UK - Meaty alternatives: between hype and global expansion

From business-reporter.co.uk

By Zita Goldman

The rollercoaster ride of the UK’s vegan and vegetarian food sector

The phenomenon of the “hype cycle” – where a supposedly transformational advancement leads to overblown expectation before its inevitable contact with reality – isn’t just limited to the tech sphere. Other industries driven by innovation can also show similar patterns of hype and disappointment before an acceptance of its genuine, if less exciting, benefits leads to gradual adoption. Similarly, revisiting old trends and fads and breathing new life into them or taking them to new heights, can happen in any industry.

 

Vegetarianism’s growing popularity in the 1970s was part of a larger overall wave of countercultural progressivism that included anti-war sentiment and more left-leaning political affiliations, which by then had established themselves in the mainstream. Environmentalism was central to this: the main argument of Frances Moore Lappé’s Diet for a Small Planet, the book that arguably triggered the resurgent popularity of vegetarianism on its publication in 1971, was that people should become vegetarian less for ethical reasons of animal welfare than to save resources.

 

Lappé’s book posited that eating grain-fed meat was “like driving a Cadillac” – every 16 pounds of grain used to rear an animal, it famously posited, produced only one pound of meat. Therefore, even a 10 per cent decrease in meat consumption could go some way to addressing the problem of world hunger.

 

Today, the focus of alternative diets has shifted from alleviating hunger to saving the world and its ecosystems. Vegetarianism, with its quaint 1970s emphasis on healthy eating, has been succeeded by the environmental exactitude of veganism, which is based on the assumption that any animal products (including dairy) are harmful for the environment. Extreme weather events and other glaring proofs of climate change have certainly lent a genuine urgency to shifting to a plant-based diet quickly and at scale.

 

Ways of expanding – rescue deals, affiliations and acquisitions 

 

However, as Heather Mills, a major player of the vegan food sector, has explained, the biggest Achilles heel for anyone going into the vegan sector is exactly that – scale.

 

Mills saw her brand Vbites collapse into administration at the end of 2023 before rescuing it from the administrators for £1 million in January this year.

 

The hype surrounding plant-based alternatives peaked in 2019, when 25 per cent of all new UK food products were vegan and two-thirds of Britons purchased meat substitutes. It was also the year the market cap of Beyond Meat, one of the major newcomers in the sector, reached $14.1 billion (£11.09 billion) – 47 times the revenue it would actually generate in 2019. As the marked cooled down, thanks to factors such as the cost-of-living crisis, rising customer expectations and concerns about ultra-processing, Beyond Meat’s market cap had stabilised at $492 million (£386.97m) by 2024.

 

But despite news of plunging market caps and firms such as VBites and Beyond Farm drifting to the verge of bankruptcy in the past four years or so, the plant-based meat alternatives market still has huge potential, and is currently dominated by acquisitions and consolidation rather than a willingness to fade into insignificance. The sales value of plant-based meat substitutes in the UK remains second only to Germany; the number of vegans in the UK increased by 1.1 million in 2023.

 

Taste the difference?

 

Whether meat substitutes will constitute an increasing share of the diets of 2.5 million vegans and 3.1 million vegetarians who live in the UK, however, will depend on how the sector can leverage innovation to improve the food itself, and allay consumers’ concerns regarding the synthetic nature of fake meat products.

 

Hamish Renton, managing director of UK-based food and drink consultancy HRA Global, offers an accurate description of the short-term struggles and strategic opportunities of the plant-based market. “Even though we are seeing a short-term sales correction, and some de-lists right now, innovation in plant-based is alive and well,” he says. “There are new challenger brands in the wings and the ethical drives remain for core vegans.”

 

As far as scaling is concerned, there is an array of strategies that businesses are experimenting with. Beyond Meat secured demand for its products by co-developing a plant-based patty with McDonalds. Its McPlant burger became a permanent addition to McDonalds’s menu in the UK in 2022, while North Yorkshire-based VFC’s Chick*n Tenders launched at 600 Marston’s pubs across the UK last spring.

 

The producers of Quorn, a “mycoprotein” fermented from a fungus found in soil – as well as a wide range of meat-like products made from it – took 30 years to become a truly global brand. A forerunner of today’s lab-grown food, Quorn was inspired by the same mission to find alternative ways of feeding a hungry global population that inspired Frances Moore Lappé when she wrote Diet for a Small Planet.

 

Founded in Stokesley, North Yorkshire, Quorn remained a primarily British brand following its acquisition by Philippine food and beverages company Monde Nissin. It is now exporting to 20 markets and is on track to become a billion-dollar business by 2027.

 

It seems that with a concerted effort of incumbents and start-ups, the UK plant-based sector will be able to tap into changing consumer habits and find innovative ways to rise to the occasion. In an ideal scenario, its players, having regrouped after a brief winter in the market, will be able to satisfy demand with products that are truly consumer-pleasing and high-quality – if not necessarily all that healthy.

https://www.business-reporter.co.uk/management/meaty-alternatives-between-hype-and-global-expansion