26 April 2019 – Plant milk products or alternatives to cow milk are no longer fringe, as let’s say compared with a decade ago. Today the refrigerated aisle in the supermarket has a lot on display: soy milk, almond milk, hazelnut milk, peanut milk, walnut milk, cashew milk, coconut milk, oat milk, spelt milk, quinoa milk and many more. The well-documented rise in demand for these alternative milk products has been fuelled by the consumer shift towards a more conscious, sustainable way of living. It has become a crowded market.
Traditional dairy companies and meat companies have responded to the trend in several ways, either by ignoring it, lobbying it, innovating within their own streams (i.e. the introduction of flavoured milk or hybrid products) or by introducing alternative dairy products under their own name or via partners (e.g. Danone buying Whitewave Foods, Valio acquiring Swedish oat milk company Oddlygood, or Cargill and Tyson Foods investing in Memphis Meats). These companies are diversifying in case of any possible declines in demand for animal products by investing in other companies that produce alternatives. Venture investors are not just based in the US or in Western Europe, but also come from Asia (e.g. Li Ka-shing, the Hong Kong magnate, has made major investments in the field).
And one last option for a traditional company is to completely transform itself into a plant-based company (or vegan company).
This may be a rare occurrence at the moment, but it does happen. In dairy, an example is New York dairy company Elmhurst, which is now a plant-based company. It continues to sell milk, but switched from cows to nuts for its sourcing.
We are now even starting to see traditional meat companies that are actually giving up on meat and turning to plant-based meat/food products instead.
Feedinfo News Service asked Tobias Leenaert, Co-Founder at CEVA and ProVeg International, and the author of How to Create a Vegan World: a Pragmatic Approach (Lantern Press, 2017) to what extent he thinks traditional meat companies completely giving up on meat and turning to alternatives instead will become a new phenomenon. And can such a move be considered wise given that meat alternatives are not yet as commercially widespread as plant milk?
Asked what the economic incentives for traditional meat companies are for doing this, Leenaert made it clear that there are currently only a few companies making that move right now, but there are a lot more meat companies who, while not abandoning meat, are making sure they are jumping on the proverbial bandwagon, either by developing products themselves, acquiring other companies, or investing in other businesses or technologies. And of course there are the companies that started up as vegetarian or vegan companies, some of which are many decades old.
“The economic incentive comes from the clear rise in the sales in vegan products. Note that this rise in demand is not driven by vegans themselves, as yet, but by the much larger demographic of meat reducers or what is sometimes called flexitarians,” he said. “If we want the vegan lifestyle to spread further, it is necessary that traditional companies can jump on board somehow, and that they have a wider variety of options than just go bankrupt or to turn vegan overnight – both of which are very rare occurrences.”
Though he admitted that a complete transition for some at this point in time would be a bad move, economically speaking, he believed that it’s probably a matter of doing it at the right time.
“One can be too early, but one can be too late and miss the boat,” Leenaert commented. “This might very well be a major revolution in the food sector, where we are seeing a shift from an old (raising feed, raising animals, killing animals, transporting them…) to a new system (raising feed directly for humans, processing and eating it) that is more efficient and more lucrative, just like the shift from video cassettes to Netflix, or from analogue photography to digital photography. Meat companies don’t want to end up being like Blockbuster or Kodak.”
Dutch meat company Bobeldijk, which was established in 1975, added vegetarian products to its range in 2008 before changing its name to Bobeldijk Food Group in 2015. The company announced that meat-free products were the future, and that it would no longer invest in meat. Leenaert, who is familiar with the project, said factory space used for meat production was freed up to give the meat-free division room to grow and all turnover from meat products was invested in the development and expansion of the plant-based product line. Bobeldijk’s CEO Remko Vogelenzang expects that the meat-free division will be able to finance itself by the end of 2019, and then Bobeldijk will be able to separate itself from its traditional meat activities.
Leenaert also mentioned Enkco Food Group of The Netherlands, which was founded almost sixty years ago as a sausage company. In 2003, Enkco acquired another company, which included the vegetarian brand Vivera, and since has continued to expand its vegetarian range, to the point that sales of vegetarian and vegan products account for more than half of the company’s turnover. Enkco plans to sell off its meat branch to a larger meat company, and will itself continue under the name Vivera, as a meat-free company.
Another factor coming into play which may eventually alter the picture for plant-based meat will be cell-based meat. The general public is expected to get its first taste of cell-based meat in 2020, albeit at $50 a burger.
But according to Leenaert, it is hard to say if cell based meat and plant based meat will be competing with each other in the long-term.
“I hope we get to a situation where plant based and cell based together make up all the “meat” there is, and there is no animal meat. At that point, plant based and cell based may be competing, but I’m not sure if it would be different from competition within plant based brands or within cell based brands,” he commented. “The different price ranges might be notable within those different types of product as well (more and less expensive plant based products). In any case, cell based might at some point become entirely affordable for everyone – though it might never be as efficient or cheap as plant based.”
In Leenaert’s view, animal products may well be on their way out. It’s just a matter of time.
“I used to think it wouldn’t be something for the 21st century. Now I definitely think that is a possibility. It might go fast at some point, where we see a tipping point. Right now many people still don’t want to know about the problems related to animal products, because they are what I call ‘steakholders’: they love eating meat and don’t want to know anything wrong about it. And one’s commitment not to know is even bigger if meat production is somehow one’s livelihood. But once the alternatives are better, cheaper and more available, it will become easier and easier to realise what a bad thing we’ve been doing all these decades, especially with factory farming.”
In a concluding comment, Leenaert wished to stress: “I hope many vegans just like me, don’t want to demonise anyone or anything, even though I understand it may often look like that to people involved in these industries. We’ve created a pretty bad system in many ways, but I don’t want to point fingers, we just need to make it better. And we’ll see about the exact shape that new system will take.”
His advice to the animal nutrition and production sectors is to try not to be defensive.
“Try to see what’s coming, look long term, and see where the plant based growth creates opportunities,” he said. “The biggest problem is for the people who raise animals (the actual farmers). For them, it’s the hardest to find alternatives regarding their business. For people producing meat products like sausages or burgers, and people in retail, it doesn’t matter whether their sourcing, or what they sell is animal based or plant based – they will sell what people demand.”
“The same can be applied to the animal feed sector. I think there are many opportunities,” Leenaert added. “Much of the feed produced can be used as food, and for the feed that cannot be used as food yet, there might be ways for companies to use it as a food ingredient. If I were a feed supplier, I’d start looking at ways in which my products can be used as food, and at possible buyers in that space.”