Are Cows Over? How the Impossible Burger and Competitors Disrupted Global Big Meat

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Recently, Missouri passed a law mandating that food producers exclusively use the term “meat” to market products that come from animal flesh. This law was the first of its kind to be passed, but it came about as part of a heated national debate over what constitutes meat between traditional “Big Meat” and disruptive meat substitute providers such as Tofurkey and Impossible Foods. As consumers become more health and environmentally conscious, the meat substitute market has undergone explosive growth. Indeed, the meat-substitute industry is expected to reach over $7B globally by 2025, up $3B from last year — and it’s making traditional meat purveyors nervous.

NewtonX surveyed the American meat market and the impact that meat substitutes are having, and are projected to have, on the meat supply chain by issuing a quantitative and qualitative survey to 1,000 meat and meat substitute stakeholders in the U.S., including FDA regulators. The insights in this article are sourced from this survey. To learn more about NewtonX surveys and expert insights, visit newtonx.com.

Big Meat Vs. The Impossible

Over the past ten years, global meat consumption has risen by 2% per year, with over 50% of this growth attributed to China. And yet, 70% of the global population has reduced meat consumption — particularly in the U.S. The number of vegans in the US increased 600% over of the past three years, and the number of vegetarians has doubled since 2014. While global, and even American, meat consumption is increasing overall, the percentage of people eating meat is declining.

Meat consumption will continue to grow over the next five years, albeit at a reduced rate of 1-1.4% per year. This growth, however, will be highly fractured, with China and other countries with growing middle classes accounting for a large percentage of the growth. Indeed, China is expected to account for 27% of demand for meat products. In countries like the U.S. and the U.K., where, culturally, reducing meat intake for health and environmental reasons is in vogue, the percentage of people eliminating meat from their diets will continue to grow.

These people are the target audience for meat imitation brands like Beyond Meat and Impossible Foods. Both have seen explosive growth over the past five years — the impossible burger has grown from being available only in two restaurants a few years ago, to being sold in thousands of locations, including the fast food chain, White Castle. In the U.K. Quorn Foods, which makes imitation meat out of mushrooms, reported a 19% rise in sales in the first half of 2017, which it attributed to a rise in meat-free diets.

Is Lab Grown Meat the New Organic?

In addition to a rising interest in imitation meat, cultural changes have sparked an interest in lab-grown meats, which the FDA recently announced it would regulate (as opposed to the US department of agriculture, which is what oversees traditional animal meat). Lab grown meat is made by extracting cells from a live animal, and then dividing the cells until they accumulate into a mass that can be formed and harvested. Ostensibly, it eliminates concerns over animal cruelty and also has a much smaller environmental impact than traditional livestock. Multiple startups are in the process of developing lab grown beef, pork, poultry and seafood, including Mosa Meat, Memphis Meats, SuperMeat and Finless Foods. In 2017, Memphis Meats raised $17 million from investors that included Bill Gates and Cargill.

Currently, however the cost of production is prohibitive to mass production — the first lab-grown burger in 2013 cost $330,000 to produce. Additionally, there’s some dispute over how actually cruelty-free the extraction process is; some opponents say the process of extracting from fetal calves is inhumane.

Who Will Win the Meat Wars?

The meat substitution industry generated $4.2B last year, and is gearing up for high growth over the next half decade. In response to the Missouri legislation outlawing the use of words such as “burger” and “hot dog” to describe food that isn’t derived from an animal with two or four feet, Tofurkey filed a lawsuit to prevent the law from being enforced. Despite Big Meat’s misgivings, demand for meat substitutes is growing and a slew of companies have popped up to meet this demand.

In fact, the meat industry is not the only legacy food provider that’s concerned over competition from plant-based substitutes. Milk sales fell 17%, while plant-based milk sales increased 100% in 2016, and in response the Good Food Institute issued a petition to the FDA asking that it decide once and for all what constitutes “milk”. Legacy milk producers even introduced a bill called the Dairy Pride Act that, like the Missouri cattle farmers-backed meat law would limit the ability of, for instance, almond milk to use the word “milk”.

As new means of food production emerge, incumbent producers will naturally be imperiled. Globally, meat and milk consumption will continue to rise, but as concerns over the environment and animal cruelty become more mainstream, it’s possible, and even likely, that meat substitutes will overtake traditional meat. 

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