unpredictable, which further complicates efforts to feed a massive population through traditional means.
Companies are responding to these challenges by opening the door to new approaches.
Last year, Tesco — the U.K.’s largest supermarket chain — announced plans to boost sales of plant-based products 300% by 2025 as part of a sustainability drive. Another retail giant Unilever outlined a new annual global sales target of $1.2 billion from plant-based meat and dairy within the next five to seven years, five times what it forecasted in 2020.
Nestlé – the world’s biggest food company – also announced plans to open its first plant-based food production facility in China in an attempt to boost its share across the rapidly growing Asian market.
There are no clear solutions to how to best handle population growth and climate change, yet many investors have bet on evolving food industry trends. For instance, there is growing demand for protein obtained from various sources – including insects.
And the market is flush with entrepreneurs such as Entoprotech, that offer defatted insect meal that could be used as a high protein replacement of fishmeal to feed livestock. It shows that different ways of developing food sources can play a role before food even gets to the table.
The coming decades will impose tremendous pressure on global food systems. Yet there will also be large opportunities for food producers that can rise to the unique challenges of the era. We are likely to see lots of them appear in due course.