fau the meat

Largest deal over

$114million

foods

Intelligence. Accelerated

thesmartcube.com

A recipe for success

Market Intelligence: Leverage regular contextualised market intelligence to track trends, opportunities (discovery of innovative ingredients) and risks in the sector

M&A/Partnerships: Identify potential partners and acquisition targets to get a head-start and benefit from third-party specialisation and investments

Product Positioning and Marketing Strategy: Undertake competitive intelligence and analyse historical marketing spend and changing ROIs to

effectively develop marketing strategies; focus on communicating sustainability and transparency clearly to win consumer approval

Assess Your Sourcing Strategy and Category Supply Chains: Identify alternative suppliers, supply locations and

sourcing strategies to to adapt to changing product specifications

R&D and Patents Research: Focus on R&D and monitor patents filed by competitors to discover new ingredients

and efficient processes to convert plant proteins into meat substitutes

Consumer Sentiment Analysis: Track consumer sentiments through social media analysis and surveys to understand

consumer attitude and perception towards new products and ingredients

Regulatory Landscape Monitoring: Closely monitor the ever-evolving regulatory framework (related to quality standards and trade) and

political stability across different countries of operation

With a forecast market value of $6.4 billion by 2023, meat alternatives are big business. Here are the four major trends driving change

From lab-grown meat to mycoproteins, these are the fastest growth categories (and drivers) in the multi-billion-dollar alternative meat market

The Smart Cube’s patent analysis shows market leaders are innovating in three key areas

Alternative Protein Sources Landscape: Analysis by The Smart Cube1

The past year saw more global fast food chains enter the market too, partnering with Beyond Meat and Impossible Foods to provide animal-free alternatives

Key Innovators - by Patents Filed1

Is it turkey, tofu, or something in between? With Thanksgiving and Christmas just around the corner, what will you be eating this holiday season?

We explore key trends in the meat substitutes market and how F&B companies are trying to stay ahead of consumer demand.

Global meatsubstitutes market

$4.6billion

2018

$6.4billion

2023F

CAGR6.8%

Key Growth CategoriesBesides plant-based meat substitutes, development of lab-grown/cultured meat is also coming to the fore (lab-grown meat has not been launched commercially yet)

Growth Drivers u Growing health concerns such as diabetes and obesity among

consumers

u Increasing adoption of vegetarianism or veganism with a focus on clean-label ingredients

u Increasing GHG emissions from large-scale livestock farming

u Growing focus on animal welfare and sustainability

The not-meat market trends

It’s (not) aliiive!

Three areas of innovation

Soy, wheat, pea and potato – our new sources of protein

3D-printed prime cuts

The Colonel, Ronald…everyone’s getting on board

Taste, texture and nutritional benefits

Ingredient SuppliersSuppliers using plant-based protein, such as pea and wheat proteins

Suppliers developing algae and fungi-derived proteins

F&B CompaniesF&B companies using oats, chickpea, rapeseed, and sunflower and camelina seeds – in addition to soy, pea, wheat and potato – as protein sources

Healthy Protein.

Healthy Planet.

u Alternative protein sources overcoming challenges (such as risk of allergies and GMO-related concerns) posed by use of soy

u Growing use of peas, oats, rice, chardonnay seeds, barley and quinoa n Beyond Meat uses pea and rice protein

u Use of algae- and fungi-derived protein, which is more economical than plant-based ingredients n Impossible Foods uses algae-derived heme

Unilever is investing in shear cell technology to texturise plant protein into meat substitutes, which offers higher energy efficiency, smaller carbon footprint and greater flexibility than conventional methods such as extrusion

Beyond Meat utilises yeast cell walls to improve fibrous texture formation during extrusion of meat substitutes

Ingredient suppliers (Roquette, Cosucra, ADM and Burcon NutraScience) improving processing techniques to produce protein isolates to reduce bitterness of plant proteins, while increasing yield

General Mills is optimising ratio of thickness and length of extruder channel to improve protein quality

Novameat – a Spanish start-up – developed a 3D-printed vegetarian steak using rice, pea and seaweed proteins

Note: 1) The information has been collated from various technological resources, including patents filed between January 2014 and August 2019

Note: 1) The information has been collated from various technological resources, including patents filed between January 2014 and August 2019

Note: 2) The list is indicative and comprises introductions during January–September 2019 3) Lab cultured meat is not yet commercially available in the market

Category NameKey Examples

Date Company Name Product Details

Vegetarian meat substitutes

May 2019 Quorn Quorn smoky fajita strips and spicy tikka strips (meat-free with low saturated fats)

June 2019 Beyond Meat

Beyond Beef (plant-based ground meat without GMO soy)

Meatier Beyond Burger (made from pea, mung bean and rice)

June 2019 Raised & Rooted (Tyson Foods)

Nuggets (made from a blend of pea protein isolate and plant ingredients)

July 2019 Gardein (ConAgra Brands)

Chick’n wings, Chick’n tender and Chick’n nuggets (made from a blend of wheat and pea protein)

Breakfast sausage patties (beefless)

Lambless vindaloo and porkless thai curry (meatless meals)

Vegan meat substitutes May 2019 Vivera 100% fat-free vegan bacon (replicates

taste and texture of real bacon)

Seafood substitutes

February 2019 Good Catch Foods Plant-based tuna

September 2019 Ocean Hugger Foods

Unami (plant-based eel made from eggplant)

Lab-cultured meat substitutes3 - Memphis Meats Cell-grown meat

These are some of the products we’ve seen transform the faux-meat landscape

We’re also seeing a great deal of innovation in the processing techniques behind meat alternatives

One of the biggest challenges for faux-meat producers is making their products taste like…well, meat. Market leaders are using a range of additives and compositions to achieve this — and delivering health benefits along the way

For most people meat is a primary source of protein, which means faux-meat producers need to offer viable, protein-rich alternatives

New on the menu in 20192

~48%Largest segment of 2018 revenue

WheatSoy Mycoproteins Others (including pea, potatoes, etc.)

Meatsubstitutes

1

1 2 3

2

3

Growth Potential in Emerging MarketsAsian markets present significant growth potential for

meat substitute products led by growing popularity of soy and gluten-based food products

Soy and gluten are frequently used as meat substitutes in Asian cuisines

Raw Material

DiversificationShift from conventional sources of plant protein

such as soy and wheat to pea and potato protein, and fungi-

derived protein

Alternative sources reduce allergen risk and

GMO-related concerns related to soy and

wheat protein

Lab-grown Cultured MeatDevelopment of lab-grown meat alternatives with similar taste profiles and

features of traditional meat

Some examples include Memphis Meat and Mosa Meat

InvestmentsEstablished traditional meat players investing or partnering with meat substitute start-ups to obtain an early mover advantage

Adoption/Commercialisation Status

Inno

vatio

n Fo

cus1

Low

High

Low High

Soy

Pea

WheatPotato

RapeseedSunflower Seeds

Lupine

AlgaeFungi

Corn

ChickpeaRice

Oats

Canola

Commercialised Texturised Proteins

Protein Sources Under Development

Other Protein Sources

Soy, wheat, pea and potato - our new sources of protein

Companies using innovative sources as soy protein replacement – the largest used source

Taste, texture and nutritional benefits

Development of compositions and additives to impart meat-like texture and flavour to meat substitutes

3D-printed prime cuts

Improvement in extrusion equipment and technologies to mimic fibre-like texture of meat

Market

Tr e n d s

Organoleptic PropertiesCompanies using plant-derived fibres to improve hydration, texture, mouthfeel, and cross-linking properties of meat analogues

n E.g. Unilever is using xanthan gum and galactomannan to increase the juiciness of meat substitutes

Health BenefitsUtilising natural and innovative ingredients to improve nutritional value of meat analogues while enhancing textural and sensory attributes

n E.g. Cargill’s dietary fibre with high β-glucan content reduces cholesterol and risk of heart diseases

n E.g. USDA disclosed that use of chardonnay seed extracts can reduce risk of obesity

Key Innovators – by Patents Filed1

Key Innovators – by Patents Filed1

2023F2018

The

future

of food

FAUXMEAT

2019 AugustBeyond FriedChicken

2019 SeptemberBeyond MeatballMarinara Sub

2019 JulyBeyond Sausage Breakfast Sandwich

2019 September Beyond Meat Burger

2019 OctoberBeyond BBQCheeseburger

2019 AugustThe ImpossibleWhopper

2018 SeptemberThe ImpossibleSlider

2019 AprilThe ImpossibleCheeseburger

2019 NovemberBurger King announced it will roll-out a meat-free version ofits Whopper burger in Europe in a partnership with Unilever

Growth spurts and growing pains

For the industry leaders growth has been rapid, but not without its obstacles

The meat substitutes market is primarily driven by investor push rather than consumer pull

Meat & Seafood alternatives start-ups in the US attracting investment

u In December 2018, Unilever acquired The Vegetarian Butcher

u In March 2018, Kerry Group acquired Ojah, a high protein meat substitute manufacturer

u Impossible Foods has raised over $750 million in total disclosed funding as of May 2019, with its total valuation estimated to be about $2 billion

u Beyond Meat’s shares peaked in July 2019, having risen five-fold in value from their debut price of $46 in early May, though have since fallen due to restrictions being lifted on share sales

u Both plant-based and cultured meat involves higher production costs compared to conventional meat

Global F&B companies are resorting to M&As to expand product portfolios

However the meat substitute start-ups are not currently generating any profits

Key tactics to help F&B companies stay ahead in a dymanic, fast-growing market

To find out more about how our solutions can help you with these intelligence and innovation strategies, please visit our website or contact us on info@thesmartcube.com

Key Consumer TrendsInnova Market Insights survey (2019)

Bank of America Merrill Lynch survey (2019)

Harris Interactive’s UK-based survey (2018)

75%of respondents thought that plant-based alternatives

are too expensive and younger consumers appeared to be more open to meat-free alternatives than older shopper groups

of Americans are purchasing meat alternatives2/3 of consumers surveyed

globally stated that they would consider/have

already purchased a plant-based protein alternative to meat

1/336% often or sometimes buy

22% buy on rare occasions

10% always buy meat alternatives

By 2050, the world’s population will grow to more than 9 billion. There’s no way to produce enough meat for 9 billion people. Yet we can’t ask everyone to become vegetarians. That’s why we need more options for producing meat without depleting our resources.

– Bill Gates Impossible Foods investor

VC firms and traditional meat companies are investing aggressively in meat substitute start-ups

Celebrities and athletes have also shown interest in investing in these companies

$192million

in 2018

Retail price of plant-based vs conventional meat

Ground beef

Plant-based ground beef $12

$3

Production price of lab-grown vs conventional meat

Conventional meat

Lab-grown meat

$1.05

$12