Glacier FarmMedia – Reports of the death of the plant-based protein industry were grossly exaggerated, according to industry proponents.
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Major U.S. newspapers have reported that the 10-year plant-based protein fad is over, pointing to ominous signals such as the 80 per cent plunge in Beyond Meat’s share price and meat giant JBS’s termination of its Planterra business.
Why it matters: The plant-based protein industry continues to grow in many food categories and is expected to achieve greater market penetration if flavour and pricing are improved.
Murad Al-Katib, president of AGT Food and Ingredients, said reporters are mistakenly drawing conclusions on the long-term viability of an industry based on a “snapshot” of one segment.
“First of all, there was never a fad here,” he told delegates attending the Plant Forward conference hosted by Protein Industries Canada, Pulse Canada and Plant-Based Foods of Canada.
“There is an underpinning of health, nutrition, wellness and the environment. These are all things that I’ll put my money on every day.”
Leslie Ewins, executive director of Plant-Based Foods of Canada, said the media headlines are solely focused on the poor performance of plant-based burgers, “but the growth across many (other) categories is still enviable,” she said.
“Projections of continued growth have not changed, albeit maybe at more measured levels than we saw during the abnormal growth of the pandemic.”
Dan Magliocco, president of Danone Canada, said the plant-based food business is still in its infancy.
Household penetration rates for most dairy alternatives such as ice cream, yogurt and cheese are less than 10 per cent. Even with a successful category such as plant-based beverages, the penetration rate is only 40 per cent.
“There are some barriers as an industry we need to overcome,” he said. “This is food. It needs to taste good. This is food. It needs to be priced competitively.”
And it needs to be easily accessible in grocery stores.
“When I walk into a store, it can’t be a safari to find where these products are. If I’m going to the milk section, I’d like to see it there. We’re not there yet,” said Magliocco.
Adam Grogan, president of Greenleaf Foods, a wholly owned subsidiary of Maple Leaf Foods, agrees that the industry is young and still has vast potential.
“We can’t judge the plant-based industry on a burger in the United States that got over-hyped,” he said, adding that the problems with plant-based burgers served as a wake-up call.
“We got a flurry of activity and interest, but we didn’t keep them because the food didn’t taste good enough,” he said.
It turns out that flexitarians, or those who enjoy both meat and plant-based foods, had much higher taste expectations than vegetarians.
Grogan said the 30 to 40 per cent annual sales growth rates have been replaced by more modest expectations of 10 to 15 per cent growth, but that is still enough for Greenleaf to have invested more than $750 million in the segment.
He also said the media tends to focus on North America, forgetting markets such as India, where there are 400 million vegetarians.
“It’s a very different perspective than one you might hear in The Washington Post,” he said.
Al-Katib also stressed the importance of export markets. He said Canada is the first stop on the protein highway with its nine million acres of legume production.
“We’re going to link that protein highway to the Silk Road in Asia, and that’s ultimately the opportunity,” he said.
He is excited about a potential market for pulse proteins in India because of the country’s new biofortification initiative, which is trying to boost the protein levels of rice by incorporating pulse proteins.
“Instead of changing people’s diets and trends, they’re going to actually transform the food products that they’re consuming today,” said Al-Katib.
New markets for the starch are also needed, he said. For every unit of pulse protein that AGT produces, there are 2.5 units of starch.
“We need to ensure we’re using that starch in healthy, crunchy snacks and breakfast cereals and extruded products,” said Al-Katib.
Magliocco said the industry needs multinational corporations such as Danone because it has the marketing clout to get the attention of grocery store retailers. However, it’s still an uphill battle. The company recently launched its So Delicious brand of dairy-free ice cream.
“The taste is mind-blowing,” he said. “There is absolutely no trade-off versus dairy ice cream.”
However, Danone is asking customers to pay more for the product, and they have to search for it in special sections of grocery stores.
“That’s not where consumers want to see it,” said Magliocco. “We have to get it into the mainstream aisles, and we know we have to get the pricing down.”
He said there is “natural momentum” for plant-based protein because consumers are deeply concerned about their health and the environment.
“Consumers know this is the right thing to do. We just have to make it a little easier for them to do the right thing.”
– This article was originally published at The Western Producer.