New Zealand exporters are not dismissing the long-term threat from plant-based alternative protein products.
The red meat and milk sectors appear to have successfully fended off initial competition from alternative proteins, which are struggling to make market gains.
New Zealand exporters are not dismissing the long-term threat from plant-based alternative protein products, which are being heavily discounted and repositioned to less favourable places on retail shelves.
Financial losses are mounting as international manufacturers struggle to reach sales targets and share prices plummet, but observers note the covid pandemic has encouraged consumers to flock to naturally nutritious products such as red meat instead of highly processed products.
The Financial Times this week reports that in September alone, US sales of plant-based meat alternatives fell 1.8% compared to the year before, taking the decline in sales for 2021 to 0.6%.
Beef + Lamb NZ’s global manager Michael Wan says US restaurant sales of meat substitutes fell more than 23% in the past year, and online search results for plant-based meat have also declined.
“We’re also seeing a change in the positioning of plant-based products in-store, as a result of them not selling as well,” Wan said.
“They’re shifting to the ends of the shelf or into the frozen aisle.”
Beef remains the best-selling meat in the US with sales rising by almost a quarter year-over-year to $30.3 billion in 2020.
“Many Americans still see meat as a healthy protein,” he said.
Wan says research by the Food Marketing Institute determined that three out of four Americans agree meat belongs in healthy, balanced diets and 94% say they buy meat because it is a source of high-quality protein.
“The vast majority of Americans see red meat as permissible and favourable and consume it in moderation,” he said.
The category of consumers known as flexitarians, those who eat meat but also regularly consume plant-based meals, is growing with some reports suggesting 36% of consumers identify as flexitarian.
Global demand for NZ’s natural grass-fed beef and lamb continues to rise as people cook more at home, their confidence in cooking and the preparation of meat emboldened by being locked down at home during the covid-19 pandemic.
“Red meat protein is seen as simple, more natural and wholesome,” he said.
“Plant-based options are highly processed with a long ingredient list.
“In the wake of covid-19, consumers have sought out foods that are better for them, are higher-quality and provide better health and wellbeing outcomes.”
Wan says B+LNZ has leveraged this opportunity through its Taste Pure Nature marketing programme to educate consumers on the benefits and differences of NZ grass-fed beef and lamb.
Alliance Group sales manager Shane Kingston says the growth of sales in alternative protein has slowed and they are being discounted.
“Consumers now have more protein choices than ever and clearly there has been a sizable increase in the number of plant-based protein players in the category.
“In some countries, this has resulted in a saturated marketplace for alternative proteins,” Kingston said.
He says that unlike natural meat, there has also been a small decline in the price per volume for plant-based substitutes and more of these products are being sold on promotion.
“In markets such as the US, we are seeing strong demand for natural grass-fed beef and lamb.”
He says consumers increasingly value the attributes of NZ red meat, such as its antibiotic-free status, and are aware of the environmental impact of producing plant-based proteins such as water-use and the number of ingredients involved in the manufacturing process.
