What is Plant-Based Meat and Origins
In 1971, Frances Lappe wrote a revolutionary bestseller ‘Diet for a Small Planet’ on American’s eating habits. In a period of rapid population growth, she contended that there was plenty of food for everyone. The problem was that more food went to nourish animals on four legs than those on two. In under five decades, the food expert’s unique philosophy has become the bedrock of the meatless revolution globally
There are two broad categories that exist in the alt meat space. The first is plant-based meat which extracts protein from sources such as soya bean and wheat. The second is cultured meat which is lab-grown from the cells of a live animal. Cultured meat is commercially unavailable at present
Meat Impact on carbon emissions
The global production of meat is expected to double from 230M metric tons in 2000 to 465M metric tons in 2050. Its negative impact on water & energy utilization, nitrogen formation means that we can no longer stick to the conventional way of killing animals to consume meat.
The meat industry uses a third of the world’s freshwater directly or indirectly which puts a tremendous strain on fast depleting water resources. According to Water Footprint Network here is the amount of water required to produce the following items:
Beef consumption remains a leading threat to the planet. A cow emits up to 500L of methane per day and contributes more to greenhouse emissions than cars. The animal agri industry (which includes feed production and transport) accounts for 18% of all greenhouse gas emissions globally. In terms of land, animal feed production takes up almost 33% of total arable land
In comparison, meat alternative creates 1/10th greenhouse emissions. Plant-based meat uses 47–99% less land, emits 30–90% fewer greenhouse gases, and uses 72–99% less water
The benefits of the switch have also been quantified in various studies. A University of Oxford study states that plant-based diets could help save up to 8M lives by 2050 and reduce greenhouse emissions by 67%. To top it off, healthcare-related savings and averting climate changes could help save $1.5T!
If the US alone adopts a vegan diet, the additional food could help feed 350M people and help save $180B in healthcare costs
Global market size and key players
The biggest factor for the growth of plant-based meat is the ability to build a more secure and resilient protein supply chain.
As the US has seen phenomenal technological innovation since 2016 in the plant-based food industry, other regions are catching up to its potential. The rise of ‘reducetarians’- (no I did not coin this term :P)- people who cut back on animal products is accelerating
A crucial indicator to separate fad from reality is when large corporates start entering the space. Nestle launched its plant-based burgers called ‘Awesome Burger’ in 2019. Others like Tesco, Perdue, Smithfield, Tyson, and Unilever have set up dedicated teams for plant-based food
In just a decade, Beyond Meat (founded 2009) and Impossible Foods (founded 2011) are the two most well-known and successful companies operating in this space. California based companies have made alternatives to meat through protein extracted from plants such as pea, wheat, and potato.
When Beyond Meat whose investors include Bill Gates to Snoop Dog went public last year, it soared 163% over its IPO price which made it the best-performing first day IPO since 2000
Investors are also looking into the market with renewed vigor and interest. Till July 2020, more than 20 faux meat startups have raised $1B+. Investor mix ranges from celebrities like Bill Gates, Oprah Winfrey to large giants such as Cargill and General Mills to traditional VC’s
So, who are the new and interesting players emerging globally?
Some startups are making 3D printed plant-based meat. This includes Barcelona based Novameat and Israeli food-tech player Redefine Meat. RM plans to launch industrial-scale 3D printers to meat distributors by 2021. Watch this exciting 2 min video where they use ingredients such as pea, seaweed, beetroot juice and shape them into fine fibers to recreate muscle tissues
In the UK, Moving Mountains introduced the first ‘bleeding burger’ in 2018 and followed it up with the country’s first plant-based hot dog. Other prominent players include Beijing based Zhenmeat, Australia based V2Food, Hong Kong-based Omipork and Russia based Greenwise
Market size in India
India remains at a nascent stage in the plant-based meat market in terms of market size but is picking up fast. According to Good Dot, which is the most prominent player in the market currently, it sells around 12–15K units of the product daily. With an avg. family size of 4, it means around 50–60K people eat such products
Trends in India- Why the timing is right?
A. Sectoral Shifts
1. Severe impact of COVID: The animal protein supply chain space has been severely strained in the pandemic which I mentioned briefly in my second part. The size of India’s poultry industry is at $14B and is losing an astounding $200M-$275M daily while chicken prices have fallen by as much as 70%.
2. Income Transition over the next decade: India will become the most populated country before the end of this decade. As we move from lower middle income to a middle-income economy, consumption patterns will change to reflect a higher protein-based consumption. Consumption of processed chickens is increasing at 15–20% annually.
B. Demographic Shifts
3. Majority of Indians are non-veg: 71% of Indians more than 15 years old report that they are not vegetarian (contrary to perceptions!). There are also marked regional variations. While 25% of people are non-vegetarians in Rajasthan, about 99% are non-vegetarian in W Bengal & Telangana. According to a Euromonitor report in 2017, chicken accounted for 50% of India’s meat market by volume followed by beef and buffalo meat at 25% and mutton and lamb at ~20%
4. Lack of protein in an Indian’s diet: In the Global Hunger Index 2019, India ranks 102nd out of 117 countries. Data from NFHS reports only 10% of infants between 6–23 months are fed adequately. Lack of adequate nutrition leads to as much as 40% of children under age 5 to be stunted. Vitamin A deficiency in preschool children is 62% due to malnutrition and poor protein intake. An astounding 60% of children aged 6 months to five years, more than 50% of women between 15–49 years, and 1 in 4 men suffer from anemia
5. Increased receptivity to trying out alt meat: According to a survey of plant-based and clean meat, 63% of Indians reported that they were extremely likely to purchase plant-based meat. This is even more than the developed economies of the US and China! Another 32% said they were somewhat likely. While the survey sample was skewed to well-educated high-income urban people the results do look promising
C. Sustainability Shifts
6. We are running out of water: According to a Niti Aayog report in 2018, 21 major cities are expected to run out of groundwater by 2020. Record monsoons in 2019 (highest in the past 25 years) and 2020 have masked the water scarcity problem to some extent. But weather patterns and erratic rainfalls can shift over the next few years. Climate change will cost 2.8% of GDP for India and worsen living standards for more than half of India by 2050
It is ridiculous then that in a country where 600M people are facing acute water shortages and 200K die each year from inadequate or unsafe water supplies, we are ‘wasting’ so much water to produce meat from animals.
7. Traditional meat production is resource-intensive: To get 1 calorie out from chicken meat, one needs to feed it 9 calories in as explained by Dhruvi from GFI. A report from J&K Pollution Board mentions that animal waste is more concentrated than domestic sewage and pollutes streams and watercourses. As most slaughterhouses operate without any effluent treatment, the untreated waste pollutes the already depleting groundwater
8. Raw material will not be a constraint: India is the largest producer of dry beans which provides adequate raw material and crop biodiversity for alt proteins.
How startups in India can tap this opportunity
Taste, nutrition, cost, and convenience will be the crucial pillars of success for players in the plant-based meat market
India’s alt meat market will also grow very differently than the West. While downstream products (burger patty, sausages) have fueled growth in the West, India will see a higher sale of upstream products (chunks of plant-based meat) since soya/ paneer or tofu chunks are more popular to be eaten as a starter or curry
Startups will hence need to understand the Indian palette and create products according to the texture and local flavors. As innovation in the space continues, products that retain the macronutrient balance and cooking experience of meat will gain adoption in the market.
Innovation will also be needed to extend the shelf life of alt meat products. India’s cold chain infra remains broken with 40–50% of food wastage. Further, only 33% of Indians own a refrigerator at home. Higher shelf life will be a necessity to expand adoption beyond the metro markets
Many startups in the online meat delivery space such as Licious, FreshtoHome, TenderCuts, Zappfresh, and Fipola are already building the supply chain. Alt meat startups could white label for them to leverage their distribution network or could explore buy out opportunities in the future
For Indian consumers, sustainability will drive plant-based meat acceptance and ethics will drive cultivated meat adoption. Campaigns tailored on both these themes could be more successful in India than in China or the US
Tie up with fast-food chains such as Domino’s, KFC, Subway, etc. can be an effective way to increase awareness and catalyze adoption as can tapping the celebrity and influencers network. Recently, Bollywood couple Ritesh and Genelia Deshmukh launched a plant-based meat venture called ImagineMeats in partnership with ADM. On the menu are items Indians love such as kebabs, biryanis, and curries (slurp!)
Lastly targeted Govt. measures such as a ‘meat tax’ and a subsidy on meat alternatives (like the EV industry but with less flip flops!) can fasten the pace to reduce market share for conventional meat
Interesting Indian Startups
The rise of digital-first consumer brands can help brands to create a ‘niche’ market and expand gradually. Urban Platter which makes mock-meat products gets 90% of its sales from Amazon.
Ahimsa is the first Indian company to offer mock meat- products that look and taste like meat but are 100% vegetarian. Their dishes include alternatives to fish, mutton, chicken with vegan hot dogs.
One of the popular companies in the space is Udaipur-based company GoodDot which offers high-protein, environment-friendly and cruelty-free meals. Its products include vegan mutton and soy-like variant which are competitively priced at Rs. 135 and Rs. 65 with a vegan chicken product in the pipeline
It markets its products as easy replacements which taste as good as meat but are healthier for you and better for the planet. A one-year shelf life makes it easier to store. It also plans to launch food trucks in Mumbai, Udaipur, and Jaipur.
EVO Foods is another interesting one that has created Asia’s first plant-based liquid egg product. Founded in 2019, their liquid egg replacer is lower in fat and calories with zero cholesterol and cruelty-free. It is also fortified with Vitamin D (a major deficiency for Indians) and amino acids which aid muscle growth
ClearMeat, a Delhi based company aspires to build India’s first eco-friendly, nutritious and affordable meat. The company is on road to produce the world’s first chicken mince and aims to add dishes such as tandoori chicken and chicken tikka masala.
Other companies include Chennai based Vegeta Gold which offers veggie meat, fish, and chicken, Delhi based Vezlay which specializes in soya products and Faridabad based MisterVeg which offers plant-based meat and seafood
In the next few years, I feel that alt-meat only cloud kitchens, QSR kiosks, and food trucks could crop up
Challenges in the market
Startups will need to invest heavily in marketing and tech. This is a new category and market development and shifting buying behavior will take time.
Price remains a sticking point to mass consumption at present. The cost of lab-grown chicken is 3–4x that of an actual chicken. Serum is the main cost driver and once successfully produced in the lab the cost can go down from Rs. 1K per kg to Rs. 200–300 per kg bringing it on parity with actual chicken rates.
The second factor is taste and texture especially for the Indian palette which prefers spicier, masala-based dishes in chicken. And it will take some time to reach there. Clear Meat’s founder states that their product is inedible at the current stage and is something that even he would not try out!
Limited access and data available on the meat demand and replacement potential in different regions in India also makes it tough to exactly estimate the market size and potential. The number of people eating meat at various levels of the income pyramid and their elasticity to switch to alternatives (which might be at a slight premium) will be crucial to stress test.
Use of the word ‘meat’ in plant-based meat might also put off consumers and the lexology might need to be altered (would you try ‘veggie meat’?). This will be especially relevant for hardcore vegetarians who might be open to exploring alternative protein options (I wanna move over paneer, soya, sprouts!) but could be hesitant to eat meat
A challenge observed globally is that alt meat might not be as healthy as claimed because products are heavily processed. An Impossible Burger 2.0 has 370mg of sodium which is 4x of that in a traditional lean, ground beef patty
Limited R&D, infrastructure, and research professionals could stymie the growth of the space in India.
This is especially true for cultured meat’s growth. To purchase a chicken, the consumer typically sees its redness and fleshiness. Several biological pathways work to achieve the inter combination of these cells. Lab-grown cells do not grow in the same format as in a healthy organism and companies must artificially induce those pathways to produce the required texture. Molecule hence becomes the IP or ‘moat’ for cultured meat startups
Overall things do look promising going forward. The world’s first research center focused on cell-based meat category was expected to open in Mumbai this year. With a focus on R&D of affordable lab-grown meat, it aims to make India a global cell-based meat hub
The center will help startups create proof of concept, create a curriculum to generate awareness, train interested professionals, and conduct research with private agencies and major conglomerates. All this will significantly shape the development of an ecosystem in plant-based meat
Innovation and resource frugality has been the hallmark of India as seen in our latest Space tech piece.
With India taking its baby steps in the space, favorable Govt. regulations, increased interest of corporate and research bodies in product development, and investor willingness to bet radical transformation will be crucial to shape the ecosystem.
Taste, price, and convenience will be the three pillars for widespread industry adoption
COVID has strengthened the thesis for the alt proteins market. We have witnessed the extent of devastation due to the link between deadly human viruses and industrial meat production from the pandemic. A big positive which can come out of the crisis is the rise of the plant-based meat market
Reduced animal cruelty, increased sustainability, and net positive impact on the environment make it evident that we need plant-based options more than ever. Generations from now, I do hope that children question their grandparents on why they used to eat meat from an animal which was barbaric and unnecessary
The question then is, are we ready to change?
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For folks keen to know more about the alt-meat market
- Chicken 2.0- Dr. Siddharth Manvati, Co-Founder of Clear Meat on building India’s first cell-based meat company
2. Impact of COVID-19 on the plant-based meat market
3. The Exciting Journey of Impossible Foods
4. Bringing Plant-Based Meat to India: The Good Dot Revolution
Image Credits: PETA, Beyond Meat, Frontiers, CNN, Good Dot, Prepared Foods, Barlcays Research
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of any institute or organization he is associated with.