Ecosystem members discuss the future of alt protein.

Inflation, overhyped forecasts, and negative attacks have contributed to a slowdown in growth of the plant-based market.

The initial overestimation of companies like Beyond Meat and the sector as a whole has led to a natural decline in share prices and sales, but there is still growth in the category and opportunity in the future, agreed members of Bridge2Food’s Ecosystem during a recent online meeting.

Leaders from around the world and all along the value chain are members of the Ecosystem, working together to improve the quality of plant-based foods, and to accelerate the transition to sustainable, healthy food systems.

There is no doubt the extreme buzz and expectations created with reckless forecasts and aggressive market assumptions hurt the industry as sales have softened recently, said John Baumgartner, managing director of Mizuho Group. But according to Nielsen 2022 data, Baumgartner pointed out, plant-based meat sales are still six per cent above the pre-COVID trendline. “The industry is ahead of the game despite concerns.”

The sector is settling out through competition, consolidation, and more manageable growth for the long term to build success, said Tom Rees, industry manager at Euromonitor International. He noted that Impossible Foods saw its revenue grow 50% in 2022, despite some job losses as it restructures.

The plant-based industry is still in its infancy and while the category is down, everyone his company deals with — from investors to retailers and suppliers — is still excited about the long-term prospects, said Taposh Bari of Impossible Foods. “This is just a bump in the road,” Bari said, “exciting things are still to come.” It is a natural market correction and the companies they deal with are also optimistic, said Meghan Gervais, chief technology officer with Protein Industries Canada, and there is still a lot of reason for optimism.

Some plant-based companies, eager to act during all the hype, put a premium on speed-to-market over product quality, said Sonia Huppert, global innovation leader, International Flavors and Fragrances. Launching products too soon, with poor taste and texture, discouraged customers away from future purchases, agreed Natasa Taseski, process engineer at Wenger Manufacturing.

“Consumers are interested in plant-based, it just has to be catered to their needs,” said Bari. As an example, Impossible launched chicken nuggets 18 months ago and it is now one of their best sellers, he said. Different consumers also have different requirements and Huppert said it is time to start segmenting the consumers that companies are targeting: vegans and meat lovers are not the same and they shouldn’t be approached the same. “Consumers should be offered something that will excite them and that will be different experiences,” she said.

The plant-based category is now entering a second phase of development, said Denis Chereau, CEO of Improve, focused more on a higher quality of source materials, better tasting products and novel categories. “Technology such as machine learning and AI is also seen as critical in driving innovation, and improving the nutritional, taste, and flavour profile of foods,” said Eva Everloo, investment analyst from Peakbridge VC. While overall alternative protein investment declined in 2022, she said, it’s still at higher levels than 2020 and did grow significantly in some regions. Asia-Pacific saw 43% growth and in Europe investment grew 24%.

“New technologies, such as fermentation, 3D printing, and cultured meat, are attracting a lot of the investment dollars currently and will be a major focus of innovation going forward,” said Marcel Janssen, senior director, GEA.

R&D in crop breeding will increase protein levels, offer a more neutral taste and aroma, and better functionality, said Chereau. Diversity and availability of crops is important for future development, and the whole value chain needs to work together, said Huppert.

Cost and price to the consumer is a major issue, said Chereau. With inflation relentlessly pushing up grocery bills, and plant-based products costing even more than their counterparts, it contributed to many consumers cooling on alternative proteins the past couple of years. Consumers won’t pay the higher markup when they’re looking for ways to cut costs. In fact, said Chereau, the goal the sector needs to achieve is better products at a lower cost than their meat or dairy counterparts to really make a difference in the world.

The sector has also taken a hit from a strong campaign against the health and environmental benefits of alternative proteins, as well as negative perceptions of plant-based meat being an ultra-processed food. “The next evolution is consumer education,” said Bari, and it’s time for leading brands to take control of the narrative of plant based.

To make it easy for more people to incorporate plant-based offerings in their everyday diet, we need to take an integrated approach, said Christophe Schmitt, protein expert at Nestle Research. “Thanks to our scientific expertise in plant proteins, nutrition, agricultural sciences, as well as culinary arts, we can develop plant-based alternatives to dairy, egg, meat, and fish, while considering taste, nutrition, and sustainability.”

Price parity needs to go hand-in-hand with tasty products, health benefits, and care for the environment, said Rees. “The world simply needs more sustainable protein,” said Eliza Tsun, sales manager plant proteins Greater Asia for Roquette. Our current food production methods cannot meet the needs of a rapidly growing global population. Alternative proteins continue to offer a profitable, delicious, and sustainable way to help feed the world.

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For a full discussion of the future of plant-based foods please join us April 26-27 in Chicago at Bridge2Food’s Summit Americas. The topic will be discussed throughout the event and one plenary session will be solely focused on the issues and solutions.

Bridge2Food’s Ecosystem brings together more than 300 industry leaders from around the globe and across the value chain. For information about membership please contact Javier Berterreche (jberterreche@bridge2food.com).