The path forward must be forged together

Food Frontier’s 2023 State of the Industry report found that Australia’s plant-based meat industry is continuing to grow; charting its own course amidst the backdrop of US-centric media pessimism about the category.
June 4, 2024 Commentary
The path forward must be forged together
By Klara Kalocsay, Head of Research Strategy at Food Frontier

Food Frontier’s 2023 State of the Industry report found that Australia’s plant-based meat industry is continuing to grow; charting its own course amidst the backdrop of US-centric media pessimism about the category. The report found that the total market size for plant-based meats has enjoyed a compound annual growth rate of 13.8% since 2020. However, as an emerging and disruptive food category, continued growth is not guaranteed.  

To inform the State of the Industry Report, I undertook one-on-one consultations with plant-based meat manufacturers and suppliers operating in Australia, to understand their pain points in more depth, identify opportunities and to find the commonalities among them. 

From the highs of pre-covid predictions, it’s clear that in 2023 consumer uptake was slower than expected. As concluded in the 2023 State of the Industry, the slow growth comes down to three key factors— price, taste and nutrition. Reducing prices, improving the taste (and texture) of products, and focusing on nutrition and health are the prerequisites for increased consumer uptake of plant-based meat products.  

These challenges facing the plant-based meat industry are not unique to the Australian market alone. My recent visit to the Netherlands, one of Europe’s most progressive countries for the support and adoption of plant-based meat, has revealed that these concerns are universal. As the early novelty around the category has subsided and been replaced by cost-of-living pressures, quite rightly, consumers are more discerning about the products they want to buy and the value they need to receive from that purchase.  

Reducing the cost of products is easier said than done as the entire food manufacturing sector now contends with increased costs of everything from inputs, energy, labour, to logistics; while retailer margins put further fiscal pressure on manufacturers.  

Likewise, improving the taste and texture of plant-based meat products is not a quick fix, with new product development timelines averaging approximately two years —if you can find those with the expertise to meet your business needs.  

And, of course, the nutrition and health of plant-based meat products will need to be an ongoing consideration for manufacturers with health, paradoxically, being both a key driver and a barrier for consumer uptake of plant-based meats.  

What do these three challenges have in common? As an individual company, all three are large and potentially insurmountable but when approached collectively they can be overcome. Collaboration is key to ensuring the long-term success of the plant-based meat industry in Australia. 

Where possible, partnerships must be forged both within the plant-based meat industry and right across the entire food manufacturing sector—including with conventional protein producers—which have the existing infrastructure, supply chains and product development skills that the plant-based meat manufacturing industry can leverage. It is not financially viable for the plant-based meat industry to build a new food manufacturing industry from the ground up, especially when some of the required facilities already exist in other food manufacturing sectors and can be repurposed or shared. In the current economic climate, shared manufacturing facilities within the plant-based meat industry or partnerships to utilise latent capacity in a private manufacturing facility can reduce upfront capital expenditure and help to reduce the overall cost of production.  

Understandably, collaboration in a competitive market can be difficult to navigate, especially when the consumer base for plant-based meat is still in its infancy in Australia. The phrase “a rising tide lifts all boats” strongly applies to the plant-based meat industry in this market; there are areas where collaboration with partners outside the industry may be preferrable. 

On projects working to improve taste, texture or nutrition, research consortia and partnerships that aim to solve common problems among parties that are not direct competitors can provide cost-effective solutions. Partnerships that involve different players along the supply chain—from pulse farmers and ingredients companies to flavour houses and manufacturers—can provide varied expertise and collective insights in a non-competitive environment. In practice, this could look like the proposed AltProtein CRC with dozens of industry and research partners, or smaller collaborations like the 2022 project undertaken by GrainCorp, CSIRO and v2food to research potential new applications of Australian-grown crops.  

Despite the difficulties of the last three years, the 2023 State of the Industry highlights that the commercial and economic opportunities presented by the plant-based meat industry and the broader plant-based food sector remain, as does the pressing environmental, health and societal imperative to diversify protein supply with familiar and convenient alternatives. Although each plant-based meat manufacturer has unique challenges, many are shared, and the opportunity at hand is collective. The Australian plant-based meat manufacturing industry could contribute half a billion dollars in value added to the Australian economy, more than 6,000 jobs and reach a market value of $1.65b by 2033.  

This opportunity can be secured if collaboration is embraced and the path forward is forged together.   

Klara is the lead author of the 2023 State of the Industry report. 


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