Alternative proteins pose fresh challenge to meat and dairy

Negative publicity aimed at the meat and dairy industry in recent years has contributed to the rise in consumers looking for alternative sources of protein that promise greener or healthier credentials.

We look at how this situation has influenced retailers and consumers and examine whether farmers can take advantage of the new trends and how the meat and dairy sector can protect its place in the market.

Health and environment

The meat and dairy sectors are under scrutiny. Questions have been raised about their environmental impact, and red meat has been dogged by claims of detrimental effects on human health. 

A recent report by Oxford University suggests red meat is so bad for health that it should be subject to a tax to force people to eat less.

Green lobby groups still cite claims made by a 2006 United Nations report which claimed greenhouse gas emissions from farming were greater than those associated with transport. Even though the statistics were later retracted, the headline figure continues to be used by farming’s detractors.

In Britain, one in two people now say they are either interested in, or already follow, a plant-based diet.

Retailers have responded by creating an array of alternative proteins and, in the US alone, demand grew by more than 20% between June 2017 and June 2018. The sector is now worth more than £2.28bn, according to sales research company Nielsen.

Markets and trends for alternative protein in the UK

Meat eaters still dominate

A survey by consumer research group Kantar Worldpanel shows that, overall, 5% of the population follows a vegetarian lifestyle.

The highest proportion, at 12%, is among women aged 25-44, while the lowest proportion, at 2%, is among 16-24-year-old men. The figures have stayed relatively static for five years.

The vast majority of the population regard themselves as meat eaters – with figures from Kantar showing that 91% of British households still buy red meat. Just 2% claim to be vegan.

Meat-free spending is growing fast

The fastest rising categories of meat-free product sales were in ready meals, up 23% to £37.4m in the 12 months to August, and snacks which increased by 39% to £27.7m.

Dairy-free growing even faster

Of the milk substitutes on offer, nut and coconut alternatives together accounted for £102m – up 15% on 2017 levels – pushing soya milk into second place, with sales of £85m. However, the biggest growth area is oat milk, which has more than doubled in two years to £23.6m.

Why are markets for plant-based food growing?

While the total number of people claiming to be vegetarian or vegan remains fairly static, sales of protein alternatives are growing fast.

According to AHDB consumer insight analyst Susie Stannard, this is because sales are being driven by meat eaters who are cutting down on the number of meat meals, rather than giving up altogether.

This group makes up about 7% of the UK population and has been branded “flexitarian”.

Research by the grocery trade body IGD suggests this growing interest in plant-based diets among those eating meat is being driven by both health concerns and ethics – in particular, animal welfare.

But about a third of those surveyed also believe plant-based food is better for the environment because of the high carbon and methane emissions associated with livestock farming.

Ms Stannard says supermarkets have been quick to respond to the plant-based protein demand by offering strongly-promoted vegan ranges, such as Tesco’s Wicked Kitchen.

In recent times, meat substitute products have accounted for 14% of all new “meat” launches tracked in Western Europe, she adds.

Should the livestock and dairy sectors be worried?

While the market data and anecdotal evidence point to a rapid rise in the popularity of alternative proteins, nine out of 10 households still buy meat.

In fact, Kantar’s figures reveal that fresh meat and poultry had a strong year in 2017, with the volume sold growing faster than can be explained by population growth alone.

AHDB data also suggests that the number of people willing to commit long-term to a truly vegan lifestyle – with its associated constraints on all animal-based products – will remain low.

But, crucially, its research also shows the ethos of veganism has shifted into mainstream thinking, with one in three respondents to an AHDB survey stating that they found vegan ideals “aspirational”.

This is what so-called “cell meat” producers hope to exploit, with claims of less dependence on livestock slaughter, lower water input, fewer carbon emissions and zero antibiotic use.

Investment

The technique is attracting multi-million dollar investments from the likes of Microsoft founder Bill Gates, agro-giant Cargill and Tyson Foods, one of the largest meat processors in the US.

Several companies including Just, Mosa Meat, Memphis Meats and SuperMeat have benefited from this investment and are already developing lab-grown beef, pork and poultry.

Mosa Meat says that one tissue sample from a cow can yield enough muscle tissue to make 80,000 quarter-pounders, cutting carbon emissions in the process.

Timescales for commercial availability, however, remain sketchy. Josh Tetrick, the chief executive of Just, has been quoted as saying some products could be on sale before the end of 2018.

However, others such as San Francisco-based Memphis Meats are more cautious with a target of 2021 for commercial launches.

One of the major reasons for this delay is that production costs have been astronomically high. Costs are now falling fast, though, and have dropped from £200,000 to create a single lab-grown burger in the early phases of development to just £10 by the end of this year.

But Ms Stannard says it is far from “game over” for conventionally produced meat. The cell-grown alternative will continue to face barriers to sales even when prices are low enough to make it affordable, she says.

Credentials

For example, the ethical credentials the developers boast of will not be enough to attract vegetarians or vegans because the production process still relies on slaughtered animals.

Others may baulk at the “processed” nature of the product, while health-conscious meat eaters may be put off by the lack of nutrients and vitamins in cell-grown meat compared with the real thing.

The reliance on foetal bovine serum as a growth medium is another limiting factor for all cell-based production, due to its cost and lack of supply.

Also, to date the lab technology has proved capable of producing only a type of meat “slurry” suitable  for burgers, but cannot deliver anything resembling a tasty, well-textured steak, Ms Stannard says.

What can be done to promote conventionally farmed meat and dairy?

Clearly, the products that represent a challenge to conventionally produced meat and dairy products have their downsides.

More importantly, conventional meat and dairy products have significant positives, Ms Stannard says, and these must be communicated effectively using all available media.

New product development, with a focus on convenience and natural health benefits, will also help to attract consumers who want to try something new.

This is particularly so in the milk sector which has long suffered from commoditisation. New products may help to arrest or even reverse the switch to non-dairy alternatives, Ms Stannard believes. 

Consumer trust is key to a secure demand, and the farming sector needs to continue to build transparency into the food chain, build on its ethical credentials and demonstrate the good work that is being done, she adds.

Exploring systems such as organic farming, grass-based systems and free range, along with ever-greater efficiency of input usage in housed systems, will also help counter any claims of poor sustainability.