In facing today’s problems—growing population, limited resources, environmental challenges—we are in search of new commodities and materials that can replace yesterday’s problematic ones. In food, this means finding alternatives to meat, which is polluting, limited, and can lead to health risks. The alternative protein sector is on the rise.
Observations
- The global protein ingredients market was $31.8bn in 2016 and is estimated to reach $46.40bn by 2022. Animal sources dominate the market compared to plant sources. However, plant proteins are gaining more popularity and market share, especially soy and pea proteins. The production of plant protein is considerably less energy intensive than the production of animal protein.
- Today, more than 70% of grains produced in the U.S. are fed to livestock. With growing demand, climate risks and health issues, governments will try to reduce meat consumption. Last year, the Chinese government outlined a plan to reduce its citizens’ meat consumption by 50%, as a consequence of its concerns about food autarky. Similarly, other countries might reduce meat consumption by taxing meat.
- The most prevalent driver of the market growth is the strong scientific evidence supporting health benefits. Plant proteins consist of low fat and cholesterol. Flexitarianism is a major consumer health trend, e.g. the Meatless Monday campaign in the U.S.
- A 2017 Protein Report shows that 36% of millennials are embracing meat alternatives, versus just 14% of baby boomers. High demand is driving soybean stocks. Startups like Impossible Foods and Memphis Meats sell meat grown from cells in a lab. The practice of using insects as a source of protein is on the rise. And algae proteins are set to undergo market growth and adoption.
- Harvesting fish and shellfish from offshore fish farms could help provide essential proteins to an expanding global population. Fish farming is the fastest growing food-production sector in the world.
Analysis
With the growing population, the global demand for animal protein will double over the next four decades. Meat is a problematic source of protein for a few reasons. First, the worldwide future demand for meat will not be met, even if all farmlands were used to feed livestock. Second, the UN General Assembly elevated the use of antibiotics in animal agriculture and the growing resistance of bacteria to a crisis level. Third, the emissions from global livestock represent 14.5% of all anthropogenic greenhouse-gas emissions. And finally, with the growing concerns about the health and environmental implications of meat, consumers are looking for replacements. How can we understand this search for and transition to better alternatives to meat protein?
Protein alternatives can be understood in a new class of more future-proof commodities that are looking to substitute those of yesterday’s world.
Protein alternatives can be understood in a new class of more future-proof commodities that are looking to substitute those of yesterday’s world. The shift from fossil energy towards the more sustainable, less scarce, and less polluting options of green energy offers an analogy. Like with protein, alternatives are available, but we are accustomed to fossil sources. Furthermore, the alternatives lead to a demand for new resources: with electric cars and solar energy on the rise, the demand for energy storage leads to a growing demand for a different commodity: lithium. The same analogy can be drawn in the field of construction with the promising material graphene. In case of protein, this could be algae. Also, the fossil fuel era seemed sustainable in times when only developed countries were using it. Now, cars are globally available as a primary means of mobility. Similarly, developing countries show that economic growth causes an increase in the demand for meat.
The change in the direction of a new class of commodities is a long process, rather than a swift change. This brings us to another perspective on meat alternatives. For now, we are looking for meat alternatives and meat substitutes, such as growing burgers in a lab and imitating meat products with plant based ingredients. These substitutes show the “horseless carriage syndrome” that arose with the introduction of the car. We are still thinking of other sources of protein as a substitute for meat. In the future, it will be odd to call our main protein sources “alternative sources”.
