COVID-19 Impact on Plant-Based Meat Market

[82 Pages Report] According to MarketsandMarkets, the Covid-19 impact on plant-based meat market is projected to grow from USD 3.6 billion in 2020 to USD 4.2 billion by 2021, recording a compound annual growth rate (CAGR) of 17.0% during the forecast period. A general consumer inclination toward healthy lifestyles, now more than ever, due to the COVID-19 pandemic and government initiatives to support the plant-based meat consumption will present potential opportunities to develop plant-based solutions. The US, Australia, Argentina, Uruguay, and Brazil are some of the countries with the maximum per capita meat consumption. However, the rapidly spreading coronavirus pandemic is expected to impact the global animal meat market significantly. Many factors such as lack of availability in some of the economies, trade restrictions, controlled government measures, and fear among consumers about the consumption of animal-based meat products are expected to severely impact the traditional meat consumption and result in consumers shifting to plant-based sources of meat.

The rising number of animal-borne illnesses, as well as the prevailing coronavirus outbreak, is expected to propel the demand for clean-label products. Government initiatives and new product developments are certain factors contributing to the growth of this market. Lockdowns, closure of international borders, and trade restrictions would significantly impact the raw material supplies. Certain countries such as Russia and Kazakhstan have temporarily banned exports of raw materials such as wheat, which are used in plant-based meat production to stabilize the domestic market due to the novel coronavirus outbreak. This, however, presents opportunities for the local and regional raw material suppliers, as most of the manufacturers would now procure from these local vendors.

Plant-based meat products are a rising trend, which can serve as an alternative to animal-derived meat products. Many consumers are demanding plant-based meat, either for medical reasons or as a healthy lifestyle, and, as a result, the current generation of plant-based meat continues to expand. Additionally, continuous efforts that are being put by plant-based meat manufacturers in terms of better aroma, texture, longer shelf life, and better nutritious profile, are projected to escalate the growth of the global plant-based meat market in the coming years.

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Impact of Covid-19 on plant-based meat market

COVID-19 is expected to affect the plant-based meat supply chain, both positively and negatively. Though the plant-based meat market is expected to be among the fastest-growing food markets due to the increased global concerns about the consumption of animal-based diets, it brings with itself some challenges simultaneously to all the stakeholders in the supply chain. The increasing health awareness and shifting preferences of consumers have led to the growing demand for plant-based diets, further supporting the growth of plant-based meat. This is projected to impact the supply chain of the plant-based meat industry positively. However, considering the current situation of COVID-19, the supply chain is likely to face short term challenges. One of the major challenges for plant-based meat is ensuring food safety compliance at every step across the supply chain. Coronavirus outbreak has led to consumers being more aware of what they consume. This would impose an increasing pressure on manufacturers to ensure they deliver safe food to the consumers. Considering the current outlook, national lockdowns and sealing of international borders have led to new transport and distribution restrictions, which could further restrict the import and export of such plant-based meat products.

Market Dynamics

Drivers: Growing demand for natural/ clean-label products

Clean-label products are organic, natural, non-GMO, and minimally processed consumer-friendly products. According to the Clean Label Alliance, It is observed that nearly 75% of the consumers are willing to pay high prices for clean-label products. Increasing health awareness among consumers is driving the demand for natural and clean-label products, which, in turn, will drive the demand for clean-label plant-based meat products. Consumers are getting inclined toward clean-label products, as they are becoming more aware of the non-synthetic ingredients and their negative effects. This will drive them to adopt plant-based diets such as plant-based meat.

Clean-label is one of the most important features of packaged foods. Consumer awareness is strengthening the clean label trend, which, in turn, will prompt them to move away from traditional meat consumption and adopt plant-based diets, further supporting the growth of the plant-based meat market. Non-GMO ingredients such as soy, wheat, etc., would be more in demand by the consumers opting for plant-based meat products. Retailers are also addressing the growing demand for clean-label plant-based products by consumers by offering their private label brands. The recent outbreak of COVID-19 has led to consumers buying more ’clean label’ products, owing to their safe consumption and positive health benefits. This will promote the growth of the plant-based meat industry. Environmental concerns related to traditional meat have led to the growing demand for clean-label products, especially by vegans and vegetarians, further driving the demand for meat substitutes such as plant-based meat products.

RESTRAINTS: Lack of cold chain infrastructure & resources in developing countries

Cold chain infrastructure is one of the most important factors in storing and transporting frozen and perishable food products. Plant-based meat is one of those food products that require a lower storage temperature. Since plant-based meat is a perishable product, it is very important to maintain effective cold chain management for the safety and quality of plant-based meat products. Such products are also likely to promote the growth of pathogenic microorganisms. Therefore, they should be kept at suitable temperatures not to generate any health risk. The cold chain infrastructure should not be interrupted throughout the supply chain of plant-based meat. It is very important to monitor the storage temperature of plant-based meat. Lack of such cold chain infrastructure is still a concern for many developing countries such as India, South Africa, Mexico, and Kenya. This is a major restraining factor for the plant-based meat market in such developing countries.

In light of the recent fast-spreading pandemic COVID-19, disruptions across the supply chains have made it more difficult to maintain the cold chain infrastructure for plant-based meat products, further causing hindrance to the market growth. The coronavirus disease has led to consumers becoming more aware of the food safety related to plant-based meat products, which partly relies on the cold chain infrastructure. The use of cold technologies in the development and storage of plant-based meat products to reduce food losses is of utmost importance. Ineffective cold chain management can result in much loss of plant-based meat products. It is very important to ensure the use and funding of cold chain technology and infrastructure to minimize the food losses due to barriers in production capabilities and distribution channels, as plant-based meat products are generally frozen. The lack of ineffective management of the cold chain in developing countries due to the current pandemic situation can hurt the market growth.

OPPORTUNIT: Impact on plant-based meat manufacturing companies’ porfolios

The COVID-19 outbreak is expected to help drive the success of plant-based meat alternatives, as the aspect of wet markets and livestock losses due to other diseases such as African Swine Fever (ASF) has attracted negative consumer attention towards conventional meat processing and products. This turn of events has helped alternative meat manufacturers solidify their current market position through expanding their current line of products as well as looking to develop newer product variants to meet consumer tastes and requirements.

Given the growing consumer awareness toward the environmental impact of meat production and the unsustainable practices followed, plant-based meat manufacturers are stepping up production as well as aggressively marketing their products to showcase the benefits of sustainable sourcing and production techniques when compared to conventional meat products.

Challenges: Conventional meat products have a higher penetration

The plant-based industry is still at its nascent stage in many economies while the trend is picking up in the US. Accelerated innovations in food technology are already driving the growth of the overall plant-based industry, which is expanding in terms of product offerings to reach and serve a wide customer base. However, conventional meat markets such as cultured meat, traditional meat, and seafood markets dominate the industry. The rise in demand for animal protein has increased the demand for poultry products. The demand for processed meat has gone beyond the original projection owing to its demand in the foodservice sector. Product innovations, especially the on-the-go snacking options within the meat and seafood industry are driving the demand for meat and seafood industry posing a challenge for the plant-based meat market.

Pea segment is estimated to dominate the Covid-19 impact on plant-based meat market in 2021

Pea, specifically yellow pea, has emerged as a key source of protein, among other plant-based alternatives. The impact of COVID-19 on plant-based meat is becoming increasingly popular among plant-based meat manufacturers at a global level. It also serves as an alternative for consumers with soy allergy due to it being allergen-neutral. One of the leading players in the plant-based meat industry, Beyond Meat (US), is using pea as a key ingredient for alternative meat patties. Plant-based meat offers various health benefits, such as reduced cholesterol and lower blood pressure. Also, the high levels of iron, zinc, magnesium, and phosphorus in plant-based meat aid in promoting improved health and other functional benefits. Allergies are rarely associated with peas due to them being allergen-friendly. Peas are comparatively sustainable, owing to factors such as improved soil enrichment and drought tolerance. These factors, coupled with the nutritional benefits of peas, will drive the demand for plant-based meat alternatives among consumers shifting to vegan diets. The growing health-consciousness and the increasing popularity of plant-based meat as an alternative to animal-based sources amid the COVID-19 outbreak are projected to drive the demand for peas as a suitable raw material for alternative meat production.

Wide-spread availability and inclusion of healthier ingredients support plant-based strips & nuggets sales

Various companies in the plant-based meat industry are looking to expand their plant-based portfolio with the addition of meatless strips and nuggets. Morningstar Farms (US), Vegetarian Butcher (Netherlands), and VBites (UK) are some of the players in the plant-based meat industry offering strips and nuggets. Soy, wheat, chickpeas, corn, rice, and oats are the raw materials used for the production of plant-based strips and nuggets. Canadian player, Garden Protein International (Canada), is among the key companies offering plant-based chicken strips made from soy and wheat. Fast-food chain, McDonald's, launched meat-free chicken nuggets made from mashed potatoes, chickpeas, onion, carrots, and corn in Norway.

The demand for plant-based strips and nuggets is projected to grow in foodservice outlets, as consumers are becoming more aware of the adverse effects of animal meat consumption due to concerns over sourcing, quality, and the recent pandemic. Strips and nuggets are preferred appetizers among consumers, and they are likely to shift to plant-based strips and nuggets.

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The Europe market is growing at the faster growth rate after North America

The key countries in the European region include the UK, Germany, Italy, France, and Spain. Europe is the second-largest market for plant-based meat globally. Italy and Spain are some of the worst affected countries in the region due to the recently discovered coronavirus disease. The rising health concerns among the consumers, now more than ever due to this deadly outbreak, will increasingly incline consumers toward healthy plant-based meat products. The exponentially growing number of vegans in the region, especially in the UK, has led to increasing demand for plant-based meat alternatives.

The rising number of cases in both Italy and France and the increasing number of deaths every day due to this pandemic have caused fear in consumers. The fear of zoonotic outbreaks associated with animal originated foods will certainly lead to consumers adapting to plant-based foods. Shelf life stability of plant-based meat will further fuel the demand for such products since it is known that coronavirus is not the only animal virus that originated out of meat consumption. Consumers will shift to plant-based meat diets and clean meats as healthier and disease-free alternatives. The overall plant-based meat industry is projected to be positively influenced by the outbreak. Start-ups such as Novameat (Spain) in Europe are coming up with new plant-based products through new food technologies such as 3D printed plant-based steaks made of rice and pea proteins. Such plant-based alternatives will aid market growth post-COVID-19 in the long term.

Key Market Players

The key players in this market include Impossible Foods (US), Beyond Meat (US), Maple Leaf Foods (Canada), Garden Protein International (US), and the Meatless Farm Co. (UK). Currently, the manufacturers are aiming to reduce the price of these products to target a wider audience. With various innovations in the plant-based meat market and huge investments from new entrants, there is a brighter future for this category. Companies such as Impossible Foods (US) and Beyond Meat (US) are among the first and top players who have initiated this disruption at a commercial scale in this industry. Apart from them, many industry participants are heavily investing in R&D processes to continuously innovate and bring in the best consumer experience with plant-based frozen food

Recent Developments

• Impossible Foods is communicating with their fans/consumers on emails asking if they would be interested in buying the burgers directly from the websites. This company’s step toward the ‘direct to consumer’ model is again expected to drive the sales of its products and can reduce the short-term disruptions in the supply chain due to COVID-19.
• Impossible Foods has undertaken aggressive expansion strategies to expand in high growth regions such as Asia Pacific, where consumers are increasingly interested in alternatives to animal-based food due to negative media hype associating COVID with animal meat.
• Beyond Meat launched Feed A Million+ in the light of the COVID-19 outbreak to provide more than a million plant-based meat burgers to help the needy during the pandemic. Beyond Meat is likely to benefit from the massive shift of consumers to alternative meats in the long term post- COVID-19.

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