The global Plant-Based meat market was valued at USD 11.1 billion in 2019 and is expected to grow at a CAGR of 15.8% during 2020-2027. The factors responsible for the growth of Plant-Based meat across the globe is due growing vegan population and Plant-Based meat products, rising consumer awareness regarding its nutritional benefits, and increasing health concerns due to COVID-19 concerns.
The global pandemic of COVID-19 has positively impacted the sale of Plant-Based meat, particularly in the U.S. and Europe. The conventional meat industry in the U.S. is in a tailspin. Owing to the risk of infection and country wise serious lockdown, then the meat packing plants in the U.S. are closed. This closure has led to reduction in more than 25% of the meat production and disruption in the food supply. Plant-Based meat producers such as Tyson Foods have announced to take advantage of such gap in food supply chain across the country. Moreover, the U.S. based Plant-Based meat giants, Beyond Meats, and Impossible Foods have taken steps to increase their retail footprint.
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Plant-Based Protein Demand is Driven by Health Concerns and Millennials
The expanding reach of social media across the world, rising concerns about food industry transparency regarding the efficacy, ill effects, sustainability of the animal based protein foods is greatly impacting the consumer buying decisions. With the ongoing pandemic of COVID-19, which is suspected to be originated from animal, the shift of consumer from meat products to Plant-Based meat is inevitable. Plant-Based meat is situated on the lucrative crossroad of these social dynamics and is likely to be benefitted from this phenomenon.
Consumers around the world are reducing animal meat, owing to growing awareness of link between high meat consumption and spread of non-communicable diseases (NCDs), as supported continuous scientific evidence over the years. This in effect encourages health campaigners, experts, and policymakers to send a clear message about the effects of less meat consumption. The trend is expected to continue over the years. According to the research published in the British Medical Journal (BMJ) related elevated rates of red meat intake to a 26 per cent enhanced likelihood of developing more than nine NCDs, including obesity, type 2 diabetes, strokes and Alzheimer's. Moreover, the World Health Organization (WHO) also listed red and processed meat as carcinogenic.
Innovations in food technology
Advances in plant-based meat products is attracting a great deal of customer and national press attention, as well as filling inventory in supermarket aisles and food service menus. We've already seen innovative new products and companies appear across categories. However, we may be on the verge of a revolution in food technology that could accelerate this trend exponentially. Innovations such as synthetic fertilizers, herbicides, selective breeding and antibiotics have enabled food production to keep pace with population growth since the 'Green Revolution' of the 1930s to 1960s.
However, those productivity gains are limited. Animal farming is inherently inefficient, especially as regards conversion of feeds. According to the study published by World Resources Institute (WRI), in 2016, even the most efficient meat source, chicken, converts to animal protein only around 11 percent of gross feed energy. It is gradually understood that this inefficiency has produced a mechanism that is ready to shake. In addition, this would produce a significant shift in productivity at a fraction of the expense and with much less detrimental effects.
Consumer wariness over over-processing and unnecessarily long comments on ingredients is probably the greatest obstacle confronting plant-based meat producers. The ill impacts of plant-based meat products still to be deciphered. Moreover, the market is also constrained by the lawsuits against it by lobby forces supporting animal based meat products.
The market is primarily segmented on the basis of source, by product, by distribution channel, and geographic region.
By Distribution Channel
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Based upon the source, the global market is categorized into soy, wheat, pea, and others. In 2019, the soy segment expected to dominate the Plant-Based meat market. The segment’s high share is due to its protein richness and widespread popularity. Soy based meats are an excellent source of protein as compared to legumes. It also contains a different kind of protein, which are not present in animal meats including dietary cholesterol and saturated fats.
According to the American Heart Association (AHA), Soy based foods are low in saturated fats, whereas animal based protein is high in saturated fats and cholesterol, which increases the probability of developing cardiovascular disease. Moreover, the growing consumer concern with the consumption of animal based protein, as COVID-19 is considered to be originated from animal, and rise in adoption of vegan diets expected to drive the usage of soy based meat products.
On the basis of product, the global market is categorized into burger patties, strips & nuggets, meatballs, sausages, and others. In 2019, burger patties product segment is expected to be largest among all the segments and is projected to be fastest growing, over the study period. The high preference of burger patties among consumers is owing to low fat content and low gluten content. Moreover, the shift in consumer preference and rising demand for the burger patties from retail channels will likely complement the uptake of burger patties.
On the basis of distribution channel, the global market is categorized into Retail Outlets, Foodservice, E-commerce. In 2019, the e-commerce channel is expected to grow at the fastest rate over the study period. Increasing participation of omni-channel and internet penetration would support the development of e-commerce in the plant-based meat industry. E-commerce platforms are expected to see growing competition for plant-based meat products, while customers may stop heading to grocery outlets due to the introduction of lock-downs in the light of the ongoing pandemic. Distributors will switch to e-commerce and electronic shopping platforms for the sale of plant-based meat goods, resulting in higher competition from these sources. However, the operation of cold chains is still a possible problem for these outlets.
Geographically, North America is the largest revenue contributor in the Plant-Based meat market. The North American region, in particular the US, is experiencing adverse COVID outcomes. Europe's growing trend of veganism has pushed the growth of the meat industry based on plants. The UK hosts the world's largest vegan populations, further boosting demand for vegetable-based meat products in Europe. The latest epidemic of COVID-19 and adverse comparisons of animal-based food would also improve the demand in North America and Europe in the coming years as COVID's worst effects have been seen by various countries in both areas.
Moreover, developed economies across the world had issued dietary guidelines to reduce the consumption of animal meat consumption. European countries such as the U.K, Sweden, France, and the Netherland had established guidelines for its citizens to reduce intake meat and dairy products.
Canada's Food Guide focuses on plant-based foods over animal proteins. In 2016, China's Ministry of Health revised to lower the range of meat consumption to encourage its citizens to reduce their intake of meat. Moreover, The French National Assembly adopted an amendment to the country's Rural Code in April 2018, where it states that designations relating to animal products cannot be used to market food products of which is a substantial part of vegetables.
The 2018 reform of the Novel Food Regulation aimed to improve the first two of these requirements by creating a consistent mechanism for product authorization in order to provide for quicker consumer acceptance of goods. Funds for innovation, lies outside the scope of Novel Food Regulation, although the provision of five-year data protection, new scientific data supporting the application provides manufacturers with a degree of financial assurance by safeguarding their competitive advantage over a period of time.
Key players operating in the global market include Impossible Foods, V2food, Beyond Meat, Garden Protein International, Zhenmeat, Morningstar Farms, Novameat, Quorn Foods, Amy’s Kitchen, Omnipork, Maple Leaf Foods, Zikooin, The Vegetarian Butcher, Greenwise, Tofurky, Gold & Green Foods, Sunfed, and VBites. These players have broad industry coverage and high operational and financial strength. They are competing on several factors such as price, product quality, taste, nutritional claims, brand value, advertisement, and promotions.