Some days it seems like the sky is falling. Mainstream news headlines proclaim the massive market growth of fake meat, and more than one editorial has preemptively eulogized real meat as a casualty of plant-based progress.
But don’t fret! When looked through the lens of the marketplace, these novel newcomers are little more than crumbs.
“If we look at the meat substitute share of all animal proteins, they are about 1 percent,” summarized Alison Krebs, director of market intelligence for the National Cattlemen’s Beef Association (NCBA), during a Checkoff-funded ag media conference held in Denver, Oct. 22-23.
Most alternative protein products try to sell themselves on their supposedly superior sustainability when compared to real meat. Krebs explained that consumers’ growing focus on sustainability has motivated Checkoff-funded research into what is happening in the market with alternative proteins.
Krebs told ag media that NCBA purchased a year of “retail scanner data” on alternative proteins to compare to retail sales of real meat. “Retail scanner data” means actual grocery store sales of alternative protein products, which includes plant- and soy-based products intended to mimic animal-based meat products. Examples include the Boca Burger, the Beyond Burger, the numerous bacon or breakfast sausage replacement items, and mock chicken nuggets made from tofu.
The data examined by NCBA and presented by Krebs did not include cell-cultured proteins, which are also called “fake meat” or “alternative proteins.” Cell-cultured protein products are created using cells from animals, making them genetically “meat,” but are not yet available to consumers. The earliest estimate from producers of such products is 2020 for consumer availability.
The data also did not include more exotic alternative proteins such as those produced from insects, nor restaurant sales of plant-derived meat replacement products. It specifically covered plant-derived protein products intended as meat replacements sold in grocery stores.
“We’re looking at an almost $51 billion market in total [for retail animal protein sales], and a little over half a billion would be substitute products,” Krebs explained.
Beef focused
“Sometimes we think, ‘Oh my gosh! The only substitute products out there are beef substitute products!’” Krebs noted. “Well, no, there’s actually several that are trying to position themselves and challenge chicken and pork product sales as well.”
Krebs presented data showing that the top five meat substitute products by market share attempt to replace chicken patties, chicken nuggets, and breakfast pork items.
When looking specifically at alternative protein items that attempt to replace beef, almost three-quarters try to replace burger patties. The other relevant effort is to replace ground beef with products that often are called “crumbles.”
Collectively, beef-replacement alternative protein products represent 1 percent of real beef sales by value; $261.2 million compared to $25.4 billion respectively.
Krebs drew conference-goers’ attention to another important difference between beef-replacement alternative proteins and the real thing: price.
Using the popular example of the Beyond Burger—a beef burger patty replacement product made with pea protein and beet juice so that it “bleeds”—Krebs explained that it sold in half-pound packages for $6 in the Denver metro area; effectively $12/lb. compared to $4/lb. for common retail beef grinds.
“We know that things like taste and safety and nutrition are also big drivers for that consumer choice and consumer decision. But price is also one of those key factors,” Krebs said.
“You have to keep in mind, ‘Who is the target market for these products, and how large is that target market for these types of prices?’”
Growth in perspective
“If you watch the popular press, … you’ll see things that talk about how great the meat substitute products are doing and they’re growing so fast,” Krebs said, showing data that highlighted the 25 percent year-over-year growth rate of beef substitutes saw last year.
“That sounds really, really impressive.”
But she stressed that percentage growth is very different from actual market share. It is easy to post large percentage growth numbers when the actual market share is very small and that can skew perspectives. Despite the fact real beef sales only grew 5 percent last year and beef replacement product sales grew 25 percent, the sheer size of beef’s market share makes gains of beef replacement products’ almost irrelevant.
“When you take into perspective how large those markets are overall and look at the actual dollar growth, the growth in beef sales of over $1.2 billion far outpaced the dollar sales growth that we saw for those beef substitute products.”
Krebs did point out that, while the market shares of alternative proteins are currently minuscule, these products are positioning themselves as competition.
“That’s something we need to be aware of. They are continuing to invest and improve products and try to get as close as they can to the real thing. So, it’s something we want to keep an eye on and that’s why we made this investment with the Checkoff to understand what’s happening in the marketplace.” — Kerry Halladay, WLJ editor
