The Economics of Clean Meat Revolution

November 7, 2017

The plant-based meat is everything you’d expect it to be: juicy, tender, chewy, and sumptuously fatty. Unlike every other burger you’ve eaten, this one is 100 percent meat-free. And it does a shockingly good job at convincing the brain that what you’ve bitten into is, in fact, real meat.

In the last couple of years, we’ve seen a fairly good number of lab-grown meat businesses thriving in the market. One is the Impossible Burger, which was developed in a lab in Silicon Valley and is a 100 percent plant-based indulgence. The fake meat burger looks like a burger, sizzles like a burger, smells like a burger and tastes like a burger. It’s famously known as ‘the burger that bleeds.’

Another one is San Francisco-based Hampton Creek, which sells a new breed of plant-based foods like egg-free mayo and cookie dough. It licenses plant-based ingredients to mammoth food companies like Kraft so they can use it in potentially hundreds of their products. The company will begin selling plant-based meat and plant-based seafood in early 2018.

A Growing Trend of Plant-based Meat Brands

If you live in the Western U.S., then you’ll find plenty of meat-free options from brands like Beyond Burger, Ocean Hugger Foods, Follow Your Heart, Ripple, and Daiya Foods. While some of these brands may just have made its debut in the food scene, a lot have been a veteran in the plant-based business. Plant-based brand Dr. McDougall’s Right Foods has been around for nearly 20 years. Diners can find organic, gluten-free, plant-based foods like ramen, pasta salad, and ready-made oatmeal. The company’s products are available at dozens of mainstream stores nationwide, including ShopRite, Target, Kroger and Safeway.

Ripple is a plant-based milk startup, which carries smaller water footprint than almond milk. The two co-founders: Method co-founder Adam Lowry and Amyris co-founder Dr. Neil Renniger, aim to shake up the milk industry with their plant-based alternative made from pea protein. Good Karma Foods created the world’s first non-dairy beverage made from flaxseed. The company recently launched a flax-based, non-diary yogurt, and is aiming to take on the yogurt industry.

Califa Farms has attracted $50 million in seed funding from a private equity firm in 2015. Califa Farms’ offering includes plant-based milks, as well as protein-enhanced milks, ready-made cold brew, and coffee creamers. In the same way, Beyond Meat hit the headlines when its plant-based chicken strips and burgers started flying off the shelves at Target, Walmart and Whole Foods. The maker of the meatless burger is backed by Bill Gates and Twitter co-founder Biz Stone.

Companies like Califa Farms, Impossible Burger and Beyond Meat are taking over shelf space at Target and Whole Foods. Beyond Meat CEO Ethan Brown believes this is the era for plant-based burgers, and is certain the market could peak $30 billion in the next year.

Alphabet-owned Google is also a part of the Better Buying Lab, which has spent the last six months experimenting with recipes for a new plant-based dish that could legitimately replace animal meat. The nonprofit project aims to come up with lucrative strategies to help people eat more sustainable food rather than rely on resource-intensive foods like animal meat.

Half of Millennials are Quitting Meat

According to John Hopkins (and many others) a “strong body of scientific evidence,” links meat consumption to heart disease, obesity, stroke, type 2 cancers, and early death. Vegetables, on the other hand, reduce the risk for heart disease, diabetes, stroke, chronic disease, some cancers and can help people manage weight. A recent Harvard Medical School and Massachusetts General Hospital found that getting protein from plant-based products, instead of meat, could significantly increase life expectancy.

Research is one thing – making behavioral changes is quite another. Making dietary changes can be a difficult and a slow process. For most, eating is a pleasurable, emotional experience. Today, we are in the midst of a major shift towards plant-based eating style, which serves as an alternative to animal-based foods in the marketplace.

Millennials, in particular, are the key drivers of the shift towards plant-based eating. Eve Turow, author of A Taste of Generation Yum, the Millennial generation is more passionate about food than any other in history. A 2014 study “Outlook on the Millennial Consumer” founds that Millennials are leaning into a more plant-based eating lifestyle. As one of the most powerful consumer groups with more than a trillion dollars in buying power, Millennials recognize the environmental impact their food choices have on society and the environment.

AL’s Place, which Bon Appetit magazine named America’s best new restaurant last year, now lists meats under “sides” on the menu. Even the absolute best restaurants like Dirty Candy in New York and Flora in Chicago – are removing vegetarian cuisine from “snacks & sides.”

Is Plant-based Meat the Real Deal?

Plant-based meat and dairy alternatives designed to resemble and taste like animal-based foods are clearly moving to the center of the dinner plate. According to Business Insider, global sales of plant-based meat are expected to peak $5.2 billion by 2020.

Bill Gates, a co-founder of Microsoft, and Li Ka-shing, the third richest man in Asia, are among the high-profile investors backing the makers of the meatless burger, Impossible Foods. Among others are Khosla Ventures; Temasek, a Singapore state-owned investment company; and Open Philanthropy Project, an investment fund led by Facebook and Asana co-founder Dustin Moskovitz.

The study Proceedings of the National Academy of Sciences, estimates that if people continue to follow meat consumption, rather than a plant-based diet, it could cost the global economy up to $1.6 trillion by 2050. There’s plenty of research that points out the economic value of the health benefits as well as the environment benefits associated with a well-balanced diet of plant-based foods.

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