Challenge: A call for a new sustainable food system
All over the world, there is a call for a new sustainable food system. Taking a ‘Food System’ approach may provide manufacturers a resource efficient and food secure future for the UK Food & Beverage industry as manufacturers aim to create a system capable of feeding the expanding global population while using less energy, less land, and less water.
Following this, industry changes illustrate the growth in plant-based alternatives that has brought disruption to the meat and dairy market. The term, plant-based, is wider as it focuses on consumption of foods primarily from plants (fruit, vegetables, nuts, oil, whole grains, and legumes). Those who follow a plant-based diet might choose to substitute animal products for vegetable options, without permanent restriction of animal foods.
How are Food and Beverage companies responding?
Existing food and beverage companies are moving to protect and enhance their positions in the market. They are doing this both through internally driven product development, innovation, and inorganic growth through the acquisition of new disruptor brands and products. The impacts of growing number of consumers looking to eat plant-based alternatives, combined with advancing technologies, decreasing cost curves, and changing regulations is having a spiralling effect, driving the large growth in the overall market and substantial gains in market share for alternative protein over the coming decade.
5 Factors driving the plant-based F&B market growth:
- Shelf space: Increasing awareness year on year of “Veganuary” and the fact that major multiple retailers have rapidly expanded their shelf space and own label new product development for plant-based products underline the growth in the sector. Many restaurants, casual dining venues, and fast-food chains now have dedicated “meat free” sections to their menu. This shows the popularity of a vegan or indeed flexitarian diet continues to increase.
- ‘Flexitarian’ consumers: The growth in the plant-based sector has largely been driven by the mainstream emergence of the ‘flexitarian’ consumer . The ‘flexitarian’ consumers are people who still consume meat and dairy but seek to reduce the levels they consume. With the increased numbers of vegetarians and vegans, consumers respond to a combination of ethical, environmental and health concerns.
- Product innovation: There are a significant number of start-up and disruptor companies in many geographies that are launching new and exciting products into the market to meet the increasing consumer base and demand for innovative products and flavours. This includes plant genetics start-ups focusing on ultra-high protein crops for use in plant-based consumer foods. Regulatory approvals on novel ingredients, production processes and products are helping to make this innovation possible. Media coverage has picked up significantly in line with the increase in new product development and demand for the products.
- Environmental challenges: Environmental and health challenges will increasingly drive the need for technological innovation in protein production to drive sustainability, nutrition and affordability. Plant-based diets have become popular as a means of reducing the environmental footprint of the diet. Also, it is promoting human health and animal welfare.
What does the future hold for the plant-based F&B market?
This trend is expected to continue to accelerate. The UK is one of the markets leading the way in plant-based products. It is the largest market in Europe for consumption of plant-based alternatives. It accounts for around 40% of the European meat substitutes market. The industry trends highlighted above create significant risk but also opportunity for established food and beverage companies with traditional meat and dairy product business models. If a progressive strategy is followed, then adoption of plant-based products could increase their market share and profitability significantly. All food value chain players can consider their product strategy and participation to capitalize on the alternative proteins trends. To reap future returns, understanding the future consumer will be critical. If a company remains static, however, there is a risk of being left behind because of the potential decline in established categories.
Priorities for manufacturer’s wishing to enhance the UK’s competitive position in global food manufacturing:
- Food Safety: A safe, secure food manufacturing supply chain
- Authenticity and Traceability: A resource efficient manufacturing supply chain
- Understanding and changing behaviours/drivers
- New flexible manufacturing processes
- Upgrading of ingredients
- Smarter packaging
- Food manufacturing for healthy diets and lifestyles
- New processing technologies: An innovative and resilient food supply chain for 21st century populations
- Sustainable food supply chain
- Eco-food manufacturing
If you would like to understand how to effectively tackle your food and beverage challenges, please contact Mark Boswell, Head of Food & Beverage at 4C Associates, at mark.boswell@4cassociates.com.
