Global Plant Protein: A Brief Outlook
Note: This article was originally published in New Protein.
The “Plant Protein Industry” is flourishing with multiple plant-based products entering the global market.
The industry was valued at around 12.5 billion USD in 2021 and is anticipated to grow at a rate of 8.7% between 2022-2026 to reach USD 18.9 billion by 2026. The growth of the industry is mainly due to the shift in consumer preference towards vegan diets, low calorie and high protein products, increasing health concerns, changing lifestyles, and demand for ethical procurement or production.
These factors together with the global pandemic situation have bolstered the plant protein industry.
As quoted by many research journals, the farming industry is the prime contributor to greenhouse gas emissions; certainly sustainability appears to be the driving force behind the success of the plant protein industry.
Plant-Protein Market Segmentation
The plant protein market can be segregated on the following basis evidencing how and why it is growing steadily yet surely.
While plant protein sees tremendous growth across the region, North America leads the way accounting for nearly 40% of the global market share with major economies like the USA and Canada holding the largest shares. The high consumption of plant protein is mainly due to the soaring percentage of the vegan population in these countries and the growing demand for clean label alternative proteins. This region is the prime location for innovation with regards to mimicking the quality attributes (texture, taste, flavour) to that of the animal proteins.
Apart from the North American region, the European market is experiencing a boom as well in terms of plant protein product launches. This accounts for a 35% rough share in the global market which is due to the prevalent increase in diseases and obesity in the region. The UK has seen significant growth in the European region. This is mainly due to the hyperactive awareness of the nutritional benefits of plant protein and the elevated promotion of these products by supermarkets and restaurants.
Another interesting aspect to consider here is Germany which takes the second position in the European Plant Protein Market in terms of volume.
The Asia Pacific and LATAM regions are also experiencing significant growth due to market competitiveness and the health benefits of plant-protein products. The largest share in this region is China followed by India because of the rise in the vegan population and production capabilities. In the LATAM region, Brazil holds the largest market share due to significant local production, high demand/ awareness and increased visibility in supermarkets & retail stores.
Presently, countries like Argentina and Peru have a considerably smaller market share but they are anticipated to grow at a CAGR of around 15% in the next five years.
The overall global market of plant protein is witnessing high innovation, surging demand, and high global production, across multiple applications in the food sector.
The source of plant protein is the key determining factor determining the taste, texture, flavour, and thus the overall acceptability of these products. Soybean, pea and wheat are some of the most frequently used plant protein sources globally.
Amongst these, soy protein has the largest consumption due to its low-cost, large-scale production, easy availability, high protein content, and excellent nutrient bioavailability.
However, pea protein is expected to grow at a faster rate due to its allergen-free status and the rise in the demand for clean labels.
By End Product
In recent years, the application base for plant proteins has experienced a remarkable expansion with a prolific rise in product launches, fortified with plant proteins across the food & beverage as well as nutrition industry.
The leading segment in this space is Dairy Alternatives due to the higher penetration of milk product substitutes like milk and cheese alternatives, frozen desserts, plant-based creamers, and yoghurts.
Another highly attractive application includes meat alternatives which have seen an extraordinary boom in recent years, especially in 2020 and 2021.
In this segment lots of innovations are taking place in terms of product diversification such as beef, pork, chicken, fish in formats like patties, nuggets, mince, ground, etc. Other applications where there is a remarkable inclination among manufacturers towards developing plant-based/vegan options are confectionery, sports & daily nutritional powder & drinks, breakfast cereals, etc.
One of the major challenges for the plant-based industry is mimicking the exact taste, texture, and nutritional profile of animal meat, which is the major reason why food scientists are incorporating different types of plant proteins into the product.
By Active Players/ Customers
Initially, the plant-based/alternatives market consisted of small and niche start-ups which grew markedly and organically, like Beyond Meat and Impossible Foods in the meat alternatives segment. Other companies that grew significantly includes Califia Farms, Daiya Foods, and Oatly in dairy alternatives, Kashi in breakfast cereals, and Vega in sports nutrition among others.
However, the present volumetric expansion in the market is being driven by large multinational corporations in the industry such as PepsiCo, Danone, Kelloggs, Nestle, Maple Leaf, Tyson Foods, Kraft Heinz, Chobani, etc. Almost all these players and several others in the industry have either expressed their interest or have already launched plant-based alternatives products under their own brand name or under a new brand altogether.
Many of these cash-rich companies are on a buying spree and looking for mergers/acquisitions in the space.
Key Trends/ Challenges
In addition to the increasing demand for plant proteins and inclination among global players towards these ingredients, there are several challenges that the R&D team in these companies face, which can potentially be resolved by protein manufacturers in this space.
These challenges/requirements vary based on product category and include challenges that are related to performance, processing & formulation, and raw materials.
Some of the key challenges across the above three categories include achieving desired taste, texture, and sensory profile of the final product such as stretching characteristics in cheese alternatives, exact nutritional profile in the milk & meat alternatives segment, masking off notes from plant proteins, and achieving desired taste, required stability & improved shelf life.
Apart from these, lead time and supply chain issues are also quite prominent in the industry.
All of that being said: innovation in the sector is enjoying the support of major multinational food manufacturers and it is an exciting time for consumers as they explore options to include plant-based foods and beverages in their diets.