Plant-based protein is gaining more and more ground with consumers, says UBS, and its consumption is becoming an increasingly common habit as people make their new year’s resolutions and 'Veganuary' grows ever larger.
According to a new survey conducted by the bank in the US, UK and Germany in November, 53% of consumers stated they have tried the products, creeping up from 48% of respondents in a similar study in March.
READ: UK market needs to keep up with plant-based meat alternatives as McDonald’s launches vegan line
Not only is the trial rate increasing, but so too is the rate of consumption, analysts noted, as 46% of respondents that have consumed plant-based meat now do so at least once a week.
For those that have either never trialled plant-based meat, or have stated that after trialling the products they don't intend to continue consuming there is a common inhibitor, which is taste.
“This is a key opportunity for the food ingredients companies,” the UBS analysts said, “with their knowledge of the appropriate
binding agents and additives to improve this sensory experience likely to prove vital in driving widespread adoption of plant-based protein, in our view.
“While plant-based continues to represent only a small, circa 1% of group sales on average for the food ingredients companies it represents a fast-growing product category.”
This positive momentum for the plant-based meat/meat alternatives category is supported by US Nielsen data too, which shows that retail sales for the category remained robust in 2020.
According to ING Economics, the plant-based alternatives market in the EU and the UK will be worth €7.5bn (£6.6bn) by 2025, compared to €4.4bn (£3.9bn) in 2019.
The UK is the most developed market among its neighbours, with annual retail sales of €1bn (£890mln), but it is still lacking in terms of own product compared to the US.
This may be about to change, as US meatless burgers producer Plant & Bean is opening Europe’s largest factory of this kind in Lincolnshire.
The plant will initially pump out 55,000 tonnes a year of alternative protein products to meet the growing demand.
London still doesn’t have a pureplay producer among its listed companies; the closest one may be Hilton Food Group PLC (LON:HFG), which holds a 50% stake in Dalco Food, a Dutch company focusing on meat substitutes – both vegetarian and vegan – alongside meat products.
London-listed Kerry Foods PLC (LON:KYGA) also last year launched meat-free ranges under both its Richmond and Naked Glory brands.
Primark owner Associated British Foods PLC (LON:ABF) and sweetener maker Tate & Lyle PLC (LON:TATE) both have fairly large food ingredients divisions but two AIM-listed players have more relevant meat-free interests.
Agronomics Ltd (LON:ANIC) has a stake in Solar Foods that is focussed on developing a novel protein called Solein "made from air", while Frontier IP Group (LON:FIPP) has a stake in Nandi Proteins, which is collaborating with a number of industry partners to commercialise its novel process to create ingredients based on animal and vegetable proteins able to replace chemical additives and fat in processed foods.
The most eye-catching names seem to be in the US, where companies such as Burcon NutraScience Corp (TSE:BU) and Beyond Meat Inc (NASDAQ:BYND) have bounced back more strongly than the broader food producer category after the COVID-19 outbreak.
“Plant-based meat alternatives have managed to pass their first stress tests during the pandemic, with pure-play companies navigating the market volatility much more effectively than broader food producers,” noted Max Hayes, analyst at Edison Group.
“We see an increasing attractiveness in the sector on the back of growing consumer demand and reduced government support for traditional meat producers.”