Growing plant-based market presenting new opportunities for South African processors

SOUTH AFRICA – Plant based food products that mimic the taste and texture of meat, milk, seafood and cheese is an emerging category that has made major highlights to date and has been identified as a leading trend to watch out in the coming year as the market continues to evolve and expand into more categories.

ProVeg International, a food awareness organisation based in Berlin, recently conducted a large scale consumer survey across nine European countries i.e. the UK, Germany, Austria, France, Belgium, the Netherlands, Switzerland, Denmark and the Czech Republic, to identify priorities for product improvement and development in the plant-based food market.

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This novel research, which is based on consumers’ purchasing and consumption patterns, identifies several gaps in the market that South African food manufacturers could be taking advantage of.

The research showed that meat-loving countries like Germany, the move away from meat is significant. Currently only 26% of Germans eat a meat product every single day, compared to 34% in 2015.

The trend is not only in Europe as demand for plant-based products in China is also growing rapidly, with companies like Whole Perfect Foods and Omnipork making huge inroads into the Chinese market, and even American market-leader Beyond Meat stating, “We see Asia as a key region for strategic long-term growth.”

In addition to meat alternatives, the report indicated that the market for milk alternatives has also exploded with giant food industry player like Coca-Cola launching a new brand of plant milk-Simply Almond.

For predictions on the general growth of plant-based products, the report stated that manufacturers can look to the market for plant-based meat alternatives, which is predicted to double within the next five years.

According to figures provided by Markets and Markets, this market was valued at US$12.1 billion in 2019 and is predicted to grow at an annual rate of 15%, reaching almost US$28 billion by 2025.

Pointing to the fact that Beyond Meat currently has a market capitalisation of US$9 billion alone. The global meat market, by comparison, is only predicted to grow by 3% per year.

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When looking for specific gaps in the market, the ProVeg research sheds some light. In Europe, plant-based cheese is the product that was highlighted as the biggest opportunity for plant-based food producers.

According to Verena Wiederkehr, Head of Food Industry and Retail at ProVeg International, who oversaw the research, “The data supports the view that good quality, affordable, plant-based cheeses have a good chance of penetrating, capturing and retaining a large part of this fast-growing and lucrative sector.”

The opportunity for South African manufacturers is two-fold. Firstly, gaps have been identified in the European market, and there’s good reason to think these export opportunities exist elsewhere to be tapped.

Additionally, there is an opportunity for the processors to be the first mover in some of these categories in South Africa as all of the plant-based cheeses that are available in the country’s large retailers are currently imported.

Infinite Foods, the local importer and distributor of world leading plant-based based products like Beyond Meat’s burger, mince and sausages, Miyoko’s plant-based butter, Nature & Moi plant-based cheese, and recently Oatly oat milk, agrees with the ProVeg findings.

“Research like this is very interesting to us, it confirms a lot of what we have been seeing and we are working hard to create partnerships with local producers to bring more home grown products to the market in the categories mentioned in the ProVeg report,” says Infinite COO Neil Taylor.

The work ProVeg is doing has already had some impact in South Africa. In 2019, South African meat company Feinschmecker Deli Meats consulted with ProVeg before they became the first local meat producer to market a plant-based meat replacement product when they launched Gudness, a range of plant-based deli slices.

“After talking to the team at ProVeg, I had a better understanding of the benefits of moving towards more plant-based offerings”, recalls Alistair Hayward, Managing Director of Feinschmecker.

“Plant-based products are not just there for vegans or vegetarians, most of the growth in this category has been driven by people who still eat some meat but are trying to cut back or just trying new options that are more sustainable,” he added.

Along with plant-based cheese, other opportunities in the plant-based segment that were highlighted by the report include plant-based egg and plant-based convenience meals.

According to Donovan Will, the Director of the South African branch of ProVeg, “The only major local manufacturer that is taking advantage of this market is Fry’s [The Fry Family Food Co.], who are exporting some of the world’s best meat alternatives like their Chicken-Style Burgers and Nuggets from their base in Durban.

He further highlighted that local production costs are significantly lower than those in Europe and America, where most of these products are being made.

“There is no reason that more South African firms can’t enter and even lead this relatively new and rapidly growing market,” he stated.

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